“So, when I first heard about bitcoin, I started reading about it,” recounts Roger Ver, who refers to himself as the first person to invest in a Bitcoin startup. “And, before that, my hobby was studying economics. In order for something to become useful and to become money, it has to have certain characteristics. Bitcoin had those characteristics better than any kind of money that had ever come along ever before. I knew for sure that people would start to use bitcoin and it would become really, really popular to be used as money. This is what inspired me to buy bitcoins and invest in startups. I knew that people would start to use it as money. It was incredibly clear.”
Mr. Ver, an anarcho-capitalist who renounced his US Citizenship and lives in Japan, then describes Ludwig von Mises’ regression theorem, which is why he was so sure Bitcoin would be successful on its journey to becoming money. The theorem describes how items become objectively valuable and used for exchange.
Mr. Ver, a vocal proponent of block size increase who has thrown his weight behind alternative solutions, like Bitcoin Classic and Bitcoin Unlimited, then details how his time spent in prison for a victimless crime helped clear his vision to recognize the opportunity in Bitcoin.
“While I was in federal prison, I was able to see before my eyes the prison economy forming and seeing how people made their own money in prison and I was able to see how in the prison economy the theories I had read about in the books were exactly right and they matched up to what people were doing in the real world,” Mr. Ver, who owns Bitcoin.com, describes. “I realized that with bitcoin it lined up with the theory of where money comes from and what characteristics it needed. I saw in the prison economy that it was true and I saw that it was true in bitcoin.”
Mr. Ver, who is an advocate for Bitcoin network layers like the Lightning Network, then underscores what concerns him about the current state of Bitcoin in terms of the block size debate.
“The underlying economic code and the characteristics that make it popular are being undermined and altered and damaged by the current network congestion,” Mr. Ver says. “If that damage becomes too severe, people are going to stop using bitcoin as money and it will stop gaining market share for being used as money. We have an 8 year track record for knowing exactly what the characteristics are and what makes it popular. We don’t want to change those characteristics. We know they work for sure. Don’t change those. Don’t break those. Don’t damage those.
“Otherwise, we risk damaging and breaking the whole bitcoin ecosystem and losing momentum and losing out to some other currency, it’s not just competing against dollar and euro and yen, but everything else. We want Bitcoin to be the fastest, cheapest, most secure, most censorship-resistant money. We need bitcoin to be the absolute best bitcoin we possibly can.”
In the first eight years of its existence, Bitcoin transactions were free. “As soon as you saw them broadcast on the network, there was a high chance of them being confirmed, low chance of double spending,” Mr. Ver describes the early days of Bitcoin. “In recent time, those things have been changing. Fees have become fee. I am sure Phil and others can tell you– anyone running a business that has payments from multiple customers going in and out, often for a transaction with multiple inputs and outputs you’re talking about tens of dollars. I tried this, and on a single transaction I had to pay $50 dollars in fees… we will start seeing people using things other than bitcoin. If you change the things that make bitcoin successful, they are going to break. Circle is quitting on bitcoin. Other businesses are going to scramble to integrate things other than bitcoin.”
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