Swedish Pirate Party founder, Rick Falkvinge, expects Bitcoin price to reach seven figures. He also sees cryptocurrency mass adoption to be an extinction level event for banks while bringing panic to governments that will realize that taxes can no longer be enforced.
Rick Falkvinge is the founder of the world’s first Pirate Party in Sweden. He is also a cryptocurrency evangelist, regularly discussing Bitcoin and the ramifications due to its growing popularity. Falkvinge was one of the people who had predicted Bitcoin's thousand-fold increase back in 2011. Russia Today's Sophie Shevardnadze asked him to comment on the recent developments in Bitcoin.
Asked whether there any price limit for bitcoin, Falkvinge -who recently published a satirical manifesto for Bitcoin Cash (BCH) where he claimed to be its CEO- replied that there is a price limit:
"[Bitcoin] cannot displace more money than exists in the world. So, there is an upper ceiling. But if you're just regarding bitcoin as a commodity on the market, which I think it is, like any currency, that upper ceiling can easily go up to 1 billion or more per bitcoin."
Bitcoin might not be the final cryptocurrency
Falkvinge is sure that cryptocurrency will displace the central bank money. But he warned that Bitcoin might not be the "final cryptocurrency" just as what happened with early social networks that where overthrown by more robust solutions.
"We had SixDegrees which was replaced by Friendster which was replaced by MySpace which was replaced by Facebook - some cryptocurrency is going to be worth a lot of money. Which one? Well, that’s a gamble."
Talking about the August 1st Bitcoin split, which resulted in two different versions of "bitcoin": the original BTC and the new BCH, Falkvinge explains Bitcoin's decentralized nature is not its Achilles heel:
"The key aspect of Bitcoin is that it is permission-less. You don’t need to ask anybody’s permission to do anything. And this is crucial to the entire community, which is why I decided to publish a letter where I was CEO without asking anybody’s permission - as a way to illustrate that we are not asking permission - that’s just part of our community."
Bitcoin cannot make everybody rich
When RT's reported mentioned the gold rush about cryptocurrency mining resulting in video card shortage in many countries, Falkvinge argues that "Bitcoin cannot make everybody rich." Rather, it is a means for "a huge wealth transfer to those who understand its implications early on" aka geeks and nerds:
"There’s a huge wealth transfer going on right now - where those who used to be poor, nerdy, geeky, sitting in their mom’s basement, if you like, are suddenly the new millionaires. "
And more than anything, Falkvinge continues, that is going to have a profound effect on what the future society will look like:
"Because for the last 200 years or so, it were the people who found oil that decided where money went, what research was made. And when the geeks and nerds are sitting on that money and deciding what research gets made - it’s not going to be a better diesel engine. It’s going to be a better solar panel, it’s going to be teleportation, space travel... I think that is going to be one of the more profound changes happening here. A wealth transfer to an entirely new type of people."
Bitcoin is a risky investment
So can somebody jump on the Bitcoin frenzy now? Falkvinge is mostly positive:
"I can’t give financial advice, but if cryptocurrency fulfills its promise - and there’s no indication it wouldn’t - then the equivalent of one bitcoin needs be in the 2 to 5 million dollar range. But at that point it won’t make sense to measure it in US dollars, because USD won’t have any measureable value. So it’s absolutely not too late, just as it wasn’t too late when Bitcoin was at 3 dollars or at 30 dollars or at 300 dollars or at 3000 dollars."
But the Pirate Party founder is not an ignorant fanboy. He warns that Bitcoin is a really risky investment:
"This is a very highly volatile [financial] instrument. This is a really risky investment. And if you ask me whether anybody should invest, then the answer is nobody should ever invest in more than being capable of losing every single last cent of it."
Bitcoin: An extinction level event for banks
Asked about the recent comments by established banking figureheas about Bitcoin being a bubble, Falkvinge seems certain that this is not the case. He sees Bitcoin bringing a financial revolution because in a cryptocurrency transaction "nobody gets to decide whether I can make that transaction or not, including financial authorities. And that in itself will mean a financial revolution. This is an extinction level event for banks. Banks will no longer be a necessary middleman. And that’s, more than anything, why I believe that this is the future of finance."
Bitcoin lack of middleman means "taxes can no longer be enforced"
Falkvinge also discussed Bitcoin's anonymity and traceability - or lack of it - and the possibility that governments might restrict Bitcoin trade for fear of its shady uses. He said that bitcoin is "more traceable than any money that came before it because every single unit of bitcoin is traceable through its entire monetary history - through anonymous accounts. But once you de-anonymize account you can start unravelling where the transactions go."
He also added that being Bitcoin a peer-to-peer technology, no government will ever be able to stop it altogether. And Bitcoin's lack of any middleman approving or denying transactions would be a problem for governments in the future regarding tax collection:
"When I’m buying a bottle of water with a credit card someone in the background there’s a bank giving me permission to buy a bottle of water with a credit card. And that is a horrifying thought. Because that means that the bank can also deny me permission to buy a bottle of water. Nobody thinks of this, but it’s there. With Bitcoin this is not true. There is nobody needing to give permission in the background. There’s nobody who gets to say no to a transaction. No money can be forced. No money can be seized. And here’s a big problem for governments in the future. Taxes can no longer be forced."
"The changes that it’s going to bring are so profound to society that we’re going to see a lot of governments panicking when they realize they can no longer just seize any money they want."
Bitcoin and illegal uses
An interesting question was about how Falkvinge feels about the fact that people can use bitcoin to pay for or child pornography or to order a hit on someone. Falkvinge was clear:
"Actually, they use the US dollar for that. And yet I’ve never heard somebody arguing against the existence of the US dollar with that argument. If you’re going after drugs and narcotics trade, then the US dollar is unparalleled in use. And I’ve never heard that being used as an argument against the US dollar."
Falkvinge also thinks that the recent interest from governments and banks about bitcoin's underlying tech, the blockchain, will not be fruitful for them. He sees the whole blockchain vs central bank currency debate as similar to the battle between open-source and proprietary software which ended with every web server running an open operating system:
"Banks and governments think that they can start a blockchain currency and issue more money down the road. But the whole point of the Blockchain technology is that you’re trusting mathematics, not the issuer. In this way, a blockchain currency vs a central bank currency is a lot like open-source software vs proprietary software, like Apple MacOS or Microsoft Windows. It took 30 years, but in the end, pretty much every single computer web-server is running an open operating system. In the same way, I predict that we will go from proprietary money to open money and permission-less money like Bitcoin."
Read the interview of Rick Falkvinge to RT.