The Crypto Brothers Descend on ‘Silicon Bali’
With its ocean views and resorts, Bali has long attracted surfers and vacationers. Today, it is also a top destination for crypto enthusiasts around the world.
Among the recent arrivals is Ilia Maksimenka, a 33-year-old Russian blockchain entrepreneur, who came to the Indonesian island in 2020, shortly after the Covid-19 outbreak.
“It’s very easy to meet the right people,” he says. “As far as Southeast Asia goes, Bali is like the [international] crypto hub now.
While the pandemic has dampened international tourism, the rise of working from home has also prompted many to reconsider their comfort of 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 have maybe 10 times cheaper living than in California. But you have the same level of comfort and much higher quality of food. People prefer to come here and experience the tropical life” , did he declare.
In Bali’s expat community, who like to describe themselves as “digital nomads”, crypto is a common interest. On social media, many brag about the fortunes they’ve made trading cryptocurrency in sunny villas, while friends muddle through cramped apartments at home.
“[We’re] Work in [these] hippie places. And you’re starting to see Lamborghinis,” said Emilio Canessa, an Italian who works in marketing for the internet computer, a project by blockchain firm 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 start of 2021. Members of the Bali crypto community that the Financial Times spoke to had a variety of interests, including trading cryptocurrency, non-fungible tokens, metaverse and decentralized finance. But most recent arrivals fit a particular mould.
“It’s 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 around the world flock to Bali in search of the crypto dream, companies have spotted 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 businesses in Bali are struggling. Up to 80% of the island’s economy relies on tourism, a source of income that has come to a virtual halt during the pandemic.
The influx of crypto-migrants will not compensate for this loss of income. According to Bali’s statistics office, only 51 tourists visited the island last year, compared to more than 6 million a year before the pandemic. Parts of the island have been practically emptied.
Members of the crypto community are not blind to the local businesses struggling around them. Last year, an anonymous group launched Bali Token, a crypto token. According to its website, it can be used as a “discount voucher” at “any tourist spot in Bali”, helping “millions of[s] of Balinese. . . staying strong during Covid-19”. The token’s value has fallen nearly 100% since its January peak, according to data provider CoinMarketCap.
Separately, an online petition has called on the Indonesian government to create a “remote worker visa” to boost the “digital and creative economy” as Bali battles tourism drought. It has been signed by 3,416 people since its launch two years ago.
The petition says that without specialized permits, remote workers in places like Bali often have ambiguous legal status.
Maksimenka suggested that many posts about Bali on social media should be treated with skepticism.
“Most of those golden kids who tried to show off their riches [on social media], they are usually scam artists,” he said. Only about 10% of Bali’s crypto community are “serious about technology”, he added, while the rest “just jump on the hype” and try to make money.
Mega Septiandara, an Indonesian who works remotely for a Bali investment company, also suggested that not every expat should be on the island long-term.
“I have a job and that’s how I stay alive. Crypto is cool. I get a good side income out of it,” she said.
But others are “trying to make a fortune”, she added. “Some are having a little trouble and have decided to return to their country of origin. [They] maybe find it a bit boring in Bali. After a while, it’s just, ‘Oh, it’s the beach.’ »