Erik Voorhees on financial collateral

Erik VoorheesErik Voorhees is co-founder of the Bitcoin company Coinapult, worked as Director of Marketing at BitInstant, and was founder and partial owner of the Bitcoin gambling website Satoshi Dice which was subsequently sold in July 2013 to an undisclosed buyer for 126,315 bitcoins which were valued at $11.5M.

He was fined by the SEC for an unregistered stock offering related to SatoshiDice. He is the creator and CEO of the instant bitcoin and altcoin exchange, having founded and operated it under the alias Beorn Gonthier, until revealing his true involvement with the company, as part of a seed funding announcement, in March 2015.

Podcast Interview Transcript

Erik Voorhees talks how he fell into the rabbit hole of bitcoin and financial collateral.

Interview with Erik Voohhees on financial collateral

Trace Mayer:  Welcome back to the Bitcoin Knowledge Podcast.  We have with us the legendary, Erik Voorhees.  Welcome to the podcast, Erik.

Erik Voorhees:  Thank you, Trace.  How are you doing?

Trace Mayer:  Doing great.  So, I mean, you've been around bitcoin a long time and a thought leader around it.  Can you give us a little bit of your background with bitcoin?

Erik Voorhees:  Yeah.  Well, it's the typical rabbit hole story.  I found out about it in 2011 from a post on Facebook, was highly skeptical at first and then after a few hours of research, realized that it was going to change the world.  I then fell down the rabbit hole and I've been stuck down there ever since and it feels like it's been a long time, but I guess, it's only about four years.

Trace Mayer:  You're currently working on a secret project.  So I guess we can't talk about that.  You have a phrase that you've already cashed out.  You know, people ask, like, oh, but when are you going to cash out at bitcoin and you're like I've already cashed out.  What do you mean by that?

Erik Voorhees:  Well, most people when they think of investments, they think of buying it and then selling it at some point, like, the exit strategy.  So a lot of that leads people to be very skeptical of bitcoin because not everyone can cash out or else it will just not have any value.  You have to have people continually buying it.

So my argument and I think a lot of people that are really into this stuff is that the cash out happen when you left the dollar system.  We cashed out of dollars and banks and we have moved into -- we exited into something superior which is an entirely better monetary system of bitcoin. 

So there isn't really a point at which we exit bitcoin.  That is now our money.  That is our system that we use and we basically sit here watching the rest of the world catch up to it.

Trace Mayer:  If they ever do.  I had written a book, March 2009 is when I published it, the Great Credit Contraction.  And I made the assertion that it had begun.  500 years ago, we had been using commodity money, 100% reserves, no gold, silver in our hand.  Now we're using fiat currency which is undefined. 

It's not like we can demand gold for it like we used to.  Roosevelt got rid of that and so did Nixon and then we have massive amounts of counterparty risk because we have all these fraction reserves and everything.  Is bitcoin a potential solution to this environment that we find ourselves in?

Erik Voorhees:  Yeah.  Because it fundamentally changes the controlling relationship with money.  So, the normal financial system that everyone uses now, you're beholden to banks in one form or another because whatever money you hold has to sit with a financial institution.

 Which means your money is held by a third party no matter what and unless you're storing gold bars in your house which has its own risks.

So bitcoin allows you actually take the power of your back, hold it yourself.  And this is what makes the whole thing so revolutionary.  Because you don't have to trust any party in order to hold or transfer money anywhere in the world.

Trace Mayer:  So in bitcoin land we would say this is holding your own private keys?

Erik Voorhees:  Right.

Trace Mayer:  So when you're using the traditional financial system if you've got a two year treasury bond, if you've got stocks even the bank account, even though you might be the beneficiary owner of it, your name is on the account.  At the end of the day somebody else is holding those private keys.

Erik Voorhees:  And you're trusting them.

Trace Mayer:  And you're trusting them to hold those private keys and you literally can't hold the private keys yourself, even if you wanted to.  And we've seen just massive abuses of that trust.

Erik Voorhees:  Right.

Trace Mayer:  With customer segregated accounts like MF Global and Jon Corzine, we've seen Fannie Mae, Freddie Mac, Lehman Brothers, multi-trillion dollar bankruptcy there, Bear Stearns, Bank of America, AIG.

 All of these FXCM just blew up earlier this week when the Swiss National Bank came out and said that they weren't going to maintain the Euro Swiss peg anymore and it moved what thirty percent and FXCM, one of my friends his wife works there, they lost $225 million.

Because their customers were leveraged and at the end of the day they were the backstop and their customers get margin call, but didn't have enough money on deposit and so bam, like.

Erik Voorhees:  The theme with all those examples you provide is when people think there's financial collateral exist that doesn't exist or doesn't exist in the form that they think or it doesn't exist in a liquid manner that they can redeem quickly.

And so, people feel like there's financial collateral somewhere and they make certain financial decisions based on that and markets can change quickly and the financial collateral can disappear through fraud or can disappear just because of over complication and then things fall apart really quickly.

Trace Mayer:  This is a very interesting phrase here, financial collateral.  Raoul Paul and Grant Williams have both been talking a lot about the quality of the financial collateral within our current system.

 The current system is so highly leveraged, you know, we've got hypothecation and re hypothecation, they just had to pass a new bill where bank account deposits are now subordinate to some of the bond holders.

I mean this is just really kind of unbelievable.  We've got bail-ins that are happening everywhere, we had Cyprus, we had the 2007, 2008 financial crises with the run on the money market funds.  We've now got negative interest rates in a lot of part of the world.  We've got quantitative easing happening on a massive scale.

Is the value even there, for most of the people who think that they have wealth in that system?  You know a lot of these pension funds, a lot of these retirement accounts, a lot of these financial assets, is the wealth even there?

Erik Voorhees:  Yeah.  Well and that there's a huge discrepancy because if you have a dollar bill in your hand you know that it's yours.  You're not trusting anyone.  And a dollar bill in a bank is the same value, it's still a dollar, but you're trusting someone.  So there's a pricing inefficiency there because there's risk that's not being represented in the price.  Whatever your money is with a counterparty there's risk there.

Trace Mayer:  Yeah.  You've got performance risk that they'll actually honor the contract and then you've also got counterparty risk, where you're depending on the financial ability of the counterparty to perform.

Erik Voorhees:  Right.

Trace Mayer:  Is what you're getting at.

Erik Voorhees:  Right.  And these dominoes can fall quickly which we see whenever the financial system has these quakes going through it.

Trace Mayer:  And Warren Buffett, back in 2004, 2005, he actually wrote about this.  These derivatives were financial weapons of mass destruction that they would create daisy chain like Contagion and he actually recommended people take physical possession of their Berkshire Hathaway shares and gave the transfer agent's phone number.

Erik Voorhees:  Alright.  Are we -- this also happened recently in China.  There was a copper scandal and there is allegedly a bunch of copper sitting at a port or a warehouse that was used as financial collateral for all sorts of loans and several different parties had using the same copper as financial collateral which is ridiculous because it's an obligation to each party.  And the copper apparently wasn't there.  It had been --

Trace Mayer:  At all.

Erik Voorhees:  They're lying about or just a mistake or something.  But it wasn't there.  So, all these people were making financial deals with financial collateral that didn't exist.

Trace Mayer:  Like two hundred thousand tons of copper.

Erik Voorhees:  Yes.

Trace Mayer:  If I remember correctly.  I mean it was just an absurd amount.

Erik Voorhees:  Right.  And so these are the stories we hear about and you have to assume that there are -- there is financial collateral other people think is there that's not.  And one of the great things about bitcoin is that you can tell exactly where the asset sits, whether it's with you or whether you trust it to another party.

 Because it's a public ledger, you can always mathematically verify exactly who has what and you don't have to rely on their promises.  And this is extremely important for finance.

Trace Mayer:  And this is part of the big, big deal of the Byzantine generals problem and how this proof of work scheme, the blockchain scheme solves that problem and gives us distributed consensus about where the bitcoins, where the Satoshi is actually sit in the bitcoin network.

Erik Voorhees:  Right.

Trace Mayer:  Is what you're getting at?

Erik Voorhees:  You can trust.  Yeah.  We can trust math instead of promises of humans.

Trace Mayer:  Now this has some really big implications because now we don't have to trust the auditor with the copper that's supposedly in a warehouse or if we want the asset, if we want the bitcoins, we can give a public key and the bitcoin either get sent immediately or they don't.

Erik Voorhees:  Right.

Trace Mayer:  And you know immediately whether you have the asset or not.

Erik Voorhees:  Right.

Trace Mayer:  You know nothing focuses the mind like a good bank run, right?  I mean that's how soak is the mind.  It's really a great thing to have happened because it cleanses out the people who are swimming naked as Warren Buffett would say you don't know who is swimming naked until the tide goes out.  And boy, have we seen that.

Mt.Gox, Bitstamp lost five million dollars.  Time after time in the bitcoin community we've seen people who've been entrusted with the assets and they've abused that trust one way or the other.

Erik Voorhees:  And the models are using, they are replicating normal financial banking practices of telling you what they have, promising that it's true and you have to trust them and that's how banks work, that's how the early bitcoin companies work.

  But because bitcoin is programmable money and it's on an open transparent ledger you can actually prove which assets are where and since people have seen the flaws with the other model they're now realizing that people need to be demanding financial transparency of these companies and you could never do that with the normal banks because you always has to trust them.  But you can now actually do that with bitcoin-based institutions.

Trace Mayer:  Now it's kind of ironic, isn't it, that Cyprus, you know, a lot of people lost a lot of money in Cyprus.  But the bitcoin price just went ballistic.

Erik Voorhees:  Yeah.

Trace Mayer:  Why do you think that is?  That we care if we were in bitcoin, are we affected by the stuff, like Cyprus?

Erik Voorhees:  Yes, it affects us.  I mean that anyone who holds bitcoin is made wealthier when the price rises and is poorer when price falls.  That is a risk to holding the bitcoin.  But it gets more stable over time.  It's far more stable today than it was.  And as it gets bigger and bigger the larger market stability will decrease because that has to.  Large things are never as volatile as small things.

Trace Mayer:  Because there's just a lot more capital flowing in and out.

Erik Voorhees:  Yeah.  More people doing more things and you smooth out the curves.

Trace Mayer:  Yeah, I kind of use the analogy that we have a storage tanks for wealth kind of like propane tanks or whatever.  And for the most part the storage tanks are full.  We've got trillions of dollars in real estate, trillions of dollars in stocks and bonds and these other financial and tangible instruments out there -- gold.

 But when it comes to cryptocurrency or blockchain technology, we've created an entirely new type of property, an entirely new asset class that's an empty storage tank.

Erik Voorhees:  Right.

Trace Mayer:  And but, I mean we're talking about potentially trillions of dollar's worth of value leading in and filling that storage tank up when we've only got three billion dollars in it currently.

Erik Voorhees:  And the skeptic will say, well, why in the world would people buy it?  What's the point?  The whole point is this type of transparency, the fact that you can now move money for free instantly anywhere in the world and if that -- the value there is utterly apparent.

Trace Mayer:  And that bitcoin is nobody's liability.  Just like gold.  There's no counterparty risk.  Yeah, it's an asset that's nobody's liability.  You can take the private keys yourself.

Erik Voorhees:  Right.

Trace Mayer:  You know, even gold, I mean you're going to be trusting Brink's or G4S, or VMS to hold it.

Erik Voorhees:  You can have gold in your house and you don't have a counterparty risk, but try paying a hundred thousand dollars to someone with your gold bullion, like it's impractical.

Trace Mayer:  Or moving it from your house in the U.S. to your house in Argentina.

Erik Voorhees:  Right.  It doesn't work out.  So physical gold while it gets rid of counterparty risk is not practical for actual economic exchange.  And bitcoin gives you that non counterparty risk asset and also can move instantly anywhere on earth.  That's why people are getting into it.

Trace Mayer:  And you can instantly verify the quantity and the quality of the bitcoin.

Erik Voorhees:  And there's never been a fake bitcoin.  There are there's occasional tungsten gold.

Trace Mayer:  Yeah.

Erik Voorhees:  But there's never been a fake bitcoin.

Trace Mayer:  Or paper gold for that matter.  Like, Kyle Bass who helped one of the big pension funds in Texas, he was at CoMax and, you know, was talking about, there's eighty billion dollars in the futures market and there's only like two to three billion dollars of deliverable gold and he was talking with the director is like, you know, what happens if there's more that needs to be delivered and the guy was like well, it just a function of price and he was like, oh, that's nice, give me a billion dollars a gold then right now.

Erik Voorhees:  Right.

Trace Mayer:  And that he took possession of it for the pension fund and moved it to Texas.  But that's expensive.  We got to hire trucks, we got to assay the bars, but with bitcoin like it's either in your public address or not and it's instantly verifiable, both the quantity and the quality.  We don't have any frictions in assaying it, for example.

Erik Voorhees:  Right.  And it would never make sense to buy something on the internet for five dollars worth of gold, a physical goal and send them a little, you know, few flesh of gold.

Trace Mayer:  Shavings.

Erik Voorhees:  Yes, shavings.  It's ridiculous, but with bitcoin you can send a hundred thousand dollars just as easily as you send five cents to someone on the internet.

Trace Mayer:  Yes, so this is such a revolutionary development.  Not just technologically, but monetarily, financially, property rights.  And it's almost as if it's a perfect antidote for the situation people currently find themselves in.  As you said, even though we've got this massive problem, we've never really had something we could do to solve it.

Erik Voorhees:  Right.

Trace Mayer:  You know.

Erik Voorhees:  The really paranoid people are really paranoid about the fiat money and banking have always been able to take possession of gold.

Trace Mayer:  Physical gold.

Erik Voorhees:  And that helps to some degree, but again it's not practical for economic exchange.  Now we have something with this.

Trace Mayer:  Like you can say that gold is like crawling into the bunker and like pulling the cover over your head.  But bitcoin actually let you continue to engage in economic activity.

Erik Voorhees:  Right.

Trace Mayer:  You know, I've often thought, look at how fast Facebook or Google or YouTube impacted society.  They went viral you could say it.  If bitcoin went viral, we've never really seen the opposite of a hyperinflation.  What I like to call hyper monetization.  Maybe the Euro is the closest example something that one day was that at worth nothing and the next day, had a lot of value. Even though people had contracts, and to which Marx and French francs and stuff like all of a sudden those were worthless and bureaus were worth something and you could exchange by decree.  But now we're seeing fractures in the Euro.  With bitcoin, we could potentially have this hyper monetization event.  I mean we live in the information age, is that's how fast stuff can happen bam.

Erik Voorhees:  Right.

Trace Mayer:  We can wake up one morning and --

Erik Voorhees:  Right.  It takes some years for the society to realize that the asset is worth bailing into.  It takes some time to get trusted.  You know, bitcoin is not going to be trusted on day one or day two.  It takes years, takes some up and downs.  Takes a mature industry to develop before real money starts realizing that okay this is fad is actually here to stay and bitcoin it's now four, five years old --

Trace Mayer:  Six, six years old now.

Erik Voorhees:  But in terms of where the public has known about it, you know it's three, four years old and it's, I think earning a reputation that it's something important that people should probably get into.

Trace Mayer:  In every day that it continues to exist, it gets stronger.  Because it's got that additional day of having function.

Erik Voorhees:  Right, yeah.  When I got involved and it was like two years old.  It was that's still very new and now it's starting to build a reputation and a history and a price performance that, people see that it rises and falls like other assets and it's more volatile currently, but they realize that it is a real thing that is scarcely useful and it's going to have a price and there's only ever going to be 21 millions of these bitcoin so that's quite a compelling reason to, at least, learn about them and figure out what it is.

Trace Mayer:  Yeah, I mean we know how to send e-mails.  We might as well know how to access or use blockchain technology.

Erik Voorhees:  What if there were only 21 million e-mail envelopes that could be used and you get to bid on those rights. All the companies in the world bid on this e-mail envelopes they could send electronic mail to each other's easily.  Those envelopes would be worth quite a bit because you can send instant communication to people anywhere in the world.  Bitcoin is that money.

Trace Mayer:  Do you think there's a potential for something to displace bitcoin?

Erik Voorhees:  Yeah, absolutely.  The whole bitcoin experiment could fall apart tomorrow and there could be some bug in software that makes it all collapse.

Trace Mayer:  Yeah.  But is it very practical.  I mean it's been around six years.

Erik Voorhees:  It's unlikely but it could happen.

Trace Mayer:  It could.  Well, it could happen but, I mean, as someone who's cashed out into bit coin, you know, when you're trying to reform your own subjective valuation of this particular asset have you weighed like, I mean, is there any competitor on the horizon when we're talking about like a new protocol layer of value transfer on the internet.  Anything that's got network effects anywhere close to bitcoin.

Erik Voorhees:  Not yet, nothing really and there's been lots of competitors.  So there's lots of new digital currencies that have come out, some are very similar to bitcoin, some do different things.  None of them has been able to really get a foothold on the market.

Trace Mayer:  Give any traction.

Erik Voorhees:  And they're worthwhile for experimentation and playing around from a technical perspective, but bitcoin continues to demonstrate the power of the network in fact.

Trace Mayer:  Which was?

Erik Voorhees:  Its obstacle we're getting.  The lack of network effects is why it's taken a long time before it even get recognized.  Once it builds out, then it becomes a tailwind.

Trace Mayer:  Yeah.  I mean the first fax machine isn't very valuable.

Erik Voorhees:  Right.

Trace Mayer:  And, you know, you get about fifty fax machines out there and they actually wanted to pass a law that you can only have fax machines in the local post office.  Yeah.  The U.S wanted to pass as a law.  Fortunately, it didn't get passed.

  But then once you had, you know thousand fax machines out there, ten thousand like those network effect just became the tailwind and fax machines became a way that we transfer that information around.

Erik Voorhees:  And when, four years ago when no websites on the internet accepting bitcoin.  It really was just more a of a theoretical possibility.  Now here we are later, there's a one hundred thousand merchants online including big ones like Dell and Microsoft that accept bitcoin and as each of those add bitcoin support.  It makes the network work better and people say oh well maybe I can take a portion of my salary in bitcoin and it builds on itself.

Trace Mayer:  But currency, I mean that's just one application of bitcoin, right?  Kind of like jewelry is one application gold.  We've got lots of other potential application to bitcoin.  Microsoft for example when they started accepting bitcoin, they also said in the press release like, you know, we're dipping our toe in the water with this but we've got a lot of other big ideas.

Erik Voorhees:  Right.

Trace Mayer:  When it comes to bitcoin.  What could they possibly have up their sleeve?  I mean this is the second largest market cap company in the world.  The richest man in the world, Bill Gates he said bitcoin is a techno tour de force.  He said that on national TV and then a year later Microsoft's begin accepting bitcoin.  What could they possibly have up their sleeve with this new technology?

Erik Voorhees:  Apart from it being a new currency unit, Bitcoin solved a very important technological problem which was decentralizing trust.  Having a system that is trustworthy, without anyone honest being a charge and this was a very important computer science problem to solve and now that it solves people are figuring out all sorts of interesting uses whereby when you have a record that is irrefutable.

It displaces all sorts of gatekeepers who before were need for the old system.  Now they're not needed because you have a technical system that proves truth.  So the number of applications of this are going to be large and many of them still haven't been discovered.  It's very early days of technology.

Trace Mayer:  So we've got one hundred twelve million millennials versus seventy eight million baby boomers in 2016.  The millennials they're graduating from college with a lot of student debt, they can't get jobs.  In a lot of cases, it's the regulation that stifling the job creation.  The Ubers and the Airbnbs, you know, you want to rent out your couch for twenty bucks a night, you get fined thirty thousand dollars.

Meanwhile the obsolete technology is being protected by the regulation and the special interest.  All of this is kind of coming into this perfect storm with bitcoin because the millennials like why do they want to have assets in a 401K or a Roth IRA where not only as you talked about the private keys to those assets are held by the E Trades or the other like the stocks or things that they've got in their retirement accounts.

But then, like being able to give any instructions on how to use those private keys have to be done with another third party that's interjected the custodian of the IRA.  Why would these millennials want to have so many layers of risk, performance risk between them and their assets?

Erik Voorhees:  As the industry matures, people realize that they don't need a middleman to handle or transfer their money.  Just like we don't need middlemen to handle our communication with each other now.  We can send digital communication over the internet to each other directly.  We don't need to use the post office.

Trace Mayer:  Which is massively bankrupt by the way.

Erik Voorhees:  Of course.

Trace Mayer:  And running massive like budget deficits.

Erik Voorhees:  But they won't close it down because it's taxpayer money.  So why would they care about profit?

Trace Mayer:  And so we're protecting, you know, the sending of physical spam and subsidizing it with taxpayer money.

Erik Voorhees:  Right.

Trace Mayer:  When, you know, we don't really necessarily need that anymore.  Just like we're protecting taxi cabs, and the hotel industry and lots of these other obsolete technologies in stifling job creation and job growth for millennials and the tech industry.

Except now, this disruption from Silicon Valley, you know, that this tsunami of disruption from information technologies like we're no longer just attacking the post office and the media industry, you know the TV shows and the movies and the newspapers.  We're going after the money now and the banks.  This is a big, big deal.

Erik Voorhees:  Banks aren't used to having a competing business model challenge them.  I guess you can say the same thing about cable companies, but when they got blindsided by the internet digital media they didn't ever think that they would be displaced either.  So the realm of money has been one which has not seen true disruption in a very, very long time.  Mostly because it's a monopoly control, the government and it's handled by banks that have no incentive or desire to change anything.

And now you have money move on to the internet.  Seeing this drastic disruptive change happening all over the world and companies and individuals who aren't paying attention to this are going to wake up one morning and realize that the whole world has changed and they missed it.

Trace Mayer:   You know, I think when we're looking at epics in history like this.  We had the shift from the Agricultural Age to the Industrial Age and now we're going from the Industrial Age into the Information Age and the tectonic plates, you know, we got tectonic plates and then we have oceans and then on top of the oceans we have oil tankers and other boats and we've got buildings and cities and all this.

So public key, private key encryption, you could say changed the economics of violence.  It was a shift in the tectonic plates, back in the mid-seventies which led to the rise of the internet, you know TCPIP and SSL and HTTPS, IP sack, all these things that we need in order to have these information technologies came and were made possible by this mathematical breakthrough in public private key encryption which changed the tectonic plates, which have now changed the oceans.

We've got like massive rogue waves and like just turmoil in the currency markets.  Because the currency markets are the common stocks of the nations as a result the ships and the buildings that are on shore the earthquakes and tsunamis that all, this is resulting, in we're seeing the Fannie Mae's and the Lehman Brothers and Exxon Mobil getting booted out of Russia, for example.

 I mean we're seeing just massive, massive change and risk out there for holders of assets.  Is bitcoin just the next step in all of this change?  I mean is it just the next logical step in the march of humanity?

Erik Voorhees:  Yeah.  It's one of them and you can think of bitcoin just being one more branch of the internet revolution.  The internet has changed all sorts of industries.  It's now getting around to money.  Money now moves for free over the internet in the same disruptive way that communication now moves free over the internet.

A lot of the financial system is built on very shaky unsound systems starting at the core of the currency itself, fiat currency which is not a stable asset whatsoever.  The U.S. dollars lost 98% of its value since the Federal Reserve was created and you can count on it will always continue to lose value because they're just printing it and they could print it at will.

That is not a stable foundation upon which an economy gets built.  If you reboot and you start with a stable foundation like bitcoin, which is a mathematical currency that cannot be changed and its supply cannot be manipulated by one party or another.  It is honest money.  When you started at a foundation like that you will end up many years in the future with a more stable and productive financial system.

Trace Mayer:  And a much wealthier humanity.

Erik Voorhees:  Right.  Because money will move more efficiently.  It will be more honest, there would be less fraud and these are all good things.

Trace Mayer:  One of my friends he had actually helped clean up State Street one of the major custodians when there was a massive scandal behind the scenes.  You know, we kind of joke that we don't think the current financial system can withstand the transparency of bitcoin.

Erik Voorhees:  No, I knew it will be like shining a light into a rat's nest.

Trace Mayer:  And it's really just a rising sun.  I mean there's only so many shadows to hide it until its noon day and every day that goes by bitcoin and this internet transformation, revolution just gets stronger and stronger.

Erik Voorhees:  Right.  And it displaces the role that a lot of regulations have because a lot of regulations are really well-intentioned.  And they would try to protect people from certain things.  But you have programmable money that's transparent and you can actually use programming to solve a lot of the problems that regulation was built for.  So instead of fallible humans being in charge of these systems you have infallible mathematics.

Trace Mayer:  Yeah.  And so people get more safety, lower cost, creates a lot more opportunity, economic activity in wealth and wealthy generation and all of this leads to wealth transfer to holders of bitcoin from some of these other assets, assuming the price goes up, right?

Erik Voorhees:  Right.  Because as the system gets used, the prices of bitcoin necessarily has to increase in order to accommodate because there's only so many bitcoin.

Trace Mayer:  Yeah.  So, there we go, it's been an excellent interview with the legendary Eric Voorhees and what's our first rule of panic?  Do it first.  And so you know you've already cashed out of the current system.

Erik Voorhees:  When I watch the news now it used to be something that maybe nervous, watching all the crazy things of the world happening and now I feel like I'm in the lifeboat watching the Titanic sink and it's sad that many people won't realize a lifeboat's sitting right next to them because it's weird and new and they're comfortable on the deck of the Titanic, but that ship is sinking and so you better get off before you’re the last one in the water.

Trace Mayer:  Well, the market has a great way of rewarding the people who make the correct financial choices and punishing the people who don't.  And it's all being played out in the price of bitcoin.  So this is exciting and we're going to see who the correct prognosticators are in a decade or two.

Erik Voorhees:  That's right.

Trace Mayer:  Thanks so much for being with us, Eric.

Erik Voorhees:  Yeah.  Thank you, Trace.

Written by Erik Voorhees on January 30, 2015.