Erik Voorhees speaks with Sean Wince of CoinBrief about the upcoming BitLicense legislature, Bitcoin and politics, and the future of new altcurrency.
Sean: This is the first CoinBrief interview that we are having with the prominent member of the Bitcoin community. This is Erik Voorhees. He’s a startup founder founded Coinapult, as well as SatoshiDice. Have you done anything else that you want to add to your résumé for this?
Erik: I was with BitInstant for about a year as the head of marketing before starting Coinapult down in Panama.
Sean: Very nice, very nice. And so, the main thing that we’re going to talk about today is the BitLicense proposal for regulations that have happened in New York. So, you’ve read the basics of this by now, have you?
Erik: Yeah, I waded through all 40 pages of it a few times.
Sean: Okay, okay. And, I read your article on your blog and it was a very good article.
Sean: You made some really great points about the financial privacy of Bitcoin transactions and what regulations could mean for privacy in the Bitcoin world. What is your greatest concern about privacy concerning the BitLicense?
Erik: The concern is essentially that any user of any Bitcoin service would have to be entered into all sorts of databases with their name and personal information, like where they live, what they look like, what nationality they are, probably scans of their passport or driver’s license. And so, this is all just a bunch of personal information that other people have no business knowing. And, if the government wants to have private information about people, they need to make a case that that person is at least a suspect of a crime I would think. They shouldn’t be able to just require everyone’s information just because they write it on paper. So that was my main concern. There are other concerns, but that was kind of the thrust of my piece.
Sean: Yeah, yeah, focusing on the privacy issue. So, they’re required to basically record all transactions that happened within that particular financial institution, is that right? And, 10 years of records of all business transactions– is that something that banks and other financial institutions are normally subject to or is that like a specific attack on Bitcoin that isn’t really leveled against anyone else in the finance industry?
Erik: I’m guessing that banks are probably supposed to keep their records for 10 years or something like that. I don’t know. I’m just guessing. But, there’s lots of things that you can do with normal money that you don’t need to betray all your personal information about, right? If you go buy some snacks at the grocery store with cash, the grocery store owner doesn’t bring out a form and require you to fill out your name and address and give them a scan of your passport and a photo and all of that stuff just to buy a $5 snack. So, why is that freedom permitted with dollars, but not with Bitcoin? Someone who wants to buy $5 worth of Bitcoin according to these New York rules is going to have to give up all the information that they would have to give up if they were to open a bank account or buy a house. So, it’s just completely inappropriate.
Sean: Yeah. Is this something they’ve been waiting to do for a while in terms of currency? Because they can’t track cash, dollars, transactions like this obviously. It’s just pieces of paper. Are they kind of trying to use this as their opportunity to create a perfectly trackable system of money and basically trying to co-opt the Bitcoin system for their own surveillance purposes?
Erik: Yeah, I mean, these agencies of course want to surveil everything. They believe that they are good people and that they need to watch over society and keep it safe. So, they don’t seem to have any sort of limit on what they want to watch. They think that they can watch whatever they want, they are good people, they will treat that information well, and thus, anyone complaining probably is just a bad guy with something to hide.
Sean: Mm-hmm. Mm-hmm.
Erik: And, I mean, this is exactly what the premise of that wonderful book 1984 was about. It states that in order to watch over the flock, is able to view everything about everyone at all times, people are not allowed to question this. And, I think most of us grew up seeing that book as something that we didn’t want to happen and that we’re like, “Oh, well, clearly, that’s bad. Thank goodness our government is not like that and let’s not ever let that happen.”But this is exactly how that does happen. It happens with these little steps, each little piece of regulation that asks for more and more information in wider areas of our lives. And so, we just are marching toward a situation of 1984 willingly. And, it’s bad enough that that’s how it is in the normal financial system, but now we have a way to escape that to avoid it, to turn the clock back on this terrible surveillance state. And, New York comes in and wants to prevent that from happening. They want to gather us all up together in all their databases and it needs to be fought in every way possible.
Sean: Yeah. And they’re doing it under the guise of consumer protection saying that this Bitcoin thing, these virtual currency things, they’re dangerous for consumers. They’re too volatile, you might get hacked too easily, the business you’re working with might go under or might steal the coins or whatever. So they’re doing it under the guise of protecting consumers and making sure that everyone is safe in this brand new financial world. But, you make the argument in your article that it’s not actually about consumer protection and that once consumers give up all their information like this, they’re actually more vulnerable because their information is all out there on a server somewhere. And then it’s way too easy to have that hacked or stolen, more easy than if they had just not given up that information in the first place.
Erik: Yeah, ignore Bitcoin for a second. People shop online for all sorts of stuff and they have to give up all this personal information when they go shopping with every merchant. And, the identity theft and credit card fraud that derives from that is massive. It’s a huge industry of crime because the information is out there for the criminals to get and they will figure out ways to get it. The Target data breach last Christmas was a really good example of this where tens of millions of customers had their information stolen from them because they all use credit cards and Target has to store that information. And, that is the very opposite of protecting consumers. You shouldn’t need to reveal personal, private information about yourself to buy things especially if you’re not under suspicion of a crime or anything like that. It’s absurd.
Sean: Yeah. They’re casting a huge wide net across everyone.
Erik: Yeah, they want to watch everyone. They don’t want Bitcoin to be invisible. They don’t want this new technology to come out that allows people privacy from the state. They don’t believe that that’s a valid desire.
Sean: Right, right. Because they’re in government, right? They think that their job is to protect everyone from everyone else and in order to achieve that they have to watch every single little thing that happens between people in terms of virtual currency and Bitcoin.
Erik: Yeah, and a lot of it is that they resort to — are now what we can call the “Because Gox” reason.
Erik: So they can throw out any rule they want. And if you say, “Well, why that rule?” they say, “well, because Gox.” Or because Gox happened, because Mt. Gox collapsed and a bunch of people lost a bunch of money because there were shady stuff that went on and it wasn’t regulated and all this stuff, blah, blah, blah. Because of that, clearly, we need to come in as your parents and take down your names and keep track of you and put a little tracking device on everything you do, monitor who you are, where you are, what you’re saying, what you’re buying. All this stuff because Gox because we’re going to prevent Goxes from happening. And of course, this is totally ridiculous because financial frauds happen in the normal financial industry all the time. Bernie Madoff is kind of the poster child of that. He used to work for a lot of these regulation agencies. I mean, he was among the regulators in high positions and he devised the worst scam of our time. So, why we should trust these people to protect us from scams? They haven’t made a very –
Sean: Yeah. They don’t have a very good résumé of actually doing the things they claim that they’re supposed to do to protect people.
Erik: Yeah. And, I mean, I guess they don’t need to make arguments, right? Because they have the gun. They can always throw you in prison. That’s their argument. The argument is, “Do what we say or else we will hurt you. We will steal your property, we will ruin your life and we’ll make everything hell for you.” So that’s their argument essentially.
Sean: Yeah, that’s a fairly compelling argument in terms of just physical safety.
Sean: So, I want to just go over some of the other things that are a part of this absurd BitLicense. So, the people who run the businesses have to do background checks, submit fingerprints to the FBI, you have to have a bond held with the New York state, you have to record transactions for 10 years. You can’t hold profits in Bitcoin or any virtual digital currencies.
Sean: So, they’re telling you that you can be successful, just turn those Bitcoins into dollars, which is what we use in the banking sector.
Erik: That was a really weird clause. And, almost all the other clauses you can at least understand what the government’s argument is, what they claim. I have no idea what they are thinking with that one. It doesn’t make any sense and I think it’s actually pretty clearly unconstitutional. The government can’t force a company to keep its savings in one form of asset or another. They couldn’t tell a company that you must keep your savings in gold or you must keep your savings in bushels of wheat. They can’t tell you that you must keep your savings in dollars. I’ve never heard of such a thing. That would be completely unconstitutional.
Sean: Yeah, it seems –
Erik: So, I think that clause will be stricken from the final rules because they have to understand how absurd that is.
Sean: Yeah, yeah. I mean, if they keep it in, people are just going to try and keep their Bitcoin profits anyway or at least a certain fraction of them and just hide it using tools like Dark Wallet or CoinJoin or something else to allow them to just keep it under the table. New York is not going to get everything above the table.
Erik: Well, yeah. Any of these of rules will have that effect. They will prevent some good people from using it legally and then they will force other people who want to keep using it to go around the law in one way or another and it’s very easy to do. So, all that’s going to happen is move what is a wonderful, blooming white market and push it underground.
Sean: So, I want to get your opinion on the Bitcoin Foundation’s position on this issue. So, Patrick Murck, who is the general counsel of the Bitcoin Foundation, he did a couple tweets when the BitLicense came out and he did some interviews too where he said that the rules aren’t going to work and there’s privacy implications. And then Jon Matonis actually did a nice editorial in CoinDesk talking about the privacy implications and actually supporting the Tor Challenge to make Tor stronger. Do you trust the Bitcoin Foundation on this issue? Do you think they’re actually on the right side of this one? Because they’ve been pushing for regulation a lot in the past.
Erik: It’s not always fair to say that a person or group is pushing for regulation. Some people are. Others feel like it’s inevitable and so they want to be proactive and help shape the regulation. I don’t think that the Foundation is necessarily pro-regulation. If the government was just going to stay the hell out of it, I don’t think the Bitcoin Foundation would be going to them and saying, “Please, please, regulate us.” I don’t think they would do that. I think they see that the government is going to regulate in one way or another and they want to engage with the regulators in order to craft it in the most beneficial and least harmful way. I know a few of the people leading the Bitcoin Foundation and I think they’re good people and I have generally feel like people should fight against this stuff in lots of ways. So, those who want to be political about it, fine. Those who want to ignore it and just keep building their businesses anyway, that’s great too. All sorts of tactics are needed I think.
Sean: Okay. Great, great, great. Yeah, that brings up the question like if the BitLicense is implemented and let’s assume that the majority of the rules are kept in the license, would that just cripple New York in terms of the digital currency ecosystem and the majority of the actually innovative businesses would just operate somewhere else?
Erik: Yeah, I think if those regulations came into effect tomorrow, I think tomorrow you would find quite a few Bitcoin companies with a new message on their homepage if you were visiting from a New York IP address, saying “Sorry, we’re not going to do business with you.”
Erik: I think that’s going to happen. It’s just not worth the time. I mean, New York is a big and important market, but it’s not worth burdening your entire business and hamstringing it with legal bills and trying to comply with this nonsense.
I mean, these regulations require the background checks and the bonds and all this stuff. Imagine some kid, some 18-year-old in college who writes some Bitcoin software and makes a service for people to start using. I mean, there’s no way that he can do it under this regulatory scheme.
Sean: Yeah, yeah. He’d have to hire a compliance officer, cyber security officer at the mandate of the state.
Erik: Yeah. So, what’s this 18-year-old going to do? Well, he can either not build his dream, which I guess is what American politicians seem to be pushing us toward or he can just say, “Sorry New York, can’t work with you. America is a free country and I have to block you because freedom.”
Sean: Yeah. Yeah.
Erik: And hopefully, enough people will do this that the politicians take notice and New Yorkers take notice and they realize that they’re being ring-fenced from the new financial system.
Sean: Yeah, okay.
Erik: And I mean, how ironic is that for New York City to become isolated from the future financial system?
Erik: It is the current hub of financial activity in the world and it is doing everything it can to make sure that it does not participate in the next generation of finance.
Sean: Yeah, that is really ironic. Ben Lawsky, he’s trying so hard to co-opt Bitcoin into the system they have already set up, the legacy financial system. Co-opt it in there, make sure that companies exchange all their Bitcoin for dollars, make sure they can see all the transactions. And, it will most likely backfire if they don’t do anything to change it. People just won’t do businesses in New York and customers who actually want to work with Bitcoin businesses out of New York, would they just be able to go through Tor and hide their IP address, and still do the things that they’re not allowed to do?
Erik: Yeah, I mean, we Americans see all these totalitarian countries where they block access to the internet or to certain services or to the New York Times or whatever so that their people can’t see these things online. And we revile at that sort of censorship and we think, “Oh, that’s so terrible, their government.” And those people get around those things through Tor. They figure out easy ways to get around these technical blocks and they participate in the global economy even though their government doesn’t want them to. I think most Americans are happy that people in these repressed countries do that and that they have these tools to get around the oppression. And then here we are, we need to look in the mirror ourselves, in our country and see the exact same thing happening here and realize that the exact same response is going to happen. People are going to figure out tools to get around it and good for them.
Sean: Yeah. So, if BitLicense goes through, we’ll be fine. There are still privacy measures people can do to hide their identity, to hide their transactions, have privacy still. But, if we want to save the people in New York from having to go through this, do you think is it worth it to try and email Dana Syracuse at the New York website and try and comment on this and try and get it changed, is it worth engaging with them?
Erik: Yeah, to a point. I mean, I sent out a tweet with her email and then encouraging people to email her. I’ve been advocating this petition that people have put out to get them to extend to the response period by at least another 45 days. So, while I detest these people, I still to some extent will engage with them and try to be civil and point out the problems and try to work with them.
But I don’t think people should waste too much time on that frankly. And, if these laws come to pass, I think the better option is simply to block that territory. Don’t destroy your business trying to comply with the dictates of these politicians. Work with them if they’ll be civil and reasonable, but a lot of them are not. So, at some point, you’ve just got to keep building.
Sean: Yeah. So speaking of civility, I don’t know if you’ve seen Bruce Fenton’s fiery speech that he gave at Coin Congress.
Sean: He got pretty riled up and started just talking about some — he called Ben Lawsky violent, he called him a liar and a couple of other semi-heated words…
Sean: …basically trying to paint him as someone who is corrupt, unreliable and we shouldn’t even deal with them on a human level basically. What do you think?
Erik: I know Bruce. I like him. He’s a great guy. Whether Ben Lawsky is those things or not, I don’t know and it kind of doesn’t matter. I mean, I generally give politicians the benefit of the doubt. I don’t think they’re evil people. I don’t think that they’re all out there trying to collude with the big interests to ruin it for the little guy and stomp on everyone. I think they’re just fools. I think they think and they have too much hubris and they believe that they can and should govern how very complicated systems work whether that’s, broadly speaking, markets or whether that’s more specifically speaking Bitcoin. They think that they can and should central plan these things and they’re wrong. It’s morally repugnant of them to do that because they have to use coercion in order to convince people to do what they think they should. And it doesn’t work. It tends to lead to all sorts of problems. It diminishes economic development, it makes people poorer, it changes the way that wealth moves around so it goes into people’s pockets who don’t deserve it and they screw things up because of their hubris. And so, I’ll give them the benefit of the doubt that they are trying to do good.
Sean: Good intentions.
Erik: But if you’re trying good — yeah, if you’re trying to do good, convince people that you’re doing good. Use reasonable arguments that you’re doing good. Get people to join your side voluntarily. If your ideas are so great that you have to force them down people’s throats, then you’re doing something wrong and you’re a bad person. And I wish the politicians would see this more often, but of course, they don’t. So, this is what we’re stuck with.
Sean: Yeah. Bruce had a great quote from his speech where he talked about, like if the regulators didn’t have the monopoly of the use of force and they just had to take their ideas like just a regular Bitcoin meetup or something and vocally speak them, they would be laughed out of the room immediately because they’re all stupid ideas.
Erik: Yeah, it’s absurd. It’s not like they could go to a group of normal people and get a lot of this stuff approved either. I mean, if you took a normal group of people, let them learn about Bitcoin for a while and then you had Ben Lawsky go in front of them and say that he’s trying to strip away all their privacy and he wants to make them just as vulnerable as with the credit card systems, they wouldn’t go for it. But, he doesn’t have to convince people. He doesn’t have to convince the Bitcoiners, he doesn’t have to convince the public at large, he doesn’t really have to convince anyone. He has the authority just to write rules that everyone has to follow.
Erik: And if it’s so bad that there’s enough political pressure on his superiors to make a change, then maybe he’ll change course. But, that happens a long way after the damage is done.
Sean: Right, right. If he wanted to, he could just keep the license requirements as they are right now and not do any changes over 45 days and just implement them at the end of that and that’s it.
Erik: Or make them worse. He could released this today and then when this period of this duration is over, he could release even worse ones.
Erik: What’s the check? Where’s the check and balance here?
Sean: Yeah. And no one elected him.
Erik: And the worst part is, this isn’t a New York thing. It’s not like this only affects people in New York because it affects any company that wants to have even a single customer in New York. So if you’re Bitstamp, right, they must have hundreds of New York customers and they now can’t work with those people at all or if they decide to go along with the regulation. Now, they have to apply those mandates to everyone else, everywhere else in the world because they need to know who every single customer is to know if they’re a New Yorker.
Erik: Right. So now, Ben Lawsky’s dictates are now imposed on people in the Sierra Leone. And they can’t vote on Ben Lawsky or Andrew Cuomo or anyone in the US government. They can’t do anything about the US policy.
Erik: And so that even if you think that a politician should be able to enact rules and laws upon the people that can vote for him, I don’t think many people would agree that New York should be able to enact laws that affect people that don’t vote for you, right? I mean, this is taxation without representation. This is kind of how America got started, it was an uprising against this very idea and here we are facing it and people like Ben Lawsky seem to think that it’s the right thing to do? What’s he smoking?
Sean: Yeah, what’s the real motivation behind this? Bruce Fenton seemed to insinuate that he’s is corrupt and this might be a ploy by the major corporate banks to co-opt Bitcoin. Would you possibly agree with that? Do you think that it might be possible that this is just the banks trying to co-opt this and regulate virtual currencies out of existence?
Erik: I think that’s kind of a dangerous distraction. And it might be totally true. Ben Lawsky might be a completely corrupt guy that’s just totally in the pockets of these banks that are afraid of Bitcoin. That might be the case. I don’t know. But I don’t think it’s really important. If people are going around debating whether Ben Lawsky is corrupt and whether this is just from the banks or not, that kind of sidetracks us for the more important point. It doesn’t matter whether it’s Ben Lawsky thinking he’s helping the world and putting in these laws or whether it’s these crony banks that are pressuring him to put in these laws. The laws are bad regardless of who is trying to get them going. We need to attack the laws as they are. It doesn’t really matter the motivation. I don’t care of the motivation of Ben Lawsky and force people to do, and what he’s trying to force them to do is wrong and that should be resisted. So let’s give him the benefit of the doubt. Let’s assume he’s a good guy. He’s going to screw things up bad and so let’s address that issue.
Sean: All right, that sounds pretty good, that sounds pretty good. And, if he does screw it up pretty bad, the Bitcoin system can adapt, create new programs and applications that increase privacy despite the regulations. And, in terms of people living in New York, you’ll have to use something else or hide yourself some way or vote in different representatives.
Erik: Yeah. I mean, you’ll figure out ways to get around it. You can look at what’s happening in Venezuela and Argentina right now, their currencies are falling apart, the government is trying to mandate how people use their money and what money they can use. They put in all these draconian rules and it’s just a joke. People get around them. But in the process, it ends up ruining lives, making people poorer and everywhere else in the world, we look at the Venezuelan government or the Argentinian government just laugh at them because of how inept they are and how cruel they’re being just trying to maintain control. And it’s not something that happens in these foreign countries. It’s happening here in the United States at the very epicenter of financial business in New York. The exact same things with capital controls and financial restrictions are happening. Why isn’t there a greater outrage about the stuff?
Erik: Well, fortunately, we don’t have to just be mad and vote. We can just opt out of this stupid financial system that they want us to use and we can use Bitcoin.
Sean: Awesome. Awesome, awesome, optimistic point. I want to get your opinion on something that came out on yesterday on the Bitcoin subreddit. Apparently, some people working on Tor have noticed a gigantic Tor node that has popped up in the last three days and it’s literally that the largest node on the network at this point and it only accepts Bitcoin connections, if I understand it correctly and no one really knows for sure exactly who put it up, who’s controlling it. It has the potential to put out 2.7 petabytes of data per month.
Erik: Yeah, it’s [inaudible]. I’m running it on my phone through my Verizon data plan.
Sean: Oh, oh, nice, nice. Oh, great, great, great. You’ve added something.
Erik: We’ve covered it. I’m going to have to turn on my — no, I don’t know much about that. Obviously, it’s interesting, it’s the largest node and it’s only accepting Bitcoin traffic.
Erik: One of the interesting things about when people can be hidden is that you can do things that if you had to expose who you were, it wouldn’t work. So, if there is a cause that someone believes in, they can put up these systems that help further it without exposing themselves personally, which is great.
Sean: Yeah. I don’t know how founded this is, but I read a comment that said it might be possible to censor some transactions on the network if enough traffic goes through this single node. They might have the ability to censor some transactions. Is that a legitimate concern?
Erik: That’s probably something that in the short-term could happen, like someone could somehow gather lots of traffic and then start censoring things. But Bitcoin is really adaptive and there’s lots of paranoid people always looking at the network and watching things.
Erik: And, if that kind of thing happens, people pick it up pretty darn quickly and people could start routing around those issues. So, there’s lots of things that in Bitcoin can be short-term problems that long-term get fixed very easily just by [inaudible].
Sean: Right. And then people start panicking in the short-term as well because they’re like, “What’s going on? I don’t know.” And some are also speculating that it might be Mike Hearn’s node because he’s been talking in the past about setting up a node for something that he’s working on. And then others are also concerned about whether he wants to kind of taint coins and do surveillance on part of the network. Is that a possibility as well?
Erik: I don’t know. I mean, I don’t know what to think of Mike Hearn. From what I’ve seen of him, he always seems like a good guy and he’s speaking and talking about the right things. But then I hear other –
Sean: And he seems really smart too.
Erik: He’s certainly very smart, but then I hear other people saying that he has said this or proposed that. I’ve never seen the sources and I’m not investigating it. So, I don’t really know what to think of him. But fortunately in Bitcoin, we don’t have to worry about any single person. If his ideas are good, they’ll tend to be adopted into this network. And if they’re bad, he’ll probably become marginalized over time.
Sean: All right, great, yeah, rely on the Bitcoin network, rely not on people, is that basically your message?
Erik: Right. I mean, that’s why it doesn’t matter who Satoshi is, the same reason.
Sean: Awesome, yeah. It could be Dorian, but it doesn’t matter.
Erik: We haven’t heard anything from Dorian in a while. Hope he’s doing okay.
Sean: Yeah, yeah. Hope he has his life back.
Sean: So, I also want to get your opinion on some alt coin action that’s been happening lately. Ethereum launched a few days ago and started their Genesis Sale of ether. Do you like Ethereum? Do you think it has potential?
Erik: Ethereum is by far the most-hyped alt coin to have ever existed. That’s in part because a lot of people involved are really smart and I think have a lot of respect in the community. So people pay attention. They also have just really slick branding and it definitely looks professional. Whether orchestrated or whether spontaneous, their marketing and their buzz worthiness has been really good. And, I don’t really know the merits of it. I mean, coin markets are great because it can be released and people can risk their capital and time on it and if it is great, then those people will be rewarded. And if not, then it’ll go away. So we’ll see what happens. And I don’t know what makes it different than something like NXT or some of the other alt coins that have more of a scripting capabilities. So, who knows about that, but certainly, it’s nice to see all this innovation happening. And, I guess one of the things that worried me with Ethereum is that they were supposed to release it months ago and they started getting really worried about regulations and they started getting worried that if they released it, what jurisdiction that came under and what the founders of it, what risks did they have and would the crowdfunding be considered an offering of securities, which would be problematic. So, they sort of retreated back and had to lawyer up and research all this stuff. And, that’s totally understandable that they would want to do that, but to me, that’s sort of the opposite of how this cryptocurrency stuff should work. There shouldn’t be a point of failure with the founders. It shouldn’t be that if they release it, a regulator can stamp them out and then Ethereum is gone. I think there shouldn’t be that vulnerability and that was one of the really beautiful things about Bitcoin, was that by the time it was known to anyone, there was no central point of failure and it couldn’t be shut down. Satoshi didn’t need to research which jurisdiction from which he should release Bitcoin. It didn’t matter. It wasn’t about a jurisdiction. So that’s been something that’s concerned me with Ethereum, but hopefully, they’ve figured that out and they don’t run into any conflicts with the crowdfunding.
Sean: Yeah, I didn’t realize that they had to go back and deal with regulatory issues before they released. I mean, that seems kind of weird that there are system that touts their smart contracts and you’re supposed to be able to do any sort of contracts in a decentralized way. But, if they have to still deal with regulations and stuff before they even release, it seems ironic at least, that’s what I’m saying.
Erik: Yeah. Well, and at least, it’s sad. Because I don’t know how great Ethereum will be, maybe it’s stupid, maybe it’s the next best thing. Let’s assume for a second it’s the next best thing and this amazing innovation is going to change money and contracts and all this great stuff. And, these guys have to hold on, change what they’re doing, put things on hold and just wait and spend a bunch of money on lawyers because there might be regulations that cause problems for it. I mean, this is the real damage that regulations do. It’s not just that they say you can’t do something and thus, people can’t do that thing. It’s the whole area of uncertainty that it creates. You don’t know how a law will be interpreted. You don’t know if something that might be legal today will become illegal tomorrow. Laws get dished out differently to different people. And, that’s all terrible for business. I mean, business is hard enough. There’s enough risks in business, but to add all this regulatory cloudiness to it, it just kills it and you can see an industry suffocating underneath it and it’s terrible. And so, people like Ben Lawsky, this is at their feet. I mean, there are the business people out there building a world and then there are politicians suffocating it. And, I’m glad that Bitcoin is something global so that even if the politicians in America have completely lost their way, at least the land of the free can move somewhere else.
Sean: I remember last year around November 18th when the Senate first started having their hearings about Bitcoin and virtual currencies and people were all expecting up until that point some really negative news, like they were going to basically ban Bitcoin at that point. Then all of a sudden, the politicians actually kind of liked what they were hearing from panelists like Tony Gallippi from BitPay and other smart people who knew what they were talking about about Bitcoin. And the news was positive. They loved Bitcoin. Well, not loved, but they were okay with it, they were fine with it and the price shot up and people were like, “Wow! We might actually see some good news from government relating to Bitcoin.” But now, we’re actually seeing the fruit of the government’s work, I guess you could call it, the license they’re trying to craft and it’s disastrous. We don’t want government involved this much trying to constrict what businesses can do with their own funds.
Erik: Yeah, well, and after those hearings that the price went up, I think mainly because everyone in the world sees how — well, not everyone in the world, many people see how disruptive Bitcoin can be. And the one gorilla in the room is, “Will governments just ban it? Will they just take a completely antagonistic view and try to stomp it out?” And if they do, then it’s going to be a very long uphill battle. So, those Senate hearings showed that who knows how the regulations will unfold, but it’s going to be a matter of what kind of regulations, instead of will they ban it or not. So, from that perspective, it’s fine. I mean, Bitcoin just grows wherever it can and if New York wants to stomp it out on that little island, too bad for them.
Sean: We’ll go around it. Adapt.
Sean: So, to close this up, would you recommend everyone watching this trying to like email the New York Department of Financial Services, try and comment on this during the 45-day period to see if we can at least get some change to this before it’s possibly finalized?
Erik: Yeah, email. If you’re going to email, don’t be rude.
Sean: Yes, yes.
Erik: Even when you’re dealing with evil people, if you come across as evil yourself, then you’re not going to get anywhere. So, if you’re going to email these people, be civil and smart and intelligent in what you say. That’s point number one. If you don’t want to converse with such people, that’s totally understandable too and I totally understand people that just want to ignore these kind of folks, that’s fine.
Sean: That’s reasonable.
Erik: Yeah, do what you can. Ultimately, just keep building. I mean, if you have a Bitcoin project, just keep building it. I mean, they can’t stop a world of builders. And so, that’s all you really need to do. If you want to try to fight them on the political margins, go for it. But, build your business –
Sean: That’s a bit tough. That would be tough to do that.
Erik: Write your software, change the world and the politicians will be left in dust anyway.
Sean: All right, that sounds pretty good. Keep working everyone. Keep building the Bitcoin ecosystem, regardless of whether governments try and regulate it out of existence, try and impose unnatural surveillance controls on it, just full speed ahead.
Erik: Yeah. History will show who was right and who was wrong.
Sean: Okay, sounds good. Thank you Erik for joining me on the Coin Brief Podcast, our first interview, very exciting.
Erik: Thanks Sean. I really appreciate it.
Sean: All right, thanks Erik.
Erik: Yeah, see you.