The Underground Caribbean Bitcoin World: Interview With Shadow Man
By: Pirate Beachbum
Tags: Caribbean, Crypto, Caribbean Bitcoin World, Entrepreneurship, Bitcoin

What area of the world are you from?

I am from an island in the Caribbean.

Why do you wish to stay anonymous?

I value my privacy; I do business with traders in Venezuela and that’s an automatic red flag to regulators in most countries.

Why are you talking to me?

There is a lot of misinformation about Bitcoin, and so if the information that I’m sharing here can be of educational value, I’m all for it. Also, I would like to debunk the ‘nocoiner’ claim that Bitcoin can’t be used as real money, by providing examples of how I use Bitcoin in my daily life.

What is your technical background, education or formal training?

I wouldn’t say I have a technical background, but I can say that I am more tech savvy than most normies, (thank God; good OPSEC is tough.) I attended a university in the US, was studying business, but never graduated.

When did you become interested in Bitcoin and crypto?

I first heard about Bitcoin in 2011, and like most people it was a friend who was showing me this nifty way to buy drugs online. I found it cool but didn’t fully get it, and so I dismissed it.

It had resurfaced in mid 2013 for me, and I’ve been in love ever since.

When did you buy your first Bitcoin?

2013, on mtGox.

What was it about Bitcoin that pulled you in?

Initially it was the price action. But then I started binging on Andreas Antonopolous videos on YouTube. He used to be on the Bitcoin group hangouts in the early episodes, and he had mentioned Austrian Economics. And so that led me to read literary works by Mises, Rothbard, etc. I’ve had a disdain for the state apparatus for a long time, but never quite realized how economics is at the heart of it all. Also, the cypherpunk writings at the Nakamoto Institute were very informative and extremely fun to read.

What is your biggest Bitcoin fail?

I’d say my biggest crypto fail was a recent fuck-up I had with one of my Monero wallets (mymonero.com.) I believe I fell victim to a phishing redirect attack. Lost quite a big chunk of Monero, but that forced me to learn how to generate secure paper wallets. You can never be too careful in this space; only the paranoid survive.

What is your single favorite Bitcoin moment?

The lightning network being deployed on mainnet. According to many people in the space, this is a game changer that will enable things we can’t even imagine yet.

Who are a few Bitcoiners who have influenced you the most?

In the early days it was Andreas, and MadBitcoins’ The Bitcoin Group panel. Also, one particular talk I saw on YouTube by Erik Voorhees titled “The role of Bitcoin as money.” I kinda lost some respect for Voorhees after his short-sighted public support for Segwit2x, but I’m still grateful for his early evangelism.

Nowadays some of the Bitcoiners I look up to are, in no particular order: Jimmy Song, Nick Szabo, Adam Back, Eric Lombrozo, Andreas, the meat eater maximalist (Rochard, Saifedean, Goldstein), Francis Pouliot, Kyle Torpey, Andrew DeSantis, Vortex, etc.

What do you see in Bitcoin that others might not living in Caribbean?

The ability to help illegal immigrants send money home to their families. Especially to countries in great turmoil like Venezuela.

What is the Bitcoin world like in your part of the Caribbean?

Very niche. There is a regular meetup here, but nothing anywhere near mainstream adoption.

How many people do you know who hold Bitcoin on your island or close to you?

I got some of my family members and friends into it. Also, the few people that attend the Bitcoin meetup here.

How do most people buy their Bitcoin where you live?

Through online exchanges, I believe.

Is there any mining happening on your island?

There are rumors but nothing I can confirm.

Being in an old Caribbean city talking Bitcoin with Shadow Man made me realize how small the Bitcoin world really is. There are many good people working everyday to help build the economy.

What is the regulation on Bitcoin like on your island?

While there has been a warning issued by central banks about scams like Onecoin and Bitconnect, there has been no official statement released mentioning Bitcoin.

What do you think about countries cracking down on Bitcoin?

These crackdowns are very short-sighted and are based in irrational fear. The innovation and economic growth will only move elsewhere, where regulation is more conducive to technological progress. We saw a clear example of this of how btc businesses in NY reacted to the Bitlicense. In the book, ‘The Sovereign Individual,’ the authors predict countries that want economic growth will start treating citizens more like customers rather than cattle, so as to attract entrepreneurs. The book was written in 1999 and is extremely prescient, they even predict the rise of Bitcoin, or as they call it ‘cybercash.’ I can’t recommend it enough.

Explain a little bit about how your business started?

I came to a realization a couple of years ago that LocalBitcoins could effectively be used to facilitate remittances.

How has it grown over the last few years?

Before, I used to deal with Venezuelan immigrants who wanted to send money home. They would give me cash and I would have the money sent to their local Venezuelan bank account using localbitcoins. I would rather have my customers receive USD, but unfortunately the only way to get money to their bank accounts would be in the local hyperinflationary currency, the Venezuelan Bolívar. I would do trades as small as the equivalent of $20 usd. Now I deal with retail store owners in town, who have access to a Venezuelan bank account, so they buy larger quantities of bolívares from me, and then in turn sell those bolívares to the Venezuelan immigrants who live on my island.

This might all sound confusing but it’s basically arbitrage trading through the informal remittance market.

What type of services do you currently offer?

I’m actually doing less of that and getting more into enterprise level crypto-mining.

Have you heard of people getting arrested?

Not here on my island, no. But I hear about miners getting busted in Venezuela sometimes.

Do you do most of your business on Localbitcoins.com or p2p?

I use LocalBitcoins a lot, but I also deal with certain traders directly, so p2p as well. These are traders that I initially started doing business with on localbitcoins, but then developed a comfortable level of trust to the point where the valuable escrow feature of localbitcoins was no longer needed.

Explain what LocalBitcoins is and how it works?

Localbitcoins.com is an online, peer-to-peer Bitcoin exchange, that allows you to buy and sell Bitcoin with individuals all over the world. The killer feature is the escrow service provided by the platform.

What are some of the positives and negatives about using LocalBitcoins versus straight p2p?

Pros:

1. Awesome escrow feature

2. Cool way to connect with traders all over the world.

3. Good track record in terms of security.

Cons:

1. LocalBitcoins takes a cut off of every trade, 1% I believe.

2. Scammers. Some scammers build up their reputation by doing fair trades with good customer feedback and then use their reputation as leverage to try to convince noobs to trade outside of localBitcoins.com.

What tips do you have for people who are interested in using LocalBitcoins.

Always read extended feedback of a user before initiating a trade.

I have never used LocalBitcoins personally, but I have many friends who have.

What do you think about the new change with LocalBitcoins requireming AML/KYC?

The change has not really affected my usage. These kind of changes are however likely to push me and many other traders to look to decentralized alternatives such as Bisq.

Will you continue to use LocalBitcoins?

For the foreseeable future, yes.

What other sites are good options to use besides LocalBitcoins.com for better privacy?

LocalBitcoins is the only one I can think of. There are others like Paxful, but I’ve never used them.

What are a few easy red flags to spot a scammer on these sites?

Next to a LocalBitcoins username, you can see number of trades as well as a percentage. The percentage refers to feedback score. The obvious red flag is if this percentage score is not at 100%. That’s not to say those with 100% score are to be blindly trusted. The user score system on lbc is a bit flawed imo and can be better. The main point here is dont fall for tricks by traders to lure you into doing business outside of the LBC platform and ALWAYS CHECK EXTENDED FEEDBACK BEFORE DECIDING TO TRADE WITH ANYONE!

What country do you do the most arbitrage with?

Venezuela and India

What is it like dealing with the Bolivar and Venezuelan Banks.

It feels fucked up dealing with a currency that gets more and more worthless by the hour, literally. It’s one of the reasons I don’t trade much with Venezuela anymore.

Getting scammed can happen to anyone. You must pay attention at all times. Never believe you are immune.

Tell us a horror story you have encountered?

I got scammed in the early days by a Venezuelan trader. We did a few trades together on localbitcoins and then he convinced me to do a trade outside of localbitcoins. As soon as I sent him the btc, he disappeared. The only thing I could do was leave negative feedback on his localbitcoins profile.

What’s it like dealing with India versus Venezuela?

It’s pretty much the same. The only main difference is that the Venezuelan currency is hyperinflationary, which means the value is in constant freefall. The Indian Rupee is relatively more stable.

How do you feel about decentralized exchanges like hodlhodl and bisque?

I am very excited about the development of these kinds of exchanges. I think the model is already workable, there just needs to be more liquidity. Something that spurs a network effect, which is inevitable imo.

What security tips do you suggest for storing your crypto?

Get a Trezor.

What are your thoughts on alt-coins?

I hold some to speculate, but my bag is mainly BTC.