Diego Gutierrez - CEO, Koibanx

Diego GutierrezDiego Gutierrez is the CEO at Koibanx and President of Bitcoin Argentina NGO. He pioneered Web development in Argentina in 1995. He was a founding member of Clarín Digital (main local newspaper) and Patagon.com (financial institution sold to Banco Santander for 750MM) among others. He founded Koibanx, Xinergia, Cero a Cien and Restocoins. Since early 2012 he has been fully committed to grow and promote the Bitcoin ecosystem throughout Latin America.


Interview with Diego Gutierrez on Bitcoin Argentina

  Trace Mayer:  Welcome back to the podcast.  We have the legendary Diego Gutierrez.  He's in charge of the Bitcoin Foundation in Argentina.  And he's coordinating all of the communities throughout Latin America.  Welcome to the podcast, Diego.

Diego Gutierrez:  Thank you, Trace.  Thank you for having me here.

Trace Mayer:  Can you give us a little bit of background about yourself?  How you got into bitcoin?  Like, why do you find it so interesting and why do you want to spend all this time and effort and energy building the communities?

Diego Gutierrez:  Well, I come from the web from the early days of the web.  And I was always looking for technology that will change society in deep ways.  I found out in the web and now that's completely realized.  And for many years I was looking for something that I would vibrate in the same way I did back in the mid-90s, early ‘90s.

And in 2011, I got my first contact with bitcoin.  But the truth is I didn’t get it.  I mean, it was through a hacker friend of mine.  We were playing around.  And, then one year later Wences Casares, who is a friend of mine from my early days from the Internet, called me and told me, “Dieguito.”  That's how they call me, “You have to look at this because this is amazing.  It's going to change the world in many ways.”  You know, we did a small transaction.  He sent me 5,000 bitcoins.  And, of course, he asked them back right away.

And when I saw the fluidity, you know, of moving money through the bitcoin that’s when I said there's something to this.  And then I went to read the Erik Voorhees, a libertarian view on Bitcoin.  And then I really understood like the full, you know, potential.

Trace Mayer:  The full scope and ramification of this new information technology.

Diego Gutierrez:  Absolutely.  And after I was like 15 days reading non-stop about everything, not only bitcoin, but macroeconomics, because I don't have a financial or economics background.  So I have to teach myself about it.

Trace Mayer:  Well, if you want to learn the truth about money you have to learn it on your own.  Like, nobody's going to teach you about this.  People don't even know who invented the gold standard.  That's just basic monetary science fact.  And nobody knows who did that--

Diego Gutierrez:  Well.

Trace Mayer:  --I mean it’s absurd.

Diego Gutierrez:  It's funny you mention that because one of the first things I did is, read the history of money.  So, read, you know, how money evolved from the early beginnings, when paper money appeared, and the full history of money.  And then you have the social impact, the social implications of bitcoin. And, then you have the technology side which is for me much easier.  You know, with very disruptive technology, there is no way you can really understand it unless you start doing things.

So, right after that 15 days non-sleep reading about everything, I started trading bitcoin on local bitcoin with guys, because I wanted to know who was involved in Buenos Aires.  So I went to cafes and meet the bitcoiners from back then.  And it was very interesting because I had this guy that was going to retire and only had 25K for retirement.  So he was buying bitcoin and gold to improve his chances of retirement.

Trace Mayer:  Sure done better than Argentine pesos.

Diego Gutierrez:  Absolutely, absolutely.  So I started meeting people and I started, you know, mining a little, like, we all did, then trade in a little, then we said, “Okay.”  Wences did the first meet up in Buenos Aires.  And I told, Wences, hand me over the meetup, I will start moving these on a regular basis.  Then I met Rudolph Franco.

Trace Mayer:  Rodolfo was great.

Diego Gutierrez: Yeah.  He has such an energetic personality and he's always moving forward.  And, yeah, I mean, I don't know we were handling, I mean, trusting each other with a lot bitcoins wherever from the get-go.  That was amazing.  I mean, we develop a trust relationship right from the get-go.

So, we started doing the meetups.  The meetup started with maybe 25 people, then a 100 suddenly, because we have a lot of coverage from the press.  Then we started creating the foundation, then the first North American Bitcoin Conference, then the Bitcoin Center in Buenos Aires.  That is, building devoted to bitcoin Argentina companies and the community in full.

Trace Mayer:  Yeah.  Isn't it great?  We've got a building just for bitcoin Argentina in Buenos Aires?

Diego Gutierrez:  Yeah.

Trace Mayer:  I think BitPay’s got an office in there and how many people are actually working out of that office fulltime on bitcoin Argentina, not just BitPay but other companies too?

Diego Gutierrez:  I think we have around thirty people.

Trace Mayer:  Thirty people there?

Diego Gutierrez:  Yeah.  Working on bitcoin Argentina projects in Buenos Aires.

Trace Mayer:  Oh--

Diego Gutierrez:  That's amazing.

Trace Mayer:  --so much fun.

Diego Gutierrez:  And, yeah it's very exciting.  It's like, you know, all these we have done in 2 years.  And well you're talking now after the second North American Bitcoin Conference in Rio.  And these things keep growing, you know, in parallel to the Argentinian community development.  I started to contact and to set up meetups all Latin America.  Some of them I went there by myself.  I went to Chile to Montevideo started the first meetups, kind of, spreading the word, you know, bring in the torch.

Trace Mayer:  I know, I brought part of the torch down to Argentina.  And, I think, I came down to South America like 6 or 7 times, 3 or 4 times in 2011 and 2012.  So, yeah, I really like South America to be honest, like a lot of people up in North America never been here, they think it's the jungle.  Like, Uruguay that's the jungle, right?

Diego Gutierrez:  Yeah.

Trace Mayer:  They don't understand, like actual standard of living down here and a lot of places are higher than the U.S. like they had nicer cars, nicer food--

Diego Gutierrez:  Yeah.

Trace Mayer:  -- nicer things to do, better weather.

Diego Gutierrez:  And also I think that people are always very warm here, I mean.

Trace Mayer:  Yeah.

Diego Gutierrez:  You might notice that like the relationships, I mean, you develop friendships very, very fast and people are always very open.  So, I think the mixture of things is very nice.  Of course, we have very bad governments over the years.

Trace Mayer:  They cover the earth like a skin disease, right?

Diego Gutierrez:  Yeah.

Trace Mayer:  Just causing problems everywhere.

Diego Gutierrez:  Everywhere.  And also there are some problems with the mentality.  I think, the entrepreneur mentality needs to be developed much more in Latin America.

Trace Mayer:  In Latin America.

Diego Gutierrez:  I think so.

Trace Mayer:  Why do you think that is?  Is it just not in the culture?  Is the society very regimented kind of like Europe?  Because it seems like Chile is trying to really encourage entrepreneurship and tech startups particularly in Santiago?

Diego Gutierrez:  They're doing a big effort in that direction.  And they are having very good results, but that was like, that was an intentional effort.  It was not in there.  I mean, they were indeed bringing tech entrepreneurs from all over the world to start creating an entrepreneurial, you know --

Trace Mayer:  Hub and center.

Diego Gutierrez: -- hub and mindset and culture on the Chilean young entrepreneurs.  So I think that's the way to go in that sense.  And I'm looking forward to see the same thing replicating in other countries which I saw already in Mexico when I was onto the web lately.

Trace Mayer:  Medellin and Columbia.

Diego Gutierrez:  In Columbia as well.

Trace Mayer:  Panama.

Diego Gutierrez:  In Argentina, we have very good talent.  Maybe the economic environment or the regulatory environment is not good for entrepreneurship.  It chokes them.  It’s very difficult to open a company, to set up a company, to open a bank account so.

Trace Mayer:  So it chokes the entrepreneurs that are operating legally who want to be compliant with the reverent law.

Diego Gutierrez:  Exactly.

Trace Mayer:  But it just creates more profitability for the more creative entrepreneurs.

Diego Gutierrez:  Well, and I think, what it create is a very good training.  I mean, you would drop an Argentinean entrepreneur anywhere else in the world and they will thrive.  It's like, you know, they are so trained to look for ways to overcome.

Trace Mayer:  And make things work.

Diego Gutierrez:  Yes.

Trace Mayer:  Yeah.

Diego Gutierrez:  So that's why if you look at the main Internet companies the ones that have succeeded regionally they all come from Argentina entrepreneurs.

Trace Mayer:  Really?

Diego Gutierrez:  We have Globant, we have MercadoLibre and I'm not talking about bitcoin.  I'm talking about the Internet, the web companies.  And that's why, I mean, we have talent and we have a very good training like Green Beret training for entrepreneurs in Argentina.

Trace Mayer:  Yeah.  And the U.S. think that they have it tough, right? If you could make it work in Argentina, you can make it work anywhere.

Diego Gutierrez:  Absolutely, absolutely.

Trace Mayer:  Are we seeing that happen?  Venezuela just a massive, massive societal disaster out there.  Are they just leaving?  Are the entrepreneurs is leaving Venezuela?  Has it just gotten so tough that they're like you know what I'm done?

Diego Gutierrez:  Yes.

Trace Mayer:  Like I'm done with this.

Diego Gutierrez:  I think at a certain point all of them you give up.

Trace Mayer:  On the shrugs.

Diego Gutierrez:  Yeah.  On the dreams of, you know, making their startups work in their country.  I mean, they don't give up on the dreams but they move somewhere else to keep doing what they do.  And, in Argentina sometimes I have very good friends or entrepreneurs and some of them are more mature I mean they have already setup many companies.  So now they are also investors.  And they keep betting on the country because they have their heart there, but at certain point they are very discouraged.  I mean, it was like, they say, why I'm doing this?

Trace Mayer:  Why do I keep banging my head against the Argentinean wall?

Diego Gutierrez:  Yeah.

Trace Mayer:  I think this is not --

Diego Gutierrez:  Absolutely.

Trace Mayer:  -- a very bright idea.  I mean, well, we’re seeing it with Europe. France had 700,000 people immigrate away.  Spain, they're fleeing.  Italy, they're fleeing --

Diego Gutierrez:  Mm-Hm.

Trace Mayer:  --Venezuela, are a lot of them coming to South America?  Are they're coming to Argentina, Brazil, Chile?

Diego Gutierrez:  I've seen -- I can tell that we really have like a massive immigration but I found some people from the Netherlands, some people from France, I don't know where they are going.  I think Santiago, the Chile has been a big target.  I have seen -- Santiago used to be like a very provincial city, like, you know, no cosmopolitan element to it.

Trace Mayer:  And now it’s--

Diego Gutierrez:  And now it’s, yeah.

Trace Mayer:  Yeah.  Six million people, I mean, just any type of food you want, that massive new skyscrapers they built.

Diego Gutierrez:  So you noticed that as well.  I mean, it's like, now you see Santiago and it’s really becoming a very true cosmopolitan city.

Trace Mayer:  Uh-huh.

Diego Gutierrez:  And I think, you know, people from all over the world is coming and bringing that so.

Trace Mayer:  Yeah.  And Chile has got this shortage of labor.

Diego Gutierrez:  Yeah.

Trace Mayer:  You know, like 14 million people.  It's the size of California.  They just don't have enough people to get stuff done.  So that, I mean they need to import labor particularly highly skilled labor.

Diego Gutierrez:  Yes.  I was going to say, I think what is lacking is mostly qualified labor there.

Trace Mayer:  Yes.  And, oh man, Chile is just such a beautiful nice country and extremely safe.  I feel very safe in Chile.  More safe than I do in most of the U.S., to be honest.

Diego Gutierrez:  Oh, really?

Trace Mayer:  Yeah.  I feel safer in Chile than I do in Los Angeles or New York City or Chicago or Washington D.C.  Yeah.

Diego Gutierrez:  Well the thing is with huge cities, I mean, with cosmopolis -- like Buenos Aires is the same, I mean, the level of insecurity goes up when you have business --

Trace Mayer:  Yeah, anytime you get a big city.

Diego Gutierrez:  Yeah.

Trace Mayer:  Like Santiago is a big city.

Diego Gutierrez:  Yes.

Trace Mayer:  I just feel very safe there.  But once you get outside of Santiago and go to, you know, go down towards Puerto Natales or Concepcion or Patagonia area, Benito Moreno (ph), like I just feel very safe outside Rancagua like some of these other outer cities.

Diego Gutierrez: Yeah.

Trace Mayer:  It's just so very peaceful gorgeous almost like California flipped upside down.  You get the inland valley and the Andes and--

Diego Gutierrez:  All the countryside is amazing.  People in the countryside is very gentle, very kind, I mean, and the same thing happens in Argentina.

Trace Mayer:  Oh, yeah.

Diego Gutierrez:  If you went to the countryside.

Trace Mayer:  You get out to Salta la Linda.

Diego Gutierrez:  Yes, Salta la Linda.  Well, that's one of my favorites.  It’s an amazing place.  Salta, Jujuy --

Trace Mayer:  Yeah.

Diego Gutierrez:  -- very nice places to be.

Trace Mayer:  A lot of people just don't understand that there is a lot of opportunity in the world and you know, bitcoin is on the forefront of the technological innovation, the technological advances that we're making.  In the U.S., I don't know that it's really the environment that young bright entrepreneurs really want to be in.  I mean, should they come down to South America?  Should they go to Chile?

Diego Gutierrez:  I think they should at least experience a short stay, maybe a six months stay in any of the main cities of Latin America.  Maybe Buenos Aires, Chile, Sao Paulo, because I think that will give them--

Trace Mayer:  Perspective.

Diego Gutierrez:  -- true perspective of what is being an entrepreneur in a different environment.  And, you know, innovation comes from challenges.  I mean, you need to be challenged to innovate and to find workarounds for things and solutions so.

Trace Mayer:  Yeah.  But sometimes it just gets so bad like Venezuela that there's just literally no future.

Diego Gutierrez: Yeah.

Trace Mayer:  And you look at the United States, massive pensions overhanging all the municipalities.  Yet, 18 trillion dollars of federal debt, you've got regulation strangling the entrepreneurs.  I mean it's a big market, but when you look over the next 10, 20, 30 years like, where should these young people be building a life?  Where should they be taking the grand kids?

Diego Gutierrez:  Mm-Hm.

Trace Mayer:  South America might very well be a place for them to go.

Diego Gutierrez:  Well, I'm a little bit biased, but I think as I mentioned on the conference I think Latin America is the next big thing.

Trace Mayer:  Why do you think that is?

Diego Gutierrez:  Well, I think it's a combination of resources and then also a fresh mindset where things can thrive and a new culture can appear and be born.  And I think if we manage to use all these new technologies, these new disruptive technologies that are appearing, we can really build the Latin American continent as a new entity, which is not right now.  I mean, now Latin America’s a patchwork, not a block.

Trace Mayer:  And it's always kind of been a patchwork merely because of the map.  You've got the Andes that split it in half.  You’ve get the Amazon the splits in quarters.

Diego Gutierrez:  Mm-Hm.

Trace Mayer:  And you got Brazil the massive powerhouse, and you got Argentina which is the other big player.

Diego Gutierrez:  Mm-Hm.

Trace Mayer:  And other than that it's very kind of Balkanized.  It's--

Diego Gutierrez:  Yes, I agree.  But I think technology can --

Trace Mayer:  Bring it all together?

Diego Gutierrez:  Can bring all together.  I think, you know, we now have the means to connect them all and to build like --

Trace Mayer:  So we're over --

Diego Gutierrez:  -- regional economy.

Trace Mayer:  We're overcoming these previous geographical hindrances with the technology is --

Diego Gutierrez:  Yes.

Trace Mayer:  -- what you're saying to unify the overall market?

Diego Gutierrez:  Yes, to connect them.  I wouldn't say unify.  I think the differences will be kept, but if we connect them and make them work together you have, you know, all the resources you need are in Latin America.  You have oil, you have water, you have, you know--

Trace Mayer:  Food.

Diego Gutierrez:  --Food.

Trace Mayer:  Cows.

Diego Gutierrez:  Cows.

Trace Mayer:  Oh, my gosh, the steak here. Bife de lomo and boniatos.

Diego Gutierrez:  So, what else you want?

Trace Mayer:  What else do you need?

Diego Gutierrez:  What else do you need?

Trace Mayer:  Vinya.

Diego Gutierrez:  You have the vineyards as well.  And then, you know, we need to educate our young generations.  We need to plan the seed of entrepreneurship and then we have a beautiful place to be as you say.

Trace Mayer:  How was the educational seen down here?  I mean, are kids graduating with $75,000 of debt, like they do in the U.S?  Well, can you go to school down here pretty cheaply?  Kids who listen to this podcast they can think I'm going to do a study abroad in South America.

Diego Gutierrez:  Well, in Argentina in particular education is free through the university.  You can actually, you know, educate, do your full career for free.

Trace Mayer:  Wow.

Diego Gutierrez:  So I think that's why we have so much talent and that created like a lot of mobility of classes.

Trace Mayer:  Mm-Hm.

Diego Gutierrez:  So somebody in Argentina can be born very poor and become a doctor, a lawyer or whatever profession he chooses to be.  So that's a good thing, maybe the implementation of that is very inefficient.

Trace Mayer:  Like everything over there.  There are none of Germans in Argentina.

Diego Gutierrez:  Yeah.  And, you know, centralization brings a lot of inefficiency.

Trace Mayer:  Uh-huh.

Diego Gutierrez:  So that's a good thing.  I mean, education is the key to change any culture and any society.

Trace Mayer:  Well, education is the key to opportunity.

Diego Gutierrez:  Yeah.

Trace Mayer:  You know, whether it's a formal education or an informal one, where you're just learning and studying.  Like, I talked about on the panel here today bitcoin take so many branches of knowledge, you kind of have to understand all of them.  But if you got that and you're in bitcoin then you're now open up to other opportunities, like this is taking place on the last day of the second annual Latin American Bitcoin Conference, that was December 7th, I think.

Diego Gutierrez:  Mm-Hm.

Trace Mayer:  And MaidSafe had done their IPO almost a year ago at 2.1 cents U.S.  And today they're trading at about 6 cents U.S.

Diego Gutierrez:  Mm-Hm.

Trace Mayer:  And they've also tripled in terms of bitcoin.  The amount of bitcoin you would have bought your MaidSafe for.  But you know using an understanding in protecting your MaidSafe coins is even a step above bitcoin.  And so we're seeing that you almost have to have this cumulative effect of knowledge.  I mean, you have to understand all this stuff and then you can get bitcoin and once you get bitcoin, then you can do MaidSafe coin.

And there are just big returns happening all over the place and who knows where MaidSafe might end up going?  It seems to be getting some speculative fever and everybody loves to chase the rabbit, you know.  So I mean it might really get some legs and run.

We'll see by the time this podcast gets edited and published, but you hit on such an important key there that we have this opportunity to get education to get formal -- to get experience traveling all over the place to just see what's really going on and not just let life happen to us but to really kind of design what we want out of our life.

Diego Gutierrez:  Well, you took the worst out of my mouth because I don't see changes in society coming from confronting governments or going through the actual political system.  I see the true change, you know, coming from building new structures that have a different organization and those structures will come from these rapid technologies.

So there will be structures built, you know, surrounding these new technologies.  So that's part of the mission that pushed me.  You were asking me why I devote so much time to bitcoin and my non-for-profit activities and the truth is that I decided to not to come from the actual system but to help build a new system with different rules, using technology, using the entrepreneurial spirit and the values I vote for, you know, non-violence and --

Trace Mayer:  Yeah.

Diego Gutierrez:  -- the other stuff that I respect.

Trace Mayer: You know it's very interesting because with the strangling of the bitcoin industry in the U.S. and just the overall, overhang of legacy institutions.  It's really crushing the next generation in terms of their earning power.  I saw on CNN, they did a poll or study or something and people 34 years and younger are earning 20% less than they did 10 years ago.

So I mean, lifestyle's just getting crushed in the U.S. absolutely crushed and we're seeing that filter through in terms of marriage rates and birth rates and stuff like that.  And then I look at some of my bitcoin entrepreneur friends and they've just gotten up and moved like they've gone to Latin America, they’ve gone to Panama, they've gone to Columbia, they’ve gone Chile, they’ve gone to Uruguay and you know, what they've done when they've left is the burden they were carrying now falls more squarely on my shoulders.  So is even heavier, which is even more incentive for me to just leave.

And so it really makes me wonder like what is the future for the U.S. because people renouncing, you know, U.S. citizenship are at all time highs.  It used to be kind of a place of opportunity and now people are paying thousands of dollars to get rid of their U.S. citizenship.  It used to cost a $100 to renounce a U.S. citizenship, then they raised the fee to $450 and they just raise it again to $2,350.  That doesn't have anything to do with your tax returns or anything.  That's just for them to process the form.  They charge you $2,350 bucks to get rid of this blue piece of paper.

Diego Gutierrez:  Of course they're using that to create a negative incentive to do so I imagine, you know.

Trace Mayer:  If anything it's just more of a warning sign then, “Hey, get out while you can.  They might raise the cost to $500,000.”  Like, they like their slaves.  You know, you're taxed on worldwide income regardless of where you live.

Diego Gutierrez:  Year.

Trace Mayer:  You could have never set foot ever in the United States and still be liable for U.S. income taxes.

Diego Gutierrez:  Mm-Hm.

Trace Mayer:  Because one of your grandparents could have been a U.S. citizen somehow, they could have immigrated somewhere, had a child and then that person could have gotten married and had you, and you're going to be a U.S. person because your parent is a U.S. person because your grandparent was a U.S. citizen 70 years ago.

Diego Gutierrez:  And in that situation.

Trace Mayer:  I mean, it’s just, it’s really kind of absurd.

Diego Gutierrez:  And in that situation even if you go to Uruguay to live you, you still would have to pay taxes to the U.S.

Trace Mayer:  You would still be liable for U.S. taxes.

Diego Gutierrez:  Yeah.

Trace Mayer:  And even worse you wouldn't be able to get bank accounts in Uruguay because of FATCA.  They're no longer taking U.S.--

Diego Gutierrez:  Yeah.

Trace Mayer:  --customers.  So you can't pay your electricity bill.  The albatross of U.S. citizenship is really getting pretty heavy.  And, yet, South America offers, you know, a lot of opportunity here on the other side of the coin.

Diego Gutierrez:  Absolutely.  I think what you are mentioning is, for me part of that all structure that, I mean, for me is part of the process is obsolete.  We still have it.  But in the meantime, I think, the best we can do is build on the side, build something, build something more fair with these new wonderful technologies we have in the last 20 years, which I think we are very fortunate to have.  I mean, how many humans in history have seen not 1 or 2 revolutions, but multiple revolutions at once.  I mean we went --

Trace Mayer:  Yeah.  We just have so much change as we move into this information age.  What effect are you seeing as you build these communities throughout Latin America?  Your focused out of Argentina, but you obviously been up to Uruguay and Brazil, Columbia, Chile, Peru, Mexico.

Diego Gutierrez:  Mm-Hm.

Trace Mayer:  Like what effect are we seeing from kind of uniting all these communities?

Diego Gutierrez:  Well, the trust bonds that are being built are creating new businesses as well.  So that's one part, the business thing.  So businesses in Argentina started to do partnerships with business in Mexico.  And that happened because of the last conference we made last year.  And then Chilean companies have started to talk to Peruvian companies and to Mexican companies.

So we see that all these bonding start generating business opportunities and new business are being born and then on the human level.  Also, I think, we are creating like trust relationships that enable us to do something like what we just did.  I mean, we co-organized this Latin American Bitcoin Conference with the Brazilian Bitcoin Foundation.

And of course, as we have experience and the knowledge we put most of the effort by the end they were heavily involved and the final feeling is that we made these together.  So, now we have a like a trust bond that is very, very strong.  And we can build on top of that because at the end, you know, you don't do business just with money.  Business --

Trace Mayer:  Business with people.

Diego Gutierrez:  -- with people.

Trace Mayer:  Yeah.

Diego Gutierrez:  So business and anything you can do, because money is a reflection of human work or energy in any form.  So, at the end, I think we are creating these human network that will enable us to do whatever things we want to do in the region and then to overcome the challenges that are ahead of us.

Trace Mayer:  Well on that note, thank you so much for getting all of this organized.  We’ve had Diego Gutierrez from the Bitcoin Foundation in Argentina.  Thanks so much for being on the podcast.

Diego Gutierrez:  Thank you very much for inviting me, Trace.

Written by Diego Gutierrez on January 16, 2015.