Crypto is winning, and Bitcoin diehards are furious about it
On the last day of the Bitcoin 2022 conference in Miami Beach, comedian Donnell Rawlings starts his routine by noting there are a lot of white people in the audience and then asks if we were involved in storming the Capitol on January 6th, 2021. He’s just warming up. “I’m at a Bitcoin convention, and I don’t even know what the fuck a Bitcoin is,” Rawlings says. “I don’t know nothing about crypto, but I know some of the bangingest parties I’ve been to is some crypto parties.”
He goes on: “I know I’m fucked because they paid me in crypto, and I don’t even know how to cash out.” Crypto has to be popular because he can count the number of people sitting in his set, and he knows “I should not be getting the amount of money I am getting paid tonight.”
Rawlings has said “crypto” a lot, and it’s making the crowd restless. After a few more repetitions of the word “crypto,” several people in the crowd begin yelling “Bitcoin.” Crypto, after all, is the blanket term for all digital, blockchain-based assets. That includes everything from Ethereum, the popular blockchain used for decentralized apps and NFTs, to shitcoins, parlance for all non-Bitcoin tokens.
“Listen, we don’t want no crypto-Bitcoin beef up in here, all right?” Rawlings says. The crowd laughs. But I keep thinking about this after the conference is over. To mainstream Bitcoin, the libertarian and anti-state politics associated with it may get shaved off — much as Eternal September changed the culture of the web itself.
Welcome to Bitcoin 2022. Cryptocurrency is the most mainstream it’s ever been, but somehow at this conference, the tone is primarily aggrieved.
Money is a mass delusion, and so people’s confidence in it matters. Economists have stuff like “consumer confidence indices,” which are not necessary for the study of real things. A tree’s existence, for example, does not depend on confidence.
Bitcoin is a pure distillation of what John Maynard Keynes called finance’s “animal spirits.” Anyone who’s transacting in Bitcoin has joined a chosen community of fellow believers — Bitcoin is backed by, in practical terms, nothing. The US dollar may not be pegged to gold anymore, but the US government still levies taxes in dollars, which it spends on a very real-world military. Since Bitcoin doesn’t have that, the way people feel about it really matters.
I’m at Miami Beach, in weather so hot and humid it feels like being inside a mouth, to try to get a sense of the vibes. I’m uncomfortable because of the heat and also the flashes of antisemitism. Tucked in the back of the expo floor, a painting for sale shows Tintin in a brown shirt with a Bitcoin logo on his sleeve, making a Sieg Heil salute. Another booth sells a T-shirt depicting a group of men sitting at a table with a pile of money in the middle, which is held up by human bodies; behind them, the pyramid found on the back of the dollar bill, with its Eye of Providence, looms. No one appears concerned.
Hats that say things like “taxation is theft” aren’t unusual in the crowd. Tom Shea, crypto tax leader at accounting firm EY, tells me he saw one such hat, and it made him nervous. Fortunately, he says, he’s met a lot of people — me included — who are curious about how taxation on cryptocurrency works. Shea is noticeably excited talking about cryptocurrency. “This is the most inspiring work in my career,” he says.
Cryptocurrency entered mainstream consciousness in a big way during the pandemic, when people were bored, frightened, and lonely. What did not enter the mainstream was the mindset of the so-called Bitcoin maximalist. Bitcoin maxis do not want to talk about cryptocurrencies or Web3. They want to talk about the One True Faith, which is Bitcoin.
Bitcoin maxis generally believe some or all of the following: Bitcoin is better than other coins such as Ethereum because its supply is fixed at 21 million Bitcoin, making it anti-inflationary. The Federal Reserve is a mistake, and leaving the gold standard was a tragedy. Bitcoin is superior to other coins because it is leaderless — its founder(s) Satoshi Nakamoto, who wrote the famous whitepaper on which all cryptocurrency is based, has vanished — and its governance owes nothing to venture capitalists. The most intense Bitcoin maxis believe Bitcoin will bring about world peace once it is the only money because it will destroy all governments.
Many of the speakers on the stage are Bitcoin maxis, though the commitment level to Bitcoin varies. It doesn’t help that high-profile speakers keep no-showing. Nayib Bukele, president of El Salvador, may have adopted Bitcoin as a currency, but he dropped out of his speaking slot at the conference. Dave Portnoy, founder of Barstool Sports and self-proclaimed “Baron of Bitcoin,” skipped his panel (“Bitcoin is Fuck You Money”) to live-tweet golf. (Some real celebrities do show: Serena Williams, Odell Beckham Jr., and Aaron Rodgers sat on a panel about how they got into cryptocurrency.)
But in general, the speaker lineup is heavy on maxis. That doesn’t reflect the makeup of the crowd, and it certainly doesn’t reflect everyone who ventured to Miami. Besides an outcropping of NFT parties — NFTs are popular with normal people, despised by maxis — there are planes pulling banners that seem designed to piss maxis off. For instance, a plane pulls a purple banner across the sky that says “Start a DAO. Save the world.”
DAOs — decentralized autonomous organizations — are not possible with Bitcoin. Like NFTs, they’re on other blockchains. Bitcoin’s concerns are narrower: it was born in response to the financial crisis as a way of disengaging from the traditional financial system. For a long time, it was a place where fringe ideologies were normal, even dominant. But now the rest of the world has arrived — but in cryptocurrency, not in Bitcoin. It’s almost like the Bitcoiners have been sidelined again in the very area they pioneered.
When Russia invaded Ukraine earlier this year, cryptocurrency donations — both of Ethereum and Bitcoin — were funneled to the Ukrainian government. This was a real-world test case of claims crypto proponents had made for a long time: that non-state money had important uses.
So the panel “Wartime Bitcoin” appeals to me — it suggests a discussion of these issues. Luke Rudkowski, the panel’s moderator, walks out in a T-shirt that says “Epstein didn’t kill himself.” Epstein didn’t have his bank account frozen by the government, says Ben Dichter, the spokesperson for the Canadian Freedom Convoy truckers.
This is my first inkling of the panel’s true theme. It turns out we will not be discussing the use of Bitcoin during wartime. We are, instead, going to discuss the war on Bitcoin.
“I’m into Bitcoin to take revenge on the government,” says Francis Pouliot, founder of Bull Bitcoin. He runs an exchange for cryptocurrency to fiat and says he can’t wait to go out of business.
This group is not enthused about the public embrace of crypto. “The bigger the communities get, the more we get infiltrated with fucking retards,” says Aleksandar Svetski, a co-founder of Amber, a Bitcoin exchange, and a writer for Bitcoin Magazine, the publication that is also organizing the conference. The audience applauds.
When the panel ends, I am no closer to understanding the use of cryptocurrency in wartime than I was when I entered the room — except that, as far as these men are concerned, the existence of other crypto constitutes a war on Bitcoin.
Jordan Peterson, Jungian prophet of manhood, is one of the most-anticipated keynote speakers at Bitcoin 2022. Peterson, who wears a pinstriped three-piece suit, does not seem excited despite receiving a standing ovation as he walks out on stage. Throughout his keynote, he appears huddled in on himself and often stares at the floor while answering questions.
Peterson says several things that are unpopular with the crowd, like that leaving the gold standard wasn’t a financial disaster or that the broadscale adoption of Bitcoin over the dollar may have unforeseen consequences. His real purpose for attending becomes clear at the end of his segment: he’s shilling his app, called Essay, that’s meant to help people write. He seems most animated when complaining about grading student papers, brushing off an attempt by his interviewer to stop him. When he exits the stage, the crowd claps but does not stand.
Peter Thiel, founder of PayPal, fares better with the audience. His speech opens with a video of him from 1999, where he discusses moving from “physical dollars” to “electronic dollars” and that he thinks the platform for this will be the cell phone. When the man himself emerges, in a white Ralph Lauren polo shirt and jeans, he’s carrying hundred-dollar bills, an important part of his old PayPal pitch process. “It would always get people’s attention,” he says. He then tosses the bills into the front rows of the audience, which are reserved for those who bought the $21,000 Whale VIP Pass.
In Thiel’s view, Bitcoin is akin to gold, whereas Ethereum (“if it works”) is more of a “high velocity, fast-moving thing.” He then loads a slide that shows two photographs: one is a beefy man in a red hat and bulletproof vest, pointing a gun at the camera. It is captioned “BTC.” The second photo is one of Vitalik Buterin, the 2014 recipient of a $100,000 Thiel Fellowship, at the beach. It is captioned “ETH.” The audience loves this, not least because the BTC guy looks like he could eat Buterin.
Thiel suggests that Bitcoin is kind of like gold, and Ethereum is kind of like Visa. “Bitcoin has every potential to replace gold,” he says. “The question is why it hasn’t done so yet.”
Cash, stocks, and bonds are effectively government-linked entities because of inflation and regulation, Thiel says. “Companies — woke companies — are quasi-controlled by the government in a way that Bitcoin never will be,” he says, to applause.
Thiel then throws some red meat to the audience: an enemies list. These “nameless, faceless” bureaucrats oppose Bitcoin, he says. Number one is Warren Buffett. Second on the list is JPMorgan Chase CEO Jamie Dimon. Number three? Larry Fink of BlackRock. He’s pro-blockchain, which to Thiel is anti-Bitcoin.
What really surprises me is a rousing chorus of boos when Thiel brings up environmental, social, and governance investing criteria. ESGs are a set of non-financial standards that some investors use to screen companies — to make sure they’re eco-friendly, good to employees and customers, and avoiding conflicts of interest, for instance. ESG is the real enemy, according to Thiel. “It’s a hate factory,” he says. “It’s a factory for naming enemies. And we should not be allowing them to do that.”
The problem is the finance gerontocracy, says Thiel, calling Bitcoin a revolutionary youth movement. Thiel is 54 and probably close to the average age of the conference attendees.
A friend tells me he passed by Fox News personality Tucker Carlson in the conference hallway, talking with Nic Carter, a general partner at Castle Island Ventures. Carlson is listening, head tilted, as Carter argues that criticism of Bitcoin’s effects on the environment is overblown.
Carter is also featured on a panel called “You are the Carbon They Want to Reduce,” which is moderated by Mackenzie Sigalos, a tech reporter for CNBC.
The panel’s contention seems to be that, except for Sigalos, a sinister media conspiracy is attempting to strangle Bitcoin’s popularity by pointing out it uses a lot of power. “Mainstream media” seems to include the World Economic Forum, which published an article in 2017 saying that Bitcoin in 2020 would “consume more power than the world does today.”
The audience gamely boos the World Economic Forum article when it comes up.
“I was building a facility in 2017, and people came up to me, hysterical that I was destroying the planet,” says Darin Feinstein, co-founder of Core Scientific, a blockchain infrastructure provider.
Besides, asks Stephen Barbour, what’s wrong with energy consumption? Barbour is the owner of Upstream Data, a company that lets natural gas and oil facilities mine Bitcoin using energy that might otherwise be vented or burned in a flare. Barbour, whose title is given as Master of Hash, is wearing a T-shirt that says “There will be Bitcoin,” a reference to There Will Be Blood, an adaptation of Upton Sinclair’s Oil!. I wonder if he is familiar with Oil!, a book about how oil barons are bad and socialism is good.
According to Barbour, there’s nothing we can do that doesn’t emit carbon, and so carbon emissions just indicate that humans are being productive. When he says Bitcoin should stop apologizing for using coal, the audience applauds.
Judging Bitcoin on its energy use is “a crazy concept,” according to Amanda Fabiano, the head of mining at Galaxy Digital. “We focus so much on the energy narrative, and we shouldn’t,” she says while sitting on the panel about Bitcoin energy narratives.
So far, as I have tabulated it, the enemies of Bitcoin are:
- Journalists (Bitcoin Magazine notwithstanding)
- Governments (El Salvador notwithstanding)
- Traditional finance (as represented by Buffett, Dimon, and Fink)
- Environmental, Social, and Governance investing generally (and environmentalists, specifically)
Even some of the parties seem opposed to fun. I pop by the Versace Mansion for a party hosted by Paxos, a blockchain infrastructure company. It’s a formal crowd, the kind of party where Versace’s iconic Elizabeth Hurley punk dress would have been a bit risqué. The party, which is mostly for Paxos investors and friends of the company, is meant to emphasize that “Paxos is a classy company,” according to Mike Coscetta, the company’s chief revenue officer.
Behind Coscetta, in a pool lit by rainbow-colored lights, several synchronized swimmers are performing. Coscetta invites me to serve myself at the oyster bar. There’s also a cigar bar, where Cohibas are being served with Paxos labels on them.
The party is filled with traditional finance types who take one look at my notebook and make themselves scarce. A few mention that they are Paxos investors before declining to give their names or talk to me in any detail.
Later in the week, I go to LIV nightclub, where personal finance company SoFi is sponsoring a party featuring celebrity host Rick Ross. LIV’s dress code notes that heels are required for women, and I’ve only packed sneakers. I get in anyway.
It’s too loud to really have any kind of conversation. Several people manage to sneak hits on their vapes. The DJ encourages everyone in the club to put their hands up, then spins Will Smith’s “Miami.”
Most of the excitement comes when the bottle service occurs and a small parade of women appears. One holds the bottle over her head; another holds a sign with lettering such as “LIV Loves Bitcoin.” The rest of them wave what look like mini-lightsabers in the air. A delivery to the VIP area involves a mockup of a coin with a Bitcoin logo on it. This mockup is ripped on one side. When I leave at 2AM, Rick Ross still hasn’t arrived.
The NFT parties are noticeably more relaxed — for starters, I am not the only woman in sneakers. The crowd there is also much younger, and they seem to be having fun. At the eToro NFT party at the Bass, Miami Beach’s contemporary art museum, there are flatscreens on the walls showing digital art. The bartenders and performers are decked out in LED lights. There’s an aerialist, a ballerina, and a string quartet that plays, among other things, Pachelbel’s “Canon” and Europe’s “The Final Countdown.”
“This party is awesome,” says Kate Goldman, 23, who works in crypto compliance. “It’s a really powerful time for crypto, though there’s some room for improvement.”
From there, I pop over to the Friends with Benefits NFT party at the Sagamore Hotel. When I arrive, a DJ is spinning, and there is an NFT of Surfing Jesus, drawn by Rachel Van Der Nacht. Standing near the screen is Dean Palmiter, 29. “I’m here for the parties,” Palmiter says. He didn’t buy a pass to the conference. He is thinking he might put his money, instead, toward buying another Bored Ape Yacht Club NFT.
It seems like a lot of people came to Miami not for the conference but for the party scene — specifically, the NFT party scene. The current interest in NFTs and Web3 highlights Bitcoin’s inflexibility. This isn’t the first time that Bitcoin appeared to be outpaced by other blockchains and coins — in 2017, there was an “initial coin offering” craze that ended badly for a lot of people. It’s possible Web3 will crash in similar fashion, and Bitcoin will be left standing.
But the tension between crypto writ large and Bitcoin itself wasn’t the only thing that made Bitcoin 2022 so strange. There was also the intra-Bitcoin conflict between those who want mainstream adoption and those who want to overthrow banks, even governments.
One of the biggest announcements at the conference came from Jack Mallers, the CEO of Strike. At his talk, he announced that Bitcoin’s Lightning network would plug into retailers such as Spotify. Mallers’ ambitions include making using Bitcoin for payments mainstream by making the network both more accessible and usable. If Mallers’ gambit succeeds, it might make a lot of Bitcoiners wealthy — but it will also radically change their online community. The incoming onslaught of normies isn’t as hostile to tax regulations or traditional finance. In fact, cooperation with these institutions is the fastest way to take Bitcoin truly mainstream. But if Bitcoin isn’t about revolution, what is it actually about anymore?
“Who got the most money in here right now?” Hannibal Buress asks on the last day of Bitcoin 2022. There are some scattered shouts: Buress, Satoshi. “Toshi? Is Toshi here right now?” Buress asks. “Why everybody quiet? You be talking all that shit on Twitter, now we got in the building, and everybody wanna be quiet, huh? Nobody got money now? Nobody a whale now?”
The price of Bitcoin began falling on April 6th, the first day of the conference. By the time Burress takes the stage, it has fallen 4.7 percent to about $42,662.72, from $44,781.90 just before the conference’s welcome remarks.
Finally, someone from the Whale VIP section shouts that he has a billion dollars. “A billion dollars, really? Show me!” Buress says.
A white man in a polo shirt and a baseball cap who appeared to be in his 30s clambers up onto the stage. He unlocks his phone for Buress, then hands the phone over.
“Oh man, this ain’t no billion dollars,” Buress says. “This is $279,000. Get that shit out of here!” As if to express his disgust — after all, $279,000 is a lot closer to zero than it is to one billion — Buress throws the phone off the stage.