Last month, the famous venture capitalist and inspiring businessman, Tim Draper, predicted that Bitcoin would reach $ 250,000 by the year 2022.
In 2014, Draper predicted that Bitcoin would be worth $ 10,000 in three years. Indeed, Bitcoin reached the $ 10,000 mark, which rose beyond this amount to reach a record high of $ 19,783 last December.
“I did not want to make predictions after that for a long time because I wanted to let the dust settle in. However, last month I thought it was time for another prediction, by presenting my new book, How to be the home hero: a guide and textbook for entrepreneurs and aspiring entrepreneurs, “Tim Draper told me in an exclusive interview.
Intrigued by Draper’s recent prediction and his keen interest in cryptocurrency, I sat down with Draper to ask him about his reasoning behind his latest forecast about Bitcoin, his new book and why he believes the cryptocurrency will completely replace fiat currencies.
Rachel Wolfson: In your new book, How to Be the Home Hero, you start with some definitions of what a hero is. Specifically, you talk about how a hero “goes long.” In cryptography, “holding” is a term we use to go long. How does this relate to being a hero?
Tim Draper: As a “holder”, I think it’s important to sacrifice in the short term for a long-term gain. Having a long-term focus on everything is worth a lot, from investing to being an entrepreneur or just living your life.
A “hero” has a long-term vision with a low probability result, but the result will always be high. In fact, the result may or may not happen. In the world of ICO (initial offer of coins), the heroes are those who are pulling their necks to create a new currency or chip to transform industries. For example, the heroes of ICO are generating a token to change governments by making them virtual. The Crypto Heroes have identified a technology that can take over the big monopoly and transform the world.
Wolfson: How did you come up with the amount of $ 250,000 for 2022?
The preaching that led me to reach $ 10,000 in 2017 was based on the idea that Bitcoin was going to be easy enough to use in the future and that people could start trading with it and use it as a stock shop. That’s why I invested in Bitcoin.
Now, I think people can spend cryptocurrencies, like Bitcoin, in typical situations. The cryptocurrencies will eventually replace the credit cards and will be something you can access from your phone. In fact, I think the cryptocurrency will ultimately replace the fiat currencies.
For example, there are currently around $ 80 trillion in trust money in the world. I think that cryptocurrencies will expand that market. I believe that cryptocurrencies will eventually grow to perhaps $ 100 billion and fiduciary currencies will fall from $ 80 billion to $ 30 billion.
I predicted that Bitcoin could end up with a market share of 20% to 30%. I outlined that, and I think the asymptote is around $ 130 billion, but only maybe $ 100 billion would be cryptocurrencies, and 20% of that would be Bitcoin. However, it would take between 10 and 15 years to reach that asymptote, so I’m thinking that along the way we’re going to see Bitcoin at $ 250,000 by the year 2022. That was one of the ways I considered predicting it.
I also look at Bitcoin as a network effect. For example, if I have Bitcoin and nobody else does, then it’s useless. But, if I have Bitcoin and you have Bitcoin, and we both recognize it, then we have a connection. Then, the link grows: it is the square of how many nodes there are in the network. At this moment there are 40 million Bitcoin wallets. I think this number will continue to grow and the square of that will determine the value of Bitcoin.
Wolfson: Do you think that the fiduciary currency will disappear altogether?
Draper: I think that in the future the fiat will resemble a change. For example, I think we will get to the point where we will go to buy coffee with, and the barista will look at us as if we were crazy. I also believe that soon we can buy coffee and other things with Bitcoin, Ether, Bitcoin or any other cryptocurrency on our phone.
Wolfson: What made you decide to invest in Bitcoin in 2014?
Draper: I decided to invest in Bitcoin in 2014
After a friend told me in 2004 about a game in Korea where everyone played. I think the game was called Legend. The game was a big problem at that time, and I was surprised that we lived in this “virtual world.” My friend told me that he was buying his son a virtual sword with fiat money to advance in these games. This made me think that we could have an entire economy based on a virtual world.
Bitcoin then came, and I knew it was a great opportunity. I ended up endorsing one of the first Bitcoin companies called “Coin Lab.” I invested in the company to obtain Bitcoin; however, the company ended up making an ASIC to extract the currency and thus be able to purchase it for much cheaper. The company then delivered this ASIC to Butterfly Labs, mined it and gave us the Bitcoin.
Bitcoin went from $ 6 to $ 36 at that time. We mine the Bitcoin and then store it in the bush. Gox, which at that time was one of the largest Bitcoin exchanges in the world. Then, of course, Mt. Gox disappeared, and we lost all the Bitcoin. I thought that was the end, but Bitcoin only dropped 15% after that news and then went up the next day. I thought: “Wow, the biggest exchange just collapsed and then continued.” This made me realize that the world needs Bitcoin.
Then I took the opportunity to buy Bitcoin that had been confiscated from the people behind Silk Road in the US Marshals office. UU There were about 19 bidders in total and most of them wanted to bid below the market, but I pushed above the market and got all nine lots of Bitcoin. Bitcoin was worth $ 632 when I bought it and slipped directly to $ 180. After this, I made my prediction that Bitcoin would reach $ 10,000 in three years. And somehow, we reached the $ 10,000 mark in three years, precisely in the number. Suddenly, I was the visionary.
Rachel Wolfson: You have been quoted as saying that blockchain technology is the next Internet. Is this true?
Tim Draper: The Blockchain technology is much bigger than the Internet. While the Internet affected the global economy, blockchain technology has the potential to transform industries that have historically been regulated by the government because they are enormous. For example, banking, real estate, insurance, venture capital, health care and the government itself can be entirely transformed by blockchain because it is the perfect book. The blockchain serves as the trusted third party to which we all turn for greater security. Personally, I feel much safer with my Bitcoin than with my trust currency in Wells Fargo. Wells Fargo is hacked all the time, but no one has deciphered the Bitcoin blockchain.
Rachel Wolfson: Do you have advice for people looking to start with the cryptocurrency?
Tim Draper: The way I see starting with the cryptocurrency is to get involved a little bit at a time. I suggest buying a small amount of cryptocurrency in Coinbase or putting some cryptography in a ledger. A ledger is a hardware wallet, so if you’re worried about someone taking your cryptocurrency, you can put it there. It’s incredible that all you need now is a USB port and you can keep all your money in your own hands.