More than 25,000 believers from across the world descended on Miami Beach last week for what was billed as a ‘four-day pilgrimage’.
Yet the sweltering U.S. city, with its neon lights and palm trees, was not hosting a typical religious gathering, but a celebration for the church of cryptocurrency.
The most famous digital money, bitcoin, as I found out, is all about belief.
Charge: The new Miami Bull, echoing the statue on Wall Street, was unveiled to kick off the Bitcoin 2022 conference
That’s what gives it value, and its evangelical believers have little time for doubters.
It’s a relatively new religion, one that has blown up in recent years, and has now become a global phenomenon that is luring wide-eyed investors — and worrying regulators. It’s also a religion that comes with lavish parties, T-shirts slogans, scantily-clad promo girls, and lots of swearing.
As a self-confessed crypto cynic and ‘doubting Thomas’, I went along to see if I could be converted…
What is Bitcoin?
In the lobby of the Miami Beach Convention Center, a huge screen shows the live price of bitcoin.
Pilgrims stop to have their photo taken with it and others clap and cheer it on as they pass by. Unfortunately, for the ‘bitcoiners’ here the price fell by more than 8 per cent last week.
But believers are used to the rocky ride.
Put as simply as I can, bitcoin is digital money created and secured by computer processes.
Despite existing only in the ether, bitcoin is hugely popular and has given rise to thousands of other cryptocurrencies since it was created by an unknown person or group in 2009.
The price of bitcoin has soared by more than 3,500 per cent over the past five years — crashing badly along the way. In the past year, it’s fallen 27 per cent.
Yet volatility is just a test of faith to those here in Miami who believe bitcoin will one day empower the poor to spend and store their money outside of the grip of governments and corporations.
But to many economic experts, bitcoin’s value is hugely overstated. It is a wobbly bubble waiting to burst.
Critics also point out that processing bitcoin consumes a huge amount of energy, and its lack or control or oversight makes it a gift to criminals and warlords.
The phenomenon has also been fuelled by the ‘fear of missing out’ (Fomo) as stories spread of those who have effortlessly made a fortune.
In Britain, more than two million people own cryptocurrency. Pandemic lockdown restrictions helped many to save — and gave them money to burn.
It’s got the City watchdog worried and The Bank of England has warned investors they could lose everything.
Gambling charities tell me they’ve seen a rise in calls from investors who have lost huge amounts of money to cryptocurrency — including those who staked house deposits.
And, as I found out at the conference, there’s a schism within the bitcoin movement.
Followers cannot seem to decide whether it is a currency to be spent, or an investment to hold on tight to.
Our man in Miami: Ben Wilkinson joined some 25,000 cryptocurrency fans at the Bitcoin 2022 conference
The faithful
Believers start arriving en masse on Thursday morning. It’s 32c outside and many are wearing T-shirts displaying their loyalty to the bitcoin cause.
One reads ‘Fix money, fix the world’, there’s ‘buy the dip, sell the tip’ and another is a more brazen ‘commit tax fraud’.
A man holds a home-made brown cardboard sign with the words ‘money is the root of all evil’ scrawled in black marker pen.
The main stage is in a huge 15,000-capacity arena complete with show lighting, thumping music and a smoke machine.
A man with a microphone, striding across the stage, tells the excited crowd that they are what gives their currency value. He says: ‘Bitcoin doesn’t exist without you. These are your people.’
Bitcoin is today being sold as the answer to rocketing inflation which has hit a 40-year high in the U.S. at 8.5 per cent.
David Bailey, the chief executive of the firm behind the Bitcoin 2022 conference, tells his eager audience they are at ‘the biggest party on the planet’.
Dressed in a Hawaiian shirt, he declares: ‘Bitcoin is money for the people, money for all people.’ This crowd is hungry for a soundbite or statement that they can applaud.
The crypto city
Miami Beach is a flash, pristine paradise. Tall, white buildings line the blocks and open-top sports cars and 4x4s roar down a matrix of straight roads.
Much of the city is said to have been built on drug money in the 1980s when Pablo Escobar’s cocaine gangs apparently made so much cash they were spending thousands of dollars on elastic bands to hold it together.
Now, the mayor wants the city to be the crypto capital of the world, and on day one of the conference he unveils a statue (he hopes) will rival the iconic Wall Street bull.
Hype: Bitcoin is today being sold as the answer to rocketing inflation which has hit a 40-year high in the U.S. at 8.5%
The Miami Herald writes that the garish metallic figure symbolised all that was wrong with mayor Francis Suarez’s ‘all flash and little action’ leadership.
Back in Blighty, politicians are also getting Fomo — Chancellor Rishi Sunak and former health secretary Matt Hancock want the Government to embrace the technology behind the so-called financial revolution.
Attendance at the Miami conference is now twice what it was in 2021, and visitors tell me there are more big businesses here this year.
Cryptocurrency exchange FTX even sponsors the Miami Heat basketball arena.
I’m reminded of how Enron had its name on a baseball stadium in Texas before the energy trading firm was ruined by an accounting scandal.
Miami’s mayor takes his salary in bitcoin and wants to be able to pay government workers with it too. But his critics doubt it will truly help his people.
Close to the conference. I see a homeless man sleeping in a bus shelter beneath an advert promoting crypto lending, mortgages and investing.
And from the beachfront I spot a plane pulling a banner reading ‘Free Bitcoin’ flying overhead, while a boat with a huge cryptocurrency advert chugs along the shore. One Miami Beach local tells me he knows he needs to learn more about bitcoin because it’s the future and there’s money to be made.
But of course, if it was that simple, we would all be rich.
Boutique bash
A gigantic exhibition centre hosts 200 cryptocurrency companies that are dishing out free T-shirts and hats. At one stand there’s even a bar.
Glamorous girls are promoting the auction of a Ford ‘Bitcoin Bronco’ SUV, and there’s a mechanical bull competition with the person who can hold on the longest promised a bitcoin prize.
I watch as a series of macho-men cling on for dear life before they are tossed to the ground, humiliated in what might well be a fitting metaphor for a bet on bitcoin.
Glamorous girls promote the auction of a Ford ‘Bitcoin Bronco’ SUV. Some 200 cryptocurrency companies set up stalls at the conference dishing out free T-shirts and hats
There’s also a market where you can buy merchandise and paintings using only the digital money. You can even get tattooed with the iconic bitcoin logo.
Alongside the fun and games, there are serious companies offering you the chance to ‘retire with crypto’, get a mortgage using cryptocurrency and sort out your tax affairs. It’s become big business.
Later that day I am invited to an exclusive party at the beachfront Versace mansion where the Italian fashion designer was shot dead 25 years ago.
Today, it’s a boutique hotel and events venue. And tonight, the poolside bar is free and there are elegant ladies dressed in gold performing a swimming routine as bitcoiners slurp seafood and knock back the drinks.
Celebrity fans
Tennis superstar Serena Williams was among the first to speak at the conference where some tickets cost more than $1,000.
To whoops and applause, she tells the congregation: ‘It is obviously the future.’
She says: ‘You can start investing little by little, you can build yourself up to where you want to be financially.’
The worrying word for me was ‘invest’. Bitcoin peaked at more than $64,000 a coin last April, but hasn’t been close since.
Last night it was trading at around $40,000.
American football star Odell Beckham Jr tells the conference: ‘It’s going to continue to grow so you might as well go with it or get left behind.’
Fevered pitch
If Bitcoin is a religion, then cult figure Michael Saylor is the preacher. He’s dressed all in black and lacks only the white collar.
Greeted by rapturous applause, he tells the crowd what they want to hear: ‘I am more bullish than ever with bitcoin.’
He’s talking to investment manager Cathie Wood, who says her firm believes each bitcoin will be worth $1 million by 2030.
Billionaire Saylor owns more than 17,000 bitcoins (worth more than $750 million) so stands to gain or lose substantially if the price surges or falls to nothing.
‘If you don’t support bitcoin you don’t support sound economics or integrity’, he says.
The software entrepreneur was once accused of accounting fraud and paid a $350,000 fine to settle without accepting guilt.
I can’t help but feel Saylor is preaching to the converted.
Before he goes, he stands up and shakes his fingers at the crowd: ‘You do not sell your bitcoin.’ Later that day, bitcoiners are delighted to hear they can now use their currency to pay for shopping in a new partnership with the payments firm Shopify.
But who would spend bitcoin today when it could be worth so much more tomorrow?
And who would accept payment for it, when it could be worth so much less?
Under attack
I soon find there’s no such thing as a typical bitcoiner.
I meet people who just want to play around and make some extra cash and I meet people who sincerely want to make money work better for everyone.
I also find there’s a die-hard, poisonous, angry faction.
Belivers: Many of those at the Miami jamboree believe Bitcoin will one day empower the poor to spend and store their money outside of the grip of governments and corporations
PayPal co-founder and billionaire Peter Thiel presents the audience with a list of ‘enemies’ including investment veteran Warren Buffett, 91, whom he describes as a ‘sociopathic grandpa’.
On another stage, an angry young man wearing a baseball cap repeatedly swears and insults anyone who doubts bitcoin’s potential. Another panellist, in a sleeveless jacket baring his biceps, says bitcoin is his way of wreaking ‘revenge’ on the government.
Speakers here aren’t interested in hearing what might be wrong with bitcoin. As entrepreneur Miles Suter put it: ‘Once you are into bitcoin, you are in for life.’
In for the ride
I meet a retired judge from Los Angeles who is wearing a T-shirt that says ‘take the orange pill’, which I take to mean swallowing the bitcoin belief.
I ask him why I’ve not heard a word against bitcoin in two days. ‘It’s a party,’ he says.
‘People are tribal.’
For the judge, who is only in his early 50s, this is little more than a bit of fun with money he can afford to lose.
I meet a young woman from El Salvador with a more altruistic view of the digital money.
She tells me her country’s adoption of bitcoin means the poor can quickly move money across the border without facing fees.
And she says her people have found out that buying with bitcoin means your phone always needs to be fully charged and you cannot afford to forget your passcode.
Is it the future?
So is bitcoin the future of money? Those in Miami certainly are convinced, but the truth is no one here really knows.
After three days of frenzied fan fever I still find cryptocurrency is just too cryptic, and I’m not sure those outside of this cult will ever really trust it.
Bitcoin’s value, at the moment, is purely speculative. It’s only worth what people are willing to pay.
Some say it’s a pyramid scheme — its value lies only in belief, it’s built on sand and could all come crashing down.
Bitcoin has clearly become a powerful force that is driving innovation, but I find myself wondering who will be the real winners from this new technology.
It’s easy to forget that governments and banks also provide us with protection from fraud and losses. The bitcoin future is financial anarchy.
It has been easy to see the opportunity in bitcoin, but not the risk. For now, those backing Miami’s bull are in for a rough ride.
Whatever bitcoin is, it’s not a sound investment. It’s a punt. Treat it any other way, and, like a pasty Englishman on Miami Beach, you are going to get burnt.
