Puerto Maldonado in Peru’s Madre de Dios Province looks like a frontier town. Dusty streets, crumbling buildings, new construction, and the hustle and bustle of the people who want to make it. Tourists are taken by bus through the city to the many ecotourism companies that bring people from all over the world to experience the Amazon. Puerto Maldonado is located on the bank of the Tambopata River, a tributary of the Amazon River. The Tambopata River gained some notoriety in ecotourism circles when mud-licking parrots appeared on the cover of the January 1994 issue of National Geographic. The industry has flourished since then.
Usually, tourists are quickly transferred to boats in Tambopata and make their way to special lodges for ecotourism operations. Some are partnerships with local Aboriginal groups, while others are entirely private riverside lands. Walking through the streets of Puerto Maldonado, you’ll see the streets with that borderline feeling…and you’ll find plenty of gold buyers and businesses associated with them. The gold trade is booming and it’s all out of the worst.
This is not gold trading for publicly listed mining companies. This is not gold trading for responsible private companies. Presumably this is not Peter Schiff’s gold trade. This is the unofficial and illegal gold trade. This is a trade that responds to price. This is a trade that abuses the destitute and empowers gangs and criminal organizations. This is the trade of the underworld. This city of less than 100,000 residents is very much a tale of two opposing worlds. Ecotourism is based on a healthy ecosystem and the gold trade that completely eradicates the forest.
Interestingly, the boom in ecotourism has led to increased protection upstream of Puerto Maldonado through ecotourism lodges that set aside land on private reserves and manage concessions on indigenous lands. This has created a buffer zone between Tambopata National Reserve and Bhawaja Sunini National Park. I’ve been visiting this part of the Amazon every year for over a decade, and the changes are evident in the increased wildlife viewing along the way. To go deeper into the jungle, one needs to continue upstream about six hours from Puerto Maldonado. There is a government checkpoint where the Malinovsky River flows into Tambopata.
“Crossroads” talks about two very different realities in this part of the Amazon. Following the Tambopata River from Malinowski Checkpoint allows you to experience some of the most pristine and vibrant parts of the Amazon basin. You enter one of the most biologically diverse places on the planet; Diversity speaks for itself. The plant diversity is so intense that it is difficult to understand. The dynamic of the river is amazing.
On the one hand, it is destructive, because it swallows up one of the banks of the river where old trees are cut down as the river’s edge decays in the fast-moving water. The other bank is built, where the flow slows down as silt and sand move from the nearby Andes. Silt brought from the Andes also means that these tributaries to the Amazon brought gold dust from the mountains. The highlands of Puno can be seen from this part of the Amazon, and on a clear day, the snow-capped peaks contrast with the green texture of the jungle. It is truly a scenic landscape and a sensory experience.
With the construction of new banks, life immediately colonizes. The ecological succession begins with grasses and small, fast-growing plants followed by lighter tree species. Over time, the diversity increases. As you travel up the river, you constantly see the forest in various stages of succession on one bank and a diverse ancient forest on the other. The dynamism is clear. The river will swell as islands form and oxbow lakes form as the river changes course. Lakes live until they turn into swamps and then forests. This dynamic means that there are many habitats that make up the diversity that exists.
Tourists come to experience the depths of the nature of the “lungs of the earth”. They come to see different types of parrots and macaws that gather to eat mud at licking mud. They hope to spot tigers and see a harpy eagle. They are often shocked to hear red monkeys howl. They are in awe of the agility of spider monkeys. They are paralyzed in fear when they have a group of 40 white-lipped peccaries racing behind them while they are stuck in thigh-high mud. It’s not for everyone but visiting this part of the Amazon is special. These experiences, in addition to the ecological performance of the forest, depend on a healthy primeval forest where the river flow does its job. But the past flow of the river ensured that a large area of this forest grew in silt containing gold dust.
If you take another crossroads at the Malinovsky Checkpoint, then a completely different reality awaits you. If you follow the Malinovsky River, you will eventually reach the unofficial and illegal mining operations that devastated this part of the Amazon. The road that connects the Pacific and Atlantic Oceans and connects Peru to Brazil via the Amazon, Interoceanica Sur, runs parallel to Malinowski. It was along this highway that miners originally started their operations. Those operations then expanded south towards the Malinowski River. This is not the only area of devastation. A quick search in Google Maps or Google Earth in Interoceanica Sur near Malinowski and you will be able to see the gold mining results for yourself (use these coordinates: -12.8657205, -69.9867795). Remember that this photo was taken in the past; It’s worse now. It’s hard to overstate the resulting inferno. Jungle to inert dirt. It is the complete extermination of the forest. It is the complete destruction of Possibility from the forest. It turns virgin forests into pools of water polluted with heavy minerals, sand dunes and silt. There is no possibility of life. Perhaps oddly enough, satellite images reveal beauty in the multi-colored puddles among the remaining sand. Even complete destruction can have its beauty.
Mercury is used to combine gold dust. When it rains, some of the mercury makes its way into rivers where it bioaccumulates and then biomagnifies in the food chain. It is estimated that more than 3,000 tons of mercury has made its way into the Amazon River in Peru in the past two decades. A 2013 study showed that 95% of people in rural areas, mostly from the indigenous communities of Madre de Dios, had elevated levels of mercury above what is considered healthy. Dependence on fishing is a likely reason, with studies showing that most types of fish will contain elevated levels of mercury. Even in Puerto Maldonado, three out of four citizens show elevated levels of mercury with three times the recommended upper limit.
Heavy metal poisoning is not the only human loss to the illegal gold trade. The gold fields are ripe with sex trafficking, child rape, and the exploitation of the rural poor. For more details about the environmental cost and the human cost, it is worth reading Thomas Moneta’s article at The New York Times“Peru Struggles to Eject Illicit Gold Mining and Save Precious Lands.”
So how does Bitcoin fix this? Illegal gold responds to the price. Any erosion of the monetary premium to gold would have an immediate impact on the destruction of the Amazon region. If the price of gold rises, the devastation will intensify. If the price of gold falls because bitcoin consumes the cash premium to gold due to investors perceiving it as improved money and a store of value, then illegal gold miners will reduce operations. These operators do not produce gold at a loss. The Peruvian government has shown that it is unable – or, more accurately, unwilling – to solve this problem. Fortunately, for the first time ever, there is a market solution to the problem of illegal gold mining. This solution is Bitcoin.
This is a guest post by Jill Buck. The opinions expressed are their own and do not necessarily reflect the opinions of BTC Inc. or Bitcoin Magazine.