Erik
Finman dropped out of school at age 15 to pursue a career as an
entrepreneur. Now, he's a bitcoin
multimillionaire.
Finman
19-year-old Erik Finman became a bitcoin millionaire
last year, and is now holds multiple millions worth of
cryptocurrency.
He's grown disappointed with the current state of
cryptocurrency, saying that there are too many scams and too
much politics for bitcoin or other current currencies to
replace traditional money.
That's why Finman has gathered a bunch of other bitcoin
millionaires to kickstart a new cryptocurrency
19-year-old
Erik Finman made headlines last year when the value of his
bitcoin holdings hit the $1 million mark — meaning he won a bet
with his parents and didn't have to go to college.
Now, thanks to the recent surge in the cryptocurrency markets,
Finman's personal bitcoin hoard is worth about $4 million, even
after the
slump of the last few weeks. And he's diversified into other
cryptocurrencies, as well as more traditional investment vehicles
— he's even started a 401(k) retirement account.
And yet, Finman is disappointed with the state of cryptocurrency,
he tells Business Insider. The cryptocurrency boom has brought
with it an upswing in
scams and dirty dealings. And the bitcoin community, in
particular, is too caught up in its own self-interests to
modernize the underlying technology so that it can deal
with the increasing crush of users, he says.
He refers to the larger cryptocurrency market as "corrupt," and
says that it's led to most cryptocurrencies serving more as an
asset, like gold, rather than a politics-free replacement for
money, which was the original idea. He suggests that the first
wave of digital tokens might be about to buckle under its own
weight — paving the way for something new.
"You're seeing the first generation [of cryptocurrency] live and
probably die," says Finman.
Here come the 'crypto whales'
Finman's next project is bringing on that next generation. He
tells us that he's been flying around the world, recruiting a
"consortium" of fellow bitcoin millionaires around the
world (he says that they call themselves '"bitcoin whales"), from
Dubai to San Francisco. And within the next few months, Finman
says, they're going to debut their master plan for a new
cryptocurrency.
The technical details will be revealed down the line, says
Finman. The big idea, though, is that Finman says this new
cryptocurrency will be everything bitcoin currently is not:
- Bitcoin's
price volatility makes it too unpredictable to be a reasonable
a way to pay for goods, so Finman says his project will be
designed to increase in value on a gentler, kinder slope that
makes it a more predictable store of value.
- Bitcoin carries transaction fees of
as high as $37 for sending or receiving bitcoin, caused by
congestion on the network from the huge swell of interest in
the currency. So the consortium has conceived a way to keep
fees small, even as the currency (ideally) gathers users and
gets bigger. Plus, Finman promises shorter turnaround times
than the days it can currently take to close a bitcoin
transaction.
- It takes massive amounts of electricity to "mine," or
generate, bitcoin, and more besides to send or receive it. By
some estimations, it's
enough to accelerate climate change. Finman says that his
consortium has some promising ideas on cutting down the
electricity usage of cryptocurrency.
- Bitcoin is difficult to use, requiring users to download
often-complicated wallet software just to make it possible to
send currency to stores or other users. This new project will be
more user-friendly from the get-go, Finman says.
These solutions are easier said than done, according to
cryptocurrency experts. These problems are well-recognized in the
cryptocurrency world, but many view them as inherent limitations
of blockchain, the technology underpinning bitcoin and other
cryptocurrencies.
The problems are solvable, but require middlemen like banks to
centralize pieces of the underlying infrastructure, streamlining
the process. That, in turn, undercuts what Finman sees as the
"beauty of cryptocurrency": It's decentralized, not under the
control of banks or governments, theoretically freeing it from
political interference.
There have been efforts to thread that needle. Notably,
bitcoin cash, a cryptocurrency that split from the main
bitcoin community late last year, has hyped itself as offering
low-cost, high-speed transactions. But Finman is skeptical of
their approach, fearing that the currency is too beholden to the
past (and past grudges) to make a real difference.
"I just don't know they're the people to do it," says
Finman.
BI
Intelligence
And yet, Finman says, "cryptocurrency is here to
stay." Which is why Finman's consortium of whales wants to
step back and rethink the whole thing.
Don't sell those bitcoins yet
They were early adopters to bitcoin — Finman met many of them on
message boards after buying his first bitcoin at age 13, when it
was $12 a coin and they were very much alone in their faith in
cryptocurrency. Finman says that those other investors prefer to
maintain their privacy; his high profile in the press made him
the natural face of the project, he says.
That long experience gives the consortium both an acute sense of
the shortcomings of bitcoin, as well as lots of ideas for how it
can improve, Finman says. Similarly, Finman says that he has a
certain degree of credibility as an early believer in
cryptocurrency.
Finman is maintaining his considerable investments in existing
cryptocurrency, out of his belief in the concept, if not the
execution. But he predicts that amid all the drama, there will be
a better cryptocurrency out there, built either by his consortium
or someone else. And he says that the benefits of that new
cryptocurrency will be so obvious, it won't even require
consideration.
"As soon as there's something better, I'll move over," says
Finman.
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