John McAfee on Bitcoin: ‘You Can’t Stop It’, Reiterates $1 Million by 2020 Price Target

  • On Bitcoin: "It's not going to disappear. It can't possibly go to zero. It can only grow as the user base grows."
  • On cryptocurrencies in general: "Digital currencies will replace fiat currencies."

Cybersecurity pioneer John McAfee, in a recent interview, reiterated the famous prediction he made on 29 November 2017 on Twitter -- namely that one bitcoin would be worth $1 million by 2020 -- and explained how he arrived at that figure.

The first question was: "Why do you think Bitcoin will go to $1 million by 2020?"

McAfee answered: "There all kinds of ways to do it. The most common way is to take number of users of Bitcoin... because as Bitcoin expands its user base, both people who hold the coin and people who accept the coin for payment... It's sky-rocketing... It's not going to disappear. It can't possibly go to zero. It can only grow as the user base grows. So, it's impossible... Listen, it's Pandora's Box... The box has been opened...

Digital currencies will replace fiat currencies. Why? I have a wallet on my phone which is an entire bank... Lending money, sending wires, I don't have to go to the bank. It takes me 10 seconds to do a wire... Do you think that is going to go to zero and we're going to go back to this incredibly dull and bizarre way of using money with banks?"

The next question was why McAfee was not worried about the effect of regulations on Bitcoin.

McAfee answered: "Congress can make all the laws it wants. Obviously, they can outlaw Bitcoin. You are assuming there is a possibility of enforcing those laws... You cannot stop a distributed system that is worldwide. There is no law that you can make... If you had one person per citizen in the country... You still couldn't do it because the enforcer would have to sleep at some point... When exchanges were centralized, you could shut down an exchange. You can't do it anymore. They have now decentralized the exchanges... How will you enforce these magical laws that Congress is going to make? Jamie Dimon has no power in this world..."

The interviewer then asked what if the government tries to make it difficult for people to spend their bitcoin.

McAfee responded: "How are you going to make it difficult? What are you going to do to make it difficult? ... The banks are not involved. The banks have nothing to do with it... The misconception is that legislation can have teeth... You can't stop Bitcoin... Technologically impossible!"

Next, McAfee was asked if he had come up with the $1 million price target based on a mathematical formula or if he had come up with the figure based on some assumptions about its usage.

He replied: "I looked at it in two way... [First] I looked at the number of users, the user growth... I came up maybe with three and seven million... [Second] I came at it the mining way, which is I believe a lot more valid... The last bitcoin to be mined... It is going to cost four to five billion dollars to mine that last coin and miners are going to do it. The value of that bitcoin has got to be more than the work put in to mine it... So if it cost even one billion dollars, why don't you work backwards from there and find out what the end of 2020 it is going to be? ... $5 million it is probably the thing... So, $1 million is way outside the lower range, so I am very safe... And it is not just Bitcoin... There are 2000 other coins... You cannot stop them. You cannot change them. You cannot control them. Accept them and try to fix your life to get in line with reality... In the 1930s we made it a law that you couldn't drink alcohol. We consumed more alcohol per capita during that period than any period in American history..."

Although quite a few famous Bitcoin bulls have given what seem like quite outlandish figures as their price targets, such as Tim Draper's $250,000 price target by 2022, McAfee's is by far the highest and the period of time -- only two years -- to reach that target is the shortest we have come across this year.

U.S. Congressman McHenry Calls Bitcoin ‘An Unstoppable Force’ at Libra Hearing

As far as cryptocurrency fans are concerned, one U.S. Congressman, Patrick McHenry, was the star of the House Financial Services Committee hearing on Libra on Wednesday (July 17). 

Before we talk about what happened at this hearing, and more specifically, how Congressman McHenry managed to endear himself to all blockchain and cryptocurrency fans, it might be helpful to present a very brief biography of him here.

Patrick Timothy McHenry is the U.S. Representative for North Carolina's 10th congressional district. He is serving his eight term at the U.S. congress, where he is currently the Republican Leader of the House Financial Services Committee, "a committee he has served on since he was elected to Congress" (in 2004, when he was just 29 years old).

On Wednesday (July 17), a day after Facebook's David Marcus, who is a co-creator of Libra and the head of the Calibra project, faced tough questions at the U.S. Senate Committee on Banking, Housing, and Urban Affairs (aka "Senate Banking Committee"), came the real grilling at a full hearing (titled "Examining Facebook’s Proposed Cryptocurrency and Its Impact on Consumers, Investors, and the American Financial System") of the U.S. House Committee on Financial Services.

Committee Chairwoman Maxine Waters (D-CA), who had previously implored Facebook to stop working on the Libra project until Congress could understand better the implications of what Facebook's proposed cryptocurrency, started the hearing by delivering a prepared statement, during which she, once again, expressed her "serious concerns with Facebook’s plans":

This venture is slated to be based in Switzerland, which has a history as a monetary haven for criminals and shady corporations. Facebook’s plans raise serious privacy, trading, national security, and monetary policy concerns, not only for Facebook’s over 2 billion users, who will have immediate access to these products, but also for consumers, investors and the global economy.

 Congressman McHenry's gave his opening remarks around 11:00 (Eastern Time). Here were the main highlights:

  • "Washington must go beyond the hype and ensure that it's not the place where innovation goes to die."
  • "Just because we may not fully understand a new technology proposal does not mean we should immediately call for its prohibition, especially when that proposal is just that — a proposal."
  • "The reality is whether Facebook is involved or not, change is here. Digital currencies exist. Blockchain technology is real. And Facebook's entry in this world is just confirmation, albeit at scale."
  •  "The world that Satoshi Nakamoto, author of the Bitcoin whitepaper, envisioned—and others are building—is an unstoppable force."
  • "We should not attempt to deter this innovation, and governments cannot stop this innovation. And those that have tried have already failed."
  • "Instead of a knee jerk reaction of banning something before it begins, my Replication colleagues and I want to first try an understanding. An in turn, based off what we learn, determine whether or not our current regulatory framework meets the demands of this new technology."  

Then, around 15:30 (ET), McHenry began his questioning of David Marcus about Libra; some of his most interesting questions are listed below.

McHenry: Is it a security?

Marcus: We don't believe it is, Congressman.

McHenry: Is it a commodity?

Marcus: Congressman, based on current U.S. law, it might be a commodity, but we see it as a payment tool.

McHenry: Is it an exchange traded fund?

Marcus: It is not, Congressman.

Congressman McHenry repeated his claim about Bitcoin being an unstoppable force during an interview with Andrew Ross Sorkin on CNBC's morning news and talk program "Squawk Box":

I think there is no capacity to kill Bitcoin. Even the Chinese with their firewall and their extreme intervention in their society could not kill Bitcoin.

Sorkin then told McHenry that although it might not be possible to technically "kill" Bitcoin, it was possible for governments to create legislation that made access to Bitcoin illegal for their citizens at fiat on/off ramps such as exchanges (e.g. Coinbase) and custodial wallets (e.g. Calibra), and that would "effectively make it very very difficult for the mainstream to use it." Sorkin then said that's why investors in Bitcoin were worried, which explained the recent drop in price.

McHenry replied:

Yes, so the price has come down to roughly $10,000... But you are talking about something that... people were giving away for free. It's now trading at $10,000... But the essence of Bitcoin is what Libra, Facebook, and corporates are trying to mimic.