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Crypto Exchange ShapeShift Is Moving Away From Its No-Account Model

Cryptocurrency exchange ShapeShift has launched a new membership program that will eventually become mandatory for its users.

Positioned as a loyalty program, the initiative will see the startup offer a range of benefits while also moving to start collecting some personal information from its users, essentially forming a pivot away from its “exchange without accounts” model.

In a blog post, CEO Erik Voorhees wrote that “that last detail sucks” in reference to the plan to make the membership program mandatory, which will take place sometime later this year.

Nothing that “we would prefer if the collection of personal information was not a mandatory element,” Voorhees went on to write:

“We still firmly believe that individuals, regardless of their race, religion, or nationality, deserve the right to financial privacy, just as they deserve the right to privacy in their thoughts, in their relationships, and in their communications. Such privacy is a foundational element of a civil and just society, and should be defended by all good people. We remain committed to that cause and it is best served if we are smart about our approach.

Members will receive discounts on exchange rates, volume-based rewards for transacting with the FOX token and higher transaction limits.

The broader changes, according to Voorhees, are a result of requests from ShapeShift users for account-related features, an “increasing interest in … tokenization” and the regulatory uncertainty surrounding cryptocurrency exchanges at present, he said.

“Membership is, in essence, an advanced loyalty program. It will lead over time both to better pricing and a superior user experience,” he wrote.

While ShapeShift is adding new features for the program, Voorhees stressed, it will remain a non-custodial exchange, meaning it will not hold customer funds.

ShapeShift image via Piotr Swat / Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Bitcoin Debate’s Defeated Bear: Digitized Gold ‘Only Type of Crypto That Can Succeed’

American stock broker Peter Schiff “technically lost” to ShapeShift CEO and crypto commentator Erik Voorhees in a ‘Bitcoin Debate’ at the SoHo Forum July 2.

The two financial thought leaders debated about the top cryptocurrency Bitcoin (BTC) and its underlying technology blockchain, questioning the potential for mass adoption, and comparing Bitcoin and other cryptocurrencies with other asset types such as fiat money and gold.

Voorhees, the Bitcoin bull of the debate, claimed that Bitcoin will eventually become a substitute for state-backed money, while government structures would be reorganized using blockchain technology. Voorhees argues that Bitcoin is “supremely good money” praising its provable scarcity, divisibility, durability, fungibility, portability, and decentralized nature, stating:

“Bitcoin will win because there is now competition in money, and Bitcoin is the best money currently available. Because it’s decentralized, it cannot be stopped.”

Voorhees noted that mass adoption will not happen right away or all at once, arguing Bitcoin will “simply, gradually come to be used as an occasional alternative to fiat.”

Defending Bitcoin bear position, gold investor and financial commentator Schiff argued that Bitcoin is not going to succeed in the future and work as substitute for fiat money since it is not backed by anything except the “confidence” of buyers, which is mostly driven by speculation.

Schiff spoke extensively on the value-creating characteristics of precious metal assets, namely gold, arguing that the fact that the U.S. dollar was once backed by gold is what allowed it to accumulate trust over time. Schiff argued that gold does not have to compete with any other asset, including Bitcoin, which is “replicating all of the properties of gold, except the most important one –– the metal itself.” Schiff’s argument for why gold is valuable as an element is based on the fact that it is rate and “has been valued as a commodity for thousands of years.”

Schiff, like many gold advocates on Bitcoin, expressed concern about the fact that it is not possible to find out how much Bitcoin is worth in terms gold or any other physical commodity:

“It has no real value into itself as a commodity, there is no way to relate the price of Bitcoin to the price of anything else.”

Continuing his argument, the investor claimed that the existence of multiple different cryptocurrencies was a weakness, stating “there is only one gold, there will never be another gold. Schiff noted there are, however, alternatives to Bitcoin, which, according to him, have “the exactly same properties [as Bitcoin]”:

“Now there are fifteen hundred or so cryptocurrencies that can do everything Bitcoin can do. Some of them can do it better, faster cheaper. There is no limit to the number of other digital currencies that can be created.”

Schiff concluded:

“If you want to go to the future, you have to go to the past. The future of money is gold.”

The stock broker explained that if a cryptocurrency were to be backed by gold, or “by real money,” then it would be the “only type of cryptocurrency that can succeed.”

Schiff, however, agreed with Voorhees about the weaknesses of the existing fiat monetary system, claiming that it is “not going to work.” However, the investor argued that Bitcoin “is not an improvement,” saying that it is still a “speculative asset” that people buy into in hopes of earning more fiat money.

At another debate in New York in April, U.S. venture capital investor and Bitcoin supporter Tim Draper argued that Bitcoin is “bigger than the internet,” as well as a number of other major developments in human history. During the debate, the investment mogul stated his oft-repeated prediction that five years from now, people buying coffee with fiat will be “laughed at” for not using crypto.

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Voorhees vs Schiff: Bull Meets Bear at NY Bitcoin Debate

A debate between an infamous bitcoin detractor and one of the cryptocurrency’s most well-known entrepreneurs made sparks fly in New York City Monday.

Hosted by the Soho Forum, a monthly Manhattan debate series, the event saw Erik Voorhees, the CEO of exchange service ShapeShift, argue that government-backed monies will eventually be replaced by bitcoin and blockchain innovations. The world’s largest cryptocurrency, he said, just needs gradual adoption to eventually triumph.

However, the debate was far from a one-sided showcase. There to represent the opposition, Peter Schiff provided more than a healthy dose of skepticism. Perhaps most damningly, he argued people are not currently buying into bitcoin or other cryptocurrencies to use them; they’re here to get rich, he said.

The economist said that bitcoin is primarily seen as a speculative asset. Moreover, even people who do plan to use bitcoin cannot do so easily.

Bitcoin is not, at present, a reliable store of value, he continued. Schiff pointed out that the price of a bitcoin can change hour-to-hour, which makes it difficult for people to price goods or negotiate contracts using the cryptocurrency.

“The biggest problem with bitcoin and why it can never be used as money is because [currency] has to be a reliable store of value, not just a medium of exchange,” he said.

Voorhees did not see market fluctuations as an issue.

He told the crowd:

“I remember when it was a big deal when bitcoin moved 50 percent. Today, it’s a big deal when it moves 10 percent. I think in a few years it’ll be a big deal when it moves 2-3 percent. While bitcoin is volatile today, I think this problem is self-correcting.”

Still, the event did see both provocateurs find common ground. Schiff, for example, doesn’t believe in fiat currency.

“The fiat system that we have now is not going to work,” but “replacing fiat currency with digital currency is not an improvement,” he said.

Gold or currency?

Another subject discussed was whether bitcoin can become a store of value to rival precious metals.

Touching on a familiar topic, Schiff trotted out the argument that gold’s long tenure in the market will make it hard to replace. Further, he argued it’s already surpassed its competition over the centuries.

“What are the odds that bitcoin’s the best cryptocurrency that’s ever going to be invented? … Nobody’s come up with a better gold,” Schiff remarked.

Here, Voorhees seemed to concede a bit to the argument, if on different grounds. Notably, he noted that the asset would likely be more susceptible to government bans than its more established competitor.

“Well, the government can absolutely outlaw bitcoin. More easily [than it would be to ban gold],” Voorhees said.

Elsewhere, Voorhees also conceded that bitcoin might not succeed in meeting all of the four classic functions of money.

In response to Schiff’s argument that the “crypto bubble will pop before the fiat bubble,” Voorhees acknowledged that consumers will likely ultimately play a role in deciding what kind of currency they want to exchange with, and whether it will be with cryptocurrency.

“The biggest obstacle to adoption is most individuals want governments to manage money for them. Until that changes, bitcoin will play second fiddle.”

No use?

But Voorhees did more than simply concede ground to Schiff.

In response to Schiff’s argument that the market is solely propelled by speculation, Voorhees noted that bitcoin can be used in cross-border transactions, is censorship-resistant and has a limited supply.

People transacting in bitcoin are also free of many of the restrictions seen in traditional financial institutions, including the fact that people cannot send wire transfers outside a bank’s business hours.

And an informal poll of the audience suggests this market may have won a few converts.

Soho Forum took a poll of audience sentiment before and after the debate, asking the audience if they thought bitcoin had a chance to beat government.

Notably, the yay votes rose from 40 to 55%, while the nay votes fell from 40 to 31%

Peter Schiff, Erik Voorhees and Gene Epstein image by Nikhilesh De for CoinDesk

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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BitLicense Refugees: Kraken, ShapeShift CEOs Talk Escape from New York

If you wanted to hear red-meat rhetoric about New York State’s regulatory approach, a fireside chat Tuesday between two of the cryptocurrency industry’s most outspoken leaders delivered.

For example, the audience at Consensus 2018 in New York City cheered when ShapeShift CEO Erik Voorhees invoked a local icon to make the case that the state’s BitLicense was a case of regulatory overreach.

Here we are two miles from the Statue of Liberty and you cannot sell CryptoKitties in the state without that license. That’s the absurdity of what’s happened here,” he said.

And Jesse Powell, the CEO of Kraken, got some laughs at the expense of former New York Attorney General Eric Schneiderman.

When Scheniderman’s office sent a request for information to Kraken (along with several other exchanges) earlier this year – three years after his company stopped doing business in New York – it felt like “a slap in the face,” Powell said.

But then “it turns out this asshole actually slapped people in the face,” he quipped, referring to the allegations of physical abuse that forced Schneiderman to resign shortly afterward.

Yet between these zingers and applause lines about the BitLicense – which both executives blame for driving their companies out of state – there were subtler points made. The conversation highlighted the challenges facing both the industry and regulators worldwide as governments come to terms with the ramifications of cryptocurrency.

Powell, for example, pointed out the tension between anti-money-laundering regulations and customer privacy protections. In the case of the BitLicense, he said, Kraken would have had to “disclose all the information about our entire global client base to the state of New York.”

That was not only distasteful, Powell said, but “potentially illegal” under the privacy laws of other countries.

“To service New York today, what we’d have to do is create a special purpose entity just to service New York and completely firewall off” all the exchange’s other users to protect their privacy, he said.

Alternative models

Widening the lens, Powell contended that the U.S. “has really failed” by leaving it up to local regulators to figure out how to deal with cryptocurrencies.

“In others parts of the world, it’s an issue that’s being taken seriously by heads of state – presidents, prime ministers. It’s not something that’s relegated to individual regulators at a state level,” he said. “It should be treated as a national economic and national security issue, maybe even an international issue.”

Powell cited Japan’s Virtual Currency Act as an example of “reasonable” regulation. Although the law is “not perfect,” he said, “we’re already seeing an explosion of business in Japan” as a result of the clarity it brought.

Voorhees, however, held up a different U.S. state as an example of how to do things right: Wyoming, which recently passed a package of five blockchain-related laws.

The two most important ones, in his view, were a law that excludes tokens from being automatically categorized as securities, and another that excludes digital asset companies from being automatically classified as money transmitters.

“That’s the model people should be looking at, they’ve done it the best,” Voorhees said.

And despite using the phrase “statist oppression” early in the conversation to describe his feelings about New York when the BitLicense was created, Voorhees later clarified that he thinks regulators generally have good intentions.

But their aims can be met today by means other than imposing bureaucratic, bank-style regulations on businesses that want to be nothing like traditional financial institutions, he argued.

“The crypto industry and regulators can find common ground in realizing that this incredible new technology can achieve many of the noble goals of the regulators such as protecting consumers,” Voorhees said.

Regulatory hopscotch

Ultimately, though, the two executives depicted cryptocurrency as a highly mobile activity that can easily relocate when any jurisdiction starts to appear heavy-handed.

Powell said Kraken’s main office is located in San Francisco only as a convenience because that’s where he lived when he started the company. Crypto businesses can basically pick up and move anywhere in the world they want to be, he said.

And users need not always move to another place, use a VPN to mask their IP address or even break the law to get around restrictions; Powell shared a tip for New York residents who feel deprived because of the way the BitLicense has limited their cryptocurrency trading options.

“If you’re here stuck in New York and you can’t trade how you want to trade, set up a Wyoming LLC and you can trade through that and have your business trade for you,” he said.

Further limiting regulators’ power, Powell said, the rise of decentralized exchanges will give users even more alternatives.

“If they can’t do what they want on Kraken they’re doing to do it on a decentralized exchange,” he said.

And Voorhees said “regulatory hopscotch” by exchanges and other businesses that move from one country to another is only a symptom of a broader phenomenon that won’t easily be resolved.

He concluded:

“Bitcoin basically broke down the borders of how value moves across humanity. There is no way that an invention like that doesn’t run straight into the jaws of regulations. And that conflict is going to be one of the great themes of my lifetime.”

Photo via Wolfie Zhao for CoinDesk. Left to right: CoinDesk research director Nolan Bauerle, Jesse Powell and Erik Voorhees. 

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Bitcoin Network Hashrate At All Time High Even Among Market Corrections

The Bitcoin (BTC) network’s hashrate is continuing to climb today, May 2, according to data from BitInfoCharts. The continuous growth of the hashrate over the past months signals a constantly increasing level of interest from the miners, in spite of Bitcoin’s inability to break the $10,000 price point after the market crash in February.

After BTC’s price reached $20,000 in December of last year, the market began to fall in the wake of the new year, with BTC dipping below $6,000 in February. Although the market has recovered slightly, with Bitcoin currently trading for around $9,144 and up 3 percent over a 24 hour period, the price is still more than 50 percent below its all-time high reached in December.

The rising hashrate – last recorded on May 1 as 31,590 PH/sec – means that new miners are continuously starting to mine for Bitcoin in spite of market fluctuations. This causes a constantly increasing competition between the miners and the resulting improvement of the network’s overall security.

In mid-March, Fundstrat’s Tom Lee reported that Bitcoin mining would become less profitable – and therefore less popular – during times of market decline, a prediction belied by the current high hashrate even with a stagnating market.

Bitcoin Cash (BCH), on the other hand, is currently experiencing a stagnating hashrate. BCH is a fork of the Bitcoin blockchain advertised as a faster and cheaper alternative, as the currency has a larger block size. However, in February BTC’s transaction fees were actually lower at one point than those of BCH.

Bitcoin, Bitcoin Cash Hashrate historical chart

Founder and CEO of ShapeShift.io Erik T. Voorhees tweeted last last month about BTC having the highest accumulated proof of work, a characteristic that depends directly on the network hashrate, as compared to BCH:

Last August, the Bitcoin network hashrate fell by 50 percent, from 8,000 to 4,000 petahash per second in a four day period, a drop attributed to the attraction of higher block rewards for BCH mining.

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Cryptocurrency Market Takes a Tumble as Ripple Bubble Fear Looms

2018 did not begin on a good note for Bitcoin as the monster rally leading to Christmas crashed, but it made a bit of a recovery in and among a boom for a number of altcoins. However, Monday has not been a good day for the entire cryptocurrency market.

Looking down the graphs of the top cryptocurrencies, you’d be hard-pressed to find one in the black as all of the top 10 coins hit a downward trend, led by Ripple which had dropped by almost 28 percent over the last 24 hours.

Red across the board

Coinmarketcap showed some unpleasant numbers for all top 10 coins as Bitcoin was registered as being down 11 percent, Ripple down 28 percent and Bitcoin Cash down 20 percent.

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Ripple’s losses were by and far the biggest, especially considering the growth the coin experienced in the past few weeks. Ripple reached $3 a coin a few days ago after it was added to Bloomberg’s price terminal in late December.

South Korea also recently pushed up the altcoin market as the mania strike the Asian country with Ripple’s doubling up attributed to South Korea being taken with the Blockchain-based payment solution for enterprise-level global payment transactions.

A bubble in the Ripple?

The low Ripple numbers may be down to the fact that Coinmarketcap does not including information from some South Korean exchanges, but there are other concerns afoot.

“The reason ripple is surging so much is it’s a bubble,” said Erik Voorhees, CEO of digital asset exchange ShapeShift and a vocal advocate for Bitcoin as a way to separate money and the state. “Testing crypto with banks doesn’t make sense. The whole idea of crypto is you don’t need a bank.”

The technology behind Ripple is aimed at large institutions, which has given it an air of legitimacy which in turn has spurred the price and build a hype for investors.

However, cryptocurrency enthusiasts say that centralization is the exact opposite of what the technology of the digital currencies should be about.

Altcoin season

Many saw the recent dip in Bitcoin’s dominance as the reemergence of altcoins, with Ripple, and even other minor coins like Verge stealing the limelight. However, this recent dip seems to suggest that there are still strong ties between many coins to the dominant force that is Bitcoin.

The adage goes that: ‘A rising tide lifts all boats,’ and the same goes for a falling one. With Bitcoin still being the biggest boat in the bay, it makes sense that should an issue affect it and its price, other coins in the crypto market will also feel the effect.

Famed stock picker Ronnie Moas recently predicted that there would be a reverse on this so-called ‘altcoin season,’ and perhaps, this is it as everyone goes down before the most established digital currency again rises up.

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Erik Voorhees

This is an entry in CoinDesk’s Most Influential in Blockchain 2017 series.


“You’ve invited a philosopher, and the curse that comes with that, is you have to hear a bit of philosophy.”

And as promised, that’s just what Patrick Byrne, CEO of e-commerce giant Overstock.com, proceeds to provide. It may be the depths of January, but Byrne is bringing his own form of heat to the roomful of bitcoin insiders assembled for the annual “Satoshi Roundtable” retreat in Cancun, Mexico.

Nearly two years into a debate over how best to alter bitcoin’s software (and still months away from anything resembling a path forward), much of the event’s itinerary centers on the issue, or as much as it can before devolving into either acrimony or aimlessness.

Fresh off a leave of absence from his company, though, Byrne adds a burst of life to the proceedings. Taking center stage for a speech, he rifles through a brisk dialogue that equates bitcoin with the American Revolution and pokes fun at major banks.

“They have not internalized how much they have to change. You’ve shown up with a Ferrari and they’re insisting on putting a lawnmower in it,” Byrne quips.

This rapid pace of play soon takes a pause, however, when Byrne points to a man with his hand raised in an effort to ask a question. Byrne soon balks at the name. “Voorhees, the Erik Voorhees?” he asks.

On affirmation, what starts out as surprise quickly turns to reverence, as Byrne nods, bends at the middle and begins a short series of bows. “I’m not worthy,” he says a few times in a sing-song tone.

Looking back on the incident some months later, Voorhees is still taken aback by the gesture. Speaking from the offices of his startup ShapeShift, nearly a year removed, he admits he’d never met Byrne before that moment, and that he hasn’t exactly had much contact with him since.

“It was nice, I didn’t know if he knew who I was,” Voorhees remarks.

Still, there’s an obvious shared camaraderie, one Voorhees traces back to not just their interest in cryptocurrencies, but the way in which they’ve approached advocating for the technology, often in protracted fights with U.S. regulators who don’t see eye to eye with their philosophy.

And in Voorhees, Byrne finds rare company, as the entrepreneur’s own battles against the government stretch back years, to a time when he was just a man defending bitcoin on message boards. But if Voorhees was an oddity then, he’s perhaps more remarkable now in that he’s remained, always a touch out of step with the mainstream.

Whether it’s taking left-of-center positions on bitcoin’s technical roadmap, how industry business should be structured to maximize growth or the nature of cryptocurrency as money, Voorhees remains the shapeshifting fox his company’s logo enshrines.

Then and now

One of the earliest evangelists for cryptocurrency (his online posts on the matter date back to 2011 and 2012), Voorhees is now one of its most distinguished entrepreneurs.

An early employee at its first major startup, New York-based BitInstant, he later founded and sold a gambling platform called SatoshiDice that was so popular it congested the bitcoin blockchain before scaling was even a widely acknowledged concern. Still, SatoshiDice was not without its critics, including the U.S. government, who fined Voorhees for the unauthorized exchange of cryptocurrency for startup equity.

If that sounds familiar, that may be because the model is en vogue these days, with so-called initial coin offerings (ICOs) performing similar sales on an almost daily basis. Since 2013, sales of custom cryptocurrencies have resulted in nearly $4 billion in project funding.

“I wish tokens were a thing back then. I went through all that risk and all that crap,” he says, reclining back in his corner office chair.

If that’s the case, though, ShapeShift’s new office complex also doubles as a statement on how far he’s come, and also how he’s always been a bit early to the future.

Complete with reclaimed wood tables, catered lunch for employees and ample room for expansion, the office is a living I-told-you-so to the naysayers who mocked Voorhees for being one of the few to embrace the idea cryptocurrencies beyond bitcoin had any value.

Yet, the growth of his company, which hired more than 50 people in 2017, at the time when many early bitcoin startups are struggling or pivoting, is credence to his foresight.

What started as a website that offered the ability for users to swap cryptocurrency without a counterparty now has five total offerings – its eponymous ShapeShift service; PRISM (a synthetic asset portfolio built on ethereum); KeepKey (a hardware storage offering); CoinCap.io (a data provider); and Arbiter (a stealth initiative).

Anarchist blues

But for Voorhees, the success has come with trade-offs. Namely, he hasn’t been able to be quite as visible – and outspoken – as he once was.

“When you run a company, you can’t also be super political. You have a target on your back; I have to censor myself all the time,” he says.

For one, he’d like to be more outspoken about the relationship between money and the government, the subject for which he first rose to renown in the industry.

Before he was an entrepreneur (struggling or successful), he was a blogger, authoring long thought pieces on the nature of politics and money, and how cryptocurrencies, by effectively moving the tools for money creation back into the hands of the people, were destined to upset this balance.

And for all there is to manage at ShapeShift, Voorhees still tries to keep in touch with his Libertarian roots. Case and point, the weekend before the interview, Voorhees was supposed to visit Ross Ulbricht, the founder of online dark market Silk Road, now serving life behind bars for his creation.

Though he’s never met Ulbricht, Voorhees likens his planned two-hour drive, delayed due to an abrupt hand surgery, to a kind of pilgrimage, one that acknowledges Ulbricht’s influence in building what was essentially the first large-scale business of any kind run exclusively on blockchain payments.

“He’s in jail forever at least until we bust him out. So, I want to go talk to him and let him know that he’s not forgotten about,” Voorhees says.

But if all this makes you think Voorhees has a bit of a fetish for oppression, he pushes back against the claim. A fairly new father, he says he’s eager to avoid a similar fate.

“I don’t want to end up in a cell,” he adds.

It’s the first of many statements in which Voorhees seems to see himself as someone bound to his beliefs, at once optimistic they’ll be vindicated, but also prepared to accept the outcome of their adherence.

Mean and nasty

On windswept streets, this predilection is on display again as Voorhees begins tearing into the meat of the subject we’ve been dancing around, his role in the industry in 2017, one that was primarily (publicly at least) defined by his support for failed bitcoin scaling proposals.

Like many other entrepreneurs, he signed a statement of support for the Segwit2x software upgrade that would have changed bitcoin’s code to increase its block size parameter. The backlash was shift, and without broad support, many CEOs pulled out over customer complaints and general in-fighting.

On the subject of how he emerged from that still respected – if voting on our ‘Most Influential’ poll is any indication – it’s clear he’s a bit bitter about the insinuation at all, calling it “totally absurd.”

“What was most tragic about the year was that all these people who were on the same side and they agree on 99 percent of things became not just opponents in a debate, but like vitriolic hating enemies of each other,” he argues.

Looking back, he’s sympathetic to his peers, like early investor Roger Ver, who have largely borne the brunt of fierce internet trolling. To Voorhees, it’s an example of how “mean and nasty” the debate got over what he believes was a well-intentioned, and ultimately necessary, change.

Voorhees, like Ver, maintains his position that bitcoin’s 1 MB block size needs to be raised for the software to succeed, and he remains taken aback by suggestions that the events served as a referendum that found developers staking a different path forward.

Asked to retort common criticisms of the Segwit2x proposal, Voorhees is quick to tear down arguments that have seemingly become accepted mantra.

“Are you saying bitcoin was not supposed to be used as a peer-to-peer cash system? It’s the sub-title of the white paper,” he says sarcastically.

Still, he does seem to refuse what appears to be the mainstream consensus, that bitcoin is now an asset more akin to a digital gold. To Voorhees, bitcoin can’t just be an asset class, or even a store of value, because it’s primary utility isn’t to be held, but to be spent.

“I’ve never confused price and utility. The only reason that the price should rise is if more people are finding it useful,” he says. “Holding is a derivative use case, it only applies long term if there’s something else the thing is useful for. In this case it was value transfer.”

Sly fox

From there, the issue is forced further, to the point where it’s perhaps too onerous to state the number of conditionals I use to prod at his preconceptions. But to this barrage, Voorhees holds the line, and over the course of the dialogue, his positions become a bit more defined.

He believes bitcoin cannot succeed as simply a store of value (and that better scaling is needed), that the rising tide of competing cryptocurrencies isn’t likely to be beaten back (by any bitcoin advance) and that, this aside, bitcoin remains worth fighting for as it’s the best chance for the cryptocurrency concept to be truly realized.

It’s perhaps this last goal that seems to most motivate Voorhees and his continued visibility in bitcoin, despite ShapeShift’s embrace of a more practical model that focuses on many protocols.

Indeed, if Voorhees proves nothing else in conversation, it’s that he’s perhaps uniquely able to see both idealism and practicality as two separate ideas to be embraced.

Time after time, he defends the idea that “magic internet money” can’t be silly or arbitrary, no matter how many there are, going so far as to fight against the idea that cryptocurrencies only have value when measured against a fiat currency.

“If it wasn’t, why would anyone be interested in it? Other than some cryptographers,” he says.

But he remains devoted to bitcoin because he wants to see the world cryptocurrency unleashes sooner than later.

“The issue is that of all the work and effort going to build bitcoin today, if it gets surpassed or destroyed, it delays the entire project,” he says.

The hanging wire

This intellectual game of fox and the hound now over, we retreat back to ShapeShift’s offices, both perhaps unsure of what to make of the conversation.

Somewhere at a coffee shop, we decide on a title for the discussion – “The philosophy of change as it relates to bitcoin and cryptocurrency” –and soon after call it a draw. Though, there’s a sense of disorientation that remains.

Looking at a twin pair of fox paintings on the wall, my perceptions blurs. Made of a million black and blue brushstrokes, I remember there’s no such thing as color at all. The images I’m seeing aren’t even right side up, they seem to say.

Voorhees stops to fix the picture.

A little to the right, a little to the left.

“It might just be the wire,” he says at last.

Do I see what he sees? I linger on the way out, stepping back, changing perspective, looking at the pictures from different angles. Stepping into the elevator, I resolve that if they’re off, I can’t tell.

But it’s a testament to Voorhees that I feel like they should be.

Want more? Hear Erik Voorhees discuss his philosophy toward digital assets.

[embedded content]


Original artwork by Luis Buenaventura II, creator of the CryptoPop website. Click here to view more by the artist, and to check out the official CoinDesk Most Influential T-shirt.

Video by Ali Powell at 40 Thieves Films 

The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Interested in offering your expertise or insights to our reporting? Contact us at news@coindesk.com.

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US Dollar Will End 2017 as Worst Year Since 2003, While Bitcoin is Up 1,372%

The US dollar has recorded the largest annual decline in value since 2003 and is forecasted to end 2017 at a three-month low against other major currencies like the Chinese yuan and Japanese yen.

Separating money and state

Meanwhile, Bitcoin, the most valuable cryptocurrency in the market with a $227 bln market valuation, is en route to ending the year recording a 1,341 percent increase in value, as one of the most profitable cryptocurrency in the global market behind Ripple, Litecoin, Dash and Ethereum.

Bitcoin Price

Several analysts such as Chris Gaffney, president of World Markets at EverBank, told Reuters that the value of US dollar would likely further decline throughout 2018, with no signs of short-term recovery.

“The dollar will face more headwinds in 2018. The Fed won’t be going at it alone in terms of taking off more gas from the stimulus pedal.”

Jens Nordvig, CEO of Exante Data, also told CNBC that while it would be normal for analysts to expect a recovery after such a large loss in value, this time, most analysts have a negative bias on the US dollar.

Nordvig said, emphasizing the rapid growth rate of the global economy and key players like China:

“We have a negative bias on the dollar, which is extraordinary considering that interest rates are going to rise at a very good clip. It got too strong before January, and the other factor is that global growth is very strong.”

Long-time Bitcoin investors and cryptocurrency researchers believe that the rise of cryptocurrencies as a new emerging asset class is playing a small role in the decline of fiat currencies across the globe, by separating money and state.

For many decades, governments have had absolute control over the global monetary system, especially of the fiat currency system with which they can easily manipulate the supply of circulating money.

In November, ShapeShift CEO Erik Voorhees noted that Bitcoin is continuing to grow in terms of market valuation, user base and user activity because as a decentralized currency and store of value, it is providing an alternative financial network to the fiat currency system. Voorhees said:

“Why does Bitcoin keep growing? Because it’s time to separate money and state.”

In response to a criticism of the abovementioned statement, Voorhees added that although short-term price bubbles in the Bitcoin and cryptocurrency markets are fueled by greed, long-term price growth demonstrates the demand for non-state finance. He explained:

“The short-term price bubbles are full-on speculation, agreed. But the long-term increase in value and price is due to the fundamental utility of non-state finance.”

Most important chart

Earlier this month, Zerohedge released a chart entitled “The Most Important Chart in the World,” which demonstrated the decline in the value of the US Treasury since 1987. While Bitcoin has recorded consistent gains throughout its eight-year history with the exception of 2014, since more than 30 years ago, the US Treasury has been on a decline.

UST

Consequently, analysts have started to evaluate the long-term bubbles in the traditional finance industry, and whether emerging assets like Bitcoin should be described as bubbles or traditional assets that have been on a decline for many decades should be considered as long-lasting bubbles.

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New Blockchain-Based Startup Creates New Opportunities for Charity

CharityStars is an online fundraising auction platform for the nonprofit sector that launched a series of auctions with prominent leaders in the Blockchain space.

The auctions which will be closed on Dec. 18, include meetings with Dr. Julian Hosp, co-founder and President of TenX, Ryan Taylor, CEO of Dash, Brock Pierce, chairman of the Bitcoin Foundation, Erik Voorhees, CEO of ShapeShift, and more.

“We believe that joining forces with such reputable leaders will not only draw deserved attention to the charities in need but also highlight the staggering benefits that this emerging technology can bring to the nonprofit sector.”

Francesco Nazari Fusetti, CEO of CharityStars

“As the use of cryptocurrencies and the adoption of Blockchain become more mainstream, the early adopters of this technology have a great deal of responsibility. At the forefront of this revolution the onus is on us to raise awareness, not only of what the technology can achieve but how we must work together as a community to achieve it.”

Erik Voorhees, CEO of ShapeShift

Proceeds from auctions

All proceeds from these auctions will be donated to the Blockchain Education Network (BEN), an international nonprofit organization dedicated to forming a network of students; the Bancor Foundation, which promotes the development and adoption of the Bancor protocol; the World Wide Fund for Nature (WWF) the world largest organization for nature conservation; Save the Children, an international non-governmental organization that promotes children’s rights; and Unsung, an online community in the US that seeks to solve hunger.

“While I always cherish the opportunity to speak at length about such a fascinating industry, the chance to sit down and do so for a good cause is both exciting and inspiring. The use cases of Blockchain are limitless but the charity sector has always been an area in which Blockchain application is particularly beneficial, and I am thrilled to be a part of it.”

Ryan Taylor, CEO of Dash

Payments in crypto

A few weeks ago, CharityStars announced the implementation of BTC and ETH payments on their website, in order to allow their users to bid with these two popular digital currencies, and an auction to meet Cristiano Ronaldo.

The auction winner paid $36,000 worth of Bitcoin to meet Ronaldo and proceeds were donated to the Forever Dream Foundation.

Aidcoin to launch an ICO

CharityStars plans to use the Blockchain to have a more transparent system to provide users a more straightforward process of the raised funds they receive.

Because of this, they created AidCoin – a project backed by CharityStars –  to implement Blockchain in the nonprofit world.

To fund this project CharityStars launched a pre-ICO through the Eidoo ICO Engine, raising 8,333 ETH.

AidCoin is an ERC20 token – based on the Ethereum Blockchain –  that will become a method of giving and paying service fees throughout the nonprofit ecosystem. The online donation market is $15 bln in the US alone.

Also, on Jan. 16, AidCoin will launch its ICO with a price of 1,000 AID = 1 ETH.

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Another Day, Another Thousand Dollars: Bitcoin Hits $15k

Bitcoin has advanced $1,000 higher in what is becoming an almost daily occurrence for the virtual currency.

Data from Coinmarketcap shows an average exchange price of $15,200 at press time Thursday, marking an astounding advance of over $6,000 in less than a week.

Wide spreads on exchanges due to volatility accompanying wild upticks means many exchanges are trading $500 or more below Coinmarketcap’s rating.

As an example, currently the difference in the price of one BTC on Bitfinex and Coinbase is over $1,000 at $14,250 and $15,400 respectively.

New all-time highs now come and go in the blink of an eye as Bitcoin adds $1,000 of value every day, beating even more optimistic short-term forecasts from the likes of Max Keiser.

Not just USD, but other currencies are also seeing milestones, such as Russia’s ruble today, now trading at 1,000,000:1 versus BTC.

New price predictions are now hard to form, with regular commentators instead advising new investors to educate themselves on cryptocurrency or simply plumping for memes.

Meanwhile, across altcoins markets assets have taken significant losses as Bitcoin outstrips their growth, even losing USD value as money pours into BTC.