The Crypto brothers go down on ‘Silicon Bali’

With its sea views and its resorts, Bali has long attracted surfers and holidaymakers. Today, it is also a top destination for crypto enthusiasts around the world.

Among the newcomers is Ilia Maksimenka, a 33-year-old Russian blockchain entrepreneur who came to the Indonesian island in 2020, shortly after the Covid-19 eruption.

“It’s very easy to meet the right people,” he says. “As for Southeast Asia, Bali is like [international] crypto-hub now.

While the pandemic has dampened international tourism, the rise in working from home has also led many to reconsider their comfort by living in cities that have traditionally been business hubs. For Maksimenka, who comes from Moscow, Bali was an exotic alternative.

“When you come to Bali, you may have 10 times cheaper living than in California. But you have the same level of comfort and a much higher quality of food. People prefer to come here and experience the tropical life,” he said.

In Bali’s posted communities who like to describe themselves as “digital nomads”, crypto is a common interest. On social media, many brag about the fortunes they have earned from trading cryptocurrencies in sunny villas while friends rummage through cramped apartments at home.

Tokocrypto office in Jakarta, Indonesia © Dimas Ardian / Bloomberg

“[We’re] Work in [these] hippie places. And you start to see Lamborghinis, ”said Emilio Canessa, an Italian who works with marketing for the Internet computer, a project of the blockchain company Dfinity. “The caliber of people here… It’s crazy.”

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

Tokocrypto, an Indonesian crypto exchange, says it now has 37,660 registered users in Bali, up from just 808 at the beginning of 2021. Members of the Bali crypto community that the Financial Times spoke to had a variety of interests, including cryptocurrency trading, non-fungal tokens, metaverse, and decentralized financing. But the latest arrivals fit a certain form.

“It is very heavy for the men. White men, people in their early twenties, ”said Antria Dwi Lestari, who works in community engagement for Tokocrypto in Bali.

As more of these young men from all over the world flock to Bali in search of the crypto dream, companies have discovered an opportunity. This year, Tokocrypto launched T-Hub, a “crypto clubhouse” in Bali with a co-working space and a swimming pool. Indodax, another Indonesian crypto exchange, has its second office on the island. Canessa suggested his company establish a “community-focused cultural presence.”

At the same time, other companies in Bali are having a hard time. Up to 80% of the island’s economy is dependent on tourism, a source of income that has almost been cut off during the pandemic.

The influx of crypto-migrants will not compensate for this loss of income. Only 51 tourists visited the island last year, compared to more than 6 million a year before the pandemic, according to Bali’s statistics office. Parts of the island have been virtually emptied.

Members of the crypto community are not blind to the local businesses that are fighting around them. Last year, an anonymous group launched Bali Token, a crypto token. According to its website, it can be used as a “discount coupon” on “any tourist spot in Bali”, which helps “millions of[s] of Balinese. . . remain strong under Covid-19 ”. The value of the token has fallen almost 100% since its peak in January, according to data provider CoinMarketCap.

Up to 80% of Bali’s economy is dependent on tourism © Sonny Tumberlaka / AFP / Getty Images

Separately, an online petition called on the Indonesian government to create a “teleworker’s visa” to strengthen the “digital and creative economy” while Bali fights tourism drought. It has been signed by 3,416 people since its launch two years ago.

The petition says that without specialized permits, teleworkers in places like Bali often have ambiguous legal status.

Maksimenka suggested that many social media posts about Bali should be treated with skepticism.

“Most of the golden children who tried to show off their riches [on social media], they are usually fake artists, ”he said. Only about 10% of Bali’s crypto community is “serious about technology”, he added, while the rest “just jump on the hype” and try to make money.

Mega Septiandara, an Indonesian working externally for a Bali investment company, also suggested that not all expatriates are on the island in the long run.

“I have a job and that’s how I stay alive. Crypto is fat. I get a good side income from it, ”she said.

But others are “trying to make a fortune,” she added. “Some have suffered problems and have decided to return to their country of origin. [They] maybe think it’s a little boring in Bali. After a while, it’s just, ‘Oh, that’s the beach.’ »

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