I’m lucky enough to be updating you all from Tamandiro, Costa Rica. On my flight down I was seated next to a great couple — without fail our conversation involved Bitcoin, don’t know how that happened (I’m sure many of you can relate). They now reside in Houston, TX but their families remain in Venezuela, a nation experiencing instability (politically and economically) following a decade of leadership from Hugo Chavez (deceased in 2013). I gained one fascinating insight (amidst several) from this couple in the course of our conversation that has my mind racing.
Given that the Venezuelan Bolivar (VEF) is currently in the throes of hyperinflation I felt fortunate to get a first hand account of the situation. It also made me think critically about how the people of nations experiencing hyperinflation deal with their circumstances.
Source: Huffington Post
The fundamental tactic to combat hyperinflation is to convert the local currency into a safe haven store of value — today this is most often assimilated with precious metals, or for much of the world, the U.S. dollar. For those with capital controls or a reality where conversion opportunities are less accessible real estate is another means. What I learned is that many in Venezuela seek to store value in their homes. Rather than hold pieces of paper that will potentially be worth half as much 6 months from now as they are today — families invest their immediate earnings into their property.
It makes me wonder — despite being considered “poor” by first world standards due to the depreciation of their currencies would we see symptoms develop where their properties are relatively more developed and modern then the first world? It would be seemingly ironic to own an unbelievable estate but by any other means be considered poor. Sadly this may become an increasing reality for parts of the world.
It is clear I don’t fully understand the degree to which this may be the case but will be spending some time this holiday researching this subject and hopefully connecting with individuals that experience this first hand. It becomes increasingly more relevant when considering developing currency crisis throughout the world (Argentina, Greece, Ukraine, Russia, etc.) It will be enlightening to have a better understanding of how people combat hyperinflation — I think if it happened to me I’d be fucked.
Yesterday I received a tweet that came as a bit of a surprise. As a fan of Joe Rogan’s podcast (The Joe Rogan Experience) I had sent Joe a $5 tip in bitcoin on twitter via the viral service Changetip. It ends up that a week after sending the “tip” Joe had setup an account and accepted it. It is worth noting that Joe’s podcast is free and despite listening to a host of episodes it had never cost me a dime to access. I was more than happy to send $5 as I believe the value of the content I have consumed far exceeds this modest amount. It was an easy, simple, and direct way to pay my dues.
A far more interesting thing occurred after posting an update to Reddit on the subject. Along with a wave of tips sent to Joe, one users post stood out to me against a host of others. The post is featured below:
It turns out that one user had recently torrented Joe Rogans Comedy Central special “Rocky Mountain High”. It can currently be viewed unedited via Comedy Central for $5 here. What is so interesting to me about this is that here we have someone doing something many have done before –
breaking the law viewing protected content online that has been posted illegally. That being said, many argue such activities are a “victimless crime”. This is debatable. What is not debatable is the intentions of the consumer — in this case they appreciated the content and wanted to see it. Furthermore they had no problem paying the designated cost of the content, but preferred to circumvent the middleman (Comedy Central) and send their funds directly to the content creator via Changetip.
(EDIT: A reader brought to my attention the error that has been crossed out above – there is in fact no law that exists that makes streaming copyright protected content illegal. Streaming protected content is often considered legal, while instances where the content is downloaded may fall into a grey area based on the type of content)
It is an interesting precedent and something I believe is the tip of the iceberg (pun intended) of an inevitable change (pun intended again). Traditionally to support content creators one must go through a third party, purchase content through a distributor or purchase merchandise as advertised on the program to display their support monetarily. We now live in a world where support and appreciation for content can be delivered directly, conveniently, and instantly in a peer-to-peer form.
Experiments have been around for years surrounding free content (Example: Radioheads In Rainbows pay what you want release). I believe this is the next evolution of this concept. I foresee a future where someone leaves a movie theater after Star Wars VII and tweets $0.50 to Adam Driver for a great performance in the film… where mid-concert a fan tips the Avett Brothers $10 for playing their favorite song during the encore. In the meantime, I also foresee a host of content consumers illegally downloading content online but deciding to “pay their dues” directly to the content creators in the form of online bitcoin tips. Ripped the latest Phish album? Send them $5. Streamed the whole first season of Game of Thrones? … clearly you should tip Sean Bean.
Like all things in this space, this is just getting started — but with that said it always seems that things take off faster than expected. Maybe Ellen’s “break twitter” tweet at next years awards will also raise $100,000 to fight child trafficking, wouldn’t that be nice?