In the Wild West of the crypto sphere, there are plenty of controversial characters. It’s a natural result of any young market with enormous potential and little regulation. Few characters attract as much attention as crypto-billionaire and former media mogul Brock Pierce, however. The former child actor-turned crypto evangelist has been at the forefront of some of crypto’s most high-profile projects, and his newest venture is nothing less than a crypto utopia in the tropical heart of Puerto Rico.
Featured Image, Photo by Forbes
From on-the-run outlaw to crypto community leader, Pierce has already put his indelible mark on the cryptocurrency market. Whether that mark heralds the wave of the future or a permanent tarnish is yet to be seen.
Early Life and Career
Chances are you first encountered Brock Pierce as a child actor, portraying the young Gordon Bombay in the hockey classic “The Mighty Ducks.” In the movie, Bombay is a soulless yuppie who reluctantly reconnects with his down-home hockey roots. His name is a reference to Gordon Gecko, the anti-hero portrayed by Michael Douglas in the 1980s video hymn to greed “Wall Street.”
Young Brock Pierce in Mighty Ducks, Image from Famous Fix
The portrayal would turn out to be prophetic, in its own way. Following his stint as a child actor, Pierce became involved in the Digital Entertainment Network startup. This talent management company racked up $88 million in the early dot-com era during its startup phase, but the company ultimately collapsed amid a storm of underage sex crime allegations.
This is where the Pierce story really takes a turn for the sordid. While accusations flew that Pierce and others had propositioned underage child actors involved in the company, Pierce and other top management officials of Digital Entertainment Network fled the U.S. for Spain. There, they were arrested and extradited back to the U.S. in 2002 to face civil suits brought on by accusers formerly associated with Digital Entertainment Network. Pierce was not criminally charged, although his cohorts were convicted on charges related to child molestation and child pornography. Pierce ultimately paid about $21,000 to settle his civil involvement in the suits. To this day, Pierce denies any involvement in his cohorts’ criminal activities.
Pierce Enters Crypto
While in hiding in Spain, Pierce became involved in a digital gaming company that focused on in-game economies, like the economic system in “World of Warcraft.” This would turn out to be his portal to the larger digital currency world, eventually culminating in his founding of Blockchain Capital in 2013. Already wealthy from his earlier ventures, here Pierce began to seriously cash in as an early Bitcoin adopter and cryptocurrency financier. Shortly thereafter, he became director of the Bitcoin Foundation. This sparked a series of resignations from the foundation’s board due to Pierce’s somewhat murky past and the allegations surrounding Digital Entertainment Network. He eventually stepped down as the head of the foundation while simultaneously professing his innocence in past affairs.
During his time at Blockchain Capital, Pierce became a heavy investor in the Ethereum platform and launched the EOS cryptocurrency via a related company, Block.one. He has since stepped down from Blockchain Capital, again due to concerns regarding past allegations.
Brock Pierce at Blockchain Capital, Image from BitcoinIsle
One thing is crystal-clear about Pierce and his involvement in cryptocurrency – he has personally amassed a serious fortune. In fact, Forbes estimates his net worth at $700 million to $1 billion, making him one of the richest figures in the crypto sphere.
John Oliver recently did a take-down piece on Brock where he encouraged viewers to Google “Brock Pierce Scandal” and mocked his appearance at the EOS launch.
Time in the Sun
All that amassed crypto wealth has served as the seed for Pierce’s next big project – Sol, a crypto community based in the Old San Juan neighborhood of Puerto Rico.
In a tragically ironic way, the Sol moniker was selected after someone pointed out that the project’s original name – Puertopia – means something dangerously close to “eternal boyhood paradise” in Latin. Given the allegations that have dogged Pierce for years, the decision was made to go with the much more neutral Sol, Latin for “sun.”
Pierce describes Sol as a self-contained blockchain community, taking a cue from similar projects in crypto-friendly nations across the globe. Puerto Rico is uniquely positioned for a blockchain community. Its residents are U.S. citizens, but Puerto Rico retains its own tax code. That means that the hefty capital gains taxes usually applied to crypto earnings in the regular United States do not apply to residents of Puerto Rico. This quirk of international tax law means Pierce and other crypto billionaires can enjoy their digital fortunes in relative comfort.
Brock Pierce on the roof of the Monastery, a San Juan hotel in Puerto Rico. Image from NYTimes
Puerto Rico also offers something of a blank slate for a new tech community due to the devastation recently wrought by Hurricane Maria, which severed almost all electrical service on the island and sparked an ongoing political crisis regarding modernization of the island’s grid.
Pierce maintains that the blockchain is the answer to solving Puerto Rico’s infrastructure problem. However, this solution has attracted a hefty bit of criticism from several different vantage points in the cryptosphere.
The economic model harkens back to the less-than-glorious days of the British Empire: Set up shop in an economically disadvantaged region and provide services that help the locals in a dubious way, extracting profit at every step. This is the crypto colonialism accusation being leveled at Sol. Cryptocurrencies and blockchain technologies are notoriously power hungry, so electricity-starved Puerto Rico seems like an odd place to set up shop. Pierce believes that Sol’s investments in electrical technology will help the island as a whole. His detractors point out that allowing Sol to become heavily involved in the island’s electrical grid would essentially make the island dependent on Sol for its electrical power, and since Sol will by its nature consume a lot of electricity, it’s fair to assume that the benefits will not be shared equally by the ultra-rich of Sol and the economically disadvantaged folks on the rest of the island. Moreover, since Sol will essentially have its finger on the switch for the island’s power supply, it might be able to exert undue economic and political influence in other facets of the island’s government.
Sol’s supporters reject these accusations and call Sol a benevolent project aimed at bringing the future of technology to a somewhat backward island power grid. Far from an exploitative move, these supporters say, Sol is using the island as a proof of concept for future blockchain-oriented communities. If a blockchain community can survive and thrive in Puerto Rico, they say, it can survive and thrive in other places in the developing world.
“The blockchain is an ideal solution set, along with incorporating existing technology frameworks and architectures, while addressing the biggest of needs being infrastructure, real estate and most importantly energy,” said Sol backer and entrepreneur Joshua Boles. “Our group is steadfast to address all of these problems, to include health care, agriculture, and a place for the artistic community to call home. Moreover, our primary focus is to restore Puerto Rico to those that have been there the longest and have created this incredible culture over hundreds of years.”
It should be noted that Boles refers to Pierce in his travel piece on Sol as the “Bitcoin grand wizard.”
Pierce: Prophet of Profit
Pierce’s Sol venture is likely to generate controversy well into the future, whether it fails or succeeds. Much of this stems from the allegations still swirling around his time at Digital Entertainment Network. For better or worse, Pierce is intimately tied up in the crypto scene due to his legacy with projects like Ethereum and EOS, and he’s likely to remain a fixture of the crypto world for the foreseeable future.