Name: Rise and fall of the house of Bitcoin
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Rise and fall of the house of Bitcoin

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By andShare this storysmall alleyway just a few blocks from the bustling Avenida Santa Fe, Pasaje Voltaire gives the impression that it’s keeping a secret. It carries the aura of the bygone era when bohemian artists and intellectuals dominated Palermo, long before it became one of the most fashionable barrios in Buenos Aires. A block over are bars where it’s rare to hear Spanish and common to overpay for drinks. This 100-meter long passageway, however, offers no such attractions. A tourist wouldn’t think twice about walking past it, nor would a local who lives in the area. With its cobblestones and squat houses, Pasaje Voltaire is a bastion of residential silence within the lively neighborhood. It’s completely inconspicuous, save for a two-story edifice dotted with clouded windows that offer no glimpses into what’s happening inside.Until recently, the building was home to a rotating cast of recent engineering graduates. Here, in Jorge Luis Borges’s former neighborhood, they chased their own kind of dream, one they believed would change the world: cryptocurrency. When they weren’t founding companies, they hosted all-night hackathons, threw elaborate parties, and welcomed friends and allies for deep talks on the nature of the social contract and the inherent value of legal tender.On the right-hand side of the façade is the only remaining trace of their presence. It’s a campy illustration of a samurai Darth Vader with an owl on his shoulder. The signature below it reads “Dilucious,” the nom de plume of an artist who used to live in the building. His real name is Agustín, and he’s one of the few people willing to speak to the media about his years in the building, which is known as Voltaire House.In 2015, Agustín took a sabbatical from work with the aim of reinventing himself as an artist. He had studied engineering at the Buenos Aires Institute of Technology, or ITBA, and was making good money as a developer for an Argentine telecommunications company, but he felt trapped in corporate culture. As luck would have it, he heard about some ITBA alums who had transformed a building into a “crazy hacker haven” for cryptocurrency projects. The founders were on the same spiritual journey as Agustín. After a meeting and a short deliberation, the members of Voltaire House invited Agustín to be their artist-in-residence.This was before “Bitcoin” became a familiar term and crypto bros began to be stereotyped as overnight millionaires. For the coder community of Argentina at that time, cryptocurrency meant something more serious — a way to create new forms of social interaction and to upend broken economic and political systems. Ever since a coder calling himself Satoshi introduced Bitcoin in a 2008 white paper, the prospect of a decentralized, peer-to-peer monetary system had become synonymous with a potential new world: one controlled not by banks or governmental institutions but by anyone with access to a computer.This vision was particularly potent in Argentina. The hackers of Voltaire House had grown up amid the turbulence of the 1990s and 2000s — an era of the country’s history defined by corrupt political administration and economic collapse, precipitated by the central government. After the country defaulted on more than $100 billion of debt in 2001, the Argentine peso began a two-decade devaluation, going from 1:1 with the U.S. dollar to 85:1 today. Argentines grew accustomed to their paychecks being devalued the instant the money landed in their bank accounts. There was no access to a stable alternative, either, as U.S. dollars were either banned or severely restricted. Many resorted to buying black-market U.S. dollars, known as “blue dollars,” which often sold for more than twice the official exchange rate.Cryptocurrency offered a means of circumventing the volatility of the local economy, and the members of Voltaire House were early adopters. They believed that Bitcoin would enable them to build a future that didn’t depend on decaying institutions. Two decades later, with the value of the peso plummeting and Bitcoin trading in Argentina soaring to historic highs, this kind of thinking has emerged again. Blockchain evangelists have long touted its revolutionary power to disrupt global economic models and supplant central authorities. While this seems unlikely in countries with stable monetary institutions like the United States, Argentina is in certain respects an ideal test case. Ultimately, however, Voltaire House offered a very different lesson about the cryptocurrency’s transformative power.&nbsp;The mainstays of Voltaire House — about 15 people, mostly men who knew one another from ITBA — believed transparency and decentralization could fix their broken country. In pursuit of this, over a roughly three-year period, they hosted daily lunches, fell into heated discussions about theoretical physics and social science, and once invited a hacker who had broken into the servers of the Buenos Aires subway system to come meet with them. All conversations inevitably came back to basic questions of economics and society: What is money? And who should control it? They didn’t just talk: They built what would become some of Argentina’s most successful blockchain companies, including Decentraland, Muun, and OpenZeppelin, which facilitated the exchange of tens of millions of real-world dollars.“The house itself was a project,” said Sacha Lifszyc, a visitor during those years. For the few young programmers in Buenos Aires lucky enough to be extended an invitation, going to Voltaire House was like entering a refuge where everything contained the potential for innovation. From the outset, its members were famously secretive: There’s scarcely any digital footprint of the talks and parties they hosted, and Voltaire’s events and public discussions were promoted boca en boca. Aside from a , Voltaire House avoided media coverage. All of its key members dodged interview requests for this story, making it clear through intermediaries that they weren’t interested, and strongly discouraged others from speaking. “This ethos of being anonymous really resonates with them,” said Agustín Ferreira, a coder who was friends with many in the house. “Like being Satoshi, you know?”Manuel Aráoz founded Voltaire House in 2014 after graduating from ITBA with a degree in computer science and joining a U.S.-based crypto wallet, BitPay, as one of its first employees. Thanks to the success of the e-commerce giant MercadoLibre, Argentina had acquired a reputation as a hotbed for highly trained software developers. Domestic and foreign tech companies employed of coders in the country, four or five times the national minimum wage. (Agustín described coding as the second-most lucrative job in the country after football.) Yet while computer engineering was an acceptable career, cryptocurrency was still new, as were most of the companies working with it. When Aráoz joined BitPay, it had about $2.5 million in funding. Today, it has raised a total of $72.5 million.To build out BitPay’s development team in Argentina, Aráoz leased the building that would become Voltaire. The house soon became a creative laboratory for him and his friends. It hosted the regular crew of about 15 coders, with others streaming in and out. House members would congregate around a big table framed by a giant statue of the letter “V” or gather in the little back garden for cookouts. During these years, members were constantly tinkering. A visitor recalled how they had outfitted a small room with VR sensors and once tried to install a system that would play customized music for each person who entered the house.This early experimentation would lead to Voltaire House’s highest-profile creation: Decentraland, a VR metaverse powered by the Ethereum blockchain with its own crypto token. To put it in layman’s terms, Decentraland was a virtual world with a limited number of properties that people could buy through a proprietary currency and sell for real money. It was a petri dish for the ideals of democracy and decentralization they championed, built on the premise that a virtual world controlled by its own “citizens” could more effectively govern itself — and offer more stable investment opportunities — than a real one governed by elites. Decentraland’s founders stipulated that it would be overseen by a “Decentralized Autonomous Organization,” a group of Decentraland residents who would vote on management decisions.&nbsp;These were the heady days of cryptocurrency, when the possibilities for expansion seemed infinite. Between February and December of 2017 alone, the value of a single Bitcoin jumped from under $1,000 to almost $20,000, and the members of Voltaire House did not want to miss out on the opportunity. In August of that year, Decentraland hosted what is known as an initial coin offering, in which they started publicly selling their token. They $24 million in 35 seconds, before shutting down the ICO. It’s unclear whether the creators ever cashed out, but some users did: One later told that he spent $60,000 on plots in Decentraland’s first city, which was&nbsp;eventually worth $350,000.Decentraland is one of about a half-dozen products to achieve international recognition whose origins can be traced to Voltaire, despite the house’s low profile. Another of Aráoz’s contributions to the world of crypto was a service called , a decentralized online notary, which made a splash as the first nonfinancial application of blockchain. In 2014, leading crypto-news outlet Coindesk projected that Proof of Existence could “revolutionize intellectual property rights,” and Voltaire House member Esteban Ordano went on the technology underlying it for his own company, , which, in 2017, a $10 million initial coin offering. Later, Aráoz and another member of the house, Demian Brener, jointly created , an internationally lauded smart contract system built on blockchain that is now used by Coinbase, , and other companies around the world. All of these startups still exist today, though they never hit the atmospheric heights that once seemed within reach.&nbsp;Nor has Aráoz. After launching OpenZeppelin, he served as its chief technology officer for four years, before stepping down in 2020. But Aráoz refuses to talk about that time, or his years in the crypto community, at all. The 31-year-old’s image on social media, at least, is that of an exile from the universe he helped build. When he does engage with his former life, he’s usually ranting in English against the economy or encouraging his followers to hoard their Bitcoins. “Democracy expired, let’s get on with the next thing,” he recently tweeted. His main focus seems to be his EDM band, Alpaca Brothers.Eventually, the companies in Voltaire House grew too large, and members began moving out. Several formed their own hacker houses; one is even named Voltaire Castle. The exact details are difficult to pinpoint, but eventually the lease for the house on Pasaje Voltaire lapsed, and everybody dispersed. One former member now teaches a crypto course at ITBA for future programmers; two still serve as advisers to Decentraland, although the project has languished without centralized leadership. Today, one of its tokens is worth about 16 cents (half of its all-time high); when we inquired about the day’s visitor numbers on a Monday in August, it had only 800.The story of blockchain promising the world and delivering far less is not a new one, nor is it unique to Argentina. Despite its lofty rhetoric, the main feat that cryptocurrency has accomplished over the past decade is to make a select few exorbitantly rich. Take Bitcoin, for example. While there are roughly 30 million people with Bitcoin addresses, 2.43% of those people almost 95% of the currency’s total value. Nor has crypto truly penetrated popular culture. Parts of its baroque vocabulary have entered the backrooms of banks and multilateral organizations, but it remains inaccessible to the vast majority of people it was intended to serve.James O’Beirne is a U.S.-based engineer who works on , an open-source project that maintains the software underlying Bitcoin. To him, Bitcoin is a promising way for people to shield their wealth from the volatility of traditional financial markets. Even so, he views many blockchain-based projects as “overcomplicated solutions in search of a problem.” The community is full of “decentralize-everything people,” he noted, who assume that the physical world should be replicated on the blockchain. This, he says, is a recipe for failure. In the case of Voltaire House, the problem of being abstruse was exacerbated by its members’ unwillingness to engage with — or even explain — their technology to the outside world.Additionally, Candelaria Botto, an economist at the University of Buenos Aires, observed that, while Argentina might seem ideal for disruption, there are basic obstacles to crypto’s truly taking hold there. Four out of 10 households do not have access to the internet. The 2001 financial crisis is fresh in people’s minds, and because the Argentine economy is so informal, many people still rely on cash. Moreover, Botto noted that, with access limited to already-wealthy communities, cryptocurrency is likely to contribute to inequality. In this sense, it’s comparable to social media platforms: “Perhaps, at the beginning, they were supposed to connect people,” she reflected, “but then companies just started collecting our data for their own profit.”“If this is the best of all possible worlds, what then are the others?” wondered Voltaire in his Enlightenment-era satire Candide. For centuries, aspiring visionaries have tried to build better worlds though cooperative textile mills or hippie communes or, more recently, crypto havens. One sticking point has always seemed to be inclusivity: the matter of how far a community’s boundaries can be expanded to bring in those outside of it, and whether they can still see what’s outside. A utopian collective could look at the world it created and believe it to be universal, without realizing that it might be more exclusive than the one it escaped.While Voltaire House and the products that came out of it didn’t transform Argentina, they did make an impact. Former members like Aráoz are legendary in the coding world, and blockchain has spread through the Buenos Aires engineering community. “Voltaire was an informal validation of crypto in Argentina,” Agustín said. “Thanks to these guys taking it seriously, many other people took it seriously — and felt challenged as well, because these guys weren’t easy to reach.” Yet Aráoz’s social media presence suggests that he has failed to understand what went wrong. The day after the U.S. election, he tweeted, “Democracy is dead, buy crypto,” without further clarification. In their obsession with complexity and secrecy at the expense of mainstream adoption, members of Voltaire House unwittingly replicated the central paradox of crypto itself. After all, how can a technology revolutionize society if its creators won’t explain what it is?Sacha Lifszyc remembers visiting Voltaire House once and seeing an early version of Decentraland. He thought it was cool but didn’t understand the point. “It’s definitely not for normal people,” he told Rest of World. “We have to first deal with the problems we have in our own reality.”Read more stories

By andShare this storysmall alleyway just a few blocks from the bustling Avenida Santa Fe, Pasaje Voltaire gives the impression that it’s keeping a secret. It carries the aura of the bygone era when bohemian artists and intellectuals dominated Palermo, long before it became one of the most fashionable barrios in Buenos Aires. A block over are bars where it’s rare to hear Spanish and common to overpay for drinks. This 100-meter long passageway, however, offers no such attractions. A tourist wouldn’t think twice about walking past it, nor would a local who lives in the area. With its...

Rise and fall of the house of Bitcoin

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