Chris Tyrrell stood in front of a screen that read “Blessed are the Blockchains?!?” and addressed an eclectic crowd of about 200 that included hedge fund managers, small-town doctors and online evangelists. They had traveled from all over the country to the Sheraton Valley Forge in King of Prussia, Pa., on Nov. 17. A few were already millionaires. Others were perhaps hoping to be. But they were all there to engage a peculiar intersection of cultures and interests: the Catholic Church and crypto technology.
“There’s something that’s going to happen over the next two days that is sort of a conversion process,” said Mr. Tyrrell, a former vice president at Goldman Sachs. “The unity between your calling as a Catholic and your vocare [Latin for “to call”] crypto’... that’s what we need for this technology to really flourish.”
It was the first keynote speech of the first-ever Catholic Crypto Conference, a two-day forum that brought together two entities that, at first glance, might not seem like a comfortable fit. What is it about the high-stakes and little-regulated world of cryptocurrency that would appeal specifically to Catholics?
What is it about the high-stakes and little-regulated world of cryptocurrency that would appeal specifically to Catholics?
The underlying technology that powers cryptocurrency boils down to a pretty simple idea: A group of stakeholders create a public list of information that they all agree on, rather than letting an institution like a bank or government agency do it for them. It could be a list of financial transactions, legal contracts or art ownership, but the process remains the same. Electronic encryption allows people to keep that list of information secure and untouchable by centralized powers. To some investors and speculators, and apparently to some Catholics, that possibility holds enormous appeal.
Bitcoin: A history
The story of crypto is a story of financial mistrust. The technology launched in 2008 with the creation of the first cryptocurrency, Bitcoin, which harnessed computing power across the internet to record financial transactions in a public way. Founders believed when a whole network of computers collaborate to track the movement of money, there is no need for a bank to act as a trusted third party keeping score.
The innovation arose in the wake of the Great Recession, a time of a record loss of confidence in banks in the United States. In 1979, Gallup found that 60 percent of respondents had “quite a lot” to “a great deal” of trust in banks; just 9 percent of respondents said they had “very little” trust in them. But by 2012, those numbers had nearly flipped: 9 percent reported “a great deal” of trust in banks, 12 percent reported “quite a lot” of trust and 73 reported “some” to “very little.”
The creator of Bitcoin in 2008 proposed that cryptocurrency could save the day.
Founders believed when a whole network of computers collaborate to track the movement of money, there is no need for a bank to act as a trusted third party keeping score.
But over the past month, evidence has emerged that crypto may not prove the antidote to reckless financial behavior. In November, just days before the Catholic Crypto Conference opened, a multibillion-dollar crypto trading company, FTX, spectacularly collapsed. That massive loss of wealth garnered mainstream attention, and FTX has since been criticized as a Ponzi scheme. Its founder, Sam Bankman-Fried, faced widespread charges of fraud and extradition from his compound in the Bahamas on Dec. 13. It has become clear that on the finance side, the unregulated crypto sector has spawned a number of apparent scams that have scared off many investors. But the crypto enthusiasts at the King of Prussia expo hastened to point out that finance is not the only application of the emerging model.
Lots of information can be stored on ledgers, not just currency and commodity transactions. Crypto technology can store any information that a central power, like a government or powerful company, might want to censor. In a crypto-inspired alternative to Facebook, for example, no single authority could remove a post that could be viewed as hate speech. That power is decentralized.
Just like the loss of trust in banks, confidence in other civil and government institutions has been falling. Gallup found a steady loss of faith in government, media, health care systems and, recently, big tech companies.
Crypto technology can attract many people who are most worried about abuses by those institutions. They often hold politically conservative views, including deep distrust of large institutions and broad enthusiasm for the free market.
Republican politicians have associated cryptocurrency with conservative values, including religious liberty. But economist Paul Krugman perceives the crypto phenomenon to be part of a strategy to seed doubt in institutions, just like Covid-19 misinformation and false claims about election fraud.
Two days worth of speakers offered Bitcoin sales pitches, background on technological advances and alerts of Marxist takeovers.
Plenty of cryptocurrency enthusiasts exist outside the more traditional and libertarian school. New York City mayor Eric Adams, a Democrat, garnered attention by receiving his first paycheck in cryptocurrency. Bankman-Fried donated heavily to liberal candidates and nonprofits with his illicit funds. And in general, reducing the power of big banks has appeal across the political spectrum.
However, the Catholic Crypto Conference seemed to lend support to Mr. Krugman’s assessment that crypto can prove most attractive to the least trusting in society.
Speakers and attendees discussed fears about insidious powers at work in the United States, about collusion between tech companies and the government meant to erode families and religious freedom. The hedge fund managers and the small-town doctors and parish deacons apparently shared a certainty that Catholics need to protect themselves from failing U.S. civic institutions. This thread wove through two days worth of speakers who offered Bitcoin sales pitches, background on technological advances and alerts of Marxist takeovers.
Decentralized finance for Catholics
On the first day of the conference, a former investment guru at the University of Notre Dame and co-founder of a private investment firm delivered stark warnings about U.S. culture and urged participants to keep an open mind about crypto. Mark Yusko, who along with his wife, Stacey, gifted Notre Dame $35 million in 2009, encouraged attendees at the conference “to begin your [crypto] journey or risk being left behind.”
Mr. Yusko spoke quickly and confidently, sharing jokes and personal stories during his presentation that captured the attention of his audience and breezing through countless slides of graphs and historical case studies meant to inspire confidence in Bitcoin, even as it dropped over the past year to less than 75 percent of its peak value.
Mr. Yusko, who has had to recover from his own financial setbacks in the past, argued that early investors in big technologies often faced criticism for those calls but made big returns in the long run.
“If you invested in the telegraph, [when] people said, ‘It’s impossible! You can’t [communicate] across copper wires,’...[then] you made 11,000 percent returns. Pretty good, ” he said.
In a more modern comparison, Mr. Yusko pointed to Amazon, a company which has rewarded long-term stockholders with huge gains. He noted that only a handful of investors had held on since the company first went public in May 1997. “Everybody else couldn’t handle the volatility,” he said. “Bitcoin has the same volatility.”
The villains in Mr. Yusko’s pitch were central banks, which print “worthless” fiat currency no longer backed by real-world assets like gold. He called monetary policy from the Federal Reserve “criminal.”
“They sold you [the belief] that inflation is good for you,” he said, referring to the 2 percent “target” inflation rate traditionally sought by the Federal Open Market Committee. “[But] inflation is theft. Inflation is unethical. The Fed steals your money and gives it to the rich.”
“Inflation is theft. Inflation is unethical. The Fed steals your money and gives it to the rich.”
Mr. Yusko had more than just the Fed in his crosshairs. Slipped into his talk were asides on hot-button political issues—skepticism about pandemic protocols, doubts about election integrity and glib remarks about “cancel culture.” He suggested that mainstream understandings of finance and history had been whitewashed to benefit those in power and offered his own theories about technological change.
“Very highly charged topic, slavery. Slavery went away because of Pennslyvania and the discovery of oil,” he said, making that incongruous connection during an analysis of how technologies replace each other. He also said that crypto technology will revolutionize the way votes are counted, which he described as inaccurate and inefficient.
The hard pitch to invest in cryptocurrencies from Mr. Yusko and others seemed at odds with the tone that organizer Matthew Pinto tried to set with the conference’s motto: “Let the conversation begin.”
Mr. Pinto explained that he did not want participants to feel pressured to invest in something that they did not fully understand. To that end, he included a speaker to discuss the dangers of cryptocurrency scams and how to recognize them.
“We are not crypto bulls. We are crypto discerners. We are discerning the space,” Mr. Pinto told America.
Yet panels on cryptocurrency investments, even in the wake of the FTX collapse, which Mr. Yusko described as a “storm [that] will blow over,” strongly encouraged attendees to invest as soon as possible.
That message did not resonate with everyone.
Deacon Bruno Schettini said that he attended the conference out of curiosity because he thought, “Catholic and crypto, those shouldn’t go together.” He practices medicine in nearby St. Clair, Pa.
Deacon Schettini said that he felt skeptical about the “tremendous hype” over cryptocurrency speculation at the conference.
“It’s a very rosy picture for blockchain and crypto,” he said. “This is probably a fad, in my mind… it’s something real, but it’s also something very risky.”
The hard pitch to invest in cryptocurrencies from Mr. Yusko and others seemed at odds with the tone that organizer Matthew Pinto tried to set with the conference’s motto: “Let the conversation begin.”
But Deacon Schettini’s take seemed to represent a minority opinion.
As Mr. Yusko finished his presentation, enthusiastic applause broke out, and one audience member turned to his companion to say, “That was awesome. I just changed my mind.” Others rushed to speak with Mr. Yusko.
A “parallel polis”
Beyond its application in the financial sector, the underlying technology of crypto has the potential to decentralize more than just the money supply. Michael Matheson Miller, a senior research fellow at the Acton Institute and the creator of the documentary “Poverty, Inc.,” used his talk to develop the idea of a “parallel polis”—blockchain technology enabling Catholic people to insulate themselves from the “soft despotism” of the United States.
Mr. Miller believes that religious freedom is under attack by civic and cultural institutions, especially technology and social media companies and the government. Some examples he cited included a 2022 Supreme Court ruling requiring Yeshiva University to recognize an L.G.B.T. student club and the 2021 temporary ban of Senator Rand Paul from YouTube after the senator claimed erroneously that cloth masks do not help to prevent the transmission of Covid-19.
Mr. Miller said that Catholics need to build a network of professionals using blockchain technology so that neither the state nor big companies can deplatform or censor them.
As an example of what could be at stake, Mr. Miller shared claims made by the former U.S. senator and Kansas governor, Sam Brownback, that JPMorgan Chase “canceled” his organization, the National Committee for Religious Freedom, by refusing to do business with it because of his Catholic religious beliefs. JPMorgan Chase denied the claims.
Much as Mr. Yusko did, Mr. Miller peppered his presentation with expressions of concern about collusion among powerful actors in the United States government and tech companies, accusing them of double standards regarding the Covid-19 vaccine effort. He said that Marxists are moving “into Catholic schools.” Regarding his “parallel polis” idea, Mr. Miller predicted that the end result could certainly involve conflict between Catholics and the federal government.
Much as Mr. Yusko did, Mr. Miller peppered his presentation with expressions of concern about collusion among powerful actors in the United States government and tech companies.
“Yes, the state can crush us. It’s absolutely possible,” he said. “But that's going to require them not to use soft despotism, not to use regulatory measures… It's going to require them to exercise hard despotism against us. And we have to ask ourselves, are the American people ready to see hard despotism? And I think the answer, God willing, is not yet,” he said.
The views of Mr. Miller and Mr. Yusko, of course, do not represent the entire spectrum of thought in the crypto world or even that of those among the attendees at the conference. A few panels focused on the humanitarian possibilities of cryptocurrency as a sound and independent form of exchange.
Economist Stephen Barrows, also of the Acton Institute, sought to apply Catholic social teaching concepts to crypto culture. He cited letters from recent popes about the importance of a stable currency system, including Pope Benedict XVI, who wrote in “Caritas in veritate” about the need for a more moral financial system in the wake of the 2008 banking crisis.
“Central banking, if not done well, can lend itself to instability in the currency. There have been different institutional arrangements throughout history that tried to mitigate that… I think cryptocurrency is going to drive that conversation,” said Mr. Barrows.
Timothy Jacklich did not attend the conference, but he works as a senior crypto research analyst for San Francisco-based Tribal Credit. He explained that in the United States, the most popular use of cryptocurrency has been speculative: A person buys a certain virtual “coin,” then they hold that coin, hoping to sell it in the future at a higher price.
Mr. Jacklich works with small and medium businesses in emerging markets, mostly in Latin America, where unstable currencies and dubious practices in finance and banking have encouraged many average people to consider adopting cryptocurrencies. In those states, cryptocurrency is more commonly used as a store of value than for short-term speculative gains.
“In markets like Venezuela, where the currency has been almost entirely eroded by hyperinflation, even the most volatile crypto assets might be a better vehicle for protecting your savings than the local currency,” Mr. Jacklich explained.
“In markets like Venezuela, where the currency has been almost entirely eroded by hyperinflation, even the most volatile crypto assets might be a better vehicle for protecting your savings than the local currency.”
Could this be what comes next for the crypto market in the United States? An access point to a reliable currency for people who mistrust or cannot access “normal” banking? Mr. Barrows thinks it is possible, but not as the crypto industry stands now.
“Right now there's no cryptocurrency that has a store value function that would make it a new money for the unbanked,” he said. “I think in order for there to be widespread adoption, there would need to be some ‘rules of the game,’” he added.
The crypto space, just like the internet before it, has expanded at a head-spinning pace, and all kinds of people are making use of its tools for their own ends. Just as the views expressed at the Catholic Crypto Conference did not represent the perspective of a lot of Catholics, they did not cover the breadth of opinion in the crypto world itself.
But the curious intersection of these two belief systems in King of Prussia surely drew in like-minded people from both communities who appear to find themselves on the same side of today’s culture wars. Crypto’s promise of decentralization holds enormous appeal for those who believe that “woke” governments and companies are conspiring to silence them.
As one panelist in “The Future of Finance” panel said, “Speaking the truth should not be a conspiracy theory. Sometimes a tin foil hat fits me just fine.”
