An unignorable icon’s passing marks the end of an important early age in crypto.

This episode is sponsored by and Circle.

The passing of an icon in crypto necessitates reflection. John McAfee was at times reviled, and at the same time, deadly serious and a prophet, sometimes a clown. The many facets to his personality mirror the roller-coaster history of crypto, a Wild West of finance in its earliest days.

Join NLW in this episode of “The Breakdown” for a journey first through the winding history of McAfee, followed by a narrative tour of the many flashpoints in the “gonzo” era of early crypto.

This episode contains explicit language. Sensitive listeners, please be advised.

Image credit: Anthony Kwan/Bloomberg/Getty Images, modified by CoinDesk


“Some may never live, but the crazy never die.” ― Hunter S. Thompson

Yesterday, John McAfee died in his Spanish prison cell, waiting to be extradited back to the US to face trial for tax fraud. 

Just hours earlier a Spanish judge had cleared the extradition to go through. 

The internet is, shall we say, not buying it. 

McAfee was one of the wildest characters in crypto. He would have been one of the wildest characters in any industry, it's just that crypto came to suit his particular brand of crazy. 

He was at turns reviled, lionized, a bad joke, a deadly serious warning, a clown, a prophet, a charecateur, a soothsayer, a s**tcoiner, a true believer. 

Whatever he was, he was unignorable. 

He was an icon. An icon of an era in crypto that is quickly passing by. 

History passing us by is a messy affair. Historians like to use emblematic events to mark passages from one phase to the next, even if the reality is by no means that cleanly organized. 

Hunter S. Thompson had something to say about this too. He wrote: "History is hard to know, because of all the hired bulls**t, but even without being sure of ‘history’ it seems entirely reasonable to think that every now and then the energy of a whole generation comes to a head in a long fine flash, for reasons that nobody really understands at the time—and which never explain, in retrospect, what actually happened."

I wonder if, in a decade or two, McAfee's end isn't seen as one of those emblematic moments; a marker of the time that crypto moved from something wild to something, well, not as much.  

First though, the man himself.

Anyone who used computers in the 1990s knows the name McAfee. He built the first commercial anti-virus software and founded McAfee Associates in 1987. He left the company in 1994 but its storied legacy lived on. 

After leaving the company, he did a slew of other things in technology. He developed one of the first instant messaging protocols, he invested in firewall software, he got absolutely wiped out in the great financial crisis after trying to invest in and build mansions around the US, he tried to grow plants for medicinal use in Belize. 

John McAfee's life in Belize was the subject of a 2016 documentary aired on Showtime called “Gringo: The Dangerous Life of John McAfee.” The documentary covers suspicions of drug tafficking, accusations of rape, and even accusations that McAfee was involved in the murder of a neighbor – something that would prompt him ultimately to leave the country. 

After leaving Belize in 2012, he was sort of quiet for a while. He ran for president in 2016 as a Libertarian, but in the meantime he had started to go deep in the decentralization space. 

He founded a company called Future Tense that was meant to build a decentralized network tool that used mesh networks to send messages and files outside of the web. 

In 2017 slash 2018, he became perhaps the world's greatest ICO shiller, charging more than $100,000 for a single tweet, and at one point actually getting a "Skycoin" tattoo on his back. 

During this era, he also made one of his most famous pronouncements. In a July 17, 2017 tweet, he said that if bitcoin wasn't $500 thousand within three years he would "eat his dick on national television." A few months later he doubled down, saying: "When I predicted bitcoin at $500 thousand by the end of 2020, it used a model that predicted $5000 at the end of 2017. BTC has accelerated much faster than my model assumptions. I now predict bitcoin at $1 million by the end of 2020. I will still eat my dick if wrong. “

Unsurprisingly, as a wave of people got absolutely wrecked thanks to shillers like McAfee, the SEC didn't stay quiet for long. McAfee started moving into a new phase - staying on the move via his boat and tweeting to his more than million followers. 

In Jan 2019, he announced that he was on the run from U.S. authorities. That didn't stop him from running for president again in 2020. 

On October 5, McAfee was arrested in Spain for tax evasion. On October 6th, the SEC said that he had made $23 million promoting ICOs. On March 5 of this year, the U.S. Attorney's Office of New York said they had formally indicted him. 

Then today, the Spanish national court authorized his extrodiction. A few hours later, he was found dead by aparent suicide. 

To get a sense of how the internet is taking it, right now both "Epstein" and "Mcafeedidntkillhimself" are trending. 

As disinterested in conspiracy theories as I am, it's hard to ignore the suspicion. 

On Nov 30, 2019, McAfee tweeted: “Getting subtle messages from U.S. officials saying, in effect: ‘We're coming for you McAfee! We're going to kill yourself.’ I got a tattoo today just in case. If I suicide myself, I didn't. I was whackd. Check my right arm. $WHACKD available only on”

He got a tattoo saying WHACKD. 

On October 15th of last year, he wrote: “I am content in here. I have friends. The food is good. All is well. Know that if I hang myself, a la Epstein, it will be no fault of mine.”

It’s not just the crypto faithful who are crying foul. After he died, his official Instagram account posted the letter “Q,” although to be honest, the best explanation of that I've seen is that its exactly the type of thing McAfee would have done to f**k with all of us and would have found hilarious .

Eric Weinstein came out with a wrought thread on how f**ked up it all was. So, even in death he is likely to stir as much controversy as he is in life. 

The coming days will reveal much and obscure even more and debates will rage. No matter what one thinks of the man, I hope he rests in peace in a wild great beyond. 

But where I want to go now is one notable fact: his absence as a part of this new bull run, this new phase of crypto. 

So let's talk about this idea of the end of crypto's Gonzo era. 

First, what the hell does this word Gonzo mean? 

In 1970, the same guy that I keep quoting, Hunter S Thompson, wrote an article called "The Kentucky Derby Is Decadent and Depraved." The piece absolutely obliterated all norms of journalism. Rather than assuming an objective stance, it put the author directly in the middle of the action, a participant observer unwilling to leave any detail or opinion out. The Boston Globes’ editor Bill Cardoso called the piece "gonzo," an old Irish bar slang for the last one standing after a night of drinking, and the name stuck. 

HST would make the style of writing even more famous with his Fear and Loathing in Las Vegas from a couple years later. But more than just a style of writing, gonzo was a style of living that attracted acolytes. 

It was to live unafraid. Unafraid of norms or mores or failure or pain or even, ultimately death. It was to do things that others thought crazy because they just seemed like the right things to do. 

“Life should not be a journey to the grave with the intention of arriving safely in a pretty and well preserved body, but rather to skid in broadside in a cloud of smoke, thoroughly used up, totally worn out, and loudly proclaiming ‘Wow! What a Ride!’"

This type of living, as you might imagine, involves some pretty serious volatility. Some wild swings that make the conventions of normal living seem quaint in comparison. 

The first decade of crypto was absolutely gonzo as f**k. 

This was an invention with the audacity to believe, not only that it had solved problems that other brilliant minds had spent decades trying unsuccessfully to solve, but that in so doing it could create not just a valuable technology project, but an entirely different form of money – an entirely different form of human organization. 

When you actually step back and think about that, it's absolutely staggering. It puts every vision slide on every Silicon Valley pitch deck to shame. 

But the crazier thing is, some people bought into it. They started f**king around, trying it out, contributing to a forum discussion, contributing code, contributing the computing power that mined the thing, never really knowing what it might become, only that it represented something different, and that difference was something they wanted to be a part of. 

As with so many new technologies, Bitcoin’s earliest dedicated users were those forced there by rejection from other parts of the civilized world. It isn't an accident that something like Silk Road happened. 

And while many will forever try to paint Silk Road as exclusively a haven of criminals, there were I believe a fair few who better fit another HST definition of outlaw: “An outlaw can be defined as somebody who lives outside the law, beyond the law and not necessarily against it.”

This is not to aggrandize nor celebrate any particular people or behaviors, only to recognize that being a refuge of malcontents is a hallmark of a truly open network. 

But that wasn't the only Gonzo part of the early days. 

The crypto exchanges we know now are some of the largest, fastest growing financial institutions in the world. Coinbase is a public company. Kraken has a banking license. FTX just became the first exchange to partner with a Big 4 American sports league. 

The earliest exchanges were held together with duct tape and paperclips. They were unwieldy, vulnerable and wild. 

Mt. Gox started as the Magic the Gathering Online Exchange. That particular story – the exchange hack that drained funds for literally months and set the professional development of the industry back years – is STILL unresolved today. 

There were also the earliest people involved in the industry. The stories of the earliest adopters are legion, and many will turn into future novels and screenplays. Take, for example, the professional poker player who became an exchange entrepreneur, built a decentralized dark market before moving to Rojava, aka Syrian Kurdistan, in order to serve in the YPG military. 

But the crypto industry's gonzo era wasn't just early bitcoiners. 

Let's zoom forward to the Ethereum hard fork. The DAO – literally the first of its type of thing that gave the new organizational form its name – starts and becomes at the time the most successful crowdfunding campaign in history raising over $150 million equivalent in eth from over 11,000 people. An auspicious and inauspicious sign of things to come in the ICO era. 

However, the code is vulnerable and The DAO was hacked, compromising more than $60 million in ether. 

At the time, The DAO had 15% of ETH locked up, so the community was faced with a serious choice: Let that theft be enshrined and sanctioned, that value lost forever to those who thought they owned it; or, play God by community mandate. Roll the state of the blockchain back to before the hack and proceed. 

This is insanely gonzo. It's not about what the right answer is or was, it's about the fact that there was this moment in 2016 that was so early in the life of this network that has gone on to represent so much massive future potential for so many people where an existential threat came down to a community decision, and a decision that still shapes how many perceive the project today. 

And then of course there is the ICO era. Never in history has so much wealth been created out of so much nothing so fast. It was a perfect story of pent up demand to be a part of the massive wealth creation of venture technology, plus social media amplification, plus the most friction free fundraising in history. Within a few months, ICOs were massively outstripping traditional venture financing. Projects were raising tens of millions with bulls**t white papers and worse websites. 

And some folks actually thought it was the beginning of the mainstream of this industry. In retrospect, it was just another flashpoint in crypto's gonzo era. 

Of course, it attracted all manner of crazies from ruthless exploiters to moralists willing to shill the thing to make a quick buck. McAfee was a king among the shills. 

The washout washed a LOT of the gonzo out of this space. The wild exploiters packed up and looked for greener pastures. The promoters and hype people slunk off to shill cannabis stocks or new age neutropics. 

And the people left got to building. Some of them worked on a totally different model for tokens that weren't fungible and could represent uniqueness, believing that there were applications for art, content, creativity. 

Some of them took what had been started with smart contracts and slagged off the tokenize the world projects to instead return to the roots of all of this by focusing on building new, open finance focused protocols. 

And then there were the bitcoiners, recovering from the blocksized war, more convinced than ever in the sound money principles underlying their asset, and out telling a story of resilience and difference in the face of an ever more interventionist fiat world. 

It worked. The industry matured. 

In the wake of the COVID-19 crash, all those millions of conversations turned into the scions of traditional finance pointing over in the direction of Bitcoin and saying: This thing offers something different. And even if you don't believe it, you can't argue with the fact that no matter how many times we call it, it just won't die." 

Hedge funders came in. Corporate treasuries came in. Insurance company general accounts came in. Entertainment companies came in. 

And all of a sudden, things were different – at least a little bit. 

Sure, there is still some pretty gonzo s**t that happens. It's entirely possible that in 10 years we will say: "Good God, remember when they let us trade with 125x leverage?" 

And sure, there are still some gonzo people. Max Keiser will probably have a “F**k Elon We're Not Selling” party for his funeral. But overall, with every week that passes, the industry becomes a little less Gonzo and a little more Goldman Sachs. 

There are warnings to be had here. Ben Hunt has written eloquently about the risk of turning into Bitcoin™ – a wall street owned and operated casino where the truly disruptive parts that challenge the power system are lost and all that's left is another game where the house always wins. 

But still the march away from the beginning is inevitable. 

John McAfee died yesterday. However it happened, it happened, and with it, something larger passed too. 

I'll end with one more quote from HST – “Yesterday's weirdness is tomorrow's reason why.”

Make of that what you will.