What Bitcoin Did

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Fighting Regulation with Decentralisation with Erik Voorhees & Udi Wertheimer

Peter McCormack

Interview | Description | Timestamps | Show Notes

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Fighting Regulation with Decentralisation with Erik Voorhees & Udi Wertheimer - WBD383 Peter McCormack

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Location: Remotely
Date: Tuesday 3rd August
Company: ShapeShift / Independent
Role: CEO, Founder / Developer, Consultant, Bitcoin Activist

Erik Vorhees was a very early bitcoiner, drawn to it because of its alignment with his Libertarian beliefs. Erik created one of the first widely used applications on Bitcoin, Satoshi Dice. A ‘provably fair’ betting game that at one time made up around 50% of all bitcoin transactions.

In 2014, in the wake of the Mt.Gox collapse, Erik built ShapeShift, a trading platform that allowed the user to trade bitcoin and other cryptocurrencies without KYC or counterparty risk, which again aligned with both Erik’s and Bitcoin’s Libertarian ethos.

However, in 2018 regulation pushed ShapeShift to KYC every customer and comply with various surveillance and reporting requirements. Erik decided the best way to push back against this would be to dismantle the legal company and move instead to a protocol, forming a Decentralised Autonomous Organization (DAO). 

In this interview, I talk to Shapeshift Founder & CEO Erik Voorhees and Developer & Consultant Udi Wertheimer. We discuss the increasing regulatory pressure, decentralising a company and whether tokens have merit.

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00:06:38: Introductions
00:08:27: Background to ShapeShift
00:10:22: SatoshiDICE
00:17:35: ShapeShift pressured into KYC
00:21:08: Different views of "consumer protection"
00:24:36: Exiting the system with decentralisation
00:32:35: Government vs known crypto personalities
00:38:54: Decentralising the company
00:40:13: ShapeShift's revenue model
00:42:15: Liquidity pools explained
00:45:01: Costs of decentralising the company
00:46:20: Compensation for employees
00:48:41: Profits for token-holders
00:51:04: The merit of tokens
00:55:15: Criticisms of ShapeShift's decentralisation
00:58:03: Risks of decentralising the company
01:04:09: The Infrastructure Bill
01:10:22: Final comments

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