John McAfee – some see him as a legend, some see him as the most controversial figure in the crypto space. For sure, books will be written about his past decade: from his time in Belize to the prison in Guatemala, his US presidency campaign and his endless activities surrounding the cryptocurrency space.
This interview was supposed to be conducted live at the recent Blockchain Cruise back in June. However, John McAfee couldn’t attend since he was in jail at the time.
So he spoke with us remotely, from what he calls “the cage”. “I’ve been on the run for almost five months.” According to him, his cage is designed to remain hidden. “No signals can get in or out; we have signal jammer devices to ensure it.”
Before our interview, McAfee’s wife, Janice, set up a press wall containing photos from around the world including the White House and the London Eye. It accomplished the dual purpose of obscuring the location of their “cage” while giving the feeling of an outdoor environment.
“They’re going against me, but they can’t find me. Nobody can find me in a cage in some unknown place in the world specifically so that I can do what I’m doing: building a distributed exchange that can’t be shut down. Do you understand? This is the world we live in. If you’re going to do things like I’m doing, you’d better be prepared to go underground. You’d better be prepared for the SEC to come.”
From “the cage”, McAfee manages his team and develops his ideas. His most recent one is McAfeeDEX, a decentralized exchange.
McAfee believes in anything that poses a threat to central authorities like governments, and he preaches personal responsibility. “You’re responsible for your choices. I don’t think no central authority needs to get rid of anything, including alcohol, weed or crypto scams like ZombieCoin.” (McAfee received $4.5 million to evaluate the latter’s whitepaper and deemed it a shitcoin.)
“If there’s somebody who is foolish, whose job is it to take care of that person? That person’s. And through their foolishness, if they have any sense at all, they’ll learn from the mistakes that they make. Good God, you can’t protect people from life and I’m certainly not going to do it.”
McAfee: I Don’t Own Any Bitcoin Myself
Telling us about his first days in crypto, McAfee heard about Bitcoin back in 2011 thanks to a coworker, the programmer Jim Zoromski. The latter came to visit while McAfee was living in Belize (“sunbathing on my sail yachts”) and told him about his Bitcoin mining hobby. Back then, you could mine Bitcoin using your PC’s graphics card. “At first I thought that was stupid. But then I read [Bitcoin’s] white paper and I understood it. It’s mathematically coherent, it’s unstoppable.”
And at what price did he buy his first Bitcoin? Surprisingly, McAfee claims not to own any. “I never buy anything myself.”
Bitcoin is Ancient
What’s more, he considers Bitcoin “ancient”. “I am not a Bitcoin maximalist. I don’t know what the maximalists are thinking. I mean, there’s zero privacy in Bitcoin. Bitcoin doesn’t have smart contracts, and Jesus, there’s nothing. It’s an ancient, arcane technology and yet it’s still going to be worth a fortune.”
“As a store of value and cryptocurrency, it’s the standard. However, it does not do much that the world needs from blockchain today. It’s simply a cryptocurrency.”
McAfee has kinder words for alternative cryptocurrencies. “The altcoins are obviously where the real action is, and there are some super brilliant people there. Things like DAI (by MakerDAO), the only real stablecoin. It never varies more than 1% up or down from the US dollar. And I dabbled in it, I’ve been watching it, and it’s astonishingly based on smart contracts.”
The $1 Million Prediction
When asked about his infamous Bitcoin price prediction of $1 million by the end of 2020, McAfee doesn’t hedge. “It can’t be otherwise. Look at the Bitcoin supply and its usage. It is so artificially compressed in value right now. It will simply get out of the artificial constraints to where it should be. I mean, there will only be 21 million coins ever, and seven million of them are lost.”
But why one million dollars? McAfee offers a creative answer. “Because the math says it’ll be $2 million and so I’m a conservative person and said one million. I didn’t randomly pick the fucking number out of the air. Good God, I’m a mathematician. I don’t know the specific date, but by December 31, 2020, it will be $1 million.”
His first crypto-related job was at MGT Capital Investments, which was one of the largest Bitcoin mining companies at the time, according to him. “I ended up in Miami after spending a month or so in a Guatemalan prison and I go, Oh fuck, what am I gonna do?”
“We had almost 10,000 [Antminer] S9. Our farm was in the state of Washington, up in the mountains where the electricity was quite cheap. We got all of these deals with ranchers who had specialized agreements for electricity.”
McAfeeDEX: A DEX Without Bitcoin
“For our current beta release, we chose the Ethereum blockchain,” explains McAfee. “If we can make it work, in theory, we can make it work on Binance chain, Tron, EOS, and NEO. We have pretty much everything except Bitcoin, which is the big problem.”
McAfee runs down the benefits of decentralized exchanges. “There is absolutely no risk of loss, because our interface is based on smart contracts. We don’t know anything about you: not your name, email, nothing. Since it’s on the blockchain, you can’t shut the DEX down; it’s clearly decentralized. Our code is open source.”
“We are working very hard. We know that there are problems and users don’t like our interface, but it’s new. We are fixing all these things as much as possible. Before the end of this year, we are going to have our production release. By then, hopefully, we will support Binance, Tron, EOS and NEO.”
Decentralized exchanges have promised a lot, but so far no DEX has generated high trading volume or user numbers. McAfee writes that off to weaknesses in existing DEXs. “The other exchanges weren’t what they should be, because they’re using Atomic Swaps, which are deadly slow. Our DEX is currently a little bit laggy as well, but we are truly functional. There is a difference. We will include every token that we can possibly include technologically.
“The feedback that we have from people is astonishing. We already have a hundred developers signed up to create their own interfaces, to add new blockchains and tokens. That’s the beauty of open source code.”
And what about the trading volume? According to McAfee, McAfeeDEX has over 100 active users at any given time, and that number is rising. The transactions are still small on average (most are under one dollar), but that’s fine considering most blockchains aren’t supported in the current beta stage, according to McAfee.
We ended our conversation by asking McAfee whether he agrees with the many banks and investment firms that expect a global recession to occur in 6-12 months, and how Bitcoin would react if one were to happen.
“Bitcoin is totally disconnected from global recessions. I think Bitcoin is its own economy connected only to those powers attempting to control its price, and it will eventually grow too big to be controlled.
“Bitcoin reacts to the number of people accepting it as currency and the number of people who are using it as currency. That’s what Bitcoin is. It is not a smart contract. It’s not a way to avoid paying taxes. It’s simply a unit of exchange. Use it as that, and its value will go through the fucking roof. Good God, it’s just basic mathematics.
“The problem is simply a lack of understanding of its purpose. If you have Bitcoin stashed away, you should be spending some of it because that’s what’s going to increase the value of your holdings. You urge people to spend it, and I don’t mean to trade it. If you don’t spend it, it will end up with zero value, people. Too many of you are holding it for profit rather than using it for growth.”