EP36: Roger Ver and Erik Voorhees - Scaling Debate and the Future of Bitcoin

**Visit website for complete Show Notes

http://libertyentrepreneurs.com/2016/06/roger-ver-erik-voorhees-scaling-future-bitcoin/

We frequently chat about Bitcoin on this podcast and have interviewed some of the biggest names who continue to shape the future of crypto-currencies.

For anyone who is familiar with Bitcoin, the names Roger Ver and Erik Voorhees should be very familiar. They are 2 very early, vocal, Bitcoin pioneers who have been instrumental in its success.

Don’t worry if you don’t know Erik and Roger; you will soon. They have incredible insights on the importance of Bitcoin as well as how it will continue to revolutionize both Money and the Financial System. I think we can all agree that the current banking model is broken, takes advantage of us and needs re-worked. This is exactly what Erik, Roger and Bitcoin are doing.

Erik Voorhees currently runs www.ShapeShift.io which is the safest, easiest and most private way to exchange almost any crypto-currency. Within minutes (or possibly seconds) you can exchange between Bitcoin, Litecoin, Dogecoin, Ether, Dash, DAO and many more. They don’t store your personal information, therefore it cannot be stolen (like we are seeing in the big banks and credit card companies recently). He also founded and ran SatoshiDice which at its prime accounted for 50% (yes, that’s half) of ALL the Bitcoin traffic. Impressive, I know.

Roger Ver was the first Bitcoin startup investor. Seriously, he was the first. His company MemoryDealers.com was the first store of size to accept Bitcoin as a payment option. He also created www.BitcoinStore.com which allowed Bitcoin users to purchase over 100,000 products with their new, digital-cash. This was long before the large retails jump on board, specifically Newegg.com, Tigerdirect.com, Dell.com, etc.

Erik and Roger met at the FIRST Bitcoin conference in New York. Erik was involved in the Free State Project and told Roger that they should meet and chat. After handing Roger his business card that read “I am friends with Satoshi” (the presumed creator of Bitcoin) it was an obvious friendship.

Bitcoin Scaling: The Future of Bitcoin

Some brief background first. Every Bitcoin transaction needs to be included in the blockchain. Think of this as a large, decentralized, permanently recorded ledger of transactions. In order for the transaction to be included, it must be placed in a “block”. There’s a limited number of blocks available every hour and only so much Bitcoin information that can be stored in each block, which currently stands at 1MB. Not very large for 2016.

The current debate is if the size of the Bitcoin blocks should be increased so that more Bitcoin transactions (information) can be added. This will allow MORE people to use Bitcoin and benefit from its security, privacy and convenience; otherwise Bitcoin may not be able to scale so that everyone can use it. As a comparison, email wouldn't have been nearly as popular if only a small subset of the global population can use it.

Roger and Erik discuss the current scaling proposals and how they foresee the future of Bitcoin. Big Blocks vs Small Blocks...how will we come to a consensus without a centralized organization making the rules? This is a grand experiment of market-based regulation and governance.

Favorite Quotes:

“What is a bigger risk to Bitcoin? That a lack of “fee market” will cause hash power to decrease several decades from now, or if Ethereum keeps growing and people start using that for transactions [instead of Bitcoin] and Bitcoin falls to zero and becomes just part of the crypto-currency history books?”

-Erik Voorhees

Alt-Coins - Bitcoin’s Possible Replacements?

Later in the show, we discuss what may happen if Bitcoin isn’t allowed to scale. Will other crypto-currencies (like Ethereum, Dash, etc) replace Bitcoin as the go-to digital currency?