I traveled down to Miami this weekend for Bitcoin 2021, an annual conference hosted by Bitcoin Magazine.
The event, which was canceled last year due to the pandemic, brings together cryptocurrency entrepreneurs and enthusiasts.
The sold-out event was capped at 13,000 tickets, which felt like more than the venue could handle. The line to enter the Mana Wynwood, a warehouse and event site, stretched more than a mile long.
This was the first live crypto event in years. Most attendees are now significantly richer than last time the event was held, and that brought a feeling of exuberance.
There Were No Suits Here
The atmosphere inside felt more like a decadent music festival than a financial conference.
There were no suits here. Many guests sported shirts with unicorns and bitcoin symbols.
A Lamborghini greeted guests at the entrance, where a lucky attendee could win it simply by posing with it and posting the image on social media.
An outdoor soundstage sponsored by Blockfolio blared techno music.
The main stage was standing room only. Bitcoin evangelists such as MicroStrategys Michael Saylor, Twitters Jack Dorsey and former libertarian congressman Ron Paul roused the crowd on the freedom and openness that comes from a currency not controlled by governments.
When the crowd cheered Saylors reference to people running bitcoin nodes in their homes as an altar to Satoshi, the creator of bitcoin, I felt like I was at a religious event.
Even though the ethos was freedom from government tyranny, we still had to observe the city rules. At one point, the fire marshal halted the event until the aisles could be cleared of patrons unable to find a seat.
That meant attendees who had forked over $1,000 per ticket and waited for 90 minutes in the blistering heat were forced to watch the event from another area on a big screen. But this wasnt enough to deter the bitcoin devotees.
Whats Ahead for Bitcoin
There were a handful of big announcements.
Dorsey said Square may build a hardware wallet.
Crypto exchange BitMEX is literally sending bitcoin to the moon, with the help of Pennsylvania-based commercial space company Astrobotic Technology.
And Wyoming U.S. Sen. Cynthia Lummis discussed how legislation and regulation could make bitcoin even more mainstream.
But the biggest announcement at the event wasnt in person.
It arrived via a video feed from El Salvador, when President Nayib Bukele announced plans to introduce legislation that will make it the worlds first sovereign nation to adopt bitcoin as legal tender.
A Country for the Future
Bukele said his legislative proposal was a way to design a country for the future.
He pointed out on Twitter that if only 1% of the worlds bitcoin moved to El Salvador, it would increase the countrys gross domestic product by 25%.
There are a few reasons why bitcoin is important to El Salvador:
- It would increase foreign direct investment and tourism. Wealthy bitcoin holders were buzzing about the prospect of paying for a seaside home in the Central American country with bitcoin.
- It would alleviate the fees charged on remittance payments. Salvadoran emigrants send back $6 billion annually from places such as the United States and Canada. The financial middlemen charge fees of up to 20%.
- It would bank the unbanked. Nearly all Salvadorans have mobile phones, but 70% of the country doesnt have a bank account. This means they have to store their cash in their homes and carry it around to physically deliver it when they want to buy something. With bitcoin, they can pay anyone, anywhere in the country, solving the problems of physical cash.
After decades of financial instability, the Salvadoran government pegged the colon to the U.S. dollar in 2001.
Many other countries do this, especially those with large trade or tourism relationships with the U.S. And it seems to work, until the Federal Reserve starts rapidly increasing the money supply, as it did last year to fight the pandemic.
When the Fed increased the money supply by 30%, it benefited U.S. banks and the stock market. However, Salvadoran banks didnt get the same monetary injection but had to deal with the effects of rising inflation. In March, the monthly inflation rate increased by 0.78%, nearly 4X the speed of last years prices.
In Bukeles press release, he stated: …in order to mitigate the negative impact of central banks, it becomes necessary to authorize the circulation of a digital currency with a supply that cannot be controlled by any central bank and is only altered in accord with objective and calculable criteria.
There are many benefits to making bitcoin a legal tender currency, but there are also drawbacks such as bitcoins volatility and recent price drop.
However, this is one small step in the right direction toward making bitcoin a global reserve currency. If it improves economic outcomes for El Salvador, other countries will want to adopt it as legal tender.
Who knows maybe the annual bitcoin conference will be in Central America someday.
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