Bitcoin Enthusiasts Bring Up ‘Silicon Bali’

With its ocean views and surf resorts, Bali has long attracted surfers and tourists alike. But today, the island has also become one of the preferred destinations for cryptocurrency enthusiasts.

Among the newcomers is Ilia Maksimenka, 33, a Russian blockchain entrepreneur who relocated to the island from Indonesia in 2020, not long after the Covid-19 outbreak.

“It’s very easy to find the right people,” he said. “In terms of Southeast Asia, Bali is like the [internacional] of cryptocurrencies, now”.

While the pandemic has constrained international tourism, the rise of working from home has also prompted many people to reconsider their satisfaction with life in cities that traditionally serve as business hubs. For Maksimenka, who hails from Moscow, Bali was an exotic alternative.

“When you come to Bali, life is maybe 10 times cheaper than in California. But the comfort level is the same and the food quality is much higher. People prefer to come here and live the tropical life” .

In Bali’s expat community, who like to describe themselves as “digital nomads”, cryptocurrencies are one of the interests people have in common. On social media, many of them boast of the fortunes they have made trading cryptocurrencies, and show pictures of their sun-drenched beach houses, while friends continue to struggle to survive in cramped apartments in cities that new cryptocurrency millionaires have abandoned.

“We used to work in these hippie places, and suddenly we started seeing Lamborghinis,” said Italian Emilio Canessa, who works in marketing on the “internet computer” project, developed by Dfinity, a blockchain company. “The caliber of people we have here… is crazy.”

“They started calling the place Silicon Bali,” he added.

Tokocrypto, a cryptocurrency exchange in Indonesia, says it now has 37,660 registered users in Bali, up from just 808 at the start of 2021. People in the Bali cryptocurrency community that the Financial Times spoke to have diverse interests, including which cryptocurrency trading, NFTs, the metaverse and decentralized finance. But most newcomers fit a certain mold.

“The male presence is very heavy. White men, in their mid-20s,” said Antria Dwi Lestari, who works in community engagement at Tokocrypto in Bali.

And as more and more young people flocked to Bali in pursuit of the cryptocurrency dream, companies saw new opportunities. This year, Tokocrypto launched T-Hub, a “crypto club” in Bali that offers shared work space and a swimming pool. Indodax, another Indonesian cryptocurrency exchange, has set up its second office on the island. Canessa said his company has established a “cultural presence that focuses on community.”

At the same time, other companies in Bali are struggling. The island’s economy depends up to 80% on tourism, a source of income that has virtually dried up during the pandemic.

The influx of immigrants attracted to cryptocurrencies will not make up for lost income. Just 51 tourists visited the island last year, according to Bali’s statistics service, compared to the six million annual tourists the island received before the pandemic. Some parts of the island have practically emptied out.

People in the cryptocurrency community are not blind to the difficulties of local businesses around them. Last year, an anonymous group launched the Bali Token, a form of cryptocurrency. According to the project’s website, the Bali Token can be used as a “discount coupon” at “any tourist spot” on the island, which “helps millions and Balinese… stay strong during Covid-19”. The virtual coupon value has dropped by nearly 100% after its peak in January, according to CoinMarketCap, which provides data on cryptocurrencies.

A petition is circulating online, urging the government of Bali to create a “remote worker visa” to spur “the creative and digital economy” and help Bali weather the tourism drought. The petition has garnered 3,416 signatures since it was launched two years ago.

The petition argues that without a special work permit, remote workers based in places like Bali often live in an ambiguous legal situation.

Maksimenka indicated that most social media posts about Bali should be viewed with skepticism.

“Most of these golden boys who try to flaunt their riches [na mídia social] are cheaters,” he said. Only about 10% of the cryptocurrency community in Bali is “serious about technology,” he added, while the rest are just “riding on the bandwagon” and trying to make money.

Mega Septiandara, an Indonesian who works remotely for a Bali investment company, also pointed out that most expats were not on the island to stay.

“I have a job, and that’s how I survive. Cryptocurrencies are cool. I get a good side income from them,” she said.

But other people “are trying to make a fortune,” she added, “Some were having problems, and they decided to go back to their home countries. Maybe they got a little bored in Bali. After a while, people think, ‘It’s just a beach. ‘”.

Translation by Paulo Migliacci