The Bitcoin 2021 Conference held in Miami at the start of June drew in 12K attendees, making it the largest Bitcoin Conference. The annual conference was moved to crypto-friendly Miami, due to strict Covid lockdown restrictions in LA. But also following a tech media blitz by Miami Mayor Francis Suarez who not only headlined the event but has been instrumental in pushing a renaissance to transform Miami into a Crypto and Tech hub. Earlier this year, Mayor Francis announced his wishes to enable Miami residents and workers of the city of Miami to pay their taxes in Bitcoin. But also receive their salary and compensation in the crypto-currency.
The Conference had a star-studded line-up of brilliant well-known and, not-so-well-known speakers: starting with former congressman and Libertarian Ron Paul, Senator Cynthia Lummis, founder of the US Senate Financial Innovation Caucus, Twitter and Square CEO Jack Dorsey, CEO of MicroStrategy Michael Saylor, Brian Brooks, former Acting Comptroller of the Currency for the United States, and the Winklevoss twins, co-founders of crypto exchange and custodian Gemini to name a few.
What was most remarkable was the innovation going on in the space. While Bitcoin reinforces its Store of Value Use-Case and cements its position as the final global settlement layer, breakthroughs in the Lightning Network, or “layer 2”, are pioneering new financial possibilities. The Lightning Network is a payment protocol built on top of the Bitcoin blockchain enabling speed of sound transactions accessible through the simple scanning of a QR code. I believe that businesses of the future, especially e-commerce, will adopt and incorporate this open monetary payment network around the globe.
In addition, companies like BlockFi and Celsius, and separately, Stacks, Aave, and Uniswap are leading the transformation of financial services from the legacy Traditional Finance (TradFi) environment to Blockchain Finance and Decentralized Finance (DeFi). In the short term, we see Blockchain Finance with the likes of BlockFi and Celsius leading the way via disruption of consumer adoption of their savings products (offering up to 8% APY on crypto deposits) compared to their Traditional Finance counterparts where cash savings are negative yielding in real terms. We see Blockchain Finance as a bridge for Traditional Finance due to its centralized and regulated nature with the difference of being natively digital and blockchain-based banks. BlockFi has created crypto versions of savings accounts, loans, and credit cards, and they also offer trading platforms. All crypto-based and on the blockchain. This has enabled crypto-savvy people to move away from the cash versions of those products and into the crypto versions, which is the primary disruption to TradFi.
It is my view that in the long term, DeFi will be the biggest disrupter. While similar to Blockchain Finance, DeFi provides the same types of services as Blockchain Finance with the main difference of being decentralized open-source protocols. Their primary purpose is to provide access to basic banking products like savings accounts or loans to anyone in the world without fear of censorship or restriction, and with full transparency because of the blockchain ledger. Due to their nature, they cannot be regulated, and KYC is unfeasible. I believe these factors will lead to greater global adoption over time and topple the restricting status quo of Traditional Finance.
In one of the final events of the conference, Jack Mallers, CEO of Strike a Lightning application, displayed a video broadcast of El Salvador’s President Nayib Bukele announcing a partnership with Strike to build and modernize the country’s financial infrastructure using bitcoin technology. In addition, he presented his plan to introduce a bill to Congress that would make bitcoin a legal tender. Since then, President Bukele’s bitcoin bill passed Congress with a super-majority and El Salvador became the first country in the world to adopt bitcoin as legal tender. The strike was instrumental in educating and raising awareness of the benefits of bitcoin for micropayments and remittances in El Salvador. The move has reverberated in countries around the world resulting in politicians from multiple Latin American countries announcing their plans to incorporate bitcoin into their economies. This is a revolutionary time for the global economy, and I believe it has ushered in the new age of bitcoin state-level adoption.
Another notable event was a keynote on Banking the Unbanked with Jack Dorsey and Alex Gladstein. When asked about what bitcoin has to do with human rights, Jack said, “bitcoin changes absolutely everything and what I’m drawn to the most is its ethos, what it represents and how the conditions that created it are so rare and so precious that I don’t think there is anything more important in my life to work on and I don’t think there is anything more enabling for people around the world. If I were not at Square or Twitter, I’d be working on bitcoin. If it needed more help than Square and Twitter I would leave them for bitcoin.”
The main takeaway from the conference was about financial inclusion and supporting the unbanked, continuing the work of moving ever closer to open systems and truly free markets, how the existing financial system is broken and how in theory, the world will be a much more free, economically liberal place if the monetary network is bitcoin.
Understandably, banks and governments are hesitant on Bitcoin being that it does aim, after all, to replace Central Banking. Bitcoin is the only risk-off non-systemic asset in existence and is the only antidote for the systemic virus currently affecting every inch of the global financial system.
As Friedrich Hayek said, “I don’t believe we shall ever have good money again before we take it out of the hands of governments.”