Roger Ver Interview - Bitcoin Cash vs Bitcoin, Future of Crypto, FTX, Ripple, Privacy Coins & CBDCs

Roger Ver talks about FTX, The future of Crypto, Bitcoin Cash vs Bitcoin, investments in Ripple, Kraken and 100 other crypto companies, Privacy Coins, Governments, Bitcoin Cash adoption, CBDCs, Crypto regulations, will Ripple win the SEC lawsuit and much more.

Transcription

Welcome back to The Thinking Crypto Podcast, your home for cryptocurrency news and interviews. With me today is Roger Ver, who’s a Bitcoin Evangelist, Angel Investor, entrepreneur, and one of the very first investors in the crypto ecosystem. Roger, it’s a pleasure to have you on the show.

• Thank you for having me on today.
• Roger, as I was mentioning before the recording, you are a crypto OG. I’ve been following you for years. You’ve invested in so many crypto companies, you’ve seen a lot of market cycles, and I have a lot of questions for you about what’s happening in the crypto market now. But I also wanted to get to know you a bit better and your background. I’ve seen you talk about your experiences and in different interviews, but I wanna start off with, for example, where you’re from and where’d you grow up?
• Yeah, I grew up in Silicon Valley and was around computers my whole life and ran a really popular, for people that aren’t old enough to even know what these things were. It was a BBS that stands for Bulletin Board System. I think you’re probably maybe too young to remember those firsthand, but they were really popular before the internet became popular and people would dial up with their modems and connect other computers in the neighborhood. And it was a really fun time. ‘Cause everybody that was on the BBS lived somewhere in your neighborhood. It’s not like we’re on the internet. You have no idea where the other people are around the world. I grew up in Silicon Valley, but I’m talking with you today from Tokyo, Japan.
• So now clearly you were into technology. Was there a technology job or career that you wanted to do when you were growing up, what was your ideal job?
• So when I was really young, my ideal job was, and I’m dead serious about this, I really wanted to be a garbage man or a garbage truck driver. And the reason I wanted to do that is ’cause you get to drive all over the neighborhood and talk to all sorts of people and see everything that’s going on. And I used to wake up every, I forget which day of the week it was, Tuesday or Wednesday when the garbage truck would come and I’d watch and they’d operate the big giant heavy machinery to do that. And to me as a young man, that seemed like a really, really exciting job. So, and I still like, big machinery and heavy heavy equipment and that sort of thing as well.
• Well, it’s so kind of, as far as machinery and technology, it’s kinda serendipitous that you ended up with Bitcoin and the mining behind that and the tech revolution behind that.
• Yeah, I think that was more of a outplay from having been involved in e-commerce from the very earliest days. Like I got started in e-commerce before it was easy for people. There was no PayPal, it was almost impossible to be able to accept a credit card through your website. It was really difficult. The way almost everybody was doing e-Commerce in the earliest days of the internet is they would literally have to go to the post office and buy a postal money order and then send that in the mail. And people today might not even know what a postal money order is. It’s basically a check from the post office. You give the post office cash and they give you a check that’s paid out from the post office to whoever you want to fill it out to. And that way when the person receives it, they know that it’s not a fake check and it’s not gonna bounce because it’s from the post office. And so people were literally sending those in the mail to buy things off the internet in the early days from independent merchants. And so every day when the mailman would come, it was like Christmas, I’d say, what checks or what post the money orders does he have in the mail for me today from people over the country and occasionally from international people as well.
• And the e-commerce site you’re talking about is that memory dealers.com, was that?
• It’s what went on to become memorydealers.com Inc and this is 1998 or something like that, ’99 in really early days. And I remember when PayPal first came along, that seemed like an absolute miracle to, “Oh wait, I can send money by email?” And I get, at first it was $10 for first I signed up and then later it was $5 for first I signed up, like I made a bunch of money from referring people to PayPal. And then later on there was another company called E Gold, which was a fantastic idea. You could transfer around ownership of gold reserves electronically, but the gold physically stayed put in their various vaults and it was starting to get more and more traction. And I was accepting it for payments on my website, my eBay sales. And then the US government came in and seized all the gold because some of the users of e-gold were using it for things the government didn’t like. But all the normal people that were just using it from normal commerce got their gold seized as well. And so that became a real problem. And so then, I dunno, another decade or so went by and then when Bitcoin came along, there was no doubt in my mind whatsoever that people were going to start using this for payments on the internet because it was better than PayPal. It was better than postal money orders. It was better than e-gold because the Bitcoins can’t be seized if you’re holding them in a wallet in which you control in the early days that that was just like taken for granted that everybody would hold their private keys and hold their own funds. Whereas more recently that’s kind of changed due to intentional congestion on Bitcoin and the high fees associated with that. Now lots of people have been trusting their cryptocurrency with custodians and we’ve seen in the early days for people that have been around a long time, they’ll remember Bitcointalk and then Mt. Gox and then there’s been a whole bunch more ones recently with the most recent one being FTX. But that just shows don’t let other people hold your cryptocurrency or you’re in for a bad time eventually. It might not happen tomorrow, but eventually bad things are gonna happen. And that’s why it’s so important for cryptocurrencies to be usable in a way in which people can hold the cryptocurrencies themselves and not be dependent on a custodian to hold them for them. And that’s been my mantra since day one, which is almost 12 years ago now since I’ve been involved in cryptocurrencies. So time goes very quickly.
• So what was your first encounter with Bitcoin? Did a friend tell you about it? Did you see it on a forum? What was that initial exposure to it and what was your “A-ha” moment?
• So the first exposure was in 2010 and it was mentioned on this radio show called Free Talk Live just in passing. And I spent just maybe one minute, two minutes googling it a little bit and I thought, “Oh this is kind of interesting.” But with only spending a couple minutes on it, you can’t really wrap your head around everything that’s going on. I thought, “It’s kind of interesting. Too bad nobody’s using it, move on next thing in my life.” And then I heard about it again on that same radio show like a month or two later. And then I googled it again and that’s when I put the pieces together in my mind that, “Wait a minute, the blockchain is this decentralized ledger that’s not on any one computer. So that means governments can’t go in and manipulate who owns which Bitcoins or block the payments or seize people’s funds. This is gonna change everything. People are gonna absolutely use this for payments all over the world.” And so I dove in head first and did everything I could to promote this to the world. And here we are 12 years later and wow, it’s become a real force around the world. Whereas back then I would tell anybody that would listen to me and I would even tell people that wouldn’t listen to me about Bitcoin and what a big deal it was. Like if you met me from 2011 until, I don’t know, 2015 or 16, there was zero chance you would not hear about Bitcoin for me in those days.
• Now I read that you bought Bitcoin under a dollar, if that’s correct. So I have to ask, are you a Bitcoin billionaire? Are you one of the Bitcoin whales out there?
• I’ve definitely done just fine in my Bitcoin and cryptocurrency holdings over the years there. So, and I don’t know if they were right around a dollar. And I’m pretty sure I got front round, like I tried buying from multiple different places. In fact, actually my very first Bitcoin would be free.
• Oh, right.
• Gavin Andresen had a faucet and he was giving away free bitcoins and I think I got a whole Bitcoin for free from that, but that’s when they were worth, maybe 20 cents or 10 cents or something like that. But yeah, thank you for Gavin for sitting up that faucet. And then if you go and scroll back to my Facebook page from early 2011, you’ll see I told anybody, post a Bitcoin address and I will send you, I don’t know, $5 or $10 or I think I gave away a whole Bitcoin in the early days. And you can see hundreds of people to maybe thousands of people post their Bitcoin addresses. And I sent them all some Bitcoin in the early days and ’cause that was the name of the game is to show people how this can work and how this is amazing and it can work for anybody all over the world.
• Did you try to mine Bitcoin at any point?
• I tried mining some with my CPU right when, like towards the very end of where I still had a chance of mining a block with my CPU, but I didn’t actually get lucky enough. But then I did a lot of GPU mining and then after that there were some FPGA’s, which I played with a little bit. And then I’ve done some basic mining over the years as well. But in the early days it was easy to make money with mining ’cause there wasn’t so much competition and the price was just going up and up and up. Whereas now, mining has really become a competitive business and you really have to be a specialized expert in the field to make money mining crypto. And especially at the moment it’s extra difficult ’cause the price is pulled back a lot, that makes it really difficult for the miners around the world. And at this point I’m glad that I’m not a cryptocurrency miner.
• Yeah, yeah. A lot of miners have been facing a lot of pressure. Some had to file for bankruptcy since it’s a tough time. Now be before we go further into, your crypto journey and investments and so forth, I wanna talk about a period in your life where you were arrested for, I believe it was selling fireworks on eBay or something and you went to jail. And I’m really fascinated by that because you bounced back and I think that’s a great story. And now obviously you’re doing well. Can you tell us about that time in your life and how you were able to bounce back from those things?
• Yeah, I guess the way I look at it, in life you only have two choices. You bounce back and you keep going as hard and fast as you possibly can or you give up and die and like, giving up and dying doesn’t sound like the right option there. So of course I had to keep going and if anything, maybe, it just motivated me a little bit more. Like I remember when, and for people that don’t know the background, like the real reason I got arrested was for political statements I made in regards to FBI and ATF being murderers in reference to murdering a bunch of kids in a church in Texas in their mid nineties. And they really didn’t like the fact that I was saying that sort of thing. And I wound up being the only person in the entire nation to be arrested for selling these firecrackers without a license. Even though the company I was buying them from and they were shipping them to me had no license. The manufacturer had no license. Cabela’s Sporting Goods catalog was selling them with no license. Dozens of other companies were selling them across the country with no license. Yet I was the only person in the entire world to have ever been prosecuted for selling those without a license. And it kind of made me, I of course I was mad, but one of the things that also really irked me is like, I’m not the smartest guy in the world, but I know I’m not stupid either. And in the pre-sentence report, which is this like report the government puts together to like give to the judge to tell them about what sort of person they think you are, they packed it with a whole bunch of lies. And I still, the guy talk about giving up and dying versus going harder. This guy’s probably dead and gone now ’cause he was old back when this happened, but his name was Dr. James Mest and he wrote this really nasty report about me saying that I don’t know that I overestimate what I can do and basically just was a, I didn’t appreciate as a report one bit and if anything, and when I read his report that he gave to the judge, it just made me that much more motivated to go out there and do big things in the world. And I think at this point I had definitely accomplished a few things here and there. But the whole system’s rigged. Like once you’re prosecuted, like they’re just gonna grind you through the gears and all you can kind of do is hope you can get out as fast, do everything you can to get out as fast as you can. And then as soon as I was out, I tried to get as far away from that machine as I possibly can. I’m no longer a US citizen, I’m not living in the US I want nothing to do with their wheels of injustice they have over there. But it’s not just the US either, it’s any country, you really have to be careful just about anywhere in the world, if you speak out against the powers that be, the powers that be are gonna come for you to shut you up.
• So it seems like some retaliation there and they were looking for whatever they could get you on and-
• Oh, absolutely, yeah.
• Wow.
• Yeah, and even while I was in prison, the company that I was buying the firecrackers from was still selling them without a license. I mean, that tells you, and I sold a few thousand of them. This company was selling tens or maybe hundreds of thousands of them. So like I was a small fish compared to this guy with no license. But the difference is they didn’t run for political office and they didn’t call the ATF and FBI a bunch of murderers. And if you wanna get them off at you, that’s the way to do it, so-
• So how did that happen, with you running for political office and I believe you’re a libertarian, is that correct?
• Yeah, I guess the more recent little libertarian party has been a little bit better. But for a while though, the libertarian party wasn’t very libertarian. So the word I prefer the most is voluntarism. And what a voluntarism is, is just somebody that thinks that all human interactions should be on a voluntary basis or not at all. And that’s pretty much how everybody deals with everybody all the time. So for example, for this interview, you asked me, “Roger, would you be willing to come and do an interview?” And I said, “Yes, I will.” And if you have a job, the employer says, “Would you be willing to come work here and I’ll pay you an exchange for that?” And the employee says, “Yes, I will.” And if you ask your friend to go to dinner, they have the option to say no, everything’s voluntary everywhere in life, with the exception being robbers, because when a robber robs you, you don’t have a choice to say no, he’s gonna hurt you. The other exception being rapists, because the difference between being raped and making love is just consent, right? If it’s not voluntary, it’s not making love, it’s being raped. And then the only other exception in life that everybody just seems to be blind to just about all the time is government, government interactions are not consensual. They’re just like rapists and robbers in the sense that they’re forcing their will upon you and you don’t have the option to say no. And everybody knows that robbers and rapists are bad, horrible people, but everybody’s been brainwashed from day one to think that it doesn’t count when the government forces itself upon you in involuntary manner. Whereas if a rapist forces himself upon you in an involuntary manner, we all know it’s bad. And the real epiphany I had is somebody, growing up in America, I knew if there’s a big war, they need to have a draft and they’ll use that to defend the country. And like I thought that was okay and this man named Murray Rothbard who wrote a bunch of amazing books, I recommend anybody pick up any of his books and they’ll change your entire view of the world. But he pointed out that the military draft is the moral equivalent of kidnapping and slavery. And then I thought to myself, wait a minute, the draft is kidnapping in slavery and if kidnapping in slavery is wrong, which we all know it is, people that claim they have the moral right to kidnap and enslave you. They’re not the good guys, they’re the bad guys. And that was the turning point in my view of the world when I realized, wait a minute, the US government or any government that’s forcing itself upon people involuntarily, they’re not the good guys, they’re the bad guys. And voluntarism is the word I like to use to describe that. ‘Cause libertarianism people might not know, “Oh, maybe it’s just like a Republican that wants even lower taxes, or a democrat that wants more drugs to be legal or something like that.” They don’t know. But a voluntarism I think is a very clear description of all human interactions should be on a voluntary basis or not at all.
• Not to get too into politics, but I do want get your take on how do you think Bitcoin and even a blockchain and in a sense could help solve and bring back the balance to the people where it’s not so much the government telling us what to do all the time and then they don’t have any accountability, but maybe blockchain brings a more transparent and trustless world?
• Yeah, that was the entire thing that attracted me so strongly to Bitcoin is suddenly there’s money that’s beyond the reach of government control for the most part, right? And we need to make the technology even more hardened against government being able to interfere in what people are doing. And so that was the entire goal from day one is to have a separation of money and state, right? Everybody today for the most part knows this separation of church and state wound up being a good thing. But we need to have a separation of money and state in which people now get to choose which form of money they want to use in the market. Just like you can choose if you wanna use, Visa, MasterCard, American Express, like, or cash, right? It’ll be nice when people can choose, if they want to use US dollars, Australian dollars, Singapore dollars, Bitcoin, Bitcoin Cash, Ethereum, Cardano, Ripple, like take your pick. Let’s give people choice in the market and people will naturally choose to use the services and the tools that are the most useful to them in their own lives. And I think, anytime you have a monopoly, the quality of the product is poor and the customer service is poor. And oftentimes the expense of providing it is really, really high. Well, let’s have an end to the monopoly in the issuance of money and let’s have some competition in the market. Just like it’s great that we have Taco Bell and Burger King, McDonald’s and Arby’s all competing for food. Let’s have competition in the area of money and that’s gonna lead to better money for everybody, that works better for everybody all over the world. And so that’s what cryptocurrencies are all about for me. And I’m looking forward to seeing even more of that take hold in around the world as the time goes by.
• So I absolutely agree with you there. And maybe there is a historical change taking place with the birth of Bitcoin, but now we see the governments are taking the blockchain and tokenizing Fiat currencies on it and you know they’re gonna force people and inject it into the economy and say, “Don’t worry about this Bitcoin or Ethereum or XRP thing it uses CBDC and maybe they’ll give you yield on it.” I don’t know, but what are your thoughts on CBDCs and what the governments are doing now?
• Yeah, if I can put on my conspiracy theory hat for a moment here, the most destructive thing governments could have possibly done to the adoption of cryptocurrencies around the world and Bitcoin around the world would be to allow the blocks to become full on Bitcoin. Because that for the very first time in the entire history of Bitcoin, when the blocks became full, companies that used to accept Bitcoin for payments, companies like Microsoft and Expedia and Dell computer, they stopped accepting Bitcoin. That was the first time in the entire history of Bitcoin, which there was negative adoption. And even to this very day, Expedia still didn’t start accepting Bitcoin again. So like that used to be my favorite go to travel website and I could book everything with Bitcoin. They still don’t to this very day. And if you read the press releases from these companies like Steam put out a grit press release, they specifically said the reason they stop is because the blocks have become full and now the transactions are slow, expensive and unreliable. And that’s not usable for a payment network. And so I think it was governments that initially propagandized the people into thinking that having a block size limit of one megabyte on Bitcoin was good and somehow made Bitcoin more decentralized when the truth was it was the exact opposite. And that gave governments more time to react and issue their central bank digital currencies. And now, how much is Bitcoin used in commerce? Some, but nowhere near what it could have been if the fees hadn’t gone to $50 in the transaction, times hadn’t become more than two weeks on average for a point in 2017. Like it became absolutely unusable for e-commerce at this point. And that opened the door for all the governments to catch up and issue their central bank digital currencies and say, “Oh, don’t worry about that Bitcoin or Ethereum or Cardano or any of that stuff. Look, here’s our digital dollar you can use that.” And people don’t realize like this also, even even with like Tether and USTC they can freeze your tether and USTC on the blockchain as well, or your Binance USD as well. Like, don’t think that’s permissionless, it’s not one bit, it’s convenient when it’s working, but they can freeze it just like they freeze your bank account if they want to. Whereas real cryptocurrencies, like Bitcoin Cash and others out there, the Monero and Zcash and all the privacy coins, I’m huge fans of, those are real cryptocurrencies. Whereas if you have the private keys yourself, nobody in the world can mess with your money and that’s a really, really big deal. But if you’re having to use a custodian to hold your cryptocurrency, it’s probably gonna be the same custodian that’s holding your central bank digital currency as well. And they’re gonna treat them just the same. They’ll freeze whichever ones they want at any time or do whatever they want or loan it out or spend it on margaritas without your permission, like we’ve seen happen recently. Like, hold your own cryptocurrency yourself and you’re gonna have a much better time in the cryptocurrency ecosystem than if you let somebody else hold it for you.
• So on the point of privacy coins, I am a believer in privacy coins, but I’m also worried the governments, and we’ve seen them in a narrative forming here, that they’re putting a target on them and there’s been calls to ban them and so forth. Do you think they’ll be able to successfully ban privacy coins?
• They won’t be able to successfully ban privacy coins. But another real visionary in the Bitcoin space was a guy named Mike Hearn, who was a professional capacity planner at Google and played a big role in the block size scaling war. He was advocating for Bitcoin to be able to scale, to be money for the world. But the point that he made, which I thought was just so once he said it, it made so much sense, but I never heard anybody say it that clearly before. He said, “Even an outlaw can’t use an outlaw currency.” And what he meant by that is if the currency’s outlawed, even people that are doing illegal things, you can’t use it because you have to have enough legal transactions happening to be able to blend in with your illegal transactions. So if governments make, and again, sometimes the Monero community, they get confused and think I’m a attack Monero. Like I bought a bunch of Monero early on and I’m one of the biggest Monero fans out there, but I see the writing on the wall, like I’m doing this call from here in Japan, Monero is already banned in Japan, no Japanese exchange is allowed to list Monero. Same thing next door in Korea. Same thing in Singapore, same thing in lots of countries around the world, privacy coins have been preemptively banned by governments around the world. It’s not that I think privacy coins are bad, I think the governments are wrong for doing that, but that’s gonna be a real hindrance to adoption. If you can’t use it legally, only outlaws are gonna be able to use it, but the outlaws won’t want to use it because nobody else is using it. They won’t be able to blend in with all the other commerce out there. So, and that’s why I’m a real big fan of like privacy tools that sit on top of things like Bitcoin or Bitcoin Cash, like Bitcoin Cash has this awesome tool called CashFusion that gives Bitcoin Cash a similar ballpark of privacy as a Monero, like in the same sort of ballpark. People don’t realize it, but governments can’t complain against it in the same way that the do is Monero because it’s turned on by default all the time with Monero. Whereas Bitcoin Cash, you just have to use a wallet that has it enabled and most people aren’t aware of that.
• So yeah, like I’m not aware of that. And so it sounds like the solution, you’re saying it’s like a layer two app that helps to achieve privacy is the way to go versus a true privacy coin. If I get that right.
• My first choice would be for governments just to leave everybody alone and disappear and let people use whatever they want. But since that’s not likely to happen, I think at this point it would be really hard for governments to ban Bitcoin and Bitcoin based coins like Bitcoin Cash or any of these other ones. And if you can build really strong privacy on top of that, then it makes extra hard for government to ban those, right? It’s like Bitcoin used to have a fair number of privacy tools on top of it, but it kind of became real expensive and the fees became high to use it. So like things like Wasabi Wallet and different coin joint things on Bitcoin, but if the fees are super high to use it, people aren’t gonna want to use it. Whereas Bitcoin Cash can still do those sorts of things for a fraction of a penny. But if you look at the social media campaign, like everybody out there, they view Bitcoin Cash as some fake knockoff of Bitcoin, but most people probably don’t realize Bitcoin Cash was razor close to being called Bitcoin and keeping the BTC ticker symbol and the thing that’s called BTC and Bitcoin today would’ve had some different name and some different ticker symbol. And if that had happened and Bitcoin had continued just working smoothly with super fast, cheap, reliable transactions, it wouldn’t be $17,000 today, maybe it would be 70,000 or 117,000 or maybe even $700,000 today, right? Like the adoption wouldn’t have come to a screeching halt like it did where everybody jumped ship to Ethereum projects or Bitcoin Cash projects or all these other projects out there in the world. People abandoned Bitcoin because it became unusable because of that block size limit. And again, with my conspiracy theory hat on, I think it was an intentional effort by governments to trick people into thinking that the one megabyte block size limit was a good thing for Bitcoin. Where the reality is, it delayed the adoption of cryptocurrency by around the world by a number of years, maybe even a decade plus. And it’s a real shame that people were fooled into doing that. But it’s a real shame that people are fooled into thinking that the military draft isn’t kidnapping and slavery and that government isn’t organized violence without people’s permission. Like, but brainwashing works. And a lot of people don’t realize that there was a huge amount of censorship that went on in the Bitcoin community in order to achieve that. That was probably one of the biggest eye openers of my life. Like, censorship works, why does it ever work? And I didn’t fully appreciate just how effective censorship is, and that’s why governments are trying to shut up Julian Assange and Edward Snowden. And that’s why governments love to send people to, they call them public schools, but if you think about what they really are, they’re mandatory youth propaganda camps where people for the first 18 years of their lives are fed the government line about what everything’s supposed to be and they’re indoctrinated by the time they’re 18. If you’re told your entire life, “Oh, society would fall apart without government and we have to have the draft, we have to have taxes for this and that, and who would build the roads?” That’s it, right? You’re already set in your way of thinking and it’s really, really hard to break out from that. And that’s what happened with the cryptocurrency ecosystem. They used censorship to push a specific narrative and then everybody that came to Bitcoin after that only heard that predominant narrative and then that became the prevailing view. And that’s what everybody believes that, oh, the one megabyte block size limit was great for bitcoin, Bcash knockoff scam. And like that’s what people believe. And really disappointing to have watched that happen right before my eyes.
• So I wanna go deeper there, because there’s a lot of new people in the crypto market who haven’t heard this story and don’t know the details, they don’t know much about the fork and what took place in 2017. And I want to you talk about what was the genesis of the fork or the idea of that and to split off, and I know it’s based on the vision that Satoshi Nakamoto had and trying to achieve that vision, but why was there a split? And I know you mentioned like your conspiracy, right? But what was the fundamental split there of people saying, “No, we don’t want to go this direction,” and the other saying, and the you have your end saying, “No, it has to be this way because it functions better and it achieves the vision of Satoshi Nakamoto.”
• Yeah, there were kind of two main, I’m making broad generalizations here, but two main ideological camps here. One camp was that everybody should run a full node themselves and have the entire blockchain and validate every transaction happening on the Bitcoin blockchain. And it doesn’t matter if the overall throughput is not that big and if not that many people are able to use Bitcoin easily. The other camp, which I fell into, is that like it’s, and the first camp, they just seemed to care about the total percentage of Bitcoin users that were running a full node. So if you have a hundred Bitcoin users around the world and a hundred percent of them, a hundred of them are using a full node, they’re really happy with that. They feel, “Oh, we have, full decentralization.” Whereas my point of view is I want to have a billion people or 8 billion people using Bitcoin, but maybe the blocks are gonna be a lot bigger because that’s a lot of people using and a lot more transactions. So instead of having 8 billion people running a full node, maybe I’ll have 8,000 or or maybe even 80,000, right? Companies and people that are doing different things around the world with that. And so you’ll have 8,000 full nodes or 80,000 full nodes around the world instead of, and that’s just a very, very small percent of the users will be running a full node, but it’s still a larger absolute number than if you just have a hundred people using Bitcoin and a hundred full nodes. And so that was kind of the disagreement is like, what is it the absolute number of full nodes around the world mining full nodes or is it the percentage of people running full nodes? And so if you limit the block size to one megabyte, it’s much easier to have a much higher number of people running full nodes around the world that are using Bitcoin, but that limits the number of people that are using Bitcoin. And I was arguably the biggest Bitcoin evangelists in the entire world. And I stopped using Bitcoin because it stopped being useful for payments. And I started using things like Ethereum and Bitcoin Cash and Monero and Dash and Zcash and a bunch of others out there just looking for something that would continue to work and increasing the block size would’ve allowed Bitcoin to continue to work and wouldn’t have hindered the adoption that was taking place all over the world. But instead my side of the argument we lost, but I think we lost due to this censorship, right? Like I think the other side really played dirty and did all sorts of dirty things and immoral things. But we took the higher ground, I think on the big block side, but we lost for having taken the higher ground and maybe the world’s worse off because of it, right? We still don’t have peer-to-peer electronic cash for the world’s easily accessible by everybody.
• So on that note, for the new listeners, tell us why folks should use Bitcoin Cash versus Bitcoin. I know you touched on some of it, but if you could say, “Here’s 10 things, why Bitcoin Cash is better than Bitcoin,” whether it be speed, a low transaction fees and so forth. I would love for you to, to give that pitch.
• Yeah, so I guess first I wanna say people should use whatever coin is the most useful to them. And I think the majority of people out there in the world, I meet them all the time. I was in the airport two days ago, people in the airport record “Let them all Bitcoin Cash, let’s talk,” in the United, they know me, but I don’t know them, but I’m nice to them and talk to him, but I told them, “Oh, there’s lot,” he was on his way to Tokyo. I said, there’s lots of places you can spend your Bitcoin Cash in Tokyo. They said, “Oh no, I never spend my crypto.” And I think that’s the mentality, right? People just have it and they want to hold it and they want the number to go up because they’re holding it and they hope everybody else will hold it too. But my point of view from day one and still today is like take, when you spend something with crypto, when you buy something with crypto, take the dollars or yen or whatever currency that you normally would’ve used to buy that product and just buy more crypto. And that way there’s just that much more crypto circulating in the ecosystem. But the vast majority of people don’t see it that way. I remember the Winklevoss twins when they were gonna make an investment in a company that I had already made an investment in. I told them, “Hey, you should make the payment in Bitcoin.” And it was like, I dunno, $200,000 or something like that. This was when bitcoins were cheap. I don’t know, maybe bitcoins are 15 bucks or something like that. And they’re like, “No, no, no, we wanna save our Bitcoin, we don’t wanna spend our Bitcoin.” And I told them, I said, “Well, instead of sending a wire transfer to this guy to make the investment, why don’t you send your wire transfer to the Bitcoin exchange and then buy the Bitcoins and then send the Bitcoins to that guy.” And then there’s that many more dollars worth of Bitcoin circulating the bitcoin ecosystem. But they didn’t see it the same way. But that’s still to this day, I think that’s the way we make this peer to peer cash for the world. Everybody take their traditional money that they normally would use to buy bottles of water or whatever else, and then use that to buy cryptocurrency and then spend the cryptocurrency to buy the things that you want. But I think I got sidetracked from your initial question of why should people use Bitcoin Cash instead of Bitcoin? They should use whatever’s the most useful to them. If you look at the hard data so far, and what’s the most interest to use? Just the number going up, Ethereum has been one of the best bets here for in recent times. So it’s Monero for that matter. And even BTC has outperformed Bitcoin Cash so far. But if you want to make payments and pay for things easily on the internet, wow, Bitcoin Cash is amazing. Grab the bitcoin.com wallet, send and receive some Bitcoin Cash. You’ll be amazed. There’s even a shareable link feature in there that’s literally showing the private key in a deep link that you can send to somebody, even if they don’t have the wallet already, you can send it via text message, Telegram, Instagram, Facebook, anywhere and everywhere you can send a link, you can send somebody even if they don’t have the wallet already. And that’s a feature built right into the bitcoin.com wallet that you can’t do on Bitcoin because the fees are high. Whereas Bitcoin Cash, the transactions are a fraction of a penny basically instant and work worldwide right now today, the big problem is it just doesn’t have that cool brand awareness and brand recognition that Bitcoin does. And I think that’s a real shame for the world.
• So Roger, I absolutely appreciate your open mindedness and your focus on utility versus the price and speculation and all that because we’re eventually gonna get there. But I think a lot of people, even myself sometimes struggle because we see the marketing, the branding behind Bitcoin, they’re now saying it’s a store of value versus a payments network and it’s gold, digital gold. But when do you think, and this is a hard question, when do you think we’ll hit that tipping point or what would be the catalyst to say, “Okay, all the speculation stuff is to decide how do we get real world application,” and like, to your point of people being able to transact and low fees and quick transaction speeds?
• So I hope people listen to me carefully here, but Bitcoin, BTC with one megabyte blocks will never, ever, ever be peer-to-peer electronic cash for the world either without Lightning network, it doesn’t matter because it doesn’t have enough transactional throughput capacity, even with Lightning Network to allow people to use it as peer to peer cash for the world. So the only way Bitcoin could ever become money that’s used widely around the world is if everybody is using it with a custodian that’s holding it for them. But then you’re right back where we were with the dollars and people, fractional reserve banking and funds disappearing and all the problems that we have. Whereas if you use a real cryptocurrency in which you can have the private keys yourself, and there’s enough throughput capacity in which people can use it to transact on a daily basis with now you can have real peer to peer cash for the world. And real peer to peer cash for the world is an incredibly important thing for the world because it increases the amount of economic freedom for people worldwide. Increasing the amount of economic freedom increases the rate of economic growth and economic growth compounds year after year after year. And so even if you just have an additional one or 2% of additional worldwide economic growth per year, compound that after a couple of decades, wow, you’ve raised everybody’s standard of living by a huge amount compared to what it otherwise would’ve been. And unfortunately we’re not getting to see that benefit because everybody’s just busy speculation of future speculators in regards to the price of Bitcoin that has no chance of becoming peer tope cash for the world. And it’s really disappointing to watch that happen.
• What do you think about the ideology of Bitcoin maximalism, these guys like Saylor, Max Kaiser who are leading the charge here with that and look there’s some lobbying happening in DC around that as well to make everything else’s security and Bitcoin the only thing that’s a commodity, what are your thoughts around that?
• I invite anybody to go and read Michael Saylor’s Twitter stream for themselves. It’s a bunch of techno babble without saying, it’s a bunch of cool sounding words that don’t say anything. Bitcoin is encrypted, energy was protected by cyber hornets or something like that. That doesn’t mean anything, it’s just like marketing bluff. And so credit to him for being a good marketer, like he’s a good marketer, but like he doesn’t say anything, right? And the rumor I heard, I don’t know if it’s true, I heard it, second or thirdhand here, I heard that up until a couple of years ago. He used to have big parties at some house he has in Florida. And the rumor I heard is that if anybody would even try and talk about Bitcoin at these parties up until, I don’t know, 2017, he’d kick him out of his house and say, “Don’t even mention that crap.” So I think that just shows some closed mindedness there to not even allow people to discuss something. And now suddenly he wants to become its biggest proponent, but if he was a real, clever investor, he would’ve been promoting Ethereum or something else there. Since he got involved, he would’ve done a lot better holding Ethereum than BTC because, and the reason why his BTC does not work for payments, and that’s what drove the original adoption without any doubt, that’s what attracted the entrepreneurs. And now it’s just a bunch of people that think they can pump the price of the asset and have it go up and sell it to future people for more, even though it doesn’t have any underlying utility.
• So do you think that BTC maximalism ideology will, it seems like it’s dying out. There’s less Bitcoin maximalism around it. Do you think over time it will phase out?
• I’m a little bit sympathetic to Bitcoin maximalism in the sense that Bitcoin had this giant first mover advantage in which in the early days, like there wasn’t, nobody was using anything other than Bitcoin. It was Bitcoin and that was it. But that was 2011, 12, 13, 14, up until around that point and they squandered their entire first mover advantage, Bitcoin had 90 something high, 90 something percent market share in the world of cryptocurrencies. And because they allowed the blocks to become full and the user experience to become bad, now what’s the market share? Bitcoin’s total market had 30, 35%, 38%, somewhere in there. Like what a missed opportunity. And so like, I think the only people that are Bitcoin maximalists today are the close-minded people that are sticking their head in the sand and refusing to accept reality. Whereas I think I was ahead of the curve finding Bitcoin and telling people, “Hey, this is amazing.” And I was ahead of the curve signing the alarm bell. Like, “Hey, Bitcoin’s on the wrong, wrong track here.” If you limit the block size, you’re gonna limit its usefulness in commerce. And if you do that, you’re destroying its entire first mover advantage. And the reason I fought so hard and so loudly about that were two reasons I wanted the additional economic freedom for the world, but two, I was the owner of bitcoin.com and a giant pile of Bitcoin. I wanted this to succeed and become money for the world. Whereas these other people that barely had two Bitcoins to rub together were out there, making other videos complaining about, “Oh, we need to limit the block size and this and that.” Like, hey, I had more skin in the game than just about anybody there.
• Sure. I want to ask you about BSV and Craig Wright calling themselves Satoshi. What are your thoughts on that? I think he’s crazy, but that’s my opinion.
• So Craig has sued me, I don’t know, four or five times now. He’s lost, three or four of those times now. There’s still one lawsuit pending. I think Craig is a really, really compelling conman. He fooled me, he fooled a lot of other really smart people, but luckily he didn’t fool me for forever. And on that point, his business partner Calvin Ayre, is gambling billionaire Canadian guy, he wants to pretend that it’s a news website, but it’s really just a propaganda website called coingeek.com. But if you think about what that website actually is is probably the first time in history anybody has literally spent millions of dollars of their own money promoting to the world, the fact that they’ve been conned by a conman, right? So Calvin Ayre is promoting on Coin Geek that he’s been conned by Craig Wright and that he’s been fooled and he’s spending his own money to promote to the world that he’s been conned by Craig Wright. So that’s how I see it today. But I’m sympathetic because I was fooled at one point. Like Craig is a very convincing conman, and I hope he doesn’t sue me again for this, but if he does, I’ll deal with it again. ‘Cause he is lost, every single one of his lawsuits against me had to pay me hundreds of thousands of British pounds and a bunch of dollars as well to recoup the legal fees for it. And he’s just wasting, and actually I’m really sad about the person that’s funding all the lawsuits and organizing them. It’s not Craig, it’s Calvin Ayre. And I wish both of them would just go move on in life and work on something productive. Really sad to see them wasting so much time and money and energy and effort on, on that sort of thing.
• For sure. So I wanna talk to you about Bitcoin Cash and what’s on the roadmap. I saw some news that it could become legal tender in Saint Kitts in 2023. There was also some adoption via different apps. Can you tell us a bit about that? What are you working on and what’s on the roadmap?
• Yeah, actually everyone’s talking about El Salvador and the amount of Bitcoin adoption happening in El Salvador, well that was pushed from the top down where everybody’s using a custodial wallet where you don’t even know if they actually have the Bitcoins or not, in Saint Kitts grassroots from the bottom up natural adoption of Bitcoin Cash, where people are primarily using the bitcoin.com wallet and this Bitcoin Cash register app, which in every one of those instances the users have the private keys themselves. And it just naturally happened to where now it’s not a stretch to say that more merchants than not accept Bitcoin Cash in the country of Saint Kitts. Like more than 50% of the merchants in the business, grocery stores, gas stations, hotels, like taxi drivers, anybody, pretty much anybody in the country will be aware of it. And most people have already used it or are currently using it at this point. And it’s really amazing. And the prime minister of Saint Kitts just a couple of weeks ago announced that they intend to acknowledge it and recognize it as legal tender in the country by March of this coming year, right? That’s 90 something days away now and that’s really, really soon here. And so I think that’s a pretty big deal. But because it’s not the cool coin that’s in the media with a higher market cap that’s orange color, it hasn’t gotten nearly as much attention, but the fact of the matter is the people are using it. If you go to head over to map.bitcoin.com you’ll see there’s an amazing amount of adoption, not just in Saint Kitts but in neighboring Antigua and St. Martin and just across quite a few places around the world. It’s amazing. And if you ask the various payment processors, which cryptocurrency works the best for payments, not necessarily the one that’s being used the most, but the one that works the best, they’ll tell you it’s Bitcoin Cash. Bitcoin Cash works the best, but it doesn’t have the cool name of Bitcoin behind it. And the BTC ticker symbol and so many people across the world, they’re just fooled by, “I’ve heard of the Bitcoin name, I haven’t heard of Bitcoin Cash, I recognize the orange coin. What’s this green thing?” And they don’t look at the underlying characteristics. Bitcoin Cash is the Bitcoin from 2009 until like 2015. And the thing that’s called Bitcoin today with the ticker symbol of BTC is some brand new project that’s trying to be a settlement layer for the Lightning network that still doesn’t work and could never onboard the entire world anyhow, because there’s not enough block space to do that at very best could onboard, maybe 1% of the world. And that’s not enough to become peer to peer cash for the world. So yeah, look at the fundamental characteristics, not just the name.
• I don’t know if you can talk about this or share any data or information, excuse me. Are there plans to go to other countries, whether it be in Europe or in Asia or even across Africa, to push the adoption of Bitcoin Cash and make it legal tender.
• There’s lots of people doing that. The stuff like everybody thinks that everything that happened in Saint Kitts was because of me. I played a very, very small role in that. I had almost nothing to do with it. The vast majority of it was this guy named Sunny Gehani who owns a bunch of liquor stores there and he’s importing and exporting liquor and apparently he had like some lawsuits with liquor companies before as to which countries you’re allowed to import and export to. And like he saw the benefit of these international payments that you can make without permission not having to beg a bank. And he just went crazy spreading Bitcoin Cash to every single one of his customers and all of his vendors. And now he’s doing his entire payroll for all his locations and employees in Bitcoin Cash. And he’s the one who really spread Bitcoin Cash, not just across Saint Kitts but a couple of other islands in the area there as well. And so it just takes one person with the right connections and the right motivation to make that sort of thing happen. And anybody can do it and really check out the Bitcoin Cash registrar app in like 30 seconds. Any physical store can be accepting Bitcoin Cash payments with no KYC, no terms of service. Nobody can block you, nobody can turn it off. They can’t stop your account if you donated money to Canadian truckers recently. Like there’s none of that. It just works and it works for everybody in the entire world. And even if they kick it outta the app store, there’s a web version as well at pos.cash and like nobody can stop that. Like it’s really, really a powerful tool for economic freedom around the world. And Bitcoin doesn’t have those things anymore. You have to use a custodian for just about everything Bitcoin related. And if you’re using a custodian, you’ve missed out on most of the benefits and enjoy your fun time with the whatever the next FTX happens to be when you’re using a custodian. Like don’t use custodian, hold your money yourselves.
• Yeah, it’s great advice. And we’ll talk a little bit more about that later with FTX, but I need to circle back and talk to you about your crypto journey and then getting into investing in crypto companies because you were like a seed investor in early days and like Ripple, Kraken and so forth, Zcash as well. Can you tell us about that, specifically Ripple and some of the other bigger companies?
• Yeah, and a lot of people sadly confused myself as being some sort of Bitcoin Cash maximalist, but no, I’m a peer-to-peer electronic cash or even any tool that enables more economic freedom around the world, maximalist. So that’s what I want more of and it’s like I would literally wish the second person ever involved at Ripple. This guy named Jed McCaleb came up with the idea and reached out to me, says, “Hey Roger, I see you’re busy in the Bitcoin space trying to promote this as money for the world. I have an idea on how to do Bitcoin that doesn’t require mining so it’ll use less electricity. Are you interested in supporting that?” I said, “Sure, let’s give it a try.” And so like I put up the seed money to start Ripple. I was the second person ever involved. And it wasn’t even called Ripple back then, the name of the coin, ’cause we didn’t have any name was called New Coin. And that’s what the folder on my computer for all the documents associated, that was literally called New Coin for years until I finally updated the name of the folder there. But all sorts of things out there as well. Anything that works Kraken, a lot of people today know blockchain.com. Blockchain.com used to be called blockchain.info. I was literally the second person ever involved there. There was the original founder who had just graduated from high school and I reached out to him and I said, “Hey, I like this Bitcoin thing and I like what you’re doing. Do you need some money?” And he said, “Yeah, I should probably get a real server to run it on, right now I’m running it on a Mac Mini in my mom’s bedroom at home.” And I said, “Okay, well I’ll help you get some money for a real server at a data center for this.” And so I was literally the second person ever involved at blockchain.com and put up the seed money for Bit Pay and a bunch of these other businesses out there ’cause I want peer to peer cash for the world that enables more economic freedom for the world. And I don’t care what the name of the coin is or what color it is, but I want it as quickly as possible for as many people as we possibly can. And so I want help build the tools to enable that.
• Now how many crypto companies you have in your portfolio to date?
• I haven’t counted, but probably, I don’t know how many of them are still in existence, but the total number of investments is probably over a hundred at this point.
• Wow, and Roger, if you don’t mind me asking, the funds for all these investments come from your Bitcoin holdings, like, being an early adopter, even a big investor at Bitcoin as well.
• Some of it definitely came from that, but some of it came from money I earned in the Bitcoin field by running Bitcoin businesses. And then a lot of it, like when I first got involved in Bitcoin, I was the only person that had any money already because I had my previous business Memory Dealers. And so before Bitcoin had ever even been invented, I was already a multi-millionaire. And so I had the money from that to start sprinkling in all these different Bitcoin businesses. And then when the price of Bitcoin went up, I crossed the line from multi-millionaire to the billionaire club, but that was later, right? But even having a, when I first got involved in Bitcoin, the most established business that was accepting payments in Bitcoin was selling homemade socks made from alpaca wool. And there’s nothing wrong with that, right? But that’s not like a very big business or anything. Whereas, my business already had, millions of dollars in sales per year. I mean, we went out there and blasted it to the world that we’re now accepting Bitcoin. And I put up the world’s first billboard on the side of it, Lawrence Expressway in Silicon Valley saying, “We accept Bitcoin for payments” and advertising, the computer parts we were selling. And that got worldwide media attention from newspapers as far away as Germany were reporting on our billboard. And everybody was, “You accept Bitcoin?” Like they were shocked and like nobody paid us with it, but boy did it work for the marketing front. And it still combines the right place to do a billboard like that.
• So, Roger, what do you feel, this is a hard one, but what do you feel has been your best investment to date and what was your worst?
• There have been plenty of bad ones. You win some, you lose some. I think the worst investment I made is I didn’t let other people hold my coins just for convenience of storage, but I’ve lent cryptocurrency to other people to try and earn interest and I’ve had other people to fault on their repayment of that interest. And so that’s probably been my biggest mistake or worst investment is trying to earn interest on that. And I feel bad, I can’t remember the guy’s name, so I can’t give him credit, but there’s another YouTuber guy, he’s like a Asian guy in Australia making YouTube videos and he pointed out if you have, if you’re looking to invest your cryptocurrency, one website’s offering 20% and the other website’s offering 2%, if you’re going to invest it at all, take the 2%, don’t take the 20% because the 20% means there’s way more risk, whereas the 2% means there’s a lot less risk. And so I thought that was actually pretty darn good advice. So if you see real high rates of return, it’s probably because there’s real high rates of risk involved there. And so I thought that was real good advice. I feel bad, I can’t remember the guy’s name or I’d give his YouTube channel credit.
• And I’m assuming your best investment maybe would be Bitcoin?
• No, probably probably Kraken or blockchain.com or maybe even yeah, some, maybe some of the other ones out there as well. Maybe Ripple. We’ll see what happens and when some of these companies have IPs, one investment I regret not having made. And so Brian Armstrong, the founder of CEO of Coinbase, He literally begged me like, “Please Roger, invest please, please, please, please.” And this is before they had gotten, hardly any outside investment at all. So I probably could have invested in them and I know a couple million dollar valuation. And I kept telling them, “No, people need to hold their own coins themselves. I want people to have their private keys themselves. I’m not trying to build another bank.” And so like, I only invested in businesses in which the users would have their private keys themselves. And at that point, mainly it was blockchain.info later to become blockchain.com. In hindsight, I should have just invested in both, right? And then I would’ve done my blockchain.com investment has done fantastic, but what an opportunity I should have invested in both. And so that was maybe one of my biggest missed opportunities. And so Brian, I should have listened to you. I’m sorry for that, but congratulations on your wonderful success and thank you for helping spread this peer to peer cash to the world.
• Sure. A question I have for you, and this is, it gets into the weeds, I don’t even know if you recognize the name because you’re invested in so many companies, but a friend in the crypto industry wanted me to ask you, why did you invest in an XX network? I also know Ripples, Chris Larsen is also invested in that those that ring a bell or?
• Of course I invested quite a bit of money in that. So David Chaum, like one of the deepest histories in the world of trying to make peer-to-peer cash for the world. He hasn’t succeeded yet, but maybe this this time will be the one that does the trick. I’m cautiously optimistic and hopeful for that one as well. But it’s been slow moving. I’d like to see things move faster, but I’m not the engineer building the system there. So I can only watch from the sidelines.
• Sure, if you don’t mind me asking it. And I’m just so curious because you have amazing success, you’re doing so many investments. Do you have a team or are you kind of like a one man show, or do you have a team of folks helping you with all these things?
• Yeah, I have a family office that’s a very competent group of people that help me with things.
• Got it, got it. Okay. Let’s talk about FTX and what’s happening in the market now. I wanna get like your raw thoughts and emotions and so forth on this. I’m pissed off about it, it’s a mess and there’s a lot of congressional hearings happening. There’s a lot of people angry at Sam Bankman-Fried saying he should be in jail and so forth. What are your thoughts on this whole debacle?
• Yeah, so I guess I need to preface it by saying, to be honest, I didn’t follow it super closely. So maybe I don’t have some of the deepest details, but the thing that just kind of seems the most ironic to me is that this guy, Sam Bankman-Fried was basically the biggest loud mouth calling for more government regulation and more government control of all the crypto businesses. Yet he was the guy that failed to regulate his own business worse than just about anybody in the history of crypto. Whereas most of the other CEOs that these crypto businesses are saying, “Hey, we don’t need government regulation, just leave us alone.” The industry can regulate itself for the most part. So I find that very ironic that the guy that was calling for the most government regulation failed the worst to regulate his own business there. And then the, oh, there, somebody made a meme, maybe I have it right here, but Sam Bankman-Fried is not in jail yet. And who did they already put in jail? There’s some other crypto guy.
• Oh.
• The, yeah, the Tornado Cash guy is in jail, but Sam Bankman-Fried isn’t and actually the thing I pulled up here, there’s another NFT artist that made, he made 4,253 Eth, he’s been charged with money laundering and I have a screenshot here. And then in the very next post on Reddit in a different sub redhead, it says, “The Pentagon admits it can’t account for $2 trillion again.” So some guy earns a bunch of money, they charge him with money laundering, but the Pentagon loses 2 trillion with a T dollars again. Nothing happens, right?
• I saw that meme and then they were also highlighting that if you do anything over 600 bucks, the IRS needs to know or you’re gonna be in trouble.
• Luckily, I’m not an American living in America, so that no longer affect me, but I feel bad for all the Americans living in America. But if anyone’s thinking of renouncing their US citizenship or you just wanna have a backup plan just in case, go and visit cryptopassportsforcrypto.com or cryptoforpassports.com I think you have both there. But that’s a friend of mine’s running that. And you can get citizenship, you can pay for the whole thing in crypto. And I think it’s a really smart move to have a backup plan in terms of citizenship. ‘Cause you never know when your country’s gonna go crazy. And it’s nice to have a backup plan to be able to go somewhere else.
• So, Roger, boy, you’ve seen Web 1.0, you’ve seen Web 2.0 and what would be considered Web 3.0 now and this situation I think, I don’t know if it’s bigger than Mount Gox or yeah, maybe it is just because of the media.
• In dollar terms I think it’s bigger yeah.
• Do you think this sets the crypto market back maybe a couple years or things like that?
• I don’t know. And it’s a double edged sword. Like yeah, it’s horrible that everybody lost a bunch of a bunch of money and that it crashed the whole market. But now the entire world is focused on cryptocurrency even more than before and people are even more aware that like this is a real thing with real amounts of money and real things happening. And so that just would probably drive you more adoption and more attention and more things happening to it. But I think Mount Gox’s percentage wise of the existing ecosystem was probably a bigger deal than FTX. But total absolute number of dollars, FTX was probably a bigger deal. Both were bad, but both drew more attention to the ecosystem in itself. So I dunno, just keep building out there and building useful tools for people to use and then people are gonna use them.
• So one of the challenges here in the United States is crypto regulations and getting proper crypto regulations ’cause we don’t want draconian regulations as stifles innovation. You have the SEC trying to put all coins into the securities basket. Bitcoin for the most part is even a CFTC chair said it this morning is a commodity, Ripple is being sued by the SEC over XRP. What are your thoughts on that and what do you see as being the outcome in that lawsuit?
• I think the SEC should be voluntarily funded, whereas right now they’re for people are forced to pay for the SEC, right? Ripple pays taxes that then go to the SEC for Ripple to harass them. I’m sorry for the SEC to harass Ripple. That’s crazy. And it’s like another example that a lot of people aren’t aware of. So before I was involved in cryptocurrency, I was selling networking equipment. Cisco systems was the brand of network equipment that I sold the most of, the NSA would literally intercept Cisco boxes, like Cisco routers and switches and then install their spyware on them and then finish shipping them and delivering them to the people so that they could spy on the telecom carriers that are using the Cisco equipment. And the NSA was doing that with money that Cisco was paying in taxes. So Cisco’s making a product that people all over the world want, paying billions of dollars in taxes. And then the US government then takes those taxes, gives that money to the NSA, then uses that to make it so that companies literally, they would rent secret like locations with different shipping addresses from the real business to order Cisco gear to have shipped to like the fake address so that the NSA wouldn’t know that it’s actually gonna be used at AT&T or Pack Bell or somewhere else. So the NSA wouldn’t intercept the gear and install their spyware on it. Like that’s how crazy the world is. Like these companies are forced to pay for the persecution or the disruption of their own business. And that’s exactly what’s going on with the SEC. I think a company like Consumer Reports, which is funded voluntarily, could do a much better job of warning people against, FTX and other things that are about to blow up and have problems. And I think businesses in the market can provide the consumer reviews to help protect consumers far better than the SEC can do that sort of thing. So I would like to see the SEC voluntarily funded and turned into a private organization that interacts with other people on a voluntary basis rather than using tax dollars to threaten people with violence, right? If people don’t obey them, they’ll send men in with guns to shut down the business. And I think that’s not the way the world should work.
• Tough question for you. Do you think Ripple’s gonna win this?
• Yeah, I think Ripple will win. But, if I can add to that, they’ll win at the expense of maybe tens of millions of dollars, maybe a hundred million dollar plus spend on this. That’s all money that they could have used to pay, software engineers to build better tools to build on Ripple or better user interfaces or better wallets or better user integrations with all these different things. So that’s maybe a hundred million dollars of fees that went to not make the world a better place. And the world is that much less wealthy than it otherwise would’ve been. The world is poor than it otherwise would’ve been. Fewer people have food to eat, more babies diet childbirth like the Bitcoin maximalist love to make fun of me for saying that. But if you look at the countries with the highest rate of GDP, more babies survive childbirth, right? So if you want more babies to survive childbirth, you want more economic freedom that leads to more economic growth and more economic growth leads to more babies to surviving childbirth. And the way to do that is not having to spend hundreds of millions of dollars fighting the SEC with stupid lawsuits. And so I really would like to see a lot of that sort of thing come to an end.
• And to your point, like BlockFi had to pay the SEC a hundred million dollars, I think they paid 70 million of that. Now they’re in a hole. They’ve been trying to to get bailouts and help. And part of that was from FTX. But after that collapse that’s off the table. So that’s a just an example of what you’re talking about there. These companies have to hand over a ton of cash and they can’t survive.
• Yeah, and those are just some big public examples, but it’s every single business and every person all over the world all the time. And like a lot of people say, “Oh, government’s the price we need for civilization.” But if you stop and take a step back and think about it, private businesses can survive without government, government cannot survive without the private businesses. And so that means that the government is the parasite upon the private businesses because private businesses can survive without the parasite. The parasite cannot survive without the host. And the host is you and I and everybody else in private industry.
• Roger you’ve seen so many things. You’ve been here in the crypto market so early. Are you still excited about this technology? And hard question, where do you see the crypto market in five years?
• Yeah, the two things I’m the most excited about are cryptocurrency enabling peer-to-peer electronic cash for the world, which increases the rate of economic growth for the world there. But then like artificial intelligence, wow, what a big deal this is. And I’m surprised, like I keep one of the most recent conversation topics I keep talking to other people about. And I’m surprised when they haven’t heard of it yet. It’s like three or four months ago, an engineer at Google quit Google and like violated his NDA with Google, talking about this chat bot they have at Google that he’s claiming, he thinks is like conscious and self-aware. And at first I was skeptical. I thought, “Okay, like, let’s see it,” but if you read the chat logs with that thing, that thing makes a really compelling case. Like, I don’t know if it’s conscious or not, but like it made a darn compelling case. And even to the point, like, I know I’m a human, I’m around here, this chat bot, I forget what the points were now, but it had like these philosophical viewpoints that like really baby stuff think, wow, I never thought of it that way before. And so like, if it’s not there, if it’s not conscious yet, it’s not that far away. Like it is coming really, really close there. I think Elon Musk comment was like, “Yeah, well can it drive a car?” So, which is a fair point from from Elon there as well, but it’s getting close and that’s gonna change everything. And so one example of that is like, most humans, if they put some time and effort into it, they can learn calculus, right? And they can figure out that if you give a dog brain a thousand years, a dog’s brain simply is not capable of understanding calculus. Even if you give it a thousand years to study calculus. There’s problems and concepts and ideas out there in the world that even if we give the human brain a thousand years, our brain’s just not capable of understanding that. But when we have these new AI super brains, they’re gonna be able to, not just understand, and recognize problems that we can’t even be aware of as humans. They’re gonna be able to solve it. And it’s really off to the races. And so, like, I guess earlier I told you my philosophy is like a voluntaryist but actually my real central core philosophy is an Extropian. And an Extropian is somebody who wants to increase the amount of intelligence in the universe. And I think the more intelligence there is out there in the universe, the more exciting, wonderful things that can happen. And I’m just excited and grateful to be a part of that journey and along for the ride there. And so I think AI is the really exciting next step to increase the amount of intelligence in the universe and doing all sorts of amazing things that my current brain isn’t really even able to understand at this point.
• Will it make crypto better or could it be a threat to crypto?
• No, it’s gonna make it better without any doubt. And if you think about it like an AI program can’t open a PayPal account, it can’t get a Visa card, it can’t open a bank account. It’s gonna be using cryptocurrency for its payments because everybody needs to use money including non-human entities on the internet.
• Got it, yeah. So Roger, I know we’re up on time, but I got some wrap up questions for you here. First, rapid fire, favorite food?
• Shabu Shabu, I think, or maybe samgyeopsalif people know what that, so one is a Japanese like hot pot, the other is a Korean barbecue pork barbecue with kimchi.
• I love Korean barbecue. Favorite musician or band.
• I’m kind of weird that way. I don’t really listen to music.
• What?, no music at all.
• Maybe Orbital, like I’m glad for people that are old enough to remember those guys. Like if I listen to music, I like electronic music.
• Favorite movie.
• Ex Machina. I don’t know if I pronounce it right, but that is a really, really wild.
• That’s exactly what you were just talking about, right? AI and consciousness and so forth.
• That could happen. Like that’s what makes, I like science fiction movies that are believable that could actually like, could potentially happen. And like that’s a real head spinning movie if you haven’t seen it, even though it’s a few years old go out and that one it’s awesome.
• I love it, yeah, I watched it. I’ve watched it maybe like five times. It’s one of those like sci-fi movies. I’m into sci-fi, so I’ll watch Blade Runner, Ex Machina and all that, favorite book?
• For science fiction books. Probably like the ooh, I have to name a couple. The 2001, 2011 or 2063, I forget there three and three, the 2001 series, right? There are four books in that series. Were all fantastic. And then another one that was really excellent I think was, Friday, is it?, I think Robert Heinlein. The story plot is that there’s a colony of humans on the moon and the governments of Earth are trying to boss around the humans on the moon. And the humans on the moon are saying like, “Hey, you’re not the boss office anymore. You stay on the earth and do your stuff. We’re on the moon and we’ll do our stuff.” And the earth governments are saying, “No, you better continue to obey us.” And so what the people on the moon did is they used the earth’s gravity against them by dropping moon rocks as a weapon down onto the earth to get the governments of the earth to leave them alone on the moon, is that Friday? I think that the name of that book was Friday, or some somebody else will know the name of that book. But that was another really fun book that I enjoyed a lot. And then, I’m sorry, there’s favorite books and there was one other question throughout.
• Oh yeah, when you’re not doing anything crypto related, what are you doing for fun as a hobby?
• Brazilian jiu-jitsu is my other hobby outside of a crypto and books and nerdy stuff.
• Ah, so any of these bitcoin maximalist try to mess with you, you can handle yourself, sounds like.
• I feel pretty confident in any grappling match with somebody that’s not a full time grappling professional.
• And finally, if you could create your own metaverse, what would theme be?
• Yeah, I don’t think I really have an answer for that. I feel like there’s so much stuff happening in the world that we’re in right now that I don’t feel a real compelling need for a metaverse in my own life. There’s so much happening already that that’s something that’s not actually as exciting for me.
• Roger, pleasure chatting with you man. Thank you so much for joining me.
• Thank you too.