Dan Larimer was broke, living in his parents’ house, driving his mom’s 2001 Nissan Altima and dealing with a messy divorce when he first discovered bitcoin in 2009.
That’s back when one of the cybercoins cost 5 cents — instead of the $8,000 to $10,000 they were selling for last week.
The now 35-year-old Virginia Tech graduate bought $20 worth, which was enough given his financial straits at the time. Today, that investment is worth about $4 million.
But Larimer didn’t stop there.
Forbes pegs the Christiansburg resident’s net worth somewhere north of $600 million. By Forbes’ calculations, that means Larimer ranks in the top 20 on the magazine’s new list of The Richest People in Cryptocurrency.
Larimer declined to confirm his net worth in a recent interview with The Roanoke Times, noting that he asked to be excluded from the Forbes list in the first place for privacy and security reasons.
He’s not one to seek out the ego boost that kind of recognition affords.
But — when pressed — he does admit he was among the first to buy bitcoin. He’ll even concede that he is in fact a millionaire, but only because that much would be hard to deny given his prominence in the industry over the past nine years.
Larimer has not been a prospector or passive observer of the digital currency revolution.
He has invented three of his own bitcoin-rivaling cryptocurrencies, which all exploded in price and have a combined worth over $5 billion today. He has developed new technology to push the industry forward and is generally regarded as a digital currency thought leader — albeit an often contested one.
And he’s been rewarded handsomely along the way.
“The money is a side effect,” Larimer said. “There is a huge amount of value to be created for mankind by the systems I’m creating. That’s where I’m focused.”
Larimer said he has traded in the Nissan for a Tesla, but he would prefer not to talk about that, too.
He doesn’t own a boat or a villa on the French Riviera. He still lives in Christiansburg and writes code on three monitors spread across a folding-style table — though it now has motors to convert into a standing desk.
In Southwest Virginia, this is what a cryptocurrency millionaire looks like.
“I drive a nicer car but otherwise my day is pretty much how it was before,” Larimer said.
His current venture, called block.one, is his most ambitious yet.
Larimer is the chief technology officer in charge of the software. He’s joined by high-profile cryptocurrency executives Brendan Blumer, the chief executive officer, and Brock Pierce, the chief strategy officer.
The company is headquartered in the Cayman Islands for tax and regulatory reasons. But most of the engineering work happens out of Blacksburg, where a team of about 10 people are building a new cryptocurrency called EOS.
Block.one is not alone, as hundreds of these digital coins have popped up over the past several years. Many are simply replicas of bitcoin designed to turn a quick profit for the founders; others are more serious technological advancements.
Bitcoin, the first digital currency launched in 2009, is still the largest with a total coin value, or market capitalization, of $153 billion.
The term bitcoin didn’t appear in The Roanoke Times until 2013, followed by years of commentators questioning whether it was a bubble about to burst. All the while, bitcoin prices kept climbing, and early adopters like Larimer kept getting wealthier.
The cost of one bitcoin rose from $600 in 2014, the first time Larimer was profiled, to thousands in 2017 and over $10,000 in 2018.
Ethereum is now the second largest crytpocurrency, with a $68 billion market capitalization, and Ripple is third with $30 billion.
Block.one’s much younger coin, EOS, ranks as the ninth largest cryptocurrency right now, with a total value over $4 billion.
And the software doesn’t formally launch until June.
Larimer said — without a hint of hyperbole in his voice — it will be better than bitcoin and all the rest. EOS could fundamentally change the way society operates, he said.
And he’s not the only one with big expectations.
Already, block.one has brought in $1.5 billion from those looking to buy in early, largely because of Larimer’s reputation for creating lasting digital currencies. It’s been featured in The New York Times and on the front page of The Wall Street Journal.
It has its fair share of skeptics, including comedian John Oliver from hit HBO television series Last Week Tonight.
“And who knows? Maybe EOS is going to be the next Google,” Oliver said during a March 11 segment about the excessive hype around cryptocurrencies. “I don’t think it is and I certainly don’t think it can be worth over $1 billion at this point. But I could be wrong. I’m absolutely not, but I could be.”
At a time when cryptocurrencies are moving into the mainstream, EOS is among the most prominent. And it’s taking shape in a small, empty-walled office at the Virginia Tech Corporate Research Center.
Charlie Jewell, executive director of the economic development group Onward New River Valley, said he still doesn’t understand all the technology, but he does understand what block.one could mean for the region.
“It hopefully puts us at the forefront of the curve of that industry,” Jewell said, noting the area’s technology legacy centered around Virginia Tech. “Having a company like that helps put us on the map for other companies that are also striving to be in that sector.”
Dan Larimer began writing software on a Macintosh II as a fifth-grader growing up in Northern Virginia in the early 1990s. His dad, defense contractor Stan Larimer, turned him on to coding early.
When he exhausted all of the Advanced Placement computer science classes during his junior year in high school, Larimer kept on going — self-taught from then on.
One of the first applications he built by himself was a Jeopardy game, complete with a graphical interface — when most of his classmates were creating simple word games.
By the time he started at Virginia Tech, Larimer tested out of three semesters of coursework.
He said that’s how block.one wound up with a Blacksburg office. This is where he went to college; it’s where his children live. So he stays.
He tried to launch a virtual reality startup in 2003, but it failed because the technology just wasn’t ready yet. Larimer then began working more traditional jobs around town, at TORC Robotics, which designs self-driving vehicles, and automation software company Phoenix Integration.
Phoenix co-worker James Mullins said he remembers Larimer as a smart engineer who liked to talk about bitcoin around the proverbial water cooler. Those were the early days for cryptocurrency and Mullins recognizes his own missed opportunity. But he hasn’t lost any sleep over it.
“I remember him being very interested in it at the time. He thought there was a lot of potential there, for sure,” Mullins said. “To be honest, I wasn’t convinced it was going to take off the way that it has.”
Larimer said that’s about the time he set out on journey of self-discovery. He disregarded everything he thought he knew and began building a worldview from the ground up.
Some of the new views he formed put him at odds with his wife, he has said, and the couple split.
They used arbitration to negotiate the terms of the separation. But Larimer said the courts later disrupted the equilibrium of the deal when a judge overturned only portions of the agreement, without rebalancing everything else.
He walked away feeling cheated.
The way he sees it, two consenting adults had negotiated a deal. But the government still had the authority to reinterpret the terms and make changes. Larimer never consented to this reinterpretation; he didn’t get to pick the judge and he had no recourse once he disagreed with the results. If he didn’t comply, he would go to jail.
“That was my first experience with the government not respecting arbitration,” Larimer said.
It was an experience that shaped not only Larimer’s own worldview, but also every product he’s created since then.
“I view violence as a shortcut to governance,” he said. “So I made it my mission in life to find free market solutions to securing life, liberty, property and justice for all.”
Larimer said he believes cryptocurrencies, and the blockchain technology that power them, can provide fairer solutions to all sorts of societal woes. Currency is the beginning, but Larimer said the technology has the potential to reach much further.
No one company or government controls the software, so authority is decentralized. It’s based on computer algorithms, so the subjectivity is removed from the equation. A contract agreed to by two parties, whether it’s the transfer of a bitcoin or a separation agreement, is set in stone and cannot be relitigated.
“Right now in the current system, I have no way to know if that’s your car,” Larimer said. “I have to go ask the government. And if there’s a dispute between us, I have to go ask the government. The government will decide and they may or may not honor our contract.”
In the future, Larimer imagines, vehicle registrations will be stored in a blockchain, or a public ledger containing the information on every vehicle transaction to ever occur.
A block will be created when a vehicle rolls off the assembly line, then another when it’s sold at a dealership. When that owner decides to sell the car on Craigslist, they accept payment and in exchange add another block transferring ownership yet again.
If there’s an argument years later about who owns the vehicle, anyone can look back at the public ledger, called the blockchain, track the chain of blocks back to the manufacturer and determine the rightful owner.
This would be a vehicle registration system that would give unprecedented transparency, where deals could never be undone and the government would be completely uninvolved.
These were the ideas running through Larimer’s head when he discovered bitcoin in 2009, the same year the coin launched and around the time of his divorce.
He bought 400 coins for $20 and then began teaching himself how to create his own blockchain applications.
The cryptocurrency community was so small then that when Larimer posed concerns about what would happen to the bitcoin network as more and more users got involved, the almost mythical creator of the coin, who goes by the pseudonym Satoshi Nakamoto, responded directly.
“I didn’t even realize I was talking to Satoshi,” Larimer said. “I thought I was debating some random guy in a forum.”
Larimer’s first attempt at creating a blockchain application was just for practice and never saw the light of day. But in 2014 he launched his first cryptocurrency: BitShares (formerly known as ProtoShares).
The concept was similar to bitcoin and took off quickly. Today, a single Bitshare, or BTS, sells for around 15 cents, bringing the total value of all coins in circulation above $400 million.
The coin was a success, but Larimer said he borrowed too many concepts from bitcoin when designing the technology. Because of the decentralized nature of the currency, there was no way to go back and change the infrastructure.
So Larimer moved on to his next project: Steemit.
That startup also involved cryptocurrencies, known as Steem and Steem Dollars. But the concept was larger this time.
Steemit was the first social network to operate on a blockchain. Users could share posts and comment just like normal, but they were paid in digital currency for the content they created. Steemit was populated with free content, users received digital currency for their time, and the digital currency became convertible to traditional dollars as it was bought and sold in online exchanges.
Again, Steemit was a success. That currency is now trading around $2.30, with a market cap over $600 million.
Larimer left again after launching that company, this time to begin working on block.one.
He’s been criticized for moving around so much, but he said he’s learned from each launch.
“Once you create something and you release it out into the world, it’s no longer yours,” Larimer said. “You’re no longer in control. It really is decentralized.”
Larimer did buy those 400 bitcoins in the beginning, but the rest of his fortune, he said, is earned through the companies he launched.
But, more importantly to him, he said he believes he’s brought the world just a little closer to the fair, decentralized society he believes blockchain technology can enable.
“I realize that life, liberty and property are extremely valuable,” Larimer said. “And if you can provide those to the market, you would be providing a lot of value to mankind and you make a lot of money in the process. But my goal was to produce value for the world.”
Block.one has a team of lawyers working to navigate government regulations as it wanders into untested waters.
There are a lot of legal nuances, but the company has essentially spent the past year making money by selling its own digital tokens which operate similar to bitcoin. The tokens don’t hold any inherent value and block.one promises the buyers nothing in exchange.
It’s a leap of faith for buyers, as these tokens accomplish nothing, are unregulated and are being sold by a company that isn’t scheduled to release its first piece of software until June 1. Block.one is headquartered in the Cayman Islands to avoid government oversight and taxes and has even blocked U.S. and Chinese citizens from purchasing tokens just to steer clear of securities laws.
Larimer said many lawyers are watching what block.one is doing, and they’re working to be transparent and legal.
“We want to do things right and set the standard for how these things are done,” Larimer said.
As with other cryptocurrencies, the risks haven’t stopped prospectors from buying and reselling the tokens in online exchanges, driving the price above $6 per token.
“Somebody has to start with it,” Larimer said. “So we said it’s as if we owned all the bitcoin and we just auctioned it all off. Now the community owns it and they can do whatever they want with it.”
By the time block.one finished selling its lot, the company had brought in the $1.5 billion.
Larimer said those funds are considered block.one sales revenue and have been converted into traditional currency, held by the Cayman Islands-based business. Block.one will use the funds to continue developing software and applications on top of blockchain technology. Most of that work happens in Blacksburg.
Asked what’s stopping Larimer, Blumer and the rest of the block.one team from taking that $1.5 billion and disappearing, Larimer’s answer was simple: “Absolutely nothing. Because if there was anything stopping us, they would make it a (regulated) security.”
“Nothing legally,” he clarified. “But our vision for what we want to create is what drives us.”
While block.one’s new cryptocurrency works like bitcoin, the company’s goals are much loftier.
Bitcoin is one application that runs on a single blockchain. Block.one, meanwhile, is inventing what you can imagine as an operating system that will serve as the foundation for all sorts of blockchains.
Block.one will create software that it releases into the public for free. Developers will use those tools to create their own applications that run on their own blockchains, much like the way Bill Gates and Microsoft created the Windows operating system for all sorts of personal computers.
“I’ve heard more and more people talking about it, partly because it’s raising so much money and partly because people are really excited about the technological promise,” Jeff Kauflin, co-author of the Forbes Richest People in Cryptocurrency list, said in a recent interview with The Roanoke Times.
Kauflin said compiling the richest in cryptocurrency list posed some new challenges for Forbes reporters, but a lot of the tools the magazine has used to estimate wealth for decades still applies. As with everyone on the list, the team looked at block.one’s success, as well as Larimer’s other companies. They talked to investors and industry analysts. They used public records and arrived at estimated net worth ranges they’re confident are accurate.
Some of the money will come and go as the price of bitcoin and other cryptocurrencies continue to bob up and down. But it’s becoming harder and harder to deny the durability of digital riches.
“Chronicling wealth is a big part of what we do,” Kauflin said. “Crypto is a legitimate asset class now. There’s a lot of wealth that’s been created based on it, hundreds of billions. We at Forbes think it should be treated as a legitimate asset class.”
