Interview with Erik Voorhees
Erik Voorhees is the founder of ShapeShift, an interface for digital assets. He was one of the earliest bitcoin and cryptocurrency advocates.
Contents
N.B. This interview was conducted as part of the “Digital Currency, Blockchains and the Future of Financial Services” class at New York University School of Law and Stern School of Business that I teach with Professors Geoffrey Miller and David Yermack.
Live Free or Die
Max Raskin: I want to start with the origin story – where and when did you first hear about bitcoin?
Erik Voorhees: I had moved to New Hampshire to join the Free State Project, which is an ongoing attempt to get 20,000 radical libertarian types to move to a small, concentrated area and have an outsized influence on politics. While I was in New Hampshire, I saw a Facebook post from a friend who was out there as well.
MR: Do you remember the friend’s name?
EV: Yeah, Keith, Keith Ammon. He still is part of the Free State Project up in New Hampshire. He's actually now a state house representative up in New Hampshire. He posted on Facebook this article about bitcoin. This was May of 2011; bitcoin’s price was around $5. I clicked on the article, read about it, thought it was stupid after the first article, read a second and a third article, and then was just completely in love with it and fell down the rabbit hole. It has become my passion, career, and hobby ever since then.
MR: What about some of your economic views before then? Who had you been reading and what influenced your political philosophy and economic philosophy?
EV: Yeah, I've always been someone who was very antigovernment from the perspective of letting people be free in their own choices and with the basic assumption that if you're not hurting someone, you should not be hurt by someone else. That's a simple premise that I think most people agree with, but most things that governments do are based on violating that principle. At that time, when I was in college, I did not have opinions on money or on the dollar. To me, the dollar just seemed unproblematic. It was just part of a capitalistic system and I was pro-capitalism, so I didn't see any issues with the money.
Then when I was in Dubai, it was the 2008 financial crisis. I watched all that unfold and started getting really interested in how banking worked, how central banking worked, how money worked, how money became fiat and how not that long ago, it had been backed by gold and why it wasn't anymore and all those kind of questions.
I came to the strong opinion that money was actually the central issue here and that if you're going to have a market-based system, a capitalist system, the most important thing in that system to be market-based was money itself. And so, to have a central state essentially planning and controlling money seemed to me to be completely antithetical and counterproductive to a market-based economy.
But I didn't have a solution to that. I was and remain a fan of gold as a superior form of money to fiat. But I did not see that as a highly effective form of money in a digital economy. So I was just frustrated with the whole thing.
That was very fertile soil for when I learned about bitcoin. I saw that wow, here's an actual money that is only of the market and is purely digital. This could actually be completely huge.
MR: Did you read the whitepaper and felt like you understood it on a technical level?
EV: My technical skills are like this: I am not an engineer. I can't program anything. The only code I know is how to do bold in an HTML tag. I can do italic and underline as well. So, yeah, I read the whitepaper and just felt like an idiot. I read it and I saw that a brilliant mind created this, but I didn't understand enough of what's was going on there to have a strong opinion on it.
Unfortunately, I couldn't understand it on a deep enough level to have an opinion, but I did trust other people that I knew were smart enough to understand it at that level. What I cared about was really if it can plausibly function as a form of money and why. That's not really a technical question. That's a question of monetary economics and is almost more philosophical than it is technical.
MR: One question I had very early on was how hard was the cap – could someone simply re-program it? Were you interested in the consensus mechanism? What was the thing that did it for you that made you think it had the properties you liked.
EV: Certainly the cap was really fascinating because any economist that you ask, regardless of whether liberal, conservative, wherever in the spectrum, they will tell you that the money supply needs to increase as an economy grows and that if the money supply is not increasing, that will actually constrain economic growth. The only economists that don't believe that are the Austrians, which is this tiny little niche.
And so I learned that Satoshi [Nakamoto] had set not just a static rate of inflation – like 1%, which would still be better than dollars – he actually capped it. That was a really foundational decision that runs counter to all professional economics today.
That really struck me as a great insight because I also felt that the supply of money is actually an arbitrary thing. What's more important is that it's transparent and knowable and that certain groups of people can't just change it at a whim. I found that interesting.
What really hooked me was that anyone in the world could send money anywhere else instantly at near-zero cost and no one could stop it. That was just so profoundly valuable and important and interesting to me.
When I read about various skeptics who thought that the whole thing was stupid and didn’t get what you’d use it for, I’m sitting there thinking – how do you not see how that's useful? A technology that anyone can move money anywhere in the world in an unstoppable way at near-zero cost. That has to be up there with like the printing press. It's that level of technical accomplishment.
It was that immutability and the ability for any person, regardless of who they were, what country they were in, how educated they were, how much money they had, they all had this equal, sovereign power over base money, which I found to be really beautiful.
New York Instant
MR: So this is a nice segue into BitInstant. How did you meet Charlie Shrem and the BitInstant guys?
EV: So in early and mid-2011, bitcoin was just a hobby. I'd been doing some freelance marketing work – I had very little money, and I should have been focused on a career, but I just fell down the rabbit hole and I couldn't get enough of it.
I went to the world's first bitcoin conference in New York City in August of 2011. There was like 50 people there. I think two of them were women, one of whom was my girlfriend. I met a lot of the characters that ended up being part of the story.
I met Roger Ver at that event. He and I hit it off immediately. We became fast friends. A few months later, he had invested in BitInstant, which was the first real crypto startup ever to receive any kind of angel investment money.
Roger invested in it and he recommended to Charlie that he hire me for marketing. I got in touch with Charlie, we hit it off, and I joined. I first worked remote for a few months and then moved to New York in the summer of 2012.
MR: I remember the meetups at the Buttonwood Project in Union Square where there'd be the open-market trading – they called it Satoshi Square. Can you talk a little bit about the early scene in New York?
EV: I didn't really participate in those, but the scene was like a hundred people in New York, and five or 10 of us worked at BitInstant.
Obviously we were all really excited about the technology and we had completely drank the Kool-Aid. We just wanted to talk about bitcoin day and night all the time. This was after the 2011 bubble where the price had gone up to $31 and then slowly crashed back down to $2 over the subsequent months, which is pretty miserable.
Almost everyone in the world who had even heard of bitcoin at that time wrote it off after that crash because that looked like the tulip bubble that had ended. That was the end.
For those of us who didn't think that that was the end, it was a special time because we had no empirical reasons to believe anymore. We had every reason to be skeptical, cynical, write it off. And so, we were all just happy to be in that delusion together. I think that's what formed a lot of really good bonds then.
MR: Did you buy bitcoins at this time?
EV: I bought some, lost them day trading in Bitcoinica, which was like this margin platform written by a 16-year-old high-schooler from Singapore on his spring break week. He wrote a bitcoin margin trading platform. That ended up getting hacked and losing a bunch of money. But I lost mine just trading. I kept believing in it. And so, I was always putting in leveraged bets that it would go up and I kept being wrong.
MR: Did you ever buy from Mt. Gox or keep coins on Mt. Gox?
EV: Yes, and I had to wire money to Japan to do it. It was like a two-week process. The whole point of BitInstant was to remove that time. The way BitInstant worked was BitInstant had a bunch of money already at Mt. Gox. If you gave BitInstant money, we would then credit you on Mt. Gox with the money that we already had there. So instead of it taking two weeks, it would take an hour in the afternoon to start.
Someone would go to a 7-Eleven and use a MoneyGram or those kind of systems to give money to BitInstant. As soon as we knew that your money was with us, we would credit you that same amount of money at Mt. Gox.
MR: How would BitInstant decide how much to send to Mt. Gox?
EV: So this was just Charlie…there was no system to it. This was napkin math, like, "Oh, I think we need another quarter million dollars over at Mt. Gox. So let's do that."
MR: Who were the banking partners that you had? How was that?
EV: Most banks hadn't even heard of bitcoin at this point. It became harder to have a banking partners later. It was actually easier at this point because bitcoin wasn't yet a thing on anyone's radar. So we had a bank account and we would send international wires to Japan.
MR: Did anyone ask any questions?
EV: Yeah. The questions started getting bigger and bigger, especially as the volumes were increasing. These were all relatively small amounts. I think in our largest day ever, we did like $80,000 in a day. To us, that was massive. This was like, oh my God, business is booming. Today, a small exchange, will do hundreds of millions of dollars in a day.
The amounts on an aggregate level were not large, but the banks were certainly seeing lots of weird flows of funds. And so, we would have bank accounts get closed and we always had a bunch of burner accounts that we'd have to go open, just assuming they would get shut down a day later or two months later. That was part of the value-add really.
MR: Now in the early days were you storing your bitcoin on a hard wallet, brain wallet, paper wallet?
EV: Hardware wallets did not exist yet. People just really used the Bitcoin client, which is like a full node on your computer.
MR: Do you have any stories about losing bitcoins?
EV: No, we were pretty good about that. I mean I've lost small amounts in various ways. I had a non-small amount at Mt. Gox, which I knew was a bad idea. I was trying to get it out there when they collapsed. So that was just bad timing. But I knew of the risk at the time.
But BitInstant, I don't believe we ever lost any. The thing about bitcoin is sometimes you lose amounts and you don't know you lost it because sometimes you'll find money in the couch cushions or certain addresses that you hadn't thought about. Certainly 10 bitcoin back then would've been $50, and so can easily think of that being in a wallet that doesn't matter. It's not worth the time to go find where that was or unlock it or decrypt it or whatever you need to do. Today that would be worth, what?
So that kind of story happens a lot.
MR: What about your views of compliance and tax issues? Did you want to make any political statements?
EV: No, we weren't trying to disobey anything. BitInstant would still pay all its normal taxes like any business. The thing to realize is from the time that BitInstant got started until the time that it got shut down was like less than a year. So even before the first real tax return happened, it was already gone.
The taxes were never a complicated thing. If you're making profits, then you're going to pay the taxes on those. What was complicated was the money transmission issues. It was not clear which activities required money transmission licensing and which did not.
That was all super messy. As BitInstant started growing, we hired lawyers and started investigating all these kind of things. But that was complicated, and even today, there's not a clear set of guidelines or answers.
Charlie and the Winklevii
MR: Do you remember when Charlie was arrested?
EV: I do. I had already left BitInstant. I had a big falling out with the Winklevii twins and I moved to Panama.
MR: Can you say that the falling out was over?
EV: Yeah. So basically they learned about bitcoin from us talking with them and they got really excited about it. We had some great weeks together teaching them about bitcoin and they were, to their credit, very authentically engaged. Then they invested in BitInstant and, for a while, things were good. But it was just a story of them starting to tell us things to do that we disagreed with, and the divergence of opinion got too great. And so, that just didn't go well.
MR: Was it anything political?
EV: No. I think they definitely had the opinion of we need to be overly compliant, whereas we felt like we should be minimally compliant. We should figure out what we need to do and then do that. But we shouldn't go out of our way to make the service worse so the politicians are happy.
That was just a matter of strategic disagreement. Ultimately, it ended in us leaving. So Charlie was alone at BitInstant for a couple of months after that.
BitInstant ended up turning itself off because it was concerned about compliance issues. So while they were researching all this, the lawyers said, "You need to just turn the service off." They did, and it never turned back on, because a couple of months after that, Charlie got arrested when he was flying back from a conference in The Netherlands. I was in Panama and I remember reading the news that he had gotten arrested as he arrived at the airport, stateside.
MR: Was that a shock to you?
EV: Yeah. I mean Charlie was and is a great friend. To hear something like that is scary and sad and tragic. You want to help and you're worried and you don't know what it means. Is it a small deal? Is it a massive deal? It's all unclear. That was super stressful and a pretty momentous event in the industry.
Rolling the Dice
MR: What was the genesis of SatoshiDice?
EV: So SatoshiDice was in parallel with BitInstant. It started as just this little side project. It was a bitcoin gambling site. Basically it was a list of addresses that anyone in the world could see. If you sent bitcoin to different addresses, you had different odds of winning the roll. The odds would be calculated. If you won, you'd get more bitcoin back. If you lost, you'd get a tiny dust transaction back so that your wallet knew that you lost.
It was very simple, but magical in that it was borderless. Anyone in the world could participate in this gambling site. Most gambling sites have all sorts of territory restrictions and issues because they're based on banking relationships and payment issues. We had none of that in bitcoin.
But the cooler feature was that it used cryptography to create provable fairness. What that meant was that you could mathematically prove that the odds we said for each roll were correct. Not only did we tell you what the odds were, which no casino in Vegas will do, you could actually prove that the odds that we said were valid.
This was like an honest, transparent way of gambling versus something like in Vegas where it's all opaque and you have this regulatory body, the Nevada Gaming Commission, that licenses the casinos, but no one has any idea what the odds are. There's no mathematical certainty that the games are actually doing what the odds say they're supposed to do.
So here comes this pirate startup, SatoshiDice. No regulation, no license, nothing. It creates a mathematically provable and honest game. I found that to just be a really cool demonstration of the power of this technology.
SatoshiDice caught like wildfire. Up until 2013 – by that time I had already sold it – but up through those first three, four years of bitcoin's existence, more than half of all the bitcoin transactions in the world were to or from SatoshiDice.
MR: So cool.
EV: Yeah, got a little bit out of hand.
MR: How does your political philosophy mesh with your business practices and at what points do you make decisions to say, "We're going to start talking to the regulators," or, "We're going to be overly compliant rather than minimally compliant"?
EV: It's not the case that I don't like the regulations because I find them annoying. I mean I do find them annoying, but that's not the real issue. The real issue is that I find them unethical. So it becomes a question of do I act in a way that I believe to be ethical or do I act in a way that is compliant?
That's a really shitty position to have to be in. What should you do when your moral compass is telling you to do something and then a politician who you don't know and doesn't understand the situation at all is telling you to do the opposite of that thing and to act in an unethical manner?
That's a really challenging problem. Sometimes I'm pragmatic about it and I try to be compliant, because I don't want to go to jail. I have a family and I don't want to spend my precious life in a cage. But I also try to push the boundaries and figure out where those loopholes are and what paths can be taken to not be out of compliance, but to still act ethically toward customers and to the people I interact with.
That's a complicated question, and it depends really on the specifics of any given topic. I will say that I have become fairly well-versed in many areas of law that I had not cared about many years ago, but I've been forced to understand it on a better level now.
Consenting Adults
MR: Can you talk a little bit about what it’s like to be investigated by the Securities and Exchange Commission? What is it like, psychologically, being on the other end of that?
EV: So in late 2012, as SatoshiDice was growing and making money, I decided I wanted to de-risk some of my exposure to it. And so, I was going to sell 10% of SatoshiDice to the crypto community.
This was long before ICOs, so there was no token involved. But I was going to sell a share of the revenues to anyone who wanted to buy it. This was done through a web platform, which was just this ridiculously antiquated stock exchange for crypto startups.
So I think I sold $100,000 for 10% of the project in that way and did that because investors wanted to invest, and I wanted the money and to de-risk a bit. It was obviously a mutually beneficial transaction, so I thought that was great.
SatoshiDice was highly profitable and I'd get to start paying 10% of the revenues out to the shareholders over the subsequent months. Everything's going well.
As it's getting bigger, I start worrying about how high profile I had become in the bitcoin world and the fact that I was running the world's biggest bitcoin casino. I felt like I needed to pick a path. One was a legally gray area and one was controversial, and I either needed to be an outspoken proponent of bitcoin or I needed to run this casino game. I felt like if I did both, that would cause problems.
So I decided to sell it and sold it in early 2013, I think. I didn't really want to sell it, but I didn't want that to be my focus. I didn't want to be the guy running the bitcoin casino. I wanted to be the proponent of bitcoin as a change for good in the world.
Maybe a month after I sold it, I got a letter from the SEC that they were investigating me for securities violations. That's obviously a very scary and horrible letter to get. It's on their special letterhead with all their badges and they use all this ridiculous terminology to scare you and intimidate you and make you feel like a bad person.
Obviously I called a lawyer immediately and started that whole process of how to deal with a regulator that's coming after you. It was really miserable. It was about nine months of time. I spent a few hundred thousand dollars on lawyers, which was a lot of my money back then.
The whole time I'm sitting in fear and feeling that the whole situation was so unjust because the investors had all made a bunch of money. After the sale, they'd gotten paid out and they were all good. There was no victim, and yet here was this agency coming after me because I didn't get their permission to sell the shares. That was what they were upset about.
Ultimately, after those nine months, we ended up settling and I had to give them $50,000. But, yeah, certainly it was pretty horrible.
MR: Did any of this change your mind that crimes should have victims?
EV: Yeah, I already knew that. I mean that seems like such a fundamental thing. Of all the difficult problems in the world, one that doesn't seem difficult is if there's no victim, then there isn't really a crime that has occurred. And yet most regulation has no victim.
MR: Do you think there should be securities laws?
EV: No, I don't. I think what is good is that when there's a victim, such as in fraud – that’s already illegal. So whatever I'm doing, whether I'm selling a security or selling a poisoned apple, it's fraud or endangerment, or there is a victim because of some material misrepresentation on my part. That fraud should be illegal and that is a matter for courts to sort out.
But there was no fraud. So there should not be securities regulations outside of the area of there being a victim. In other words, as long as fraud is illegal, the entire Securities and Exchange Commission doesn't need to exist.
MR: Did they ever try to get you to attest to something, like that you love the securities laws and regulation?
EV: No, but I was barred from saying things that I would've liked to say, and I can't go into more detail than that. Obvious violation of the First Amendment, but that doesn't really stop them.
Shifting Shape
MR: After something like that happens to you, how did you think about what to do next?
EV: At that point, I was down in Panama when the issue got settled with the SEC. Several months later, I had decided I wanted to move back to the U.S, back to Colorado and, at the beginning of 2014, had the idea for ShapeShift. And so, as I'm in the transition of moving back to Colorado, that concept came to me. It was based on how SatoshiDice worked, which was this open platform where someone sends in a transaction and something happens and a transaction is sent back to them. In SatoshiDice, it was a wager or a gamble on a bitcoin transaction. In ShapeShift, it was a send in coin A and we send coin B back to you. It was a way of exchanging without holding custody of user funds.
This was right in the wake of the Mt. Gox catastrophe where $400 million of investor money got lost. I wanted to build a way for people to convert one token into another without an exchange holding the funds. To me, that seemed really important to be able to do that. That doesn't work for dollars, but it does work for crypto assets. So that was the impetus for ShapeShift.
MR: It's funny, you had just said that ShapeShift, it's very similar to SatoshiDice. Were you worried about them wanting to ding you again?
EV: Yeah, of course. I mean ever since I got involved in bitcoin, I've always known that it was going to be a highly controversial technology. I stepped into that knowing that it was important enough to take that risk.
I've been eyes wide open in that regard the whole time, and I'm not going to not build something useful for humanity just because politicians have a problem with it. That's just a decision I've made in my own life, that I care more about helping people than I do about following laws. This probably sounds controversial to a lot of people, but if you read about how good change happens in the world, it tends to be people who are willing to break laws because they needed to do the right thing instead.
Dread Pirate Roberts and Frédéric Bastiat
MR: The obvious question here is around this time, Ross Ulbricht was arrested.
EV: Yeah, that was about six months earlier.
MR: He would say a lot of the same things; do you think there are differences?
EV: I've met Ross. I met him in jail actually and talked with him for a while and got to know him as a person. My opinion of him is that he is very much ideologically motivated in a very similar way to me. He was willing to take a risk that I wouldn't have been willing to do.
I think the act of creating something like Silk Road is more risk than I would ever be willing to take. However, I don't see any moral issues with the Silk Road. I think any consenting adults that want to buy things, they should be able to do that as long as there's no victim.
MR: Which political philosophers influenced your views on this?
EV: There's a lot. Frédéric Bastiat is one of my favorites. He was a French economist and philosopher from the 19th century – he wrote a lot on what law should be and what it isn't. Obviously, all the Austrian economists have a large influence on me. The founders of the United States had a lot of influence on me. Just reading the rationale for how America was formed and why and the principles of that had a lot of influence on me. And so, it has been sad to see how far from that vision the current national government has veered.
MR: I want to talk to you about the transition into institutional. At this point, holding bitcoin is not a political statement anymore and you don't run the risk of going jail when in the early days, that was not totally clear.
EV: Well, I think the history of that is still to be written. It is true that from the early days, I was much more concerned about an outright ban or really draconian regulation, especially in the U.S., and that hasn't happened yet. So that's been great – a nice surprise.
However, I'm of the opinion that bitcoin ultimately takes over the world from a monetary perspective. As that occurs, bitcoin goes from this speculative technology that people talk about in some circles to a financial asset that a bunch of people are willing to hold, to an actual existential threat to the United States dollar.
As that occurs, I think the tone and temperament of the United States government will change from one of tolerance to one of severe antagonism. I would not be surprised if the United States government tries to ban bitcoin or impose absurd rules on it. To their credit, they have not done that yet. So we will see.
MR: Is there a jurisdiction that you're bullish on? Do you have a bug-out plan?
EV: None of the jurisdictions are great. What's important about cryptocurrency is not that you can go to some jurisdiction and use it. It's that the cryptography itself means it can be used anywhere regardless of what the rules are. So bitcoin can be used no matter where you are and you don't have to move in order to use it.
MR: I mean in some ways like gold.
EV: No, but not like gold because gold is so difficult to move or transact in.
MR: Yes, but, philosophically, if you live in a jurisdiction that outlaws gold, like the United States did, the gold doesn't cease to be valuable by fiat.
EV: Correct. A good example to illustrate this point is strong cryptography generally used to be illegal in the U.S. Almost no one knows this. But cryptography was illegal itself up until, I think, the mid-'90s when it started being made available.
Cryptography, obviously, worked throughout that period where it was illegal. It is such a useful and valuable technology that ultimately the government capitulated and let the plebeian populace use this technology again.
So if that happens with bitcoin, or cryptocurrency generally, it will be temporary because the value, the utility of this technology is so immense that humanity itself will not permit something so valuable to be kept in a cage forever. But there could be some number of years in which it is a pretty brutal situation.
Minimal Maximalism
MR: Are you a big advocate of individuals holding their own bitcoins?
EV: For sure – self-custody. The most important attribute that comes from bitcoin is self-sovereignty over money for all people around the world, regardless of their background, race, gender, anything. Self-sovereignty over money is now available to all humans. That property is only possible or expressed when you're holding the bitcoin yourself.
If you leave it with a custodian, if you leave it with Coinbase, if you leave it with Gemini or Kraken or any other custodian, you are at the behest of that company and the government that controls that company. So you lose the most important attribute of bitcoin. Now I'm a big fan of all those companies, but you just need to realize that you are losing the important attribute of bitcoin if you're only using it through custodians.
MR: When your grandma asks you how to buy bitcoin, what do you recommend and where do you recommend she store it?
EV: Obviously I'm biased, but today I would tell her to use ShapeShift – the mobile app or the web interface. A hardware wallet is a really easy way to store it yourself. If you take two minutes, you can do it very easily.
It's a great option to use Coinbase to buy some Bitcoin, but just don't leave it there.
MR: Would you consider yourself a bitcoin maximalist and what does that term mean to you?
EV: I used to be, but I'm vehemently opposed to that position now. I would define a bitcoin maximalist as someone who believes that bitcoin is valuable and no other digital asset has value – that they all are either scams or distractions.
I think that's a really foolish perspective to have now for two reasons. One is that one of bitcoin's most important attributes is the decentralization. I think you zoom out from that and you realize that decentralization is best served when you have multiple different blockchains built in different ways, used by different types of people for different types of purposes – that is a much more robust and antifragile ecosystem than one monolithic chain.
Two, a lot of these other digital assets are not trying to do the same thing that bitcoin is. So a coin like Litecoin is just trying to do what bitcoin is with a couple variables changed. It's a faster block time. That's it. So it's competing narrowly for that space of money. And so, if you're a maximalist and you see that, you're like why would you waste your time with Litecoin when there's bitcoin?
I can understand that argument. However, something like Ethereum does something completely different than what bitcoin does. It works differently. It will be moving to proof of stake from proof of work. It can run these incredibly complicated smart contracts and you can build all sorts of incredible financial tools in that ecosystem.
You cannot today do that on bitcoin, and that's okay. These are both different tools for different purposes. Ethereum's existence, in my opinion, is great for bitcoin, and vice-versa. And so, the maximalist position is one that I really don't like anymore.
MR: But at the time, I think it was very, very defensible, especially when it was just things like Litecoin where the promoters said, "Oh, it's just like bitcoin, except this and that…"
EV: Yeah. I can sympathize with the maximalists who are so tired of hearing about 50,000 different coins and all their ICOs and whitepapers. It's a noisy industry and there's a lot of crap. There's a lot of scams. There's a lot of worthless projects. I get that. But it doesn't mean that everything is worthless.
MR: People must come to you all the time with their ideas for coins and startups and things like that. You must have a lot of flow, and I know you invest in things. What is your mechanism for winnowing out the nonsense from what you find valuable?
EV: You generally have to spend some time with any project to tell if it's nonsense or not, because a lot of projects that are legitimate will have fancy marketing and a lot of projects that are illegitimate will have fancy marketing. You have to look underneath and understand what it's actually trying to do and if it's solving a problem and if it's valuable.
A big proxy for this is who is the team involved. I've been in this space for almost 11 years, so I know a lot of people. If there are people that I know to be credible, I will pay more attention to that project than a project of strangers that I've never heard from. So that's a shortcut to help winnow through it.
But in terms of things I invest in, I probably invest in like three or four projects a year and often it's not just if I think they will be financially viable, because there's tons of that in crypto. But generally I'll invest in the things where I also believe in what it's doing. Is it improving the world in some way? Not just is it economically going to be profitable, but is it going to be profitable and improve the world? If I think that it's plausible on both sides, that's a good candidate to invest in.
Satoshi and Vitalik
MR: Do you have a suspicion of who you think Satoshi is?
EV: I don't and, again, because I'm not highly technical. I wasn't involved in the cypherpunk movement in the '90s. Satoshi definitely emerged from that whole ecosystem. And so, the people who were part of that fairly niched group are probably the best ones who have suspicions of who it would be, but a lot of those people were pseudonymous anyway. So who knows? The answer is no. I don't really know who it would be.
MR: Do you have a hero in this space?
EV: Yeah. Vitalik is definitely one of them – the founder of Ethereum. I've known him since 2013, long before Ethereum. He was 17 years old. He was up at a New Hampshire Liberty Festival where I met him. At that point, he was a writer for Bitcoin Magazine. He's this socially awkward guy, of course, but he's genuine and he's sincere and he's brilliant. That's a very special combination because so many people who are brilliant end up with some massive ego or developing various antisocial tendencies.
Vitalik went on to create Ethereum, which is one of the greatest inventions in the entire history of mankind. I don't think that's an overstatement. He's fabulously wealthy at this point. I don't know if he's a billionaire. Maybe he doesn't even know.
He has tremendous influence over lots of important people, and yet he has remained humble, dedicated to the cause, thoughtful, open-minded. I just think that that's a very notable path over a decade.