The 19-year-old bitcoin multimillionaire, Erik Finman, is traveling the world recruiting a team to build an alternative to what he calls the ‘corrupt’ world of cryptocurrency.
Erik Finman says 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 cryptocurrencies to replace traditional money. That’s why he has gathered a few other bitcoin millionaires to start a new cryptocurrency that intends to fix the biggest problems with current cryptocurrencies.
19-year-old Erik Finman made headlines last year when the value of his bitcoin holdings hit the $1 million mark. This enabled him to collect on a bet he made with his parents and not to go to college.
Finman’s personal bitcoin stash is worth about $4 million, even after the recent January drop. He’s also diversified into other cryptocurrencies, as well as more traditional investment vehicles, including a 401(k) retirement account.
According to Finman 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.
“You’re seeing the first generation [of cryptocurrency] live and probably die,”
Finman’s has 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 big idea, is that Finman says this new cryptocurrency will be everything bitcoin currently is not. He goes on to list the problems:
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 problems are well-recognized in the crypto world, but many view them as inherent limitations of blockchain, the technology underpinning bitcoin and other cryptocurrencies. The electricity used to mine bitcoin can be considered one of it’s strengths as it works to protect the network. Some industry commentators also point to the new Layer Two solutions such as Lightning Network that will solve many of the current problems Bitcoin is experiencing.
Finman does say, “cryptocurrency is here to stay.” Which is why his consortium of whales wants to step back and rethink the whole thing.
Finman says he met many of the ‘whales’ on message boards after buying his first bitcoin at age 12, when it was $12 a coin. Finman says that those other investors prefer to maintain their privacy; his high profile in the press made him the obvious choice to front the project.
Despite his misgivings, Finman is maintaining his investments in existing cryptocurrency, out of his belief in the concept. However, he predicts that sooner rather then later a better cryptocurrency will come along, 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,”