Your support of Bitcoin puts you in the same category as the framers of the Constitution.
Bitcoin is special.
Bitcoin is the future.
Bitcoin will undermine their ability to control us.
It has all the trappings of religion.
Those who are not getting into Bitcoin now, it's because their DNA was not meant to survive.
FTX is the safest and easiest way to buy and sell crypto.
Sam Bankman-Fried is in federal court right now for his arraignment.
The collapse of FTX gave the Biden admin a perceived moral license to go after crypto
in this aggressive way.
And the governments aren't exactly going to let us walk in the front door with this new
open source money called Bitcoin, right?
Everything you're seeing now, we've seen before.
There's nothing new.
It is just typical Bitcoin.
Fifteen years after Satoshi Nakamoto dropped a nine-page white paper on an obscure email
list, sketching out an idea for a new peer-to-peer digital currency, Bitcoin has become a global
phenomenon.
And nowhere is its pomp and promise more on display than at the blockbuster annual conference
put on by Bitcoin Magazine here in Miami Beach.
But it's also had a disappointing couple of years.
Bitcoin was supposed to be an inflation hedge.
But after the Fed fired up its money printer during the pandemic, the dollar lost value
and Bitcoin went in the same direction.
Bitcoin was supposed to be a way to transfer money from one party to another without going
through a financial institution, to quote Satoshi.
But 15 years later, a lot of users are still trusting regulated financial institutions
to manage their holdings.
Bitcoin was supposed to be above politics, but the community around it has seen bitter
infighting.
Just saying, that's not how you use Bitcoin, though.
That's not how you use it.
You should use Bitcoin in this particular way.
And some worry that Bitcoiners' intolerance of dissenting ideas has turned it into something
akin to a religion or a cult.
And yet the Bitcoiners we talked to in Miami seemed convinced that its value proposition
as a decentralized money that governments can't censor or destroy is as strong as ever.
Are Bitcoin's troubles a sign that the project is failing or just the inevitable bumps on
an upward trajectory which will one day result in monetary freedom for the entire world?
Attendance here at one of the largest Bitcoin conferences in the world is down by more than
half amid this so-called crypto winter.
I think if you were to compare like last year's conference to this year's one.
Very noticeable dramatic difference.
I'm not a fan of the mania bull run phases because of the type of people that it attracts.
You might call them the tourists or the LARPers or in many cases the scammers.
There's a big chunk of crypto that needs to burn on a raging funeral fire.
There were criminals, scammers, grifters, overleveraged business models that should
never have been implemented.
FTX has arrived in trail five.
So I just got one question.
You in Miami?
Just a few miles away from this year's conference is the Miami Heat's home court, formerly
called FTX Arena, after the crypto platform paid $135 million for the naming rights back
in 2021.
In January, when FTX collapsed into bankruptcy and its founder, Sam Bankman-Freed, was arrested
for alleged fraud, the signage was removed.
Bitcoiners believe that any cryptocurrency other than Satoshi's original creation should
be referred to as a shitcoin and that the crypto industry is a cargo cult run by scammers
who have the mainstream media and much of Silicon Valley fooled.
Exhibit A, Sam Bankman-Freed.
He's a criminal.
He should go to jail.
People who conflate what they did with Bitcoin have got it entirely wrong.
The way I like to describe the crypto industry and blockchain is it's an arbitrage on the
trend.
It's sad and it's disgusting.
It's got to stop.
Bitcoiners also see the FTX collapse as a reminder that you can't trust bankers or
tech founder media darlings like Bankman-Freed to take care of your savings, whether they're
outright scammers or not.
Banks must be trusted to hold our money and transfer it electronically, but they lend
it out in waves of credit bubbles with barely a fraction in reserve, Satoshi wrote in 2009.
The message is trust nobody and become your own bank, which Bitcoin makes possible.
I think it just shows that like these large centralized institutions are always going
to be a risk, right?
So the ethos of Bitcoin is not about putting all of your money into a giant centralized
custodian.
So like none of that would have happened in Trad5 because everyone would have been bolstered.
Everyone would have been bailed out.
But in crypto, the bad actors were allowed to implode publicly and people got hurt.
But that overall is just the immune system for crypto showing itself.
Another reason to be your own bank is to avoid financial censorship so that everyone from
third world dictators to DC regulators is prevented from telling you how you should
spend your money.
The fall of FTX precipitated a crackdown in Washington that was meant to send a very strong
anti-crypto message in the words of former Congressman Barney Frank.
We don't need more digital currency.
We already have digital currency.
It's called the US dollar.
FTX certainly gave them political cover to do this.
Then they opened up the toolkit and they went to their favorite tool, which is politicizing
the instruments of finance.
Nick Carter is a writer and crypto investor who coined the phrase Operation Chokepoint
2.0, a reference to the Obama era policy of bullying banks into denying accounts to payday
lenders, pornographers, firearms dealers, strippers and other fully legal industries
that regulators would rather see disappear.
So again, a perfectly legal industry in the US that's being targeted through the bank
regulatory apparatus.
It really kicked off this year in January.
It involved virtually every financial regulatory agency, in particular the bank regulators.
And the objective was to stymie the legal crypto industry in the US, not through any
lawful mechanism, but through insinuations, through threats.
Operation Chokepoint 1.0 was carried out by the Consumer Financial Protection Bureau,
which was the brainchild of Elizabeth Warren.
And now she's become the Senate's most vocal Bitcoin critic.
If I buy Bitcoin, am I buying a share of stock or am I buying a pork belly?
Or are you buying air?
Rogue nations, oligarchs, drug lords and human traffickers are using digital assets to launder
billions in stolen funds, evade sanctions and finance terrorism, Warren said last year
when promoting a bill that would extend the state's power to surveil people's finances.
Crypto is helping fund the fentanyl trade and we have the power to shut that down.
If I were Elizabeth Warren, what would you say to me?
First of all, I would shake your hand.
I would say, hi, it's really good to meet you.
I would also say you are purposely misinformed about crypto.
She doesn't understand Bitcoin.
She doesn't understand energy.
She's part of the elite.
She's part of the corrupt political structure you have in the US.
And she's anti-human.
She's anti-freedom.
I've been trying to clean up this industry for a while because I firmly believe that
there are affronts to private property rights.
Caitlin Long, who spent 22 years in corporate finance, is the founder of Custodia, which
she hopes will become America's first Bitcoin bank.
It's designed to be the antithesis of the company run by Bankman Freed, whom Long clashed
with on stage at the same Bitcoin conference back in 2021.
Satoshi gave us money that isn't debt.
I like to use the phrase, a fool and their leveraged Bitcoin are soon parted.
Sam, do you agree?
Not with a lot of it.
Um, this is not shocking.
FTX allegedly squandered its customers' holdings.
Custodia, by contrast, plans to go much further than even a regulated retail bank by keeping
108% of its customers' cash in Bitcoin on hand at all times.
Thus, it won't have any need for federal deposit insurance.
Look, you can take the position leverage is bad.
It's not a crazy thing to think.
However, I think you probably also have to be willing to sacrifice more than most people
realize in order to get there.
I think you have had to sacrifice the majority of the growth that the industry has had to
date.
And he and I were arguing over whether leverage was good.
Leverage is never good in crypto, period.
Anything that is circulation credit that goes above one times leverage, right, that is creating
claims to the underlying out of thin air.
It is fractional reserve banking.
And we are fundamentally committed to not doing that.
All of those crypto lenders I knew were going to fail.
Why?
Because there's a finite number of Bitcoin.
All you're doing is creating fractional reserve Bitcoin.
And that's all going to come back to haunt you when inevitably there's going to be a
price correction.
Everybody wants the real thing.
Yet the Federal Reserve rejected Custodia's application to become a member of its network
on the grounds that it's quote, "crypto activities are highly likely to be inconsistent
with safe and sound banking practices."
So the crypto industry was proposing a solution to the inherent instability of the banking
sector.
And yet that solution was denied because the Federal Reserve didn't want to give a crypto
focused bank access to the payment system.
It's extremely perverse.
Long is suing the Federal Reserve to force it to reconsider.
But part of Satoshi's vision was to create a system in which regulatory approval wasn't
necessary.
Bitcoin is the first digital currency you can hold yourself.
So why do we need to trust a third party middleman at all?
You read the white paper, you read what Satoshi said, trusted third parties are security holes.
Jameson Lopp is a Bitcoin developer and the co-founder of Casa, which helps its customers
safely self-custody the secret passwords or keys necessary to spend their Bitcoin.
If you lose them, the money is as good as gone.
But if you're not holding them yourself, are they really yours?
The Bitcoin writer and evangelist Andreas Antonopoulos coined a popular saying in the
space.
Your keys, your Bitcoin.
Not your keys, not your Bitcoin.
Your keys, your Bitcoin.
Not your keys, not your Bitcoin.
Most people don't want to be their own bank.
But what we're really saying is like, if you want to have a level of bank security, if
you want to be able to operate in such a way that you don't have to ask permission from
a third party, then you do have to take on some responsibility.
Self-custody especially appeals to Bitcoiners worried about Operation Chokepoint 2.0 and
the plight of the Canadian truckers who occupied Ottawa last year to protest a cross-border
COVID vaccine mandate.
Prime Minister Justin Trudeau responded to the demonstrators by using emergency powers
to force financial institutions to freeze all funds sent to support the cause.
These illegal blockades and occupations received disturbing amounts of foreign funding.
So a group of activists used Bitcoin as it was meant to be used, getting about $630,000
worth to the truckers.
Since the funds didn't go through the traditional banking system, they were hard to stop.
An activist filmed himself handing out seed phrases, or the code words used to access
self-custody Bitcoin.
This grassroots solution was imperfect, laborious, and in need of improvement.
But in the end, it worked.
A world where most people hold their own Bitcoin keys would be a world far more resistant to
financial censorship and surveillance.
But is it really possible?
It's definitely a breach of a person's privacy, freezing their bank accounts, especially
if they've committed no real crimes.
Do you think there's ever a future where we can get grandmas to self-custody?
Well, it's definitely possible.
I can tell you from experience, we have plenty of people in their 80s who are clients of
Casa.
The answer lies somewhere in the middle.
I think we will have a diverse ecosystem and range of custody.
And it doesn't actually necessarily need to be a binary thing.
It doesn't have to be just trusted third party or just self-custody.
What really worries me is if too much of the Bitcoin goes into too few hands, especially
if they're like regulated companies that can be easily targeted by nation states.
That is when Bitcoin itself, you know, as a network becomes a bit more prone to nation
state actions.
And that, for many at this conference, is the entire point of Bitcoin.
Effective resistance against authoritarian government action.
As most of you know, that trucker strike was a peaceful demonstration of people who were
demanding rights that are sacred and are taken for granted for every American.
Walking around the conference, all of the elements of the Bitcoiners' creed were on
full display, which Nick Carter says has turned into a religion.
It has its own heroes, icons, doctrines, saints and heretics.
On one hand, having a devoted following that won't abandon a project through the rough
patches is a key to long term success.
On the other, fanaticism leads to poor decision making and can drive away vital allies.
Certainly not the only secular religion out there, but it's a particularly pernicious
breed.
Nick Carter was in Miami this year during the conference, but says he didn't attend
any of the sessions because of safety concerns.
Much of the community turned on him when it was revealed that his investment fund had
a stake in cryptocurrencies other than just Bitcoin.
So he penned a eulogy for Bitcoin maximalism, declaring that there's an awful sickness
pervading the space.
I have been a full time Bitcoiner for 10 years and I've dedicated my professional and personal
efforts to the sector tirelessly that whole time.
And yet because I'm more of a Bitcoin moderate, a lot of the hardline Bitcoiners don't like
me.
But I think what we need to realize is our enemy is not inward.
We shouldn't be doing this circular firing squad thing.
Something all Bitcoiners have been saying for years is there's a big difference between
Bitcoin and crypto, a distinction that now even the head of the SEC, Gary Gensler, made
when talking about crypto regulation.
Speaking Monday on CNBC, Gensler says that Bitcoin is the only cryptocurrency that he
is prepared to label publicly as a commodity.
There has been a decent amount from Bitcoiners, some that I respect, that have essentially
been cheering on government attacking people.
The end game is attacking Bitcoin.
There's an expression in crypto, not your keys, not your crypto.
Bitcoiners should be trying to win in the free market and organize Bitcoin such that
it is the most compelling blockchain, the most credible one, the most decentralized.
They should not be trying to utilize the instruments of state power to suppress their perceived
adversaries.
Bitcoin has its own merits.
It stands on its own two feet.
You don't need financial regulators to try and pick and choose which winners there are.
Jameson Lopp has also been on the receiving end of Bitcoin maximalist rage after his company,
Casa, made the business decision to expand its service to help Ethereum owners self-custody
their holdings.
In 2019, a teenager called in a swap raid on his home because, according to Lopp, the
kid didn't like his opinion about how the Bitcoin protocol should function.
In response, Lopp shared a video of himself firing an AR-15 on Twitter.
Then he took extraordinary steps to make himself impossible to track down in meatspace, which
was later written up by The New York Times.
It's a result of social media.
You can instantly go from being essentially a nobody with no one paying attention to you
to being someone who has attracted the ire of millions of people in a matter of moments.
It's similar to a sort of political theater and phenomenon where you build up your narratives,
you build your audience and your following and your community.
And one of the ways that you create more cohesive audience is by having enemies that you attack
in certain ideological ways.
And so basically that same thing has unfolded within Bitcoin.
Most of the religious imagery present at the conference was shrouded in irony.
But as with so much of digital life, it was hard to tell where the joke ended.
I don't believe that there's any moral status in your portfolio.
And there is a faction within Bitcoin that believes that the only moral asset to hold
is Bitcoin itself, nothing else.
Bitcoin religion is not a universalizing one.
It actually just concentrates the membership and they become increasingly radical and disconnected
from the real world.
So if they want to succeed, they need to find a way to grow the membership of the Bitcoin
space rather than impose all these additional requirements in terms of what it means to
be a Bitcoiner.
As the quasi-religious fervor around Bitcoin has grown, so too has the potential for a
Bitcoin voting bloc.
Ronald Reagan once courted the religious right.
But in 2023, a parade of once and future presidential contenders made the trek down to Miami to
pander to the Bitcoiners.
Former Congresswoman Tulsi Gabbard showed up.
Once we give up our economic autonomy, we give up our freedom.
Along with longshot presidential candidate Vivek Ramaswamy.
Freedom of speech and freedom of money are two sides of the same coin.
Perhaps nobody better captured the mood, though, than Democratic presidential candidate Robert
F. Kennedy Jr., who in his keynote speech repeated the anti-elite populist messaging
that's central to the Bitcoin creed.
Control over the public starts perhaps as it means, but it always becomes an end through
exercising perfect control over society.
Bitcoin is a bulwark against precisely this kind of government and corporate expansion
and intrusion.
R.F.
Kennedy, basically what he's saying with that one is like, government is not your friend.
An art gallery at the conference displayed work demonizing Bill Gates, Anthony Fauci
and the World Economic Forum's Klaus Schwab.
What do you think about Klaus Schwab's face?
Truthfully, I don't think it's messed up anywhere near enough.
There are certainly a lot of people who get turned off by some of the vitriol, whereas
other people get interested and sucked into it.
But if anything, I think it may be overblown.
The vast majority of people who use Bitcoin don't know about any of that.
They just see Bitcoin as a thing that they're using.
It's not something that they have adopted from a cultural standpoint.
It's just a tool that they have adopted because of the properties of Bitcoin.
What's the purpose of Bitcoin?
To not be with the government.
Fair enough.
We should just be focusing on, you know, what are Bitcoin strengths, which is like peer
to peer transactions, non-KYC transactions.
And that's that's what I'm interested in.
What is Bitcoin?
To me, it's money.
In the original white paper, Satoshi described Bitcoin as a peer to peer electronic cash
system.
15 years later, it still isn't widely used as a medium of exchange.
At first, its limitations were technical.
The network can't process more than about seven to 10 transactions per second.
But a decentralized payment technology called the Lightning Network is endlessly scalable
and has made paying for a cup of coffee with Bitcoin fairly seamless, though not a lot
of people are doing it yet.
I have 100% conviction.
I mean, there's there's zero doubt.
It's just a question of, you know, at what pace global adoption will take place.
Chris Hunter founded Bitcoin Beach Wallet, a lightning based payment software that launched
in El Salvador, whose president, Nayib Bukele, is another politician who has capitalized
on his association with the Bitcoin community.
He announced at the 2021 conference that El Salvador would be first in the world to adopt
Bitcoin as legal currency.
It was 90 days from the announcement here in Miami two years ago when they were going
to make Bitcoin legal tender.
And 90 days later, on September 7th, 2021, did they actually launch the implementation
with their Chivo wallet, which was the government issued wallet gifted to every citizen.
Nobody could manage a 90 day implementation like that properly.
And so there was understandably technical missteps.
And that was quite unfortunate because, you know, the average person in El Salvador or
anywhere around the world doesn't really understand Bitcoin.
Salvadorans prefer to hold and spend the U.S. dollar, which, despite the recent spike in
inflation, still has a much more stable value than Bitcoin.
In terms of adopting Bitcoin as legal tender, what really matters is, do we get Bitcoin
in the hands of people?
Do they use it as everyday money?
And that's what's going to make the difference in terms of whether Bitcoin is widely used
or not.
So will Bitcoin ever become a commonly accepted medium of exchange?
That's partly a bet that technologies like the Lightning Network will continue making
it easier and easier to use.
And it's also a bet against the dollar as exploding U.S. debt puts increasing pressure
on the Federal Reserve to inflate the money supply.
The only way that Bitcoin is going to move forward and get mass adoption is through bottoms
up grassroots movements.
Bitcoin has been eulogized repeatedly by journalists and the mainstream media.
And yet it has always come back, surviving exchange collapses, bitter infighting and
government antagonism.
The access to the payment system should be something that is neutral, apolitical.
It should be a common resource.
And right now, barriers are being inserted into access to payments and banking.
And it's becoming much more a question of, do you have political favor as an industry?
And that's just not the way it should be in this country.
There is a saying, which is Bitcoin is for enemies.
This is really supposed to be a neutral technology and platform where anyone who follows the
rules can use it regardless of if anyone else disagrees with who they are and what they're
doing.
As the human drama unfolds, this decentralized, borderless, censorship-resistant software
network continues to function just as Satoshi envisioned.