Today’s guest is Erik Voorhees, Founder and CEO of Shapeshift.io, the best way to exchange digital tokens on the Internet.
I met Erik in Panama City, Panama in 2013 because he had a Bitcoin sticker on his laptop while posted up working at the NY Deli Bagel Cafe in El Cangrejo. I was working for Peter Schiff’s Euro Pacific Bank and had just heard Erik on Peter’s radio show.
I was amazed at how eloquently Erik could communicate the benefits and value of Bitcoin as well as why it should be embraced by every person who supports “free market money” (Gold/Silver). Unfortunately, Peter Schiff wasn’t able to (and still doesn’t) grasp the paradigm shift and advancements in money created by Bitcoin and blockchains.
Since his [Erik’s] entry into Bitcoin around 2010, he has either built or helped build several cryptocurrency companies including SatoshiDice, BitInstant, Coinapult and his most recent project Shapeshift.io. Tune in to hear how a fundamental understanding of money and freedom was instrumental in all of Erik’s business ideas.
Protecting Customers: Market-based solution vs Government Regulations
Most people (general public) believes that a government needs to “regulate” the Free Market in order to protect customers. We discuss how such government regulations actually harm the customer and protections should be left to the Entrepreneurs and business leaders to figure out.
At Shapeshift, Erik has built a digital token exchange which does not require your private information (name, address, utility bill, social security number, etc). Simply send tokens to an address and receive the new, different tokens to your crypto wallet.Once an exchange is requested, Shapeshift only controls byour tokens for a few seconds as they perform the exchange and send back to you. This is a revolution in “financial custodial accounts” and is an evolution in how financial companies will protect clients in the future…as long as the government stays the hell out of the way.
How Shapeshift has Created a Revenue Stream for Digital Token Wallets
Speaking of revolutionizing business models, before Shapeshift it was very difficult to create a cash-flow positive business that builds crypto-currency wallets. Selling ads, allowing purchases with a credit card (very difficult and risky) or creating a LocalBitcoins-eque marketplace were the only ideas. None of them worked well. Now with Shapeshift, crypto-currency wallets who support multiple tokens can now integrate the Shapeshift exchange engine and make a small cut of all the token exchanges happening from within the wallet.
Shapeshift Hack, Bitfinex Hack and the Invention of the “Crypto bond”
Another interesting conversation was the similarities and differences between the hack on Shapeshift and the hack on one of the world’s largest digital token exchanges, Bitfinex. Since Shapeshift does not hold client funds, no user’s money was affected whereas ~$75M of customer funds were stolen at Bitfinex.
You do not want to miss the discussion about the impact of the “Bitfinex token” and how that allowed 100% of customer’s funds to be refunded. Another evolutionary step in how the Free Market and satisfying customer demand is the best way to protect sensitive information and money.
Bitcoin Block Size Debate, “Alt-coins”, Libertarians and Bitcoin Maximalists
We close the interview with reflections on the nearly 2 year battle to increase (or not) the Bitcoin block size. I interviewed both Erik and Roger Ver last year and nearly nothing has been accomplished since then and Bitcoin is slower and transactions are more expensive than ever.
Why Bitcoiners would rather fight each other rather than the “powers that be” in the banking industry and with the government’s fiat money seems to take a back seat to how Bitcoin should be upgraded. This in-fighting has created doubt in the Bitcoin blockchain and has caused an explosion of both interest and market cap other blockchains and digital tokens.
A solutions-first approach seems to be missing and nagging, complaining and blame throwing are in the forefront. Reminds me of all the unnecessary fighting in the Libertarian community. What’s up with fighting the people who you have >90% in common with?
That’s it for this episode of the Liberty Entrepreneurs Podcast! Please Like, Share and Review if you have time!
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