“Crypto Titans” is a series of personal interviews conducted by CoinMarketCap with prominent and forward-thinking minds tinkering on and behind the scenes of the cryptocurrency landscape. Click here to see all the Crypto Titan interviews up to today!
Charlie Shrem, one of the most energetic first movers in the crypto industry, spoke to CoinMarketCap about the early days of Bitcoin (when all BTC miners could talk in one chatroom, and you could message Brian Armstrong if your Coinbase account froze), how blockchain is no real cure for coronavirus, and a book recommendation for those in quarantine (from someone who knows a things or two about being stuck inside).
How did you first get involved in cryptocurrency?
Like a lot of people who got involved in the early part of the decade: IRC chat rooms.
I’m pretty certain the first time I ever heard the word Bitcoin used was in an IRC chatroom. After that, I started hearing people chat about it a little bit more — when I say people, I mean like three or four people.
The beauty of IRC is that you’re able to pretty easily jump between all different channels and networks and servers. I would jump into the Bitcoin network and then jump out of it.
In fact, I remember one of the earliest times — I think it was 2013 — when Bitcoin almost died when the database was changed from Berkeley to Level DB. I don’t know if you remember, but it’s controversial whether it was a soft or hard fork, but the Bitcoin network forked and Bitcoin almost died.
Everyone who was involved in Bitcoin at that time, all the miners, all the exchange CEOs, hell, all spectators, just regular people, we all congregated in one IRC channel and literally were able to get all the miners to just mine one chain instead of the other one, and prevent a huge financial loss and the death of Bitcoin.
That’s how prominent IRC was in the early days of Bitcoin, but people don’t even talk about that. Till today, Bitcoin developer meetings happen on IRC.
Could you debunk a common myth or misconception in cryptocurrency that you often run into?
This is kind of a rabbit hole, it’s a fun conversation or debate to have with people who understand a debate — but there’s no such thing as actually owning a bitcoin.
There’s no such thing as a bitcoin. There’s a Bitcoin network, and then on the Bitcoin network — we can go super into a rabbit hole, I don’t want to lose people — but there are unspent inputs and outputs. Essentially, the value of a bitcoin per se is essentially how many unspent outputs a private key has associated with it at that moment. That’s what a bitcoin is. It’s more like a balance.
It’s not Bitcoin that has value, it’s how many unspent outputs your private key has access to spend that has value. Oh, I should write that down. I should tweet that. That’s good.
I mean, you can’t get up in court and use that argument, because that’s not how the law works. But it’s a fun debate to have.
What is ownership of a bitcoin? What is a bitcoin? I think Satoshi almost designed it in this way: with the Bitcoin network, there’s always a case to make or plausible deniability. But it’s not really like the right way to go about things.
What’s something that the crypto industry has taught you?
I’ve taken a lot of lessons from life. Humility is a very important life lesson: basic humility, communication, things like that.
Of course, you go to jail, you learn all these different things and try to become a better person.
The crypto industry in general, this is really the only industry I’ve ever been a part of. I was briefly a dishwasher, so I was part of the restaurant industry.
But I’ve been in the crypto industry for almost 10 years now. It’s an interesting space of people.
I’ll say this: the crypto industry is very willing — especially when it comes to M&As — things like that are able to happen a lot more with handshakes and meetings and walking through things and having conversations.
Literally, you can message the CEO of a company that you’re using on Twitter and be like, dude, what the hell is going on? Why is it not working right now? Obviously, that’s changed. You can’t do that with companies like Coinbase anymore, you used to be able to.
You used to be able to email Brian’s [Armstrong] Gmail and say, “Brian, what the f***? Why is my Coinbase bitcoin not showing up? I just paid $50 a bitcoin and now it’s at $75. What’s going on?”
You can’t do that anymore. But at the same time, you still can to an extent. That’s one of our biggest strengths.
Think about it like this. What other industry has a sense of common good, of wanting to work together? The only industry I can think of is the medical industry.
Because all the medical people, no matter what hospital you work for, no matter what medical office you work for, you want to save lives: there’s a common goal there.
What other industry has a common goal? Crypto will compete, but we all want our industry to continue growing. So long as we continue to remember that and maintain that, it will be our biggest strength.
Has your belief about the crypto industry changed in any way since the beginning of this year, which coincided with a global pandemic?
I think the industry is a little bit humbled by corona.
If you’ve noticed, we’re always all over the internet like “Bitcoin solves this, crypto solves that, blockchain solves this” — you don’t see that so much going on today. You do see a lot of charity, you see a lot of people saying we need to fix things, but you don’t see that [promotion] right? Are you seeing that on the internet? Are you seeing, “Oh, blockchain technology could have solved coronavirus before it happened”?
Do you think the kind of havoc the pandemic is playing in the traditional markets could end up highlighting the benefits of crypto?
Of course, 100 percent. Supply chain management will definitely come to the forefront. I think with COVID and crypto, they’re going to see people say, “Let’s start really tracking the supply chain because there’s a huge supply.”
Let me ask you a question. What is the topic of the day? What’s going on right now as we’re talking?
All the hospital workers, the nurses, want to go on strike from HCA, the largest private hospital company in the country.
All their nurses are saying that they don’t have enough even surgical masks. We live in America. We live in America! We don’t have enough masks. Really? Come on. A conversation needs to happen about that.
I know you just said that there aren’t really any headlines that blockchain could have prevented the pandemic. But do you think that blockchain use in sectors like supply chains would have made things more efficient?
It’s not fair to make that statement.
It’s unfair to make any kind of headline or any statement and say, “This could have prevented COVID,” unless it’s about a vaccine or a cure.
I mean, could it [blockchain] have slowed the curve? Could it have made things easier? Could it have prevented less deaths? Maybe. With blockchain technology, with things in the future, with some upgrades.
Look, our financial system is being stretched to the limits right now.
I don’t know if you saw the story [in late March], but the Silvergate bank and a bunch of other banks’ wire transfers that usually take minutes from bank to bank in the US, were taking two or three days. Wire transfers! They are the bread and butter of the global financial system.
I was jokingly saying on Twitter that the Fedwire needs bigger blocks.
Money needs to be moved to right now. There is someone in Holland trying to buy 5 million KN95 masks from someone in China, but if that person can’t pay the other person, how is that contract supposed to be fulfilled? How is it supposed to be shipped? How are the shippers supposed to get paid?
The financial system, literally, as long as it’s moving, will save lives.
Do you think that right now, in the current climate, cryptocurrency as an industry should be embracing more regulation or championing more freedom and deregulation?
I think that any regulations that can be immediately repealed during a crisis should be part of a conversation whether those regulations should have been there in the first place.
On Twitter, you recently published a list of 137 books that you read when you are in prison. Do you have one you could recommend in particular to those stuck in quarantine right now?
A Day in the Life of Ivan Denisovich by Alexander Solzhenitsyn. That book…you can read in one day. It’s amazing.
I think I read it seven times when I was in jail. It made me cry every time. It’s the best book ever written. Unbelievable book. You can get through it in a few hours, and you can read it over and over and over again.
Whenever you are feeling sad and depressed about being stuck at home, just read that book and you’ll feel a lot better about your day. That book is literally one day in his life in the gulag [Soviet prison camp].
I guess the scariest part of being in a gulag is knowing that some random person just said, “You have 30 years,” and that random person can just change that on a whim. How are you supposed to tuck in and do your time if your release date is a moving target and the time you do it doesn’t really matter?
The best day — from the moment I was arrested to the moment I was off of probation, seven years in between — the best day, the day I cried the most in that whole experience, was the day I was sentenced.
I cried of joy. Why? Why would I cry of happiness on the day I’m being sentenced to two years in prison? The answer is at that point, I finally saw the light at the end of the tunnel. That point I can say, “OK, this is really over now in two years.”
In the gulag, or even the situation we’re in now today: we don’t know when it’s going to be over. And the unknown is what scares us most, it gives us the most anxiety, it makes us all freak out. It’s hard. I’m struggling with it every day. We all are.
This interview has been edited and condensed.