McAfee Rebuts Dimon: Crypto-Currencies ‘Not a Fraud’

Legendary security technology pioneer John McAfee was on CNBC this evening with host Melissa Lee to explain why he thinks that bitcoin will hit $500,000 in value in three years, up from about $3,900 or so today, and why the whole phenomenon of crypto-currencies is not a “fraud,” rebutting J.P. Morgan (JPM) chief executive Jamie Dimon’s attack yesterday.

As my colleague Teresa Rivas noted yesterday, Dimon was interviewed by CNBC at the channels investing conference yesterday, and said bitcoin is a “fraud,” and defended the value of fiat currencies.

McAfee, who last year became CEO of MGT Capital Investments, noted that “my company is one of the biggest miners” of crypto-currencies in the world.

He pointed out that bitcoin was “at $2,900 two months ago” and that many people thought that was a top, “but then it went up to 3, to 4, 5,000.”

Bitcoin’s trend “is consistently up,” said McAfee. He argued that crypto-currencies keep gaining in prevalence generally “because more people are believing,” meaning, believing that it’s valid. Crypto, pointed out McAfee, “is easier than credit cards” or other payment means. Versus entering names and card numbers and other details, “it takes just 15 seconds to pay” with crypto-currencies.

“Suddenly, fiat currencies make no sense,” said McAfee. “There will be government intervention, that will happen,” he continued, “because governments are going to lose tax revenue.”

“But how do you stop something like this?” he asked. “Government doesn’t have enough people to regulate it.”

Governments, said McAfee, “will have to face reality, and find another source of revenue.”

Lee asked McAfee, who has his own colorful reputation, about the connection by bitcoin to “nefarious” activities. But McAfee countered, “I’m still active in security, I still track the Dark Web, and bitcoin has been replaced on the Dark Web by Monero. It’s not bitcoin, it’s crypto generally,” he said.

“Bitcoin is 99.9% legitimate at this point.”

Asked to address Dimon specifically, McAfee said, “I respect you, sir, I know that having gotten where you are, you are not an idiot.”

However, “It costs over $1,000 to create each coin” in bitcoin. “That expense is a proof of work. Surely, there is some value in that work. Sure, the crypto market will continue to be volatile, but it is not a fraud I don’t ever lose bets

One way to track bitcoin is by the Bitcoin Investment Trust (GBTC).

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