Tim Draper: Bitcoin auction a ‘vote of confidence’ by U.S. government


03 July 2014 / Mercury News – Silicon Valley venture capitalist Tim Draper confirmed Wednesday he submitted the winning bid in a government auction of nearly 30,000 bitcoins, saying the acquisition was part of a long-term global investment strategy to spread the virtual currency to developing markets.

Draper will team with Palo Alto startup Vaurum to inject the bitcoins into exchanges in places like South America, Africa, India and parts of Asia. Since bitcoin isn’t controlled by any particular government, the free-spirited investor said, it is attractive to businesses and entrepreneurs in developing economies who contend with political instability and weak currencies.

“Humans out there are subject to political whims,” said Draper, known for unconventional ideas such as splitting California into six states, “and their whole lives can be overturned.”

Speaking at his eponymous entrepreneurial school in San Mateo, Draper declined to say how much he paid for the 29,565.5 bitcoins auctioned Friday by the U.S. Marshals Service, aside from joking, “I paid more than the other people in the auction.” The market value of the bitcoins was nearly $19 million Wednesday, up from roughly $17 million Friday.

The founder of Menlo Park firm Draper Fisher Jurvetson has emerged in recent years as a bitcoin proselytizer along with his son Adam, who runs an incubator, Boost, that focuses on the digital currency. Both Drapers have invested in Vaurum, which is also backed by former AOL Chairman Steve Case.

Draper claimed the government’s decision to auction the digital currency rather than destroy it was a “vote of confidence” in bitcoin, which the IRS regards as taxable property. Vaurum CEO Avish Bhama said the auction bolstered the idea that bitcoins are a legitimate asset…. Read more




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