Interview with Wences Casares

**Zachary Karabell** (0:05)
What could go right? Unless you have been otherwise engaged, disconnected from the web, living on a tiny island without satellite communications, you have been aware of the vertiginous and sudden rise of Bitcoin, both as a social phenomenon and as a financial phenomenon. Its increase in value in 2017 was astonishing, rising at the time of this recording to almost $17,000 per coin up from less than $1,000 a year ago. That's led to questions. Is it a bubble? Is it not a bubble? What is going on? Are digital currencies the wave of the future or the fad of the present? In order to shed some light on this, I'm talking now with Wences Casares, who is one of the early apostles of Bitcoin and the founder of a company called Zappo, which is a wallet and storage for your digital currencies and for Bitcoin. Wences has started several businesses, including one of the first Internet services in Argentina, which he started in his 20s in the 1990s in Argentina and sold for a tidy sum to Banco Santander. He now sits on the board of PayPal, but for the purpose of this conversation, Wences really is a true visionary for Bitcoin. He believes that Bitcoin is not simply a digital innovation for currency, but a potential vehicle for the democratization of money and for the facilitation of global commerce and prosperity in a way that doesn't depend on governments and banks to facilitate. That may of course end up being a vision for the future, or it may end up being one of the many dreams that people have had that goes unrequited. Either way, having a conversation about Bitcoin without reference to Wences Casares would be a shame, and so we are going to have that conversation today.
So Wences Casares, you are now at the epicenter of one of the most debated and talked about phenomenon of our day, which is the rise of Bitcoin and cryptocurrencies. Although you and I have been talking about this for five years, and you've certainly been involved in this for somewhat longer, even though this is pretty much virgin territory for everyone. So just as a general and beginning softball question, what do you make of all this frenzy that has suddenly erupted? Did you expect it to happen nowish or eventually? And what's going on?

**Wences Casares** (2:59)
No, I had no clue when it was going to happen. Bitcoin is one of the most interesting experiments going on right now.
But it's still an experiment. And I think that as an experiment, it has a chance of failing. And that chance is not trivial. Probably as much as 20% chance of failing and being worthless. But I also think that it has a higher than 50% chance of succeeding. And if it succeeds, it's going to be worth more than a million dollars in less than 10 years. So I'm not surprised by this, because this is how it would eventually get there. Having said that, there's a lot of risk that it doesn't happen.

**Zachary Karabell** (3:52)
So when you talk about a price, I'm always curious about this. A lot of people throw out price points for Bitcoin. How does one assess an eventual price? because you hear a lot of people going, Bitcoin could go to $40,000 a coin by the end of 2018, or it could go to 100,000, or you just throw out a million. Where do you come up with a potential number?

**Wences Casares** (4:14)
I think that if Bitcoin succeeds, it's going to be worth at least a million dollars per Bitcoin, because a scenario in which Bitcoin succeeds, it's a scenario in which Bitcoin becomes the first global political standard of value. And today, the only political standard of value we have, it's gold, and it hasn't been very important financially for at least 100 years. And we are using the US dollar and the euro and the yen to a lesser degree as standards of value, but they are very political standards of value. So if you were to replace all of that for a true political standard of value, the value of all gold above ground is about $7 trillion.
The value of global money, M1, is around $60 trillion. A million dollars, a Bitcoin would be $21 trillion. So more than gold, but less than money. And it's consistent with what we have seen so far. Now, that would imply about two billion people using Bitcoin.

**Zachary Karabell** (5:28)
So people throw out these arguments, right? Here's why Bitcoin isn't a currency. There's not enough transactions. It's not a good store of value because it's so volatile. How do you respond to those complaints, criticisms?