What Happened When Bitcoin Made People Rich Quickly? | Cryptoland

Welcome to the land of cryptocurrencies, I am Krishna undevolu

bitcoin

gave rise to a new class of millionaires and billionaires,

what

does that mean for the future of cryptocurrencies? In 2013, Motherboard attended one of the first

bitcoin

conferences in history. It was only a few hundred

people

. Low-key and very nerdy back then, Bitcoin was either a niche obsession for

people

who embraced its promise of a democratized currency or, depending on who you talked to, maybe just a way to buy drugs on the dark web, Dexter Thomas found himself with the organizer of that. event that has come a long way since then and so has your bank account.

I'm here at decentral miami, which says it's the biggest challenge at this year's nft conference and I've been here for about an hour and the scene is super weird. man, I mean, the line wraps around the parking lot. I saw someone running with bitcoin Balenciagas. There is a lambo part in the place for the disabled. There are models. I mean, you could be forgiven for thinking that it's actually a club queue rather than a para queue. a crypto convention and you have to be a damn kidney, there's someone running around with the real shiba inu, I don't know

what

I expected

when

I came here, it wasn't this decentralized overlapping with the miami art basil festival and it was heavily focused on nfts that have exploded in the crypto space over the last year.

I have no idea what's going on, so there are places everywhere here with that explosion. Hundreds of new nft companies have emerged. Hi, can I scan or whatever? and many of them are here with stands. and paid radio models and qr codes that try to get people's attention and they are all quite friendly, if you don't understand what is going on they will be happy to explain it to you. Tokens are still kind of abstract but that's how I decided, I say it's the new stock market for the new internet one of your nfts just crashed bro you got a 404 on one of your nfts gotta get my boy , you still need a guy in this world, this is all fine, but it's not the only reason I'm I flew to Miami to meet up with a guy who in another world would still have been my coworker, Alec Liu, former writer from the Vice technology section, motherboard.

A lot of this is still abstract, reminds me of Bitcoin 2013. Hey. I'm alec with motherboard, we're here at the first bitcoin conference in san jose, where over 1,200 bitcoin supporters gathered to celebrate how far the movement has come. This bitcoin conference in 2013 was a turning point for alec, he was there covering the event that has been. It's a crazy, interesting, strange scene, we feel that Bitcoin is entering a new phase after the event where he left his job to join the crypto industry and like many people here, he is doing quite well now, like this guy and this guy and this guy on the day of this conference one bitcoin was worth about 120 in 2021

when

the miami conference was held it was worth an average of 47,000 which means every 20 that this guy entered that ATM is worth a little over $8,000 now and the comedian they hired for four bitcoins my mom is so Japanese that when I was born I actually came out wireless in hindsight I had a pretty solid job bitcoin is a tremendous force that can make the world a better place it's up to us to make sure that happens on the keynote that you're us winklevoss and it was like, wow, that's a big deal, but there were so many question marks everywhere, like people were talking about this future, but there was a lot of work to do, you know?

I was left with a kind of feeling of wow, this was like the Bitcoin launch party, how did you decide to stop doing it? You know, doing essentially what I'm doing now. You know what, right? Let me get into this cryptocurrency thing. I'm definitely a little burnt out, uh, I mean, look, money is a great motivation, but it's also like the opportunity to be a part of, let's say, the beginning of the new Internet. um, that was just an opportunity I couldn't miss. I respect that man. 2013 was like this like a motley crew of people like all different, like the early adopters, the hackers, the true believers, but obviously you're fighting a lot of rejections because you know the main narrative is pretty cool, this is this dumb digital currency. to buy drugs online, now it's a silly digital currency and you can actually buy. expensive art to put on your TV, you have to realize that in 2013 it was just bitcoin.

I would say that the next big milestone was when ethereum came out and now you could add programming and code, that in some way laid the foundations for what we are seeing today and the nft thing has been huge because now it has brought creators and artists, it is a very different crowd, the crowd is different partly because a lot of new people have arrived, but also some of the people from the first days have changed. What's wrong with everyone? Good morning, good afternoon, good evening, I'm your host, Charlie Schrempf. Charlie Shreem is considered one of the founding fathers of cryptocurrencies in 2011.

He instantly started bidding for the first truly user-friendly way to buy Bitcoin. He was also a founding member of the bitcoin foundation and he was the one who organized that conference in 2013. Thank you all for coming these days, he works in a fancy office and lives in a beautiful house in Sarasota, Florida, with his wife Courtney and their dog, But in 2013 his lifestyle was quite different. I just got out of bed a few minutes ago. Everything's fine. Thank you. Is anyone hungry or thirsty or something? It was nice meeting you and Charlie's mom. I guess this is downtown, this is where all the magic happens back when Charlie Shrimp lived. and working in his parents' basement, she kept my hands here and he had big plans for the future.

I want to make the world a better place. I feel like I was put here to make bitcoin. This is my life's work and there is much more. and i'm still young so a lot more things are going to happen this is like the first part a lot more

happened

just a few months after this interview charlie shrem was arrested on money laundering charges after stealing over a million dollars worth of bitcoin from his exchange ended up on the Silk Road, pleaded guilty to a reduced charge of aiding and abetting the transmission of money without a license and served more than a year in federal prison, it doesn't matter if you are a casual observer of bitcoin, one of the die- hard and faithful, you need to know what's going on these days, Charlie Shrimp no longer runs his own company, I mean, he doesn't have to, he's

rich

, instead he's leaned more toward being a crypto evangelist than He travels around the world to spread the good word that is today.

He flew to Baltimore as he does every two weeks to film a video series aimed at investors, but while he was in the area he wanted to take me to the monuments, what do you think Abe Lincoln would have thought about bitcoin? He would have loved it. that conference in 2013 where you were mentally thinking about bitcoin i was walking around like my didn't suck they called me the prince of bitcoin did you like that title yeah of course you did it was a cool title I mean here I was high school kid who I didn't have any friends I was a geek I was a nerd and suddenly I'm like the most popular kid in school and I found an industry that loved me as much as I loved it what was your motivation then we all realized early on that in This community what we were doing was special, there was no doubt about it, but for me personally I was looking for a family as I was leaving the very religious Orthodox Jewish community I had grown up in. in shrimp says his family

made

him choose between them and his religion and his then girlfriend Courtney who is not Jewish, he chose her and a life outside the community, he hasn't spoken to his parents in years, do you find looking for something? of the things you had within your community when you were growing up in bitcoin oh yeah, one of the things that frustrates me all the time is that growing up in a religious community is having instant camaraderie or friendship with tens of thousands of people. but in the external world it is very difficult to make friends.

You got into Bitcoin to find friends. I came with Bitcoin and found some friends. As long as I remain involved in the industry, I will always be fostering that camaraderie in the community. because that's what got me started, bitcoin was worthless at first, it wasn't tradable, it wasn't worth the only reason we started a bitcoin exchange was simply so more people would get it back. Back then, most people thought of Bitcoin as a dodgy electronic alternative to cash, like the monopoly money of hipster nerds, but the conversation is much broader now, not only is CNBC giving financial advice on Bitcoin, but that people in the community promise that the blockchain could do everything from stopping you. racism and labor exploitation to achieve world peace, it's quite remarkable given that we still don't even know who invented bitcoin, all we have is his pseudonym satoshi, who do you think satoshi is?

Oh, I stopped, it's funny, I stopped asking myself that a few years ago. I really believe that what makes Bitcoin great is that there is no Satoshi. Probably Satoshi's aliens, aliens or time travelers, if time travelers invented Bitcoin to save the world and published it the same way Satoshi published the white paper, invent it in depth. but don't take any credit because you want people to believe it came from them or maybe people

made

it up. I don't know many people who actually believed in many of these things from the beginning, yes, many of them did. idealists that's something I hear a lot about I hear a lot we should really say optimistic you know, I mean utopian think well of yourself this is going to stop wars this is what's going to help could finance wars maybe 100 finance wars and this is What I'm talking about, objectively speaking, right money is a big part of state and government power, that's a fact and therefore if you look at it from the perspective that if state money is undermined, you're undermining state power and it's hard not to talk about state power here, the US government has been quite concerned about cryptocurrencies in general, other major global superpowers have toyed with restricting or even banning cryptocurrencies entirely, for On the other hand, we have El Salvador starting to fully adopt Bitcoin and it is starting. to make it seem like governments are realizing that cryptocurrencies might not be something they can simply legislate away.

If you are in my position right now, seeing what you are seeing at this conference, would you take the same step or do you think that moment has passed? It certainly hasn't been approved, we're in everything, it's very early, people have proven what's possible and that's why this energy exists, that's why this investment exists, we've seen enough validation to be confident that we're going. to get there. We're supposed to support each other through spaces with enough money that many people who are in crypto don't actually care about the technology, they just play it off as a buzzword in the stock market they're in. money, but after more than 10 years. cryptocurrencies are different from the stock market in that the OGs think they have a chance, it actually changed the world.

The other side I see is that this will be a new aristocracy, there will be some people who came early and got a bunch of bitcoins, they will be

rich

, but they will still be another one percent and the rest of us, 99, will stay on the certificate. I think that has always been the history of technology and, like great technological developments, it is a double-edged sword. I think the good thing about the framework is that it has that utopian flavor in mind, but this is a very capitalist system and so you know there are going to be winners and losers the hope is that the competition is fairer and I think we all need to stay vigilant if you want fairness and you want justice you have to fight for it every day regardless of the underlying technology so you're saying that I should leave Bison, follow in your footsteps, there is room for you, there is a great opportunity. now and I think we need good people fighting that good fight to make sure the next chapter works for us and not the other way around.

We're over a decade into the life of bitcoin and we're here to talk about whether it has delivered on its original promise and how it will shape the future here with me are motherboards maxwell Strawn one of the early adopters of bitcoin and current director of equity strategy of coins malcolm demiros malcolm maxwell thanks for joining me, there is a lot to talk about, but in order to talk about what bitcoin is like today and its future, we have to go back in time and talk about how it was born, its history, its cultural collapse. I imagine it might be a good idea to talk about your life and how you got into bitcoin, because maybe it follows a sort of broader trajectory of where we are today absolutely, I think, as a lotPeople, when I first heard about bitcoin it was in 2012 and bitcoin was deeply ideological in nature and very closely aligned with this idea of ​​cryptoanarchism in the early days.

The days when I got involved in Bitcoin it wasn't about an investment, it wasn't about making money, it wasn't about, you know, becoming a millionaire or billionaire, it was actually about how we use technology to subvert the political climate. , current economic and social and to introduce something new to the world and the great experiment that we are trying is the separation of money and the state and when I was leaving graduate school I thought what am I going to do with my life and then I spent the next three years of my life I was completely immersed in the bitcoin ecosystem working with core developers working with entrepreneurs working with financial institutions I mean, I did the rounds in 2015 on the street throwing bitcoins to banks and everyone thought we were crazyeveryone thought we were money launderers, everyone thought you know we're like, oh here's the bitcoin lady, don't talk to her, she's weird, but it was interesting, I have such a vivid memory of the day bitcoin hit ten thousand dollars for the first time.

At that time and we were all gathered in New York because the media company we were running at the time was hosting the first investor-focused crypto event and I vividly remember never having owned a good pair of shoes before, so at the time When bitcoin hit ten thousand dollars I went on my little netaporte app and I bought a nice pair of shoes for the first time and I had them worn to the conference and I put them on and I was like, wow! and a group of us put up 1.1 bitcoin each which costs a thousand dollars and I think there was a hundred of us so we ended up having a hundred thousand dollars and we had a crazy party on the roof of the public and we were all like what's going on, why it is this?

It's happening because it's happening so fast and so intensely and now we have the capital, we now have the resources, not just as individuals but as companies, my company manages seven billion in assets, we are a billion dollar publicly traded company. dollars and I think it's amazing that We have a community of people who are leading with technology, the tenants are open source, decentralized, permissionless, and these people are empowered with capital and are motivated to build. There is no doubt that Bitcoin and all cryptocurrencies have a very political origin story. There was a lot, you have to remember that when all of these ideas first came to light, we were in the middle of a financial crisis, I think there was a lot of justifiable anger and frustration with the United States government that was bailing out Wall Street. banks and there was a lot of concern about the federal reserve and its role in the money supply, and yes, there was certainly a hugely political undertone to the beginning of cryptocurrencies from what we can see in polls and things of that nature. most people buy cryptocurrency because they think it's an exciting space, they think you know they could increase their net worth by a certain percentage and that's, you know, that's a justifiable reason to buy something.

I think the question is how do they combine? that with the kind of political elements to get to some sort of more revolutionary decentralized process like she was talking about, people love to talk about cryptocurrencies as if there's some esoteric niche corner of finance, they're not, this is a three trillion dollar asset class that we have created a meme, it's crazy, yes, I laugh because it's crazy, yes, but we have done it and I think about it again, when we think about investing in cryptocurrencies, the Another thing we must remember is that for many people it is. an antidote to the chaos you can buy in your wallet is a protection against endless money printing against trillions of dollars in bailouts government incompetence we are seeing around the world for many people who have never had the ability to get out properly I have only had the ability to express their disagreement, but for the first time with Bitcoin, people who are unhappy with the monetary regime they find themselves in had the ability to leave, help me understand how that all makes sense, I think people who They do not do it.

They don't come from a lot of money, they feel the need to take on risky proposals to, you know, improve their lives. What I don't fully understand is how that set of incentives is different from someone who joined an exchange house. 2003 or someone who bought Apple stock in 1995. What is it about cryptocurrencies that differs from those types of previous risks? There is no CEO of Bitcoin. There is no singular leader. There is no singular investment thesis about Bitcoin. People see what they want. I see in bitcoin, so there's a whole group of people who focus on technical analysis and trading and are really interested in the speculative element and they're all these different niche subcommunities, but the good thing is that bitcoin is enough flexible to adapt.

All these different subcommunities and some of them evolve and develop and become their own thing, but I don't think there's a singular vision, a singular perspective or a singular spirit, there's no one person dictating what happens. it's up to us, I know a lot of people own a little bit of crypto, but my understanding is that crypto for the most part is highly concentrated, the vast majority is owned by a very small number of people and that's right, that's wrong and if It is true that it is concentrated among a small number of people, how is it a democratizing force?

How is that different than you know how assets are divided through Wall Street or something? This is a great question and I love it. Speaking of which, in our existing monetary system, wealth is extremely concentrated and today, whales control about 12 of the bitcoin supply, but what whales really are are people, whales are people who own over a thousand bitcoins, okay, so it's 12 with the whales with the whales, but then the really interesting thing is that there is an extremely long tail of smaller bitcoin holders and that long tail continues to grow, which gives them more resources to do what want to do, so that long tail continues to grow, but we need to find more ways. to help a lot of growth, but that sounds like you're identifying a solution to what is a problem, i.e. it's not democratized right now, so there has to be a way to do how you propose we create a new currency world. and distribute it fairly I'm not here to answer that question like no I don't even know if we need a new world currency and distribute it fairly if we want to change the world and the power structure in In our world we have to start with money because at the end of the day it all comes back to money and I think that's what I'm really advocating for: let's look at this as a potential tool in our toolkit along with a variety of other initiatives and technologies that can help us start to find better answers to some of these systemic challenges that have plagued humanity since the beginning of time, like what's happening to the wealth that's being created because I think that might be the way to talk. on this question because, what are we doing?

What are you guys doing to make sure that that wealth actually benefits a large portion of people? Yes, I think there are a few different approaches. I mean, I think also, are you guys paying taxes? taxes of course how it works with taxes and bitcoin and how do you think it should work how it should be and yeah exactly the reason why I think this is an important question is because we live in a society with our government we live in a society, yes our government, our governments might be broken, but a lot of attention today is paid to whether billionaires or people who made a lot of money are paying their fair share in broader based programs that are decided through media democratic like how do we have better roads or how do we move towards a greener economy, these kinds of things, so if you want to keep everything within the crypto world and never withdraw money, when are you going to pay taxes and when you pay taxes, you pay? taxes on similar exchanges, so if I exchange my bitcoin for another cryptocurrency, that is a taxable event, just like it would be if I bought Google stock to buy Apple stock, I think the problem is if we look at how the resources of taxpayers in the United States. about waging endless wars, the agreement to totally destroy countries was broken, but also to defend the dollar, social security, public school, of course, but if we look at what we get for the amount of taxes we pay in the United States, What we do is take public resources and put them in. billions of dollars in tax subsidies are in the hands of private companies Tesla, so I think the problem we have here is that there is so much dispute with public sector resources flowing into the hands of private corporations, that's what I'm with disagree, that's where inequality arises.

The reason is that we don't live in a democracy, we live in a corporate state, so if our tax structure is more like Europe with nationalized healthcare and lower defense spending and things like that, how would that affect your view on how they should be paid? taxes? being an employee in the US, I mean, look, all I can say is we can sit here and we can pontificate and that's great and we can complain, but if there's one thing I've learned over seven years of being in this industry en At some point you just have to shut your mouth and build it, so I'm going to help put people in office.

We need to create a new political party. I don't think the two-party system in the United States works and I think we are now at a point in the crypto ecosystem where we have enough resources, we have enough wealth, and we have enough people who see the world through the same lens, we can start to implement a real change and it's not us sitting here around this table talking. we put people in office who are going to change things how much real wealth has been created through bitcoin so just basic facts today bitcoin is a $1.2 trillion asset class bitcoin represents among the 40 and 50 of the general cryptoasset market. relative scale correct cryptography $3 trillion market precious metals literal rocks $12 trillion market okay okay global stocks $100 trillion market real estate $300 trillion market apple is a two trillion dollar company Microsoft is a two trillion dollar company right, yes they have budgets that are bigger than the budgets of nation states so the general solution is that if you take a step back, cryptocurrencies aren't the craziest thing out there. happening, we live in this interesting world where corporations have more power than nation states. they have more resources than nation states which is a dynamic we haven't seen before and is a result of there being so much money in the system so cryptocurrencies are the least surprising to me and it's so blatantly obvious if you put it in context.

I agree with all the issues you've mentioned today. I just have a hard time understanding why cryptocurrencies are the answer to any of those things, like what makes them so different or what about decentralized technology that I've never been able to. I understand how that helps solve things outside of being another market or something. How do you solve some of those problems? There's a great quote from satoshi and I'm going to use it because the gospel of satoshi is real and it's um if you don't. I understand that I don't have time to explain, so I think there is something interesting.

I spent the last seven years of my life trying to explain and convince various people from all walks of life about the importance of bitcoin and, again, as if money were just a shared delusion is true, and so is money. It's just a collective fiction. I'm trying to convince you of my point of view. My deception is true, but it is very difficult for me to convince you of my deception because you are trapped in your own delusion, which is obviously true. I'm not stuck and it could be that the benefit of cryptocurrency is that it moves resources from this traditional hierarchy of white men working at Goldman Sachs to a totally different group of people and that might be fine, I think that would be a good idea.

I think the most powerful thing that Bitcoin has done and the most dangerous thing that Bitcoin has done is that it has helped people understand that they have a choice, so Maxwell, I want to talk to you for a second because there are a lot of great ideas and in your reports On inequality in tech, what are the red flags you see emerging from this conversation? Do you know what makes you want to boost? Tell me about my red flags. I'm dying. You know, you were talking about, you know, spending money on ridiculous things that IThey look ridiculous, it doesn't seem like a problem to me to be honest, like rich people have been spending money on stupid things for thousands of years I think, but the one or maybe millions who know they were trading want them as sick rock art, yeah, so you know, yeah, nfts, whatever you think about them, some people think they're innovation, some people think they know they're going away, I don't.

I know I don't really care, I don't know if there's a red flag, but I'm still confused about the rising price of bitcoin, uh, bitcoin, uh, allowing people in the past to buy nefarious drugs, I'm just having trouble to see how it's solving any of these problems and obviously people think that's the way it is because, like you said, there's a religious element, there's a real devotion to it and I think it's understandable that early adopters feel attached to cryptocurrencies because, especially in the The case of Bitcoin has changed the lives of many people and if you came early, but if we start today, if you are starting to get in, you want to buy Bitcoin today, I wonder if you think you will be.

You are too late to the party or you are still too early. You don't have to buy bitcoins, although you can earn bitcoins. You can receive bitcoin cash back rewards. What we want to start doing is creating new dynamics where you don't. We have to buy the choke point, the choke point will always be where cryptocurrencies touch the traditional banking system, so one of the things we are really focused on is building the capacity so that people never have to leave the crypto ecosystem we now can. allow people and there's actually a really cool company called stack work that allows it to be like an upwork or fiverr where people can get paid in bitcoin, so if you're a developer, for example, if you're a college educated woman In Afghanistan you can no longer work outside your home if you have an internet connection you can work online and receive payments in bitcoins so you don't have to deposit into a bank account because as a woman you can't have a bank account so that now you can train people from all over the world to work on bitcoins, which is great. that's a tangible benefit how big is that how big is that how often does that happen right now all the time and there are huge developer communities in argentina in chile in venezuela in turkey where I'm from in the philippines in malaysia so now I can allow anyone with a phone and an internet connection to get bitcoins and I think that's super powerful.

You and I don't feel that pain because we live in America and we have bank accounts and we've never been marginalized or excluded, but I think for people who haven't had opportunities like this it's tremendously exciting for them. I think it's a super exciting opportunity. No? You have to agree. Yes, of course, but the question is: will this tide really lift all boats? and I think that's the inequality question in a nutshell and here's my response to that, like I can't decide that for anyone because value is deeply subjective and deeply personal and we're still very early in the technology to be able to do this. .

Things are like three years old, what happens with that, that future depends on people to build and decide. This is permissionless fintech, so people will build different things and some of them will make sense to us, some of them won't. They will be altruistic and well-intentioned in nature, some of them will not be, but my only job is to empower people to build the things they want to build and try to advance the movement in a way that is positive and creative in values ​​and That's all I can do, I will say that the only thing that concerns me is that, there are many things, I feel that there are many things, is that, you know, this is essentially unfettered capitalism, it is stateless capitalism by definition.

That is the ideological foundation of the whole thing and there is a lot of history that shows that this is not a democratic thing, democratizing all the time, ends up benefiting society in general, raises all boats, or helps a concentrated few, eh. I don't think we know yet, but it's not written, yes, but it's worth asking until we know, but by telling these stories we can help shape the direction of the story, yes, but since we have to, we have You go ahead and do it. You know Malcolm, we've been hard on you to a certain extent, I think it's because a lot depends on what the early wealth generators in this community do with it and how it turns into something or just turns into something else, I think there's many things.

There's a lot of promise here and I think the technology itself is there, but that story is for us to write and by holding people accountable and asking the hard questions, I don't even have the tools to hold people accountable for this. I don't even have the tools to hold people accountable for this. I know what the right questions are because it seems like yes, the sky is the limit. Well, thank you both for this extensive conversation that is not over. That's how I feel about it. It's just getting started, so thank you and thank you for joining us.

It's for us today see you next time