The last Bitcoin gunslinger

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When Erik Voorhees discovered the bitcoin, the cryptocurrency was not tamed. Memories of the Great Recession, where world economies crowded, banks were rescued by governments, and taxpayers were left with the bill, they were still thick in the air and in newspaper headlines. Bitcoin was still largely unknown around the world and the secret message embedded by Satoshi Nakamoto in bitcoin genesis block ten years ago, the warning of a future bank bailout plan was considered a sacred knowledge among the first initiated by bitcoins:

The Times 03 / Jan / 2009 Chancellor on the edge of the second bailout for banks

The so-called crypto-anarchists, who tried to use cryptography to guarantee extreme privacy, and their kinder libertarian brothers, who wanted to build a world with less government influence, were among the first to adopt cryptocurrency, which allowed anyone in the world to shift value without the need for what they regarded as unreliable banks, and, some thought, to do it beyond the reach of regulators.

To achieve these goals, a few months before Voorhees, the cofounder of the cryptocurrency traded Shapeshift, discovered bitcoin in May 2011, a twenty-six Penn State graduate named Ross William Ulbricht founded Silk Road, an online market that accepted bitcoins and was designed to operate outside the jurisdiction of any government. Shortly thereafter, the aspiring entrepreneur Charlie Shrem launched the first exchange of cryptocurrencies BitInstant and Voorhees became a number three employee. As the chief marketing officer of BitInstant, one of the main responsibilities of Voorhees was to explain to the rest of the world how the nascent cryptocurrency could allow a new financial paradigm without banks.

Now, on the tenth anniversary of the first bitcoin block, Voorhees has survived the incarceration of his former boss BitInstant; the life imprisonment of Ulbricht, whose black market was partly supported by back-office relations with Shrem; an agreement with the U.S. Securities & amp; Exchange fee to resolve more expenses; and more recently, he reports that another investigation is under way to see if he has violated the terms of a previous agreement with the SEC.

While the stock market closes one of the worst years of a decade and Bitcoin's potential as the foundation of an alternative financial infrastructure is increasingly questioned, Voorhees remains rebellious. Thanks to all this, he emerged as a staunch defender of the first bitcoin promises and a symbol of how compromise could still be the best way to open global finance to the masses.

"If we are closed and sent to prison, who did this help?" Asked by Voorhees. "So, in the end, we pay taxes, but I'm morally opposed to taxation." Why do we pay taxes on the company? "" Why are our principles changing? "" No, it's because we're forced to do it, and if not we do it we are thrown into a cage. "

The concept of freedom – and its absence – permeates the work of Voorhees, dating back to before he discovered bitcoin. Born in Danbury, Connecticut, in 1984, Voorhees grew up in a libertarian family in the dense Colorado forest. His father, Jacques Voorhees, sold the $ 8,4 million Polygon diamond trading platform in 2004 and is recognized in the libertarian community as a leader for both his extensive literature on libertarian thinking and the way he ran his business .

Jacques taught the young Erik his first economics lessons using the same woods they lived in. When Voorhees was 4 years old, he met a local boy, Justin Blincoe, and the two immediately hit him, tying himself to what Blincoe describes as a common mischievousness. Shortly after meeting, perhaps inspired by Voorhees' father or perhaps following an innate entrepreneurial spirit, Voorhees and Blincoe began their first activity together, selling pine cones collected in the courtyard of Voorhees.

"Who would not want to buy them?" Blincoe jokingly asked, referring to the pine cones. "They were great!" Alas, the boys' classmates did not agree and the operation did not take off. Now the chief financial officer of ShapeShift, Blincoe describes a lesson on the economics of pine cones that he and Voorhees received from Erik's father after failing as the first lesson of supply, demand and scarcity.

Friends split shortly after their second year of high school when Voorhees was sent to Vail Mountain School, a private school in Vail, Colorado, and Blincoe remained at Public High School. But the two friends never lost contact.

In 2003 Voorhees enrolled at the Puget Sound University in Tacoma, Washington, where he became a friend of Nic Cary, a classmate of business economics and politics, which Voorhees would later fatally introduce into bitcoins. After graduating, Voorhees moved to Dubai, where he worked as a communications manager for a real estate company. Blincoe joined him four months later.

When the Great Recession hit in 2008, Voorhees and Blincoe were still in Dubai. They describe the fact that the economic collapse of the United States has slowly rippled in the world as a decisive moment in their lives. "The world was really bigger than the United States," Blincoe says. "It really became obvious that the government should have nothing to do with money," adds Voorhees. "The government would never give up control of money, so what would we do?"

To pursue more seriously his increasingly strong convictions that the government and banking power should be limited, Voorhees collected shares and moved to New Hampshire, the state of Live Free or Die. There he worked with the Free State Project, a long-term effort to build a society with the least amount of government interference, and met Keith Ammon, an emerging local politician. In May 2011, Ammon introduced Voorhees in bitcoin, which, unlike the pine cones of his youth, was limited in supply and, unlike the US dollar, had not been coined by a government.

Voorhees describes reading an article that Ammon has posted on Facebook and thinks cryptocurrency "was a little strange." Then he read further, and from the third article, he says, "clicked". Beyond the scarcity of bitcoins, says Voorhees, what most attracted him and what has permeated each of his activities since it was the idea that no one possessed the open source blockchain technology that fed it – could not be closed by a government – and the money could be moved anywhere on earth to "basically zero costs" If it could get enough people to use cryptocurrency, it could weaken the influence of traditional banks.

"This was supposed to be the most obviously useful invention I had ever seen," he said. "And I totally fell in love with it."

Turned into a mission, Voorhees immersed himself in Satoshi Nakamoto's bitcoin white paper and quickly landed a job with BitInstant, a previously unknown New York cryptocurrency exchange led by Charlie Shrem and supported by Tyler and Cameron Winklevoss, who had just received a lucrative agreement from Facebook. Voorhees has made a place in high-tech startups leveraging his communication experience to become the company's chief marketing officer.

This period, since the end of 2011, when bitcoin was worth about $ 2, is widely known as the Wild West of cryptocurrency. At the time, it was thought that Bitcoin was unregulated and unregulatable. One of BitInstant's many customers was a startup called Silk Road, a digital black market for the purchase of illicit goods, especially drugs. By 2013, BitInstant was processing a third of all bitcoin transactions, according to some accounts, and indirectly helped Silk Road users to conduct some of the $ 200 million in valued sales of illicit drugs during this period, apparently outside the scope of the law.

Between playing poker for 10 bitcoins each with his former boss, Shrem, and helping to build BitInstant in one of the first most popular bitcoin exchanges, Voorhees was becoming a spokesperson not just for BitInstant but for bitcoin itself. One of his most influential moments took place in the winter of 2011, when Voorhees found himself fishing on ice with his old college friend Nic Carey at Gardiners Bay on Long Island. While Carey describes the fateful meeting, Voorhees dug a hole in the ice to capture the rumble, opened an "economic budweiser" and explained how the open source code behind bitcoin could become the future of money.

"We all share a structured world ahead of our participation," says Cary, who raised $ 70 million for Blockchain Inc., a bitcoin wallet supplier. "And if we also have a chance to build an economic structure that allows all people to exchange value regardless of where they were born, it's worth spending a career".

Having helped inspire the creation of Blockchain Inc., the world's largest bitcoin wallet supplier, with 30 million bitcoin wallets, Voorhees, who was still living in New Hampshire, has returned to his day job at BitInstant. Browsing the social media site Reddit, he discovered some simple lines of code that mimicked the behavior of the dice. Less than a year had passed since he discovered bitcoin, and those few lines of code were about to transform him, one of the first to earn a living in the crypt, in one of his first multi-millionaires.

The code that was shown to him by the anonymous Reddit user ended up forming the building blocks of a bitcoin casino dice game. Voorhees has tested the code and says that two things have distinguished themselves. First of all, an account was not necessary. Players can play from anywhere in the world without having to give any personal information. Second, the odds of the games were cryptographically verifiable, so the players could rest assured that the dice were not rigged.

Hearing this could be a turning point, Voorhees bought the code for 40 bitcoins, which was worth what he estimated was around $ 350 at the time, and launched SatoshiDice, an online casino accessible to anyone with an internet connection. Between August 2012 and February 2013, Voorhees collected 50,600 bitcoins at a price of about $ 14, worth approximately $ 722,659 at the moment, according to a US Securities & amp; Estimate of the exchange commission (SEC). He did it by selling 13 million unregistered shares the now defunct MPEX exchange. Speaking at a conference in May 2013, Voorhees valued that SatoshiDice was currently responsible for half of all bitcoin transactions ever conducted and more than half of all commissions paid to miners who helped control bitcoin blockchain.

"I can not take too much credit," says Voorhees today. "In reality it was a good demonstration of how powerful the bitcoin itself was".

But Voorhees had to make a choice. Online casinos are a legal gray area in the United States, and it was increasingly becoming a public figure in the rapidly growing bitcoin community. "In the end, I understood, I could go underground and continue to run this very profitable casino, which was pretty interesting and interesting to me," he says, "or I would need to sell it to keep being a public voice for bitcoin, but not I could do both. "

At the beginning of 2013, the path to become a more vocal public voice was partially clarified when Voorhees had what he called a "big fall" with investors BitInstant Tyler and Cameron Winklevoss, who now manage the Gemini cryptocurrency exchange . Shortly after the dispute he left BitInstant and made his first major compromise to get the widespread adoption of bitcoins. In July, he sold SatoshiDice to an anonymous buyer for 126,315 bitcoins, worth $ 11.5 million. At today's bitcoin price of $ 3,800, SatoshiDice would be worth $ 479 million. In terms of the bitcoins involved, excluding the increase in the value of cryptocurrency in the same period, this is an increase of 315.687%.

"It should go down as one of the largest investments of any person at any time," says Voorhees, who claims that his shareholders have profited much more than he did. However, Voorhees had to pay $ 50,000 in penalties, not counting legal fees and fees as part of an agreement to sell unregistered securities.

If Voorhees and many other early bitcoin entrepreneurs were originally attracted to the bitcoin due to a theoretical The disgust with the regulation of the government, being forced to pay these fines has made his resentment for the government very, very personal and has become a reminder of what he himself had at stake.

"It was a terrifying experience for me," says Voorhees, who calls the unregistered SatoshiDice to sell its biggest regret over the past decade. "And all that happened after creating something that was beautiful, useful and revolutionary and that earned investors a lot of money seemed to me such an obvious injustice that it was really valid."

In addition to frightening Voorhees, the SEC fines were in many ways the beginning of the end of the Wild West cryptocurrency. Not only have fines paved the way for a series of recent SEC actions, they have forced Voorhees to make a series of compromises to stay on the right side of the law, he says. "This is something that remains, in hindsight, a horrible decision," he adds. "Not because it's wrong to sell to people, but because of all the problems it brought with the SEC and the decisions I made later, that were horrible financial decisions that I was forced to make."

After marking the decline of bitcoin's Wild West, Vourhees sold SatoshiDice in the same month, his former employer BitInstant was shut down and Shrem was charged (and then convicted) of helping to recycle money for Silk Road users . Although Shrem has served almost two years in a federal prison, Voorhees has never been accused of any wrongdoing. Then, at the end of 2013, the same silk road was closed when its founder, Ross Ulbricht, was captured in a local library and charged with narcotics trafficking and money laundering plus a "kingpin" charge usually reserved for bosses of crime. Condemned by all charges, Ulbricht is serving life in the maximum security of Florence Prison in Colorado. & Nbsp;

Despite being the symbolic end of the Wild West of cryptocurrency, Voorhees also calls the closure of the Silk Road the single most important bitcoin event since Satoshi wrote the white paper that describes it. Not because he thinks that the Silk Road's reputation was bad for bitcoin ("I think that site had every right to exist," he says) but because before then, most people knew that bitcoin was thought to be inextricably bound to the success of the black markets. "I think that moment was really very important for people to see that this was something real that was not based on any specific service," says Voorhees.

Watching his former colleagues and friends defend himself in court and then being dragged to prison has taught Voorhees a hard lesson. While Satoshi's goal of creating a more democratic and decentralized ecosystem could still be achieved, the notion that would have existed beyond the scope of the regulators at any time was doubtful.

So Voorhees resumed investing and investing SatoshiDice profits in about two dozen cryptographic projects, including Coinapult, a short-term startup aimed at allowing customers to send bitcoins with a mobile device more easily, and ShapeShift, its current company , an exchange of cryptocurrency that allows customers to easily convert their activities into other activities without the exchange being entrusted to either of them.

From the time Voorhees founded ShapeShift at the end of 2014, what distinguished society from most other exchanges was its access process, as with SatoshiDice, there was not one. If a user has a bitcoin account, he can immediately use ShapeShift. Voorhees was so strict not gathering customer data that, instead of complying with New York state regulations that required ShapeShift and other cryptocurrency companies to gather information about their customers, prevented New York residents from using the product. Once again, Voorhees demonstrated his talent for simultaneously attacking him and keeping himself away from the long arm of the law.

The controversial move to block users in New York was also accompanied by a transfer of the official ShapeShift headquarters in Zug, Switzerland, crypto-friendly. In the following years, ShapeShift monthly transaction volumes grew from of $ 110,000 in 2014 to $ 30.26 million in 2017. In March 2017, Shapeshift had raised $ 10.2 million from traditional investors like Early Bird Venture Capital, and the company was becoming one of the world's most popular exchanges.

As ShapeShift has grown to 125 employees today, Voorhees has begun to exert its influence all over the world in other ways. In 2017, the price of bitcoin skyrocketed, rising from around $ 1,200 when ShapeShift increased capital in March to $ 19,000 by the end of the year. Partly spurred on by sudden high-pitched pickets, the quarrels within the global group of bitcoin users (many of whom no longer wish to be called a community) have threatened to destroy bitcoins.

The factions had formed among the bitcoins who were trying to figure out how to prepare cryptocurrency for widespread adoption. Currently, bitcoin can handle only seven transactions per second; by comparison, Visa can handle around 24,000 transactions per second. While many of the first to adopt Bitcoin have joined a group that preferred a solution favorable to ordinary users, Voorhees united & nbsp;a group of venture-backed startups to support a solution that many felt was best for businesses. For the first time, Voorhees found himself on the side of the plant.

Before the dust settled on the heated debate about how to resize the bitcoin, a new cryptocurrency was formed, called liquid bitcoin, and another division was avoided when the Voorhees group canceled its efforts for change the bitcoin code at the last minute. "Basically, the community that was very much on the same team and struggling for a noble cause, instead of being defeated by its real adversaries, was internally split and spent most of its time beating itself," says Voorhees. "This was just a horrible thing to watch."

The price of bitcoin fell by 70% in 2018, closing the year at $ 3,878.

Since bitcoin has become a household name and bitcoin money has been created, the industry has started to change in other ways that will continue to be perceived in the coming years, and even Voorhees was present. Rumors that the SEC was planning a series of actions against cryptocurrency startups and those who raised capital through an initial coin offering (ICO) materialized in September 2017 with the establishment of the Cyber ​​Unit Of the regulator, which was partly dedicated to the shady start-up encryption.

As a result of the formation of the Cyber ​​Unit, entrepreneurs who have entered cryptocurrency and blockchain technology that enables it to create a parallel the financial system controlled by the people who used it began to learn the language of the establishment. Otherwise, random letters strings such as AML and KYC have begun to take on disturbing meanings such as "anti-money laundering" and "know-your-customer". In December 2017, the US Governor's Cyber ​​Unit presented its first allegations against an encrypted startup, frozen assets of the alleged perpetrator, based in Quebec, as part of an ongoing investigation.

As a result of the increasingly tightening and increasingly international reach of US regulators, Voorhees has been concerned about the potential vulnerability of their company. Despite being legally resident in Switzerland, he says, he has dedicated "millions of dollars" to researching ways to avoid complying with the SEC's AML / KYC requirements. But in September 2018, after 18 months of research, Voorhees announced that ShapeShift would implement client accounts, not just as an optional way to receive the benefits of membership, but, as he later said, in case a government agency requested information.

"The whole company suffered at a philosophical and emotional level," says Voorhees. "Having to do something that we think is morally and ethically wrong just because government regulators may need it is a really horrible position." Timing, however, was not a coincidence.

In September 2018, the Wall Street newspaper reported that more people have used ShapeShift to recycle money. Two months later the SEC formally announced his first public inquiry into a cryptocurrency exchange, which indicates greater involvement in the Shapeshift industry, and at the end of that month the magazine reported that the SEC was examining whether Voorhees himself could have violated an agreement he had entered into with the regulator as part of SatoshiDice's agreement. Voorhees staunchly denies the accusations and calls the official of data set and "nonsense" methodology.

Now 34, Voorhees still has all his career to implement the difficult lessons he learned about the price to achieve the traditional bitcoin, if can survive the transition from the gunman of the wild west to the archaia. From the SEC's initial slap, which awakened him to the very personal threats that regulators could pose to his vision of absolute financial freedom, to his decision to force ShapeShift's clients to present personal information, he learned to make painful compromises in pursuit of what he believes is a greater good.

"When I got involved for the first time, cryptography was made up of a few thousand mostly radical libertarian types, and for the most part very enthusiastic engineers or cryptographers really are passionate about this fantastic project," says Voorhees. "He grew up, and I'm glad he grew up, there are people who use it without any ideological concerns about it, people who simply use it because it helps them in some economic way, and that's exactly what should happen."

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When Erik Voorhees discovered the bitcoin, the cryptocurrency was not tamed. Memories of the Great Recession, where world economies crowded, banks were rescued by governments, and taxpayers were left with the bill, they were still thick in the air and in newspaper headlines. Bitcoin was still largely unknown around the world, and Satoshi Nakamoto's secret message in the block of bitcoin genesis ten years ago, warning of a future bank bailout plan, was considered sacred knowledge among the first bitcoin initiates:

The Times 03 / Jan / 2009 Chancellor on the edge of the second bailout for banks

The so-called crypto-anarchists, who tried to use cryptography to guarantee extreme privacy, and their kinder libertarian brothers, who wanted to build a world with less government influence, were among the first to adopt cryptocurrency, which allowed anyone in the world to shift value without the need for what they regarded as unreliable banks, and, some thought, to do it beyond the reach of regulators.

To achieve these goals, a few months before Voorhees, the cofounder of the cryptocurrency traded Shapeshift, discovered bitcoin in May 2011, a twenty-six Penn State graduate named Ross William Ulbricht founded Silk Road, an online market that accepted bitcoins and was designed to operate outside the jurisdiction of any government. Shortly thereafter, the aspiring entrepreneur Charlie Shrem launched the first exchange of cryptocurrencies BitInstant and Voorhees became a number three employee. As the chief marketing officer of BitInstant, one of the main responsibilities of Voorhees was to explain to the rest of the world how the nascent cryptocurrency could allow a new financial paradigm without banks.

Now, on the tenth anniversary of the first bitcoin block, Voorhees has survived the incarceration of his former boss BitInstant; the life imprisonment of Ulbricht, whose black market was partly supported by back-office relations with Shrem; an agreement with the US Securities & Exchange Commission to settle multiple charges; and more recently, he reports that another investigation is under way to see if he has violated the terms of a previous agreement with the SEC.

While the stock market closes one of the worst years of a decade and Bitcoin's potential as the foundation of an alternative financial infrastructure is increasingly questioned, Voorhees remains rebellious. Thanks to all this, he emerged as a staunch defender of the first bitcoin promises and a symbol of how compromise could still be the best way to open global finance to the masses.

"If we are closed and sent to prison, who did this help?" Asked by Voorhees. "So, in the end, we pay taxes, but I'm morally opposed to taxation." Why do we pay taxes on the company? "" Why are our principles changing? "" No, it's because we're forced to do it, and if not we do it we are thrown into a cage. "

The concept of freedom – and its absence – permeates the work of Voorhees, dating back to before he discovered bitcoin. Born in Danbury, Connecticut, in 1984, Voorhees grew up in a libertarian family in the dense Colorado forest. His father, Jacques Voorhees, sold the $ 8,4 million Polygon diamond trading platform in 2004 and is recognized in the libertarian community as a leader for both his extensive literature on libertarian thinking and the way he ran his business .

Jacques taught the young Erik his first economics lessons using the same woods they lived in. When Voorhees was 4 years old, he met a local boy, Justin Blincoe, and the two immediately hit him, tying himself to what Blincoe describes as a common mischievousness. Shortly after meeting, perhaps inspired by Voorhees' father or perhaps following an innate entrepreneurial spirit, Voorhees and Blincoe began their first activity together, selling pine cones collected in the courtyard of Voorhees.

"Who would not want to buy them?" Blincoe jokingly asked, referring to the pine cones. "They were great!" Alas, the boys' classmates did not agree and the operation did not take off. Now the chief financial officer of ShapeShift, Blincoe describes a lesson on the economics of pine cones that he and Voorhees received from Erik's father after failing as the first lesson of supply, demand and scarcity.

Friends split shortly after their second year of high school when Voorhees was sent to Vail Mountain School, a private school in Vail, Colorado, and Blincoe remained at Public High School. But the two friends never lost contact.

In 2003 Voorhees enrolled at the Puget Sound University in Tacoma, Washington, where he became a friend of Nic Cary, a classmate of business economics and politics, which Voorhees would later fatally introduce into bitcoins. After graduating, Voorhees moved to Dubai, where he worked as a communications manager for a real estate company. Blincoe joined him four months later.

Quando la Grande recessione ha colpito nel 2008, Voorhees e Blincoe erano ancora a Dubai. Descrivono il fatto che il collasso economico degli Stati Uniti si è lentamente increspato nel mondo come un momento decisivo nelle loro vite. "Il mondo era davvero più grande degli Stati Uniti", dice Blincoe. "È diventato davvero ovvio che il governo non dovrebbe avere nulla a che fare con i soldi", aggiunge Voorhees. "Il governo non rinuncerebbe mai al controllo del denaro, quindi cosa avremmo fatto?"

Per perseguire più seriamente le sue convinzioni sempre più forti che il governo e il potere bancario dovrebbero essere limitati, Voorhees raccolse quote e si trasferì nel New Hampshire, lo stato di Live Free o Die. Lì ha lavorato con il Free State Project, uno sforzo a lungo termine per costruire una società con il minor numero di ingerenze da parte del governo, e ha incontrato Keith Ammon, un politico locale emergente. Nel maggio 2011 Ammon ha introdotto Voorhees in bitcoin, che a differenza delle pigne della sua giovinezza era limitato nell&#39;offerta e, a differenza del dollaro USA, non era stato coniato da un governo.

Voorhees descrive la lettura di un articolo che Ammon ha postato su Facebook e pensa criptovaluta "era un po &#39;strano." Poi lesse ulteriormente, e dal terzo articolo, dice, "cliccò". Oltre la scarsità di bitcoin, dice Voorhees, ciò che più attraeva lui e ciò che ha permeato ognuna delle sue attività da quando era l&#39;idea che nessuno possedesse la tecnologia blockchain open source che l&#39;ha alimentata – non poteva essere chiuso da un governo – e il denaro potrebbe essere spostato ovunque sulla terra a "fondamentalmente zero costi "Se riuscisse ad avere abbastanza persone per usare la criptovaluta, potrebbe indebolire l&#39;influenza delle banche tradizionali.

"Questa doveva essere l&#39;invenzione più ovviamente utile che avessi mai visto", ha detto. "E me ne sono totalmente innamorato."

Trasformato in una missione, Voorhees si immerse nel white paper bitcoin di Satoshi Nakamoto e rapidamente approdò a un lavoro con BitInstant, uno scambio di criptovaluta di New York, allora sconosciuto, guidato da Charlie Shrem e sostenuto da Tyler e Cameron Winklevoss, che aveva appena ricevuto un lucroso accordo da Facebook. Voorhees si è fatto un posto nella startup high-tech sfruttando la sua esperienza di comunicazione per diventare il chief marketing officer della società.

Questo periodo, a partire dalla fine del 2011, quando il bitcoin valeva circa $ 2, è ampiamente conosciuto come il selvaggio West della criptovaluta. All&#39;epoca, si pensava che Bitcoin fosse non regolamentato e unregulatable. Tra i molti clienti di BitInstant c&#39;era una startup chiamata Silk Road, un mercato nero digitale per l&#39;acquisto di beni illeciti, in particolare di droghe. By 2013, BitInstant was processing a third of all bitcoin transactions, according to some accounts, and indirectly helped Silk Road users conduct some of the $200 million in estimated illicit drug sales during this period, seemingly beyond the reach of the law.

Between playing hands of poker for 10 bitcoin each with his former boss, Shrem, and helping build BitInstant into one of the most popular early bitcoin exchanges, Voorhees was becoming a spokesperson not just for BitInstant but for bitcoin itself. One of his more influential moments took place in the winter of 2011, when Voorhees found himself ice-fishing with his old college friend Nic Carey in Gardiners Bay, Long Island. As Carey describes the fateful meeting, Voorhees dug a hole in the ice to catch flounder, cracked open a “cheap Budweiser” and explained to him how the open-source code behind bitcoin could eventually become the future of money.

“We’re all sharing a world that was structured in advance of our participation in it,” says Cary, who went on to raise $70 million for Blockchain Inc., a bitcoin wallet provider. “And if we have even a shot at building an economic frame that lets all people exchange value regardless of where they were born, that is a worth spending a career on.”

Having helped inspire the creation of Blockchain Inc., the largest bitcoin wallet provider in the world, with 30 million bitcoin wallets, Voorhees, who was still living in New Hampshire, returned to his day job at BitInstant. Browsing the social media site Reddit, he discovered a few simple lines of code that mimicked the behavior of dice. It had been less than a year since he&#39;d discovered bitcoin, and those few lines of code were about to turn him, one of the first people to earn a living in crypto, into one of its first multimillionaires.

The code he was shown by the anonymous Reddit user ended up forming the building blocks of a casino dice game with bitcoin. Voorhees tested the code and says two things stood out. First, no account was necessary. Gamers could gamble from anywhere in the world without having to hand over any personal information. Second, the odds of the games were cryptographically verifiable, so gamers could rest assured that the dice weren’t rigged.

Sensing this could be a game changer, Voorhees bought the code for 40 bitcoin, worth what he estimates was about $350 at the time, and launched SatoshiDice, an online casino accessible by anyone with an internet connection. Between August 2012 and February 2013, Voorhees raised 50,600 bitcoins at a price of about $14, worth approximately $722,659 at the time, according to a U.S. Securities & Exchange Commission (SEC) estimate. He did this by selling 13 million unregistered shares on the now-defunct MPEX exchange. Speaking at a conference in May 2013, Voorhees estimated that SatoshiDice was at the time responsible for half of all bitcoin transactions ever conducted and more than half of all the fees paid to miners who helped audit the bitcoin blockchain.

“I can’t take too much credit for it,” Voorhees says today. “What it really came down to was it’s a beautiful demonstration of how powerful bitcoin itself was.”

But Voorhees had to make a choice. Online casinos are a legal gray area in the United States, and he was increasingly becoming a public figure in the rapidly growing bitcoin community. “Ultimately, I realized, I could either go underground and keep running this very lucrative casino, which was pretty compelling and interesting to me,” he says, “or I would need to sell it so I could continue being a public voice for bitcoin, but I couldn’t do both.”

In early 2013 the path to becoming a more vocal public voice was partially cleared when Voorhees had what he called a “big falling out” with BitInstant investors Tyler and Cameron Winklevoss, who now run the Gemini cryptocurrency exchange. Shortly after the dispute he left BitInstant, and made his first big compromise to achieve widespread adoption of bitcoin. In July, he sold SatoshiDice to an anonymous buyer for 126,315 bitcoin, then valued at $11.5 million. At today’s bitcoin price of $3,800, SatoshiDice would be worth $479 million. In terms of the bitcoin involved, excluding the increase of the cryptocurrency’s value over the same period, that’s a 315,687% increase.

“It should go down as one of the greatest investments of any person, of any time ever,” says Voorhees, who claims his shareholders profited much more than he did. Nevertheless, Voorhees had to pay the SEC $50,000 in penalties, not counting legal fees and taxes as part of a settlement for selling the unregistered securities.

If Voorhees and many his fellow early bitcoin entrepreneurs were originally attracted to bitcoin because of a theoretical disgust with government regulation, being forced to pay these fines made his resentment of the government very, very personal and became a reminder of how much he personally had at stake.

“It was a terrifying experience for me,” says Voorhees, who calls selling the unregistered SatoshiDice shares his biggest regret over the past ten years. “And for all that to happen after having created something that was cool and useful and revolutionary and that made investors a bunch of money seemed like such an obvious injustice to me that it was really validating.”

In addition to scaring Voorhees, the SEC fines were in many ways the beginning of the end of the cryptocurrency Wild West. Not only did the fines pave the way for a spate of recent SEC actions, they forced Voorhees to make a series of compromises in order to stay on the right side of the law, he says. “That’s something that remains, in hindsight, a horrible decision,” he adds. “Not because it’s wrong to sell to people but because of all the problems it led to with the SEC and because of the decisions I made after that, which ended up being horrible financial decisions that I was forced into doing.”

Further marking the decline of bitcoin’s Wild West, the same month Voorhees sold SatoshiDice, his former employer BitInstant was shut down and Shrem was accused (and later convicted) of helping launder money for Silk Road users. Though Shrem served almost two years in a federal prison, Voorhees was never accused of any wrongdoing. Then, at the end of 2013, the Silk Road itself was shut down when its founder, Ross Ulbricht, was caught in a local library and charged with narcotics trafficking and money laundering as well as a “kingpin” charge usually reserved for crime bosses. Convicted of all charges, Ulbricht is serving a life sentence in the maximum security Florence Prison in Colorado.

In spite of being a symbolic end to cryptocurrency’s Wild West, Voorhees also calls the closure of the Silk Road the single most important event for bitcoin since Satoshi wrote the white paper describing it. Not because he thinks the Silk Road’s reputation was bad for bitcoin (“I think that site had every right to exist,” he says) but because before then, most people who knew what bitcoin was thought it was inextricably tied to the success of black markets. “I think that moment was really profoundly important for people to see that this was something real that did not rely on any specific service,” Voorhees says.

Watching his former colleagues and friends defend themselves in court and then get hauled off to prison taught Voorhees a hard lesson. While Satoshi’s goal of creating an ecosystem that was more democratic and decentralized might still be possible to achieve, the notion that it would exist beyond the reach of regulators anytime soon was doubtful.

So Voorhees hit restart and invested the SatoshiDice profits into about two dozen crypto projects, including Coinapult, a short-lived startup intended to let customers more easily send bitcoin with a mobile device, and ShapeShift, his current company, a cryptocurrency exchange that lets customers easily convert their assets into other assets without the exchange taking custody of either.

From the time Voorhees cofounded ShapeShift at the tail end of 2014, what set the company apart from most other exchanges was its login process—as with SatoshiDice, there wasn’t one. If a user had an account with bitcoin in it, he or she could use ShapeShift immediately. Voorhees was so stern about not collecting customer data that, rather than comply with New York state regulations that required ShapeShift and certain other cryptocurrency companies to collect information about their customers, he blocked New York residents from using the product. Once again Voorhees demonstrated his knack for simultaneously sticking it to the man and staying away from the long arm of the law.

The controversial move to block New York users was also accompanied by a relocation of ShapeShift’s official headquarters to crypto-friendly Zug, Switzerland. In the years that followed, ShapeShift’s monthly transaction volumes grew from of $110,000 in 2014 to $30.26 million in 2017. By March 2017 Shapeshift had raised $10.2 million from mainstream investors such as Early Bird Venture Capital, and the company was on its way to becoming one of the best-known exchanges in the world.

As ShapeShift grew to 125 employees today, Voorhees began to exercise his influence around the world in other ways, too. In 2017, the price of bitcoin skyrocketed in value, increasing from about $1,200 when ShapeShift raised its capital in March to $19,000 by the end of the year. In part spurred by the suddenly very large stakes, squabbles from within the global group of bitcoin users (many of whom no longer like to be called a community) threatened to destroy bitcoin.

Factions had formed among bitcoin users trying to figure out how to prepare the cryptocurrency for widespread adoption. Currently, bitcoin can only handle about seven transactions per second; by comparison, Visa can handle about 24,000 transactions per second. While many of bitcoin’s early adopters joined a group that preferred a solution favorable to ordinary users, Voorhees joined a group of venture-backed startups to support a solution that many believed was better for businesses. For the first time, Voorhees found himself on the side of the establishment.

Before the dust settled on the heated debate about how to scale bitcoin, an entirely new cryptocurrency had formed, called bitcoin cash, and another split was narrowly avoided when Voorhees’ group cancelled its efforts to change the bitcoin code at the last minute. “Basically, the community that was very much on the same team and very much fighting for a noble cause, instead of being beaten down by its real opponents has allowed itself to splinter internally and spend much of its time beating itself up,” Voorhees says. “This has just been a horrible thing to watch.”

The price of bitcoin dropped 70% in 2018, finishing the year at $3,878.

As bitcoin has gone on to become a household name and bitcoin cash was created, the industry started to change in other ways that will continue to be felt for years to come, and Voorhees was there, too. Rumors that the SEC was planning a sweeping series of actions against cryptocurrency startups and those who raised capital via an initial coin offering (ICO) materialized in September 2017 with the formation of the regulator’s Cyber Unit, which was dedicated in part to going after shady crypto startups.

As a result of the formation of the Cyber Unit, entrepreneurs who had gotten into cryptocurrency and the blockchain technology that enables it in order to create a parallelo financial system controlled by the people who used it started having to learn the language of the establishment. Otherwise-random strings of letters like AML and KYC started taking on ominous meanings like “anti-money-laundering” and “know-your-customer.” By December 2017 the U.S regulator’s Cyber Unit filed its first charges against a crypto startup, freezing the assets of the alleged perpetrator, based in Quebec, as part of an ongoing investigation.

As a result of the ever-tightening grip and increasingly international reach of U.S. regulators, Voorhees grew concerned about his own company’s potential vulnerability. In spite of being legally based in Switzerland, he says, he dedicated “millions of dollars” to research ways to avoid having to comply with the SEC’s AML/KYC requirements. But in September 2018, after 18 months of research, Voorhees announced that ShapeShift would in fact implement customer accounts—not only as an optional way to receive membership benefits but, as he said later, just in case a government regulator requested the information.

“The whole company has suffered for that on a philosophical and emotional level,” Voorhees says. “To have to do something that we think is morally and ethically wrong just because government regulators may require it is a really horrible position to be in.” The timing, however, was no coincidence.

In September 2018, the Wall Street newspaper reported that multiple people had used ShapeShift to launder money. Two months later the SEC formally announced its first public investigation into a cryptocurrency exchange, indicating increased involvement in Shapeshift’s industry, and at the end of that month the magazine reported that the SEC was looking into whether Voorhees himself might have violated an agreement he made with the regulator as part of the SatoshiDice settlement. Voorhees staunchly denies the allegations and calls the Journal’s data set and methodology “nonsense.”

Now 34 years old, Voorhees still has his entire career to implement the tough lessons he’s learned about the price of reaching mainstream bitcoin adoption—if he can survive the transition from Wild West gunslinger to rancher. From the initial hand-slap by the SEC, which woke him up to the very personal threat regulators could pose to his vision of absolute financial freedom, to his decision to force ShapeShift’s customers to submit personally identifiable information, he has learned to make painful compromises in pursuit of what he believes is a greater good.

“Back when I first got involved, crypto was a few thousand mostly radical libertarian types, and mostly hardcore engineers or cryptographers really passionate about this cool project,” Voorhees says. “It has grown, and I’m glad it has grown. There are people who use it with no ideological cares about it at all. People who simply use it because it helps them in some economic way. And that’s exactly what should happen.”