Bryan Micon Speaks Up About Bitcoin, Butterfly Labs and SealsWithClubs

This is the third and final part of a interview series with poker professional Bryan Micon. Read the previous parts first to get the full gist of Micon’s life as he gives us a walkthrough of from his High School days in Indiana until his big poker success as the 2006 World Series of Poker.

Part 1
Part 2 

In the final part of this interview Micon speaks extensively about Bitcoin. Micon got into Bitcoin from the early stages and watched the currency explode into a worldwide phenomenon. The fame and fortune that Bitcoin brings to many people also creates some problems, and Micon goes in-depth on one of the companies that’s not running a legit business in his eyes, Butterfly Labs.

When you hear about someone being an early investor into something that turns out to be successful it’s easy to assume they are now very rich. Micon starts out by explaining that he’s no longer handling his money the way his younger self would’ve done.

“I might be a little bit more conservative with money compared to back in the day. If I take an honest look at it; I’m way more conservative. My Bitcoin position is very comfortable and I’ve definitely profited greatly from it. On my social media accounts you can find some pretty good posts back in the day when I was just screaming from the hilltops that people should get on Bitcoin. And remember, that was when it was at three, five and ten dollars. It was like a slice of the future you could directly profit from and I certainly took my own advice,” Micon started out with about the currency that’s been all over the map in the last few weeks.

“In 2011 I did not have a lot of money lying around to just buy a ton of Bitcoin, but I did invest what I could and kept buying some as time went on. Through SealsWithClubs I derive my income in Bitcoin, so that makes my position on that stronger as well,” Micon added.

Even right now, in November 2013, a lot of people still seem hesitant about the future value of Bitcoin. Even though there is a lot of trading going on it’s hard to predict what this online currency, or perhaps it’s more a form of stock, will do going forward.

“I was not totally convinced it was the next big thing, but I did realize that it was something we could all play poker with in the future. I was very happy about that because that was right on the heels of Black Friday in 2011,” Micon said.

“I was approached by a group of poker players that needed a marketing guy for their Bitcoin poker website and I was very intrigued right away. I was intrigued because this was something the government couldn’t just shut down and take all the money. I didn’t think of it as a big world changer, but I thought we could be able to play poker with it for quite a while. That very thought sent me on a research quest that’s not nearly completed even right no,” Micon said as he’s been very much involved in the Bitcoin community ever since.

“Every day since I found Bitcoin I researched it and it’s definitely the most intriguing thing I’ve ever been interested in. This is ever evolving research and it includes reading the news, Twitter, Google Alerts, forums, and so on. Every bit of info I can consume I will consume,” Micon said.

“The Bitcoin was $4 for quite a while when I started working for SealsWithClubs and we only had 12 people connected to our network. There was nothing that pointed towards Bitcoin being big fucking news back then, no signs or signals at all. This thing is super polarized because if it was going to boom it was going to boom big. At that point it was either going to die and drop to zero or have a huge run up, and that’s what happened,” Micon said.

“I was used to losing money on investments, so I wasn’t scared of that, and invested in Bitcoin. If it wouldn’t work out I would’ve probably found something new quickly again,” Micon added.

“The fact that this was a very math based system where the government couldn’t just decide to shut it down had a very big impact on me. It’s a super pure math based system and the people have control of it, and that’s why it’s so interesting. I think that is needed for humanity and it makes the world better,” Micon said as he started explaining what makes Bitcoin so attractive.

“In the beginning it was something I was very positive on thinking that this was the thing that the world needed. It was there, but not widely adopted and only a bunch of nerds were using it at the time. Through poker I thought that we could further that. If a poker site would run a good operation by just using Bitcoin it would, in my opinion, create some amazing wins that the market would otherwise never allow. For instance, we have 80% off rake and that’s not feasible for websites with 50% chargeback,” Micon said about SealsWithClubs, the poker client he does the marketing for.

Micon also gets into why Bitcoin creates could be a great replacement, or at least competitor, with the current financial system.

“The traditional banking and transaction system never made any sense to me. To this day I try to research, and when you read this you should give it a try yourself, why there is a two- to three day hold every time you deposit a check. Just try to figure that out, why in the world would that have to take that long? Why can’t you not deposit a check on a Sunday at 9:00 PM? Why can that not happen? It never made sense to me, and it gets even crazier when you look at all the fees. Why does a business, located in the US, wanting to accept credit cards, have to pay 2, 3 and sometimes even an outrageous 7% on their transactions? On top of that, there aren’t a lot of options either for those businesses and I think it’s killing them. The system of fees is eating up the economy. The average asshole, at least in America, walks around has his bullshit job and gets eaten up by fees every single time he’s using an electronic method of payment,” Micon started a rant about the current system.

“It’s just wrong, awful and hurting the country a lot. When you’re using the ATM to withdraw $200, there’s a $4 fee. Don’t get me started on wiring bigger amounts, because holy shit that’s expensive. Sending $7,600 from the UK to America costs a friend of mine $75. The fee was $50 and there was another $25 charge on top of that. This is where Bitcoin gets a lot more interesting, as it basically attacks that system. Bitcoin attacks PayPal and eBay, because PayPal says, “We have a hundred million users so the world embraces this payment system. We’re using this advantage to charge you $9 when you want to send your buddy $350 for whatever it may be. Oh, and if you use it on eBay we’ll charge you an eBay fee, a final value fee, an insertion fee and every other possible fee which we will automatically take from your PayPal account.” It’s a racket man; it sounds like the mafia to me,” Micon said took a moment to catch his breath.

The frustration was clearly noticeable in Micon’s voice as he continued about the current banking system.

“Bitcoin is there basically to salvage whatever there is to salvage of the global financial economy. The Internet allows people in large groups to solve and identify problems. Payment, processing, payment fees and the banking system as it is now are a huge problem. The Internet has identified this problem and looks for a way to change it. If you look at Bitcoin as a system I think it will kill PayPal in the long run or at least swing the tide of the war. It will certainly kill fees and make traditional banking options more competitive,” Micon said.

A company that in Micon’s opinion takes advantage of people trying to get their hands on a lot of Bitcoin is Butterfly Labs. As time went on Micon decided to go after this company, which sells Bitcoin mining rigs. Micon explains in the following paragraph why he has a big feud with them.

“Happenstance, that’s really why am I going after Butterfly Labs right now. It was early this year during CES, a conference that I always go to, where for the last couple of years there have always been Bitcoin related booths. It’s very easy to just walk in and talk to some of these companies, and it’s even more fun because those Bitcoin companies look at SealsWithClubs as one of the winners. The people that are in the know are always happy to talk to me about their business and about the one I’m involved in. So at CES I make sure to shake hands and say hi to all the Bitcoin related businesses,” Micon started.

“I’m very friendly with the guys over at BitPay as I use their API for my BitVapes website. This year BitPay was sharing a booth with Butterfly Labs and I had a crazy interaction with them,” Micon said about the video you can watch below.

“After what happened, as you can see in the video, I was floored. There had already been some discussion about this company being a scam, but there hadn’t been enough to convict yet. So at CES I met one of the principles in person and when that happened I was stunned and convinced. I mean, how can a legit company handle skeptics like this? And think about it, it was on the floor of CES where this happened,” Micon emphasized.

“So after that I started investigating Butterfly Labs a bit more. When I observe something like that in a social setting the poker player of the last decade inside me takes over. With poker player I mean, the wide spectrum of judging what people’s real intentions and motivations are. Currently I believe that extends far beyond just poker and I would say that Joe Navarro’s book of tells is a great lesson in life. So these guys at the Butterfly Labs stand were already giving off low confidence tells, even before Josh Zerlan started spewing off insanities in a very derogatory manner. They are so unprofessional that I started investigating. Everything that comes up about this company just stinks. The founder is on probation and had participated on a mail order scam; the guy that yelled at me in the video was arrested and convicted for a DirectTV cheater card scandal,” Micon said.

“It’s a company full of assholes that have no morals. The way they have presented themselves to the Bitcoin community is so detrimental and that’s why I’m so loud about it.  They are one of the best-marketed companies in the Bitcoin community and that’s because of their spending, not because of their creative marketing or because someone behind the scenes is pulling the strings well. They just fire. They take pre-order money and just fire it on advertisements. That way they get more pre-order money and this cycle was very successful for them. They are good at raising capital but unfortunately they are not good at operations. It’s a bunch of people gambling with pre-order money and as it sits now shit is going to hit the fan soon,” Micon said as he expects their problems to become much more public over the next few months.

A very well respected tech website, ArsTechnica also resported on the Butterfly Labs story and the Micon’s involvement in exposing them.

“They made a lot of desperate moves and it’s really interesting to read the whole story of what happened in the last few months. Basically what they did is take a ton of pre-orders and trickle out some machines to maybe about 5% of all the customers. So those customers are very happy and they are seeing some return of investment (ROI). The thing is that even those people had ordered their machines a long time ago. Mining Bitcoin gets harder and harder and this generation of ACIS is not going to have any ROI. There’s people who fired $22,000 worth of Bitcoin in 2012, which would be worth about half a million right now, to pay for these rigs that would really have killed it at that point in time. It’s just a forever stall and mismanagement of customer’s expectations that has gained them this hated role. They have been overstating their operations and overselling every part of what they do. They’ve collected as much money as they could for over a year while being as unapologetic as they could possibly be. Even right now you can use any search engine and search for a Bitcoin Miner and you will find Butterfly Labs ads everywhere,” Micon said expressing his hatred openly.

“This thing is going to leave such a black eye on Bitcoin. They have even released a new chip while they still have a 400-day backlog of customers waiting for their miner. In my opinion they are going to try the pre-order scam all over again,” Micon added as he’s afraid this will hurt even more people going forward.

Even though there’s plenty of bad news to be found on the Internet about BFL there are still people that attack Micon for the way he handles this situation.

“Butterfly Labs manages, as I would like to call it, sock puppet accounts on the forums. Some of these negative things come from accounts that have less than 100 posts or have been created in the last month or so. I do agree that some legitimate users have beef with the way I handle things, about this and the Pirate@40 scam. I was probably the most vocal about that as well and it turned out to be the biggest ponzi scheme in Bitcoin history,” Micon said about the scam which is documented here.

Over time Micon has become quite the interesting figure in the Bitcoin world as he has also created the “Bryan Micon List of Bitcoin Scammers“.

“Back when I joined the forums, in 2011, there were a lot of young kids that were extremely impressionable. The older people, from the late 20s and so on, ran very blatant scams and while that seems behind us now the Butterfly Labs scam is not nearly as blatant. Right now BFL also seems pretty blatant to me but back then it was hard to judge what was going to happen with them. Going back to the Butterfly Labs case, I think that there is a lot of Stockholm syndrome going on. A lot of people who have pre-orders with BFL are thinking that any negative reports or news about the company is only going to affect their order negatively,” Micon said.

“Of course I hope that everyone gets their rigs and makes money of their investment and I agree that I was aggressive with my opinions about BFL. I went at Josh Zerlan for over a week on the forums, and he right back at me in a very childish way and I did so as well. That wasn’t the best thing to do, but I thought it was important to show people that it was not good what was going on. The BitcoinTalk forum had big banners from BFL on their website and the money they paid for that probably provided a pretty good income for those people. I don’t blame them for that, but therefor the forum seemed to be biased towards BFL in a positive way,” Micon said.

“Some negative threads about BFL were even split up, moved to the “Butterfly Labs trolls” section. Nowadays there are too many people pissed off and I hope that my loudness helped a little bit towards creating more openness about the subject,” Micon said as he hopes his actions helped a little bit with raising awareness about Butterfly Labs.

“The 400Ghz miner, when they promised it, could’ve shat out 1,000 coins in a year. It would’ve been a giant winner if everything went like they said it was going to be. Perhaps that should’ve set off some red flags itself, also because it was said that this company was mining with their own rigs themselves. So maybe, instead of sending it to the guy in the order queue, they mined on it themselves for three months. Bitcoin mining gets harder every month, week and even every day the way the economy is changing right now, so it would be huge if that was the case. This is the main reason everyone is so pissed right now, because Bitcoin mining is a time game. Mining Bitcoin is directly correlated to the network’s hash rate. It’s not like a miner will run out of steam because it’s been running for three months, it just gets harder for those miners to mine as time goes on,” Micon said getting a little into the technical aspect of mining Bitcoin.

All Butterfly Labs’ problems and Micon’s personal Bitcoin situation aside it’s also very interesting to know what’s going on with SealsWithClubs. Micon explains how it all started and how one man basically started the client from scratch.

“The owner who goes by his handle “Freemoney”, started the website in 2011 and sat there waiting for players all by himself. SealsWithClubs started with one man waiting for a game to start. He sat there for weeks and played, as big or as small as people wanted, against anyone who wanted to play. Because of maniacal customer support and a little Micon marketing a new poker site was launched to the level where it’s at right now. I guess I’m just throwing the brilliance or Bitcoin in for free, but that of course is a much-needed cog,” Micon said.

“But right from the beginning the site was very honest with quick cash outs and very good customer support for its players. Around Black Friday I was out of a job and begged the owner to hire me because I thought that with the right marketing this could turn into something real. I really believed, and still do, in this product and he decided to hire me. At that point there were maybe 12 players playing on the site and right now the daily peak sits around 215 players,” a proud Micon said.

“I’m very proud of it because it feels like a win right now. I created the Big BTC which had 40 Bitcoin guaranteed every Sunday and a 1 Bitcoin buy in. Right now that tournament has a .5 Bitcoin buy in and a 20BTC guarantee. When I bust out of the Big BTC I feel terrible because I know that the first place in coins is going to be worth a lot more in the future,” Micon said about the tournament that he never misses out on playing.

“In a few years I think Bitcoins will be worth thousands. Don’t take that as a prediction, but as a way I can see it go. As a play right now it feels like high stakes to me. Just think about it, that one coin could be worth $5,000 by the time my little baby girl goes to college,” Micon said.

“I think that the Bitcoin is either going to skyrocket or bust down to zero. I definitely don’t see it being stagnant and stay at $100 over the next few years. People who speculate and say that Bitcoin is going to do this or that are just totally wrong. This is very unpredictable and I don’t want to predict any numbers, I’m just trying to say that it can go up a lot in the future,” Micon closed out with.

While Bitcoin remains very unpredictable Micon seems to have found a very stable way of life. The former crazy degenerate has a wife and a young baby daughter to take care off and that will obviously influence him as time goes on. Micon continues to work for SealsWithClubs as the Bitcoin poker client shows a small but steady growth over the last few months.

If you want to stay up to date on Micon’s latest exploits you can do so by following him on Twitter. If you want to play poker for Bitcoin you can do so by visiting SealsWithClubs

Frontpage photo credit:

Remko Rinkema

Remko Rinkema has covered the biggest poker tournaments in the world since 2008, including many WSOP, EPT, Aussie Millions, APPT, MCOP and Unibet Open events. As an in-depth interview and story enthusiast he tries to do things a little differently. Besides the usual writings Rinkema grabs every chance to appear on podcasts, live streams and in the occasional video.

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