Deconstructing Richard Heart’s Lies About Bitcoin

Richard Heart is a pathological liar and his Hex project is a textbook Ponzi. But thanks to his rhetorical skills and knowledge of post-modernist philosophy, he often turns the argument around to make it look like he’s operating a meta-scam: something which has all the characteristics of a scam for the purpose of attracting retail investors, but beneath the surface is actually a legit and solid investment that’s backed by the well-meaning intentions of a motivational speaker.

Growing up in Eastern Europe, I’ve seen lots of conmen like him and I’m not the kind of guy who gets fooled easily. These are the kind of people who will steal from your pocket and shame you for not enabling them to perform another charitable action. They’ll always find a grander lie to justify their actions and therefore make it look as if their end game is noble in its scope while and you fail to see the bigger picture. It’s psychological to the same extent that it’s rhetorical.

Just like his blockchain of choice (Ethereum), Richard Heart will create layers of complexity on top of his lies. It’s a useful tactic which exploits people’s fallible memory in order to obscure shady dealings from the past. For example, the Hex mastermind will point out to the price performance as the argument which momentarily defeats any criticism regarding the origin address’ stipulations from the smart contract (which unfairly enriched the creators every time a new user claimed his Hex) and the fact that a smart contract that’s worth 2.91 ETH manages assets which are worth 1359 ETH.

Heart will talk about 51% attacks and inflation bugs on Bitcoin, but conveniently forget that his ERC20 token is at the mercy of Ethereum developers who can simply remove his little Hex Ponzi scheme in any one of the upcoming hard forks. Likewise, one of the big node operators (Infura, Geth, Amazon) has the power to refuse to propagate a transaction belonging to a certain address (or from a specific smart contract). So before miners even get to write the transactions in a block, the operations can be arbitrarily denied.

Hex’s coin staking mechanism is every Ponzi schemer’s wet dream: early investors will feel hesitant to cash out due to the high gains and punishments for early withdrawals, while newcomers will believe that there’s nobody to sell the coins after they buy in. Once again, it’s a psychological trick which works when people believe that such a system is sustainable. But we shouldn’t overlook the terrible Lindy coefficient (the top 10 addresses control more than 61% of the supply) and the fact that the origin address has received more than 185.000 inbound transactions (according to the smart contract, this address receives tokens every time a Bitcoin UTXO claims Hex).

So much for Hex’s alleged superiority over Bitcoin – it’s a centralized Ponzi that’s bound to fail as soon as new people stop joining and there’s nobody to pay for the yield. But Richard James Schueler (Richard Heart’s real name) has made his pre-Bitcoin fortune in the early 2000s, under the nickname of Spam King. So is any of the elaborate conman behavior really surprising?

However, there is a significant difference between the usual snake oil salesman and Richard Heart: the former is mostly interested in financial gains, while the latter gets his kicks controlling and manipulating other people’s lives. Yes, there is still a lot of money involved in Richard “Heart” Schuler’s dealings. But based on my own observation, Richard Heart gets a lot of pleasure from making Roger Ver admit that “bcash” is a better branding name for Bitcoin Cash. He’ll brag about his contributions to charity (you know, like every legitimate philanthropist would), take credit for changing people’s lives (the Hex website has an entire section of people posting pictures of cars and tattooing the Hex logo on their skin), and act as if his social participation in the Bitcoin space has had a greater impact than it actually had (during his debate with Alex Svetski, he actually bragged about Blockstream removing increasing the Bitcoin block size from the “roadmap” thanks to his support for the UASF movement – which was also supported by Blockstream and backed by people like Greg Maxwell, with help from thousands of sovereign node operators).

From a rhetorical point of view, Richard Heart’s approach to debating is worthy of the Spam King nickname: he talks a lot, throws in a handful of lies and distorted facts in the middle of his argument, then present a truism at the end in order to make the adversary agree on principle. If he talks more than the other person and makes lots of references and appeals to authority, he will look more knowledgeable and “smart” to his followers. And if the amount of information is too high for the debater to follow through, he remains unchallenged and appears to be always right. There are also moments when he does get challenged or called out for his use of misinformation – this is when Richard Heart belittles the significance of the issue and changes the subject to something that puts him back in the offensive position. As long as he is the one who does most of the talking, he is in control.

The tragedy here is that lots of his lies never get challenged – he keeps on repeating them to guests whom he vets personally (usually friends or weak debaters), and ultimately convinces his listeners that he is both knowledgeable and honest about everything. In fact, most of Richard Heart’s takes are extreme cases, slippery slopes, half-truths, and distorted facts. Which is why I’ve decided to write an article in which I deconstruct his lies about Bitcoin.

Hopefully, this will open the eyes of some of Richard Heart’s followers about his rhetorical game. And even if it doesn’t, it will definitely help future debaters who challenge him or any other scammer of his calibre.

Richard Heart overstates his own importance and influence in Bitcoin

In his rhetoric, Richard Heart often portrays himself as the disillusioned Bitcoin maximalist who made significant contributions during the scaling debate, defended BTC against its big block forks, and even made UASF happen. In his debate with Alex Svetski, he even went as far as implying that he contributed to Blockstream’s small-block agenda and made them remove mentions of increasing the block size from the roadmap.

This is false: Bitcoin Core developers like Luke Dashjr, Greg Maxwell, Pieter Wuille, Johnson Lau, and Eric Lombrozo are really the ones who contributed decisively to the popularization and UASF-powered activation of SegWit. Litecoin developer Shaolin Fry also played a major role in demonstrating that the soft fork is safe, thus demonstrating that the code is ready for Bitcoin.

At most, Richard Heart was an advocate of small blocks and decentralization. But given his agenda to push his failed CFD token (whose roadmap starts in Q4 2017 and was in a seemingly-advanced state during his March 2018 interview with Doug Polk), it’s hard to take his “Bitcoin maximalist” phase seriously. His ulterior motive was always to make more money by leveraging financial trends outside of Bitcoin. So one can easily argue that his “good guy” moments were only attempts to build an audience and onboard more users to his new project. After all, claiming Hex does require BTC UTXOs.

Richard Heart failed to call the tops and bottoms of the last 2 cycles

On his personal website, Richard Heart claims that he accurately called the tops and bottoms throughout two market cycles. On October 12th 2017, when the BTC price was in the $5200 – $5700 range, he said that we would see $20.003 by Christmas. This was pretty close.

But during a December 2018 interview with Ivan on Tech, when the price of BTC dropped to $3200, Richard Heart burst into tears after admitting that he had “lost a lot of money”. On his website, however, he claims that he also called the $3000 bottom. He doesn’t provide any link for this prediction, and his crying moment is proof that he has little understanding of the market dynamics and even makes poor choices for himself.

In 2019, Richard Heart said Bitcoin would hit $60.000 “in a year or two”. But when this high was reached, he acted as if he made a very accurate prediction. This is misleading, since his wording was vague at best.

The same can be said about the moment when he supposedly called the top in April 2021: Richard Heart merely compared the BTC parabola with one from which ETH crashed in January 2018. He never said “this is the top”, he only made an observation which the market confirmed in the following days. In July 2021, Richard Heart also predicted that Bitcoin would drop to $10.000 – which it didn’t.

Though Richard Heart enjoys taking credit for his ability to foresee bitcoin prices, his record is pretty bad. He makes lots of predictions during his videos, then cherry picks the ones which turn out to be true to fool newcomers into thinking that he’s extremely knowledgeable.

Richard Heart claims Hex is better than Bitcoin

Bitcoin is the most decentralized and secure money network in the world. Hex is just a token on Ethereum, which exists at the mercy of ETH developers who may eliminate it any time through a hard fork or blacklist the addresses related to Hex to prevent them from ever swapping the tokens.

Objectively speaking, there is nothing that Hex does better than Bitcoin. Transactions pay gas fees to ETH miners, so the cost to move Hex tokens is higher than that of transferring Bitcoin or Counterparty assets. The security of Ethereum is lower than that of Bitcoin, as the hashrate is lower, the network is more centralized, and the cost to run a 51% attack is higher.

But as an ETH token, Hex benefits from extra programmability which enables it to get used in financial schemes (staking to earn yield) and decentralized exchanges (Uniswap, Sushiswap). Its computational advantages are network-specific and there is no particular merit to Hex. It’s a textbook Ponzi scheme which meets the magic of locking coins to receive interest. Every scammer’s wet dream, as his victims can’t sell.

Otherwise, Hex has an insignificant network effect. It exists on very few reputable exchanges, nobody outside of the community accepts it for payments, there is no brand recognition, and legacy institutions couldn’t care less about its existence. No serious exchange will ever list something as centralized as Hex, as they expose themselves to the risk of losing money. This might also explain why Richard Heart is so openly against exchanges (though trading would absolutely destroy his plans).

If you think that Hex is the future of money, then you find yourself in a deep state of delusion and need to take a break from Richard Heart’s Telegram and Discord groups.

Richard Heart will tell you that it’s too late to get into Bitcoin

Well, isn’t that something convenient to say when you’re trying to sell your own shitcoin? In his debate with Svetski, he suggested that we are at the top of an S-curve and everyone buying BTC today will not make any profits. Once again, his price prediction record is pretty broken (especially when it comes to calling bottoms).

Also, the statement is disingenuous. Bitcoin adoption is still in its early days. Just because a few legacy financial institutions are involved doesn’t mean that we have reached the peak of adoption. Richard Heart’s candelabrum and shirt definitely weren’t bought with bitcoin and the amount of objects that he can purchase with his BTC is still limited. It’s because high-throughput technologies like the Lightning network and scalability sidechains are still in their early days and real grassroots adoption takes years.

If we’re talking about top-down institutional or governmental adoption, then there isn’t too much to say either. So how can anyone claim that this is the absolute top and the moment when the speculation bubble bursts forever, since there is so much work to do and there are billions of people who never used a Bitcoin wallet? The price will definitely keep up with the scale of demand and adoption. If the technology and infrastructure provide the value to the world, then this will be reflected on the markets.

Also, anyone who truly thinks that Hex is going to dethrone Bitcoin is delusional.

Richard Heart says that Taproot might have been a Bitcoin hard fork

This is yet another disingenuous lie. If any of this was true, then the network would have already split due to users not upgrading their nodes. A hard fork implies forced consensus: everyone runs the latest version of the code, or else they get left behind supporting an older version of the network. However, Bitcoin upgrades with soft forks: optional software which brings improvements to users who do desire to use them, but doesn’t force anybody to upgrade.

In time, if the new soft fork becomes statistically dominant, the network may look as if it hard forked. However, old versions of the Bitcoin client will still be compatible. As of March 2022, the percentage of Taproot adoption is still small and, only a handful of wallets support P2TR addresses.

Richard Heart only makes such claims in order to attack Bitcoin’s ossification by implying that the code is easy to change. Speaking of which…

Richard Heart will falsely tell you that Bitcoin is easy to change

Yes, there are people in the world who will tell you that Bitcoin is like a rock which never moves or changes in any shape or form. It’s untouchable, infallible, and robust. But their claim is about the consensus rules (monetary policy, transaction validation, checks and balances between miners, nodes, and developers). There are still refinements that Bitcoin Core developers make in order to make synchronization faster, eliminate minor inefficiencies, and add extra features.

However, even the slightest adjustment that’s made to the code requires years of development, peer review, and testing. No line of code makes its way into the Bitcoin client without proper scrutiny. And even after all the research and development happens, users (nodes and miners) can still reject the changes. When it comes to making changes to Bitcoin, we’re dealing with a complex, time-consuming, and slow process – which is great, as a good monetary system shouldn’t be easy to change and must not be subjected to human politics.

But it’s easier to promote your own shitcoin and make it look more legit if you make it look like Bitcoin has big problems which counter the common narrative. Nobody made any changes to the monetary policy, Richard.

Richard Heart shamelessly takes credit for raising awareness of the hacking of Bitcoin.org, as if he saved the Bitcoin network

Let’s face it, most Richard Heart fans don’t know the difference between the Bitcoin.org website and the Bitcoin network. Since Bitcoin.org is the place where you can download Bitcoin Core, they will also assume that the software went down with the webpage’s availability.

Also, assuming that a livestream does anything to stop people from getting scammed is delusional at best. Firstly, there is no way to prove any of this in a measurable way. It’s pure virtue signalling to make Richard Heart look like the elder statesman who cares about the Bitcoin project while everyone else allows a website to get hijacked by scammers so newbies get scammed.

Richard Heart will also point out to the fact that the Hex website never went down and has a perfect record for availability. Well, that’s only because nobody cares enough to hack it.

Richard Heart claims he gave away “billions of dollars” of his work to Bitcoin holders

As if he hasn’t benefited from every Bitcoin UTXO which claimed its corresponding HEX tokens via origin address rigging. Richard Heart paid 2 ETH to start a smart contract for a premined ERC-20 token, and also paid the developers to write the code. Otherwise, he has no merit here outside of doing YouTube videos every week to encourage his self-help video consuming fans to invest in Hex.

The Ponzi scheme wouldn’t have worked if there wasn’t somebody to exchange a more valuable currency for the worthless Hex token. So even if the did give away billions of Hex, they would have been worthless without those who bought it. If anything, Richard Heart should be grateful to those people.

Richard Heart claims that ASIC miners are most profitable during the first 2 weeks after production

This is yet another lie which implies that Bitcoin mining is rigged by the ASIC manufacturers and therefore should not be pursued at all by his followers. It’s also a convenient lie which makes his staking affair seem more attractive to newbies.

However, ASICs are computers which fulfil only one purpose. To discover blocks, Bitcoin miners use SHA256 ASIC machines which have a certain hashrate. To claim that they are most efficient and profitable in the first two weeks is disingenuous. These machines output a hash within the same range. The only variable is the mining difficulty, which readjusts every 2016 blocks (~2 weeks).

But to claim that ASICs become inefficient 2 weeks after leaving the manufacturer’s warehouses is a lie. Their profitability depends on the difficulty – which sometimes goes up, but it also goes down. Bitcoin is a global network and miners follow their incentives. Sometimes electricity becomes too expensive to justify the costs in some parts of the world, so the miners stop their activity. Other times, the difficulty is so low that miners join in even with their older and lesser efficient machines in order to maximize their chances to earn coinbase rewards.

Proof of Work is dynamic, competitive, and in a perpetual state of change. This is why some home miners use Antminer S9 machines from 2017 – even if they are technologically obsolete, they can become profitable in some parts of the world. On the other hand, Proof of Stake (to which Ethereum will transition) is static and oligarchic – the early adopters retain an unfair advantage that they preserve in time without any kind of effort or external cost. Hex staking and the nature of its smart contract favors early adopters – just like every other Ponzi scheme.

Richard Heart will always make it about the fiat gains and cherrypick convenient time frames

Bitcoin enables billions of people around the world to send and receive money outside of a hostile and politically-controlled financial environment. Honest hard-working individuals can flee authoritarian regimes to start new lives in another place. Protesters can raise funds in spite of GoFundMe and PayPal censorship. Citizens of a highly sanctioned nation can still participate the world economy in spite of politics for which they have no direct responsibility.

But here’s Richard Heart telling you that Bitcoin sucks, has no good pumpamentals, and doesn’t go up in price fast enough to satisfy his greed. He’ll permanently make every discussion about making US dollars, gains, charts, and trading (even if he actively discourages his followers from trading, as he makes money from dumping bags while they lock their tokens).

As I’m writing this article on March 31st 2022, the price of Hex is almost 70% down from its all-time high. But if you ask Richard Heart, he will say that his coin is 900% up in the last year. After this, he will quickly take a shot at Bitcoin and imply that everyone who bought BTC is dealing with an asset which underperforms his project.

Richard Heart will even use luxury items (Rolex watches, sports cars) as points of reference which elevate his successful status in the eyes of his fans while also undermining the performance of bitcoin. Remember, he cherry picks his time frames to fit a narrative and “spams” you with words to make it hard to fact-check or filter facts from cover-ups.

Right now, bitcoin is only 31% down from its all-time high. Hex is 68.9% down from its mid-September rally. The former is a decentralized and highly liquid asset. The latter is a manipulated Ponzi.

Richard Heart will defend centralization for “being efficient”

The irony of the Hex Ponzi is that it’s such a meta scam that some people will think it’s actually smart. When addressing the centralization of both development and ownership, Richard Heart appeals to irrelevant examples which involve Amazon under Jeff Bezos and Tesla under Elon Musk’s leadership – both of which are registered companies which operate under a legal framework.

Had Richard Heart started the same scheme without making use of Bitcoin and Ethereum, he would have been arrested for selling illegal securities and/or operating a Ponzi scheme. But since he is using a technology that regulators don’t understand properly while putting all the disclaimers in the right places and being careful with his language, he still gets away with it.

Make no mistake: Hex is centralized and will never become anything like Bitcoin. It only exists for the purpose of granting Richard Heart access to money and power. It makes him rich and gives him a sense of importance for which he craves.

Richard Heart claims that only “venture capitalists and scumbags” own bitcoin

There are thousands of examples from developing nations in which people use bitcoin to better their own lives. They use BTC to escape poverty, hyperinflation, financial censorship and surveillance, confiscation, and theft. According to Richard Heart’s classification they must be “scumbags”, right?

Richard Heart claims that exchanges can change Bitcoin

If they truly can, how come the New York Agreement failed so miserably in 2017 and required the support of a majority of miners or else voluntary user activation (which happened in favor of the SegWit soft fork via UASF)?

Richard Heart seems to really enjoy painting this picture where Bitcoin is fragile to regulatory capture, but fails to provide any arguments or fine details. Exchanges really can’t change the code, the best they can do is lobby and pressure the actors that actually mater in the network: miners, sovereign nodes, and developers.

If you get your Bitcoin education from Richard Heart, then you’re doing it wrong.

Richard Heart implies that Bitcoin will meet its demise when Satoshi Nakamoto sells his coins or Mt. Gox sells

Once again, the Hex creator disregards network effects in order to create an imaginary world where every market actor sticks around only when the valuation is high and vanishes whenever significant price drops happen. If Satoshi Nakamoto or Mt. Gox sold their coins, thousands of bitcoiners will gladly acquire them. BTC has moved past the shelling point, there are enough people who will buy at any price.

Also, I tend to believe that Satoshi Nakamoto’s coins will never move specifically because they are a honeypot for attackers. For as long as Satoshi’s coins are there, we know that the cryptography works and nobody was able to break the private key.

Richard Heart claims that BTC is confiscatable

Bitcoins on the Bitcoin network are unconfiscatable and uncensorable. In order to seize them, a thief or government authority will have to force brute the private key – an work-intensive undertaking that will not be completed in our lifetime. However, confiscation is easy if the coins are held in a legal custodian’s account – it’s only a matter of sending a few official letters and threatening with certain restrictions.

It’s only the bitcoin that’s kept on exchanges which is confiscatable. Likewise, private keys that are poorly stored also lead to easy confiscation – but this concerns social engineering more than it intersects the field of computer science.

When Bitcoin advocates refer to “unfonfiscatability”, they talk about the protocol level and a situation in which users interact with the network through non-custodial wallets. However, Richard Heart will cherry pick the cases to make it look as if trying to have control is futile and his Ponzi is just as good.

Richard Heart claims that Hex is 3 times audited, while Bitcoin is not

This is by far the silliest of claims. Because Bitcoin doesn’t need any paid third party audit, as thousands of people look at the code every day. There’s a huge incentive to break it and Satoshi’s bitcoins (almost 5% of the entire BTC supply) are the reward for anyone who figures out how to break the cryptography or signatures scheme.

At the same time, every skeptic can pay a computer scientist or cryptographer to audit the Bitcoin code. It’s not an activity which requires any kind of central planning or involvement from an influential figure. It’s a permissionless and decentralized network, so everyone is supposed to verify the code for themselves or else trust in the track record.

Meanwhile, Hex needs to pay for audits because nobody cares enough to do it for free and, given the amateurish nature of the original development team, it’s very likely for bugs to exist. It’s a lot like sex: when nobody cares about you but you still want to be part of the game, you have to pay for the stuff that alphas get for free and without even asking.

I’ll keep on updating the list of claims as I discover them. If you enjoyed the article and want to support my work, please consider donating.