January 23, 20185min873

1 Bitcoin = 1 Million US Dollars

Dan Schulman, chief executive of PayPal, talks with bitcoin pioneer Wences Casares about bitcoin, blockchain and fintech in a Facebook interview. Casares, a serial entrepreneur, has launched startups across South America and the United States, not the least of which is bitcoin wallet startup Xapo, which he currently leads. Casares is also a member of the PayPal board. Schulman touts Casares as one of the foremost authorities globally on bitcoin and blockchain.

Bitcoin and Blockchain are changing the world

Schulman pointed to the bitcoin price, which at the time of the interview was trading at $14,800, clairvoyantly predicting that the price could change even as he spoke. Bitcoin and blockchain have captured people’s attention because they view it as an “interesting experiment,” said Casares. “If it works out, it could change the world more than the internet changed it,” he added.

Casares warned, however, that given the nature of an experiment, bitcoin and blockchain “could also fail.” He gives the bitcoin and blockchain experiment a 20% chance — at least — of failure. He gave key investment advice, recommending that people don’t own more of the cryptocurrency than they can afford to lose.

But after the warning, Casares provided a silver lining, saying there’s greater than a 50% chance that the bitcoin and blockchain experiment will succeed. But industry participants must be patient, as it will take anywhere from five years to a decade before that success is solidified.

In a successful experiment, he pointed to a different world and “concrete economic consequences,” saying “1 bitcoin is going to be worth $1 million. So, most of the world is going to wish they had bought it at $14,000 or $20,000” the risk notwithstanding and putting today’s bitcoin price declines in perspective.

Casares’s story

Argentinian-born Casares has distinct memories from his childhood of his family losing everything, thrice. He characterizes those memories as “emotional” and “social” rather than economic, and points to the Argentinian government as having triggered events that led to the fallout — hyperinflation, for instance. It was two steps forward and three steps back for his family as a result of government activity, even confiscating bank accounts.

His childhood experience, coupled with an awareness of the world’s unbanked citizens without the luxury of the US dollar, seems to have shaped his belief in bitcoin. “It was the first time that I could see technology solving that problem for good,” he said. As a result, he’s pledged the rest of his career and is staking his reputation on it. He is pulling for the bitcoin experiment to succeed because if it does, we’ll have a much better world than we have today, he said.

Blockhain cannot exist without Bitcoin

While it may be fashionable to do so, for someone to draw a distinction between bitcoin and the underlying protocol, saying they have an interest in blockchain but not bitcoin, shows “ignorance for how the system works,” Cesares said, likening the comparison to the web and the internet. “Blockchain doesn’t exist without bitcoin,” he said. It wasn’t till January 2009 that the blockchain “came to life” because that’s when we could trust the integrity of data without knowing hardware, software or jurisdiction because it doesn’t matter. With blockchain, there are no counterparties.

“If you were to remove the bitcoin, miners would disappear and so would the blockchain,” said Casares.

As for the future of altcoins, he reminded PayPal’s Schulman that it’s an experiment, one whose outcome no one knows. Casares also predicts a single blockchain for value, with the exception of certain use cases that merit a different blockchain, similar to how there’s only one internet. He predicts that the most likely blockchain will be bitcoin, which hasn’t suffered any hacks, but he admits that his prediction is highly speculative.


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