Consider Venezuela and Bitcoin Together

The above two primers, taken together, represent an unprecedented opportunity for entrepreneurs to address the situation in Venezuela in an extremely impactful way, which has only been possible since now. I’ve devised a plan that’s “so crazy, it just might work.”

What’s the idea?

We intend to raise at least $300 million worth of real hard-earned Bitcoin capital, and electronically airdrop a large portion of it onto Venezuelans. Unfortunately, in order to avoid tipping our hand as we plan and prepare, we wish to keep the exact method(s) a secret. All that I’ll reveal is that our tactical plan is a practical and scalable approach. You just have to think big.

We also intend to establish a non-profit foundation and evergreen fund to enable the execution of similar large-scale future operations.

Over the last couple of weeks, my team and I have spoken to a prominent billionaire, a human rights foundation, an ambassador to the UN, many Venezuelans, journalists, Bitcoin engineers, VCs, and others. All have expressed excitement and an eagerness to help, and we’re connecting with yet more prominent people. It’s very inspiring.

What’s the point?

The purpose isn’t to provide everyone a fish, but rather to teach everyone how to fish en masse in order to jump-start a gigantic fish market operating at the scale of an entire economy.

Paypal once incentivized people to sign up by giving them $5 in order to create network effects. Peter Thiel, co-founder of PayPal, notes that when one receives an email indicating that they’ve received money, one will almost always expend the effort necessary to access the money. (e.g., by creating a PayPal account.) We’re leveraging the same idea to teach people how to accept and use Bitcoin.

We want to take a gigantic defibrillator and reboot Venezuela’s economy. We expect this to be a powerful example for the world to observe.

Will this work?

At the end of the day, nobody can know what will happen for sure. It’s an experiment. I’m fully aware that we may not be successful, but nothing can possibly be worse than what is already happening in Venezuela, so it’s worth a try. Every Bitcoiner I’ve spoken to has indicated that they would be happy to donate 1% of their holdings for the cause, knowing that if the mission is successful, that this will likely increase the value of the remaining 99% of their holdings, due to a massive uptick in real-world utility and attention, and thus demand. Will we be successful? Let’s try it and find out. There’s little to lose, and much to be gained.

How will this be executed at the scale required?

The effort I’m proposing is much larger than a startup. We intend to inspire and collaborate with prominent individuals and institutions to address this very large problem.

What about Bitcoin’s volatility?

If you’re Venezuelan and Bitcoin drops 50% in value, that’s comparatively great money; it’s still holding most of its value. 90% of the bolívar’s value is lost every couple months, and it’s only accelerating. By the way, as Bitcoin appreciates in value, its volatility generally decreases. (In 2011, it swung from $1… to $30… to $2! Ouch!)

Bitcoin’s volatility is decreasing over time.

Why not US Dollars?

Well, I’ll ask you: Would you go door-to-door distributing indivisible 10 dollar bills? The approach doesn’t scale, the Venezuelan government won’t allow it, it’s not teaching anyone how to fish, and centralized online solutions are prone to government censorship. Venezuelans understandably express distrust of both U.S. dollars and bolívars, given that they’ve recently witnessed two separate crises with both.

But still… why Bitcoin?

Imagine that you could flee Nazi Germany, with all of your capital, using little more than a password in your head. That’s pretty world changing, right? That’s what Bitcoin offers. Nobody can forcefully rip your own capital away from you. What’s yours is yours. Not even a “$5 wrench attack” will work; many Bitcoin wallets work by making every password you enter unlock a different “account.” Thus an attacker can never know if everything has been successfully extorted.

What’s a $5 wrench attack? Great question! (This is really what cryptographers call it!)

I believe that when Venezuelans realize that they’re holding on to a fundamentally deflationary asset, that behavior will radically change. Instead of being incentivized to immediately spend money by the day or hour, one is incentivized to save, invest, and plan for the long term.

I’ve skipped a lot of detail, but this post is probably long enough already.