He believes that selling drugs in Bitcoin is okay and that the complex currency will revolutionise the world.
When Roger Ver first found out about Bitcoin, he ended up in hospital. He had stayed up nights reading up about the new currency and the lack of sleep made him sick. Upon recovery, he realised that Bitcoin was his life’s calling and that he wanted to spend every waking minute convincing people about the concept.
Ver believes in the idea to the extent that he converted a majority of his wealth into Bitcoin, and has distributed thousands of coins for free, which as of today are $97 a pop. In Bitcoin circles, he’s referred to as the “Bitcoin Jesus”.
Ver, 34, has invested in over 10 Bitcoin businesses including Charlie’s Shrem’s Bitcoin transaction company BitInstant.
Ver is a millionaire in dollars and in Bitcoin. But for the record, it isn’t just Bitcoin that’s made him a millionaire. While in college in 1999, he founded MemoryDealers.com, a site that sells discounted computer parts. Clients past and present include HP, Cisco and Vodafone. The firm is headquartered in California with branches in Japan and South Korea.
His life has been anything but boring. He’s a self-confessed “voluntaryist” who believes that the government should have no control over your money. In 2000, he ran for California State Assembly as a Libertarian and came under fire for calling America’s Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) a “bunch of murderers”.
He then served 10 months in federal prison for selling firecrackers used by farmers to scare deer and birds away from their cornfields. However, he believes he was made a target because of his comments on the ATF. He moved to Tokyo after his federal probation ended.
Today, Ver is doing everything to make Bitcoin mainstream – be it wearing a Bitcoin-imprinted Brazilian Jujitsu uniform or asking parking lot attendants if he could pay for his parking with Bitcoins.
His ultimate vision for Bitcoin is to make it simple to use the complex currency. How will he do it? We ask him for answers.
Q. Hi Roger! Let’s start with Memory Dealers, how did that come about?
I was in college in 1999 when the dotcom bubble burst and all these companies were going bankrupt. So I figured out pretty quickly that I could buy computer parts from these companies and sell them on the internet for a very handsome profit margin. I quit college to concentrate on the business as I realised that I would probably earn more money with the business than working for someone else after graduating.
I started out with investing $1,400 that I made in my summer job. I still remember: I bought 14 nine-gigabyte hard drives for $100 each and I was able to sell them on eBay for between $350-$380 each.
Today, I own 100% of the business and am expecting a turnover between $5-$10m this year.
Q. How did you get into politics then?
While I was in high school I started reading up economic books from authors like Adam Smith, Ludwig von Mises, Milton Friedman and Murray Rothbard. The more I read the more I realised how government control and regulation is making the world a poor place. I learnt that if something’s worth doing, then you don’t need the government forcing people to do it because they will do it on their own. So with that in mind I ran for California State Assembly and decided that if I were to be elected, I wouldn’t take any salary whatsoever because that money would be taken involuntarily by some force.
Then I was invited to participate in a debate at San Jose State University against the Republican and Democrat candidates. In that debate I called the ATF [Bureau of Alcohol, Tobacco, Firearms and Explosives in the US] “a bunch of jack-booted thugs and murderers” as they gunned down people in Waco, Texas in 1993. It just so happened that there were some plain-clothed ATF agents in the audience. They didn’t like the fact that some 20-year-old kid is calling them a bunch of murderers. So they started looking into me thinking about how they can teach this kid a lesson.
I then became the only person in the entire nation to be prosecuted for selling this firecracker that farmers use to scare birds from cornfields. I wound up doing 10 months in federal prison and did three years of federal probation. The day I finished probation I moved to Tokyo and haven’t lived in the US since.
Q. So what did you do after prison?
Before I went to prison, I had to lay off all the Memory Dealers employees. I taught my mother how to fulfil orders that came in when I was away. Then after I got out of prison, I worked on the business every waking moment to ensure I [would] have thousands of happy customers all over the world. Today, just about any company you can think of has bought products from Memory Dealers at some point.
Q. So then how did you get into Bitcoin?
I was visiting the US when I heard about Bitcoin on a radio programme. I googled it and probably spent just five minutes looking at it, but didn’t study it properly. Then the same programme mentioned Bitcoin again a month later, and that’s when I spent a little more time and understood the core concepts of Bitcoin and the bitcoin pro official app.
I realised it’s the best form of money that the entire world has ever seen. I literally got so excited because I felt my life’s calling had arrived in the form of Bitcoin. I didn’t leave my house for over a week and spent every waking moment reading every single thing I could find on Bitcoin. I got so sick from the lack of sleep that my friend had to take me to the hospital.
It’s been two-and-a-half years since then and I have devoted a lot of time to Bitcoin-related stuff because I don’t think I could possibly be any more excited about the incredible positive ways that Bitcoin is going to change the world.
You need to read:
How 23-year-old Charlie Shrem became a millionaire through Bitcoin
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The future of money: the five forces killing off cash
Q. Change the world? Isn’t that a very big claim?
Now there’s a form of money that no one can control, and anyone can send and receive money freely on the planet. No-one that isn’t directly involved in the transaction can interfere with it in any way. Previously, any bank or government could block you from sending and receiving money. With Bitcoin, you can pay someone from London to India instantly with no permissions and it’s impossible for someone to freeze or control your account in any way.
Like I said, I firmly believe in a greater form of economic freedom and I can’t imagine a better combination than Bitcoin for granting economic freedom on the entire planet.
Q. So what did you do after finding out about Bitcoin?
I bought some Bitcoins, and this was before Mt.Gox [the world’s biggest Bitcoin exchange] was popular. I was sceptical about them to be honest, but I sent a small wire through them and t
he transaction was smooth. Then I met Mike Caldwell, creator of Casacius coin, and I bought Bitcoins from him.
Q. Have you actually cashed out of dollars and yen for Bitcoin? Isn’t that a big risk?
Yes, indeed I have cashed out of dollars and yen and hold the majority of my wealth in Bitcoin. The most common things I do is: every week I buy tens of thousands of dollars-worth of computer parts in China and pay [for] them in Bitcoin. Most of these suppliers use [Bitcoin] to pay their suppliers and don’t change them into renminbi. So, I try to pay suppliers in Bitcoin as much as I can.
Yes, it’s very early days for Bitcoin, but that’s when you have the biggest chance for reward. If you follow the crowd then you don’t have any advantage there.
However, I will not complain even if I don’t make any money with Bitcoin. My main motivation is to strip the government’s control over money supply.
Q. Tell me about your first investment in Bitcoin
The first investment I made was Charlie Shrem’s BitInstant.com. He posted on one of the Bitcoin forums saying, “Why don’t any of these venture capitalists understand Bitcoin?” I saw it and emailed him saying I understand Bitcoin and have money to invest. So we chatted on Skype and he explained to me what he was doing and I wired him some money the very next day. In fact, we finished signing the contract after I sent him the money.
After that I’ve made many investments in Bitcoin businesses because I want to do everything I can to promote Bitcoin. So I have been shouting from rooftops to let everyone know that. And it looks like it’s starting to work.
Q. With so many Bitcoin businesses popping up, is there competition yet?
I think at this point there’s still very friendly competitiveness. The vast majority of early Bitcoin adopters got involved in it for philosophical reasons and not necessarily to earn money. All of them might make money along the way but they got involved because they were interested in the actual technology behind Bitcoin. So they feel a great camaraderie even though they might be competing from a business stand-point. All of them want the same thing – to have an economy where we have full control over our money.
Q. So why are you called the ‘Bitcoin Jesus’? Do you actually distribute Bitcoins for free?
I can’t count how many Bitcoins I’ve given away, I think they must be in thousands by now. They weren’t $80 a piece when I started giving them away though. I still try and give $1 or 100 yen-worth of Bitcoins to people who haven’t used them before.
The hope is that more and more people will start using Bitcoin. At the end of the day, if people aren’t using Bitcoin then the concept wouldn’t work.
Q. The most common problem with Bitcoin is that the price keeps fluctuating. Is it going to be as volatile as the stock market?
The prices will continue to be very volatile for quite a while but the trend in the long run is almost certainly up. You might not make a profit in a three-month period but if you keep it for a longer time, you won’t lose money. My advice is to wait a little longer and you’ll be glad that you did.
Q. Bitcoin got slapped with a cease-and-desist order recently. What are your thoughts about the regulations that governments are trying to restrict Bitcoin with?
Philosophically, I am opposed to all of that, because all the regulators are is a group of people telling another group of people that “if you don’t listen to us, we are going to hurt you”. So from that perspective, I’m opposed to anything that the regulator wants to do.
From a practical business stand-point, in order for Bitcoin to grow and become mainstream, all these Bitcoin businesses will have to obey the regulators and work by those rules. What businesses need at this point is for regulators to state clearly what the rules of this game are going to be.
Q. Bitcoin’s constantly under fire for being used to buy drugs on websites like Silk Road. What are your thoughts about that?
I think the amount of people buying drugs with Bitcoin is really, really small compared to people buying drugs using money.
I think Bitcoin takes away all the complaints politicians have about drug abuse. I think buying drugs using Bitcoin means you don’t have to meet some shady dealer in the back alley and worry about getting robbed or stabbed.
Also, I believe in the idea that everybody has the right to own their body and be allowed to put whatever they can in it. I think all the people behind Silk Road are heroes, and the police, who want to lock these people up because they want to put something in their body, are the bad guys.
For the record, I have never bought, sold or used any drugs that are illegal. I don’t smoke and I’ve tried alcohol a few times in my life.
Q. You’ve said in the past that Bitcoin could displace Visa or MasterCard. How will that happen?
If I am paying you $100 and you have the option of receiving the whole of $100, or $97, which would you choose? The answer is obvious – you want the $100. With PayPal and MasterCard, you get $97, as they charge a transaction fee – but with Bitcoin you get the full value.
Q. So will Bitcoin force MasterCard to reduce its transaction fees?
The amount of transactions that people use MasterCard or Visa for will definitely shrink. You’re still going to see people using credit cards but they will use [them] when they can’t find Bitcoin outlets they can trust.
Q. You tweeted recently that “$32,000,000,000,000 [$32 trillion] USD are stored in offshore tax havens. If 1% moves into Bitcoin, each Bitcoin is worth $15,000”. Can you elaborate please? [The figure is from research by the Tax Justice Network. Note that the world’s total economy is widely estimated to be worth around $85 trillion.]
There was a discussion on it on an incredibly active Bitcoin group on Reddit. We were talking about how Europe and the US [are] trying to crack down on tax havens. With Bitcoin everyone has an opportunity to put their wealth in a commodity that is impossible to be used by regulators, government or the taxman – I think that’s a fantastic thing. People should be allowed to keep their own money.
Q. Finally, what do you think will make Bitcoin mainstream?
It needs to grow organically. The more people use it to make payments and the more businesses use it to sell stuff, the bigger it’s going to become. I think at some point the banks will have to start playing nice with Bitcoin too. One interesting development that I heard of a few weeks back is that there is a website called DinoDirect.com that offers 3.3 million items for sale and takes payment in Bitcoin.
Also, conversion of Bitcoins into another currency needs to be smoother, that’s the hardest part currently. If that becomes smoother then people will feel safer [when they] turn their money into Bitcoin.
Thanks for your time Roger.