Nelson Chartrand, 50, subsists on mangoes and sugar water in a small town outside Havana. Photo: Daniel Oberhaus

Cuba's Bitcoin Evangelist

“We gave ourselves the task of studying Bitcoin because we are against government.”

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Jun 30 2015, 1:20pm

Nelson Chartrand, 50, subsists on mangoes and sugar water in a small town outside Havana. Photo: Daniel Oberhaus

Nelson Chartrand looked anxious as he sipped a lukewarm beer in a small café in Central Havana. Sweat darkened patches of his slate grey shirt, which he used to pat away the beads that slowly congealed on his forehead. It's hard to tell whether his diaphoresis is from the stifling Havana heat or his nerves.

Chartrand's trepidation is quite understandable given the circumstances. He believes he was followed here. He nodded discreetly toward a man sitting in the corner of the café. The man appeared to be minding his own business, entirely immersed in a Cuban daily as he waited for his pollo asado.

"Secret police," Chartrand informed me.

The anonymous man, a pudgy, balding figure in oil-stained pants, looked far and away from what the image that the phrase 'secret government operative' usually conjures in the mind's eye.

"How can you be sure?" I asked Chartrand, as I tried to remain discreet while observing the source of Chartrand's anxiety.

Chartrand shrugged, then adjusted his glasses. "Impossible," he admitted. "But believe me, they know that I'm here talking to you. If they aren't here now, they'll be waiting for me when I get back home." He hit his closed fist against his empty palm, darkly underscoring his predicament.

He says he's not afraid. "I just live in uncertainty," Chartrand told me. He smiled cryptically, and changed the subject. "This," he informed me in Spanish, gesturing to his drink, "is the first beer I've had in months. I had almost forgotten what it tastes like."

Chartrand has been unable to afford such luxuries since he lost his right to work in Cuba some seven years ago, he explains, an unfortunate result of his heretical political beliefs. Chartrand is a co-founder of the Cuban Anarcho-Capitalist Club, an association of political dissidents who want to see a free-market flourish in the land of the perennial revolution. The society of anarcho-capitalists was founded in March 2014 and since its inception its members have strived to subvert the Castro government through ideological warfare, holding seminars and distributing literature on how the internet, free markets, and the dismantling of centralized authority can help promote a truly free Cuba.

"We gave ourselves the task of studying Bitcoin because we are against government"

More recently, the CAC became the first Cuban group to begin accepting digital currency, adopting Bitcoin last February as a tactical element in their struggles against the Castro regime. The task of introducing Bitcoin to Cuba has taken on a special urgency ever since Obama announced plans to normalize relations with the island nation last December, a move that will facilitate the proliferation of global internet access at levels necessary to make cryptocurrency a viable alternative to centralized banking.

"We gave ourselves the task of studying Bitcoin because we are against government," said Chartrand. "We were curious about Bitcoin as a way to work outside of the central institutions, to subvert the state, and we believe that it can be a very powerful tool for Cubans."

***

Chartrand is quick to point out that Bitcoin is inherently anti-authoritarian insofar as it allows for financial transactions to occur in the absence of a central monetary power. This is made possible because every transaction is uploaded to a distributed database known as the blockchain, which is maintained by various independent nodes verifying updates to this public ledger, effectively creating an entirely decentralized, peer-to-peer monetary system.

A new block is added to the blockchain about every ten minutes, containing updates accounting for transactions since the last block was added to the chain. These updates contained in the new block must be verified by the nodes, which each maintain a copy of the entire chain. It's a system of independent verification that makes things like double spending very difficult to accomplish.

The takeaway here is that due to the frequency of the updates to the blockchain and the size of the chain itself (currently around 35 gigabytes), being able to maintain regular internet connection is a key requirement for partaking in Bitcoin. This is to say nothing of the large energy requirements necessary to actually mine for the currency.

While introducing Bitcoin into a country with as little connectivity as Cuba certainly creates a number of difficulties, the task is not necessarily impossible—the use of Bitcoin would simply have to be adapted to fit the Cuban reality. For instance, in a state where the flow of information is heavily restricted, many Cubans are only able to stay up to date on Top 40 shifts and their favorite TV shows (Cuban youth are particularly fond of Game of Thrones) through massive pirating operations which will upload foreign media for a price of about $1 USD per gigabyte to their USB sticks.

As Bitcoin blogger Garrett Keirns has speculated, a similar principle could potentially be applied to Cuban Bitcoin markets, whose members could download a pre-synchronized Bitcoin client on a weekly basis and update the blockchain with Cuban Bitcoin transactions. This is already done for Cuban Craigslist equivalents revolico.com and cubisima.com, allowing people to download a refreshed version of the site to their USB on a weekly basis.

While hypothetically feasible for Bitcoin, such recourse to action would probably end up being more trouble than it's worth, given the ever-increasing size of the blockchain and the fickle quality of Cuban internet connections outside of only the best government institutions.

Actually introducing Bitcoin to Cuba may be a ways off, but the CAC's activities have nevertheless drawn down the wrath of the Cuban authorities. Its members have allegedly been subject to incessant intimidation, kidnappings, beatings and imprisonment as a result of their less-than-covert political operations. Chartrand admits that the constant mental and physical harassment gets wearisome, though he says he no longer fears it. According to him, his political troubles began much earlier and at this point the intimidation tactics have become just another fact of life.

Chartrand now finds himself unemployed at the age of 50. He had previously earned his bread as a lawyer with the Cuban Ministry of International Commerce. He had worked there for decades until he was arrested in 2008 for seeking asylum at the embassy of the Dominican Republic.

A street in Havana. Photo: Daniel Oberhaus

"Cubans couldn't travel freely then like they can now," he explained. "I was very frustrated so in an act of protest I introduced myself into the embassy of the Dominican Republic. They had extraterritoriality in theory, but as soon as the guy who was in charge got there he turned me over to the Cuban authorities."

Chartrand was initially sentenced to two years in prison, but his training as a lawyer allowed him to negotiate his sentence down to eight months. Upon his release, Chartrand found that not only had he been banned from working in the country, he was also prohibited, both financially and legally, from leaving.

"I had gone to the embassy of the Dominican Republic for two reasons: one was protesting for a basic human right to move around and the other was to see if I could leave Cuba," Chartrand said. "Now things are different. I don't want to leave Cuba. I want the state to leave."

Since his release and subsequent ban from legitimate work, Chartrand has been leading an increasingly impoverished existence. He largely subsists on mangoes and sugar water, and earns a meagre wage in a small town a few hours outside of Havana.

I asked Chartrand how he makes his living now that working is technically illegal for him, but he waved my inquiry away as if it were one of the innumerable flies that circled the café. "You wouldn't believe me, even if I told you."

His prison term was a apparently profoundly formative time in terms of shaping his political views. Rather than crushing his will, he emerged from prison with a novel raison d'etre, albeit one which made him even more or a political outsider in the eyes of the Castro regime. According to Chartrand, however, he didn't have much choice in the matter.

"I began being free in prison," he said. "And now that I've tried the nectar of freedom, I would never abandon it."

Chartrand's socio-economic views, which had always been ambiguously libertarian, began to coalesce into a more explicit outlook and strategy over the five years following his release from prison. His ideas became heavily influenced by the economists Friedrich Hayek and Lorenzo Infantino. This steadily mounting personal dissent against the totalitarian policies of the Castro government was finally consummated in March 2014 when Chartrand co-founded the Cuban Anarcho-capitalist Club under the direction of Joisy Garcia, his longtime friend and member of the independent Cuban press.

"We started the club to give Cubans hope, as something to aspire to because there is no liberty here," said Chartrand. "We've been living over half of a century with a state that's imposed a way of thinking that's damaging to people. This government has crushed everyone's individuality and will to fight. It's become a country of automats [and] we are trying to offer another way of thinking."

Joisy Garcia after a beating. Photo courtesy Joisy Garcia

Since its inception, the activities of the CAC have remained largely ideological in nature. They have created independent libraries throughout Cuba that offer reading selections that are typically banned in the country, in addition to holding teach-ins on subjects such as polycentric law and the internet. So far, popular reactions to the CAC's message have been mixed.

"Every day, people are just trying to figure out how they are going to eat. They are getting paid shit and they are conscious that the salaries aren't enough, but then every Memorial Day the great majority still go to the plaza to hail the gods in power here. That's not logical," said Chartrand, who added that those who dare to speak out against the government are almost guaranteed to be met with some sort of punishment, which is frequently corporal in nature. "That's a very sad concept: that people who are going through the same hardships as you are capable of harming you physically and emotionally when they see that you are fighting for freedom."

This was something experienced firsthand by Garcia, who left to the United States this year on an invitation from Florida International University after years of being harassed both mentally and physically by Cuban authorities for being an outspoken member of Cuba's illicit independent press.

"They didn't want us to spread our ideas. I had two vertebrae broken from the beatings"

"I was always persecuted," said Garcia. "They didn't want us to spread our ideas. I had two vertebrae broken from the beatings—beatings, kidnappings, and threats were our daily bread."

Eventually Garcia, Chartrand, and the 21 other official CAC members found a purely ideological struggle against the Cuban state to be insufficient. It was their pursuit of more practical avenues of subversion that eventually brought them to consider cryptocurrencies as valuable tools with which to bring about serious socio-economic reform on the island.

Although an increasing number of avenues for Cubans to participate in entrepreneurial activity have opened under Raul Castro's government, the Cuban economy is still largely centralized and subject to the mandates of the regime. The CAC wants to overturn this economic paradigm by paving the way for a free-market system in Cuba by way of decentralized currencies such as Bitcoin.

The CAC go further in their political views than what the typical American might regard as 'libertarian,' not merely seeking a reduced state (something the CAC sees as naïve) but rather the complete dismantling of centralized authority.

"The CAC is anarchist in the sense that everyone has their free will to trade as they'd like without being controlled by a state. As long as there is a state, capitalism is bullshit as well," Chartrand said, while explaining the CAC's program to me. "In that sense, it has nothing to do with capitalism. The capitalism part has more to do with allowing people to do whatever the hell they want in a free market."

This is where Bitcoin could come in, allowing Cubans to avoid high import/export costs and giving them greater monetary freedom.

Waiting at Etecsa, the state-run telecommunications company. Photo: Daniel Oberhaus

The CAC began accepting Bitcoin donations in February, making it the first group under the Castro regime to accept a digital currency. But Chartrand and Garcia admit that there still remain serious logistical impediments to really introducing cryptocurrency to the island.

The foremost problem is that Cuba has one of the lowest rates of internet penetration in the world. While the International Telecommunications Union announced that Cuba's internet penetration stood at 25 percent in 2014, the pro-democracy watchdog Freedom House claimed that only about 5 percent of the Cuban population has access to the full, global internet. According to a Freedom House report, this makes Cuba one of the least free places in the world as far as the internet goes, only surpassed by countries such as China, Syria and Iran.

At the moment, the only Cubans with regular access to the internet are usually those with close ties to the government, such as Party officials, employees of the state's various ministries, or those who find themselves in other highly regulated positions, such as doctors or professors. If someone from the general population wishes to get access the full internet, not the state-run intranet, they must go to Etecsa, the state-run telecommunications company. Here, Cubans will wait up to several hours outside in the Havana heat to pay $4.50 for each hour they wish to access this heavily-monitored internet, no small sum considering the average Cuban's monthly salary is around $25.

Some of the islanders have created their own independent intranet known as SNET, which is technically illegal, but has been allowed to exist since 2001 so long as those who connect to it refrain from discussing anything remotely political or participating in other illegal correspondence, such as distributing pornography. An independent intranet is certainly a step in the right direction in terms of internet freedom. But the general state of the web in Cuba is a far cry from the conditions required to effectively introduce a cryptocurrency as resource intensive as Bitcoin.

"A lot of people in Cuba have never actually been online—that's the big obstacle right now"

This infrastructural deficiency with regard to the internet is something that Garcia and Chartrand are painfully aware of, and they have adapted their tactics for introducing Bitcoin to Cuba accordingly.

"A lot of people in Cuba have never actually been online—that's the big obstacle right now," said Chartrand. "It's a long way off. We just want to plant the seed in peoples head. We're working for future generations."

***

Thus the process of introducing Bitcoin to Cuba remains largely a slow ideological permeation fostered by the club. As Chartrand told me, just trying to get people to warm up to Bitcoin and the CAC's political justification of the cryptocurrency has been struggle enough thus far.

"People respond with fear, as is logical within the society here. It's been very clandestine and the students were very fearful of [these ideas]," said Chartrand.

Now that tensions are beginning to ease between the United States and Cuba for the first time in half a century, spreading the good word of Bitcoin has begun to take on a peculiar urgency for the club. Promises to work toward ending the embargo have been made on both sides of the aisle, a development that is poised to push Cuba toward becoming truly connected to the global internet.

A state-run internet café in Havana. Photo: Daniel Oberhaus

Some progress has already been made in this direction: Companies like Netflix and AirBnb began offering their services to the island earlier this year. New Jersey-based IDT Corp became the first US telecom company to directly connect phone lines with Cuba in March. Google representatives paid the island an exploratory visit that same month. According to a US spokesperson from the State Department, Cuba had committed itself to having web access for 50 percent of its household by 2020, meaning that Bitcoin may become a viable option in the country before long.

This is the opinion of Ramon Quesada, the co-founder of avalBit, a Spanish association dedicated to promoting Bitcoin projects, who also serves as an advisor to Garcia on all things Bitcoin. Quesada noted Google's recent bid to bring free Wifi to New York City through its Sidewalk Labs as an example of how bringing the solid internet connectivity required by Bitcoin to new locations is becoming easier than ever.

"The technology is growing at an exponential rate," he told me. "Perhaps I am a dreamer, but I see it getting closer every day."

Despite these technological gains, the necessarily secretive nature of the CAC's activities has made displays of solidarity hard for its members, which according to Chartrand only reinforces the herd mentality of the Cuban populace and makes discussing ideas such as Bitcoin all the more difficult.

"The people who think differently exist, but they know they'll get beat up by the government's goons for thinking differently and so they don't speak out," Chartrand said. "Then people keep thinking that the great majority wants this system."

But he thinks the struggle, no matter the difficulties, will ultimately be worth it.

"I believe everyone has anarchy within themselves. It's within our nature. We all want freedom. We all long for it," he said. "I think people are good at heart, they just get scared when they hear 'anarchism' or 'anarcho-capitalism.' These are just names. Make it nameless, and just think of the wellbeing of the human race."