Tim Draper has been one of the most vocal proponents of Bitcoin. In fact, he says it will become bigger than the internet and will touch $250,000 by 2022! While this might be too optimistic for most people to digest, Draper, the first investor in Hotmail, Tesla, and Skype said –
"This is bigger than the internet. It's bigger than the Iron Age, the Renaissance. It's bigger than the Industrial Revolution. This affects the entire world and it's going to be affected in a faster and more prevalent way than you ever imagined."
Draper made this comment during a debate at the Intelligence Squared U.S.in partnership with Manhattan Institute's Adam Smith Society. Elaborating on the use-cases, the founder of the leading venture capitalist firm, Draper Associates and DFJ explained his reasons. Draper had purchased nearly 30,0000 bitcoins from 2014 U.S Marshall Service auction (the coins auctioned by the U.S government after busting Silk Route operations). The accumulated value of these coins makes them worth $268 million as he is still holding onto them. While the debate was counter-argued by Financial Times Managing Editor Gillian Tett, who contended that bitcoin was prone to nefarious activities, volatility, and risks associated with it, Draper felt that money was safer than the bank accounts.
Draper was supported by Overstock.com CEO Patrick Byrne, who is also a follower of the bitcoin and is currently working to realign the company’s retail business on the blockchain. He contended that fiat U.S dollars were equally capable of being misused and hacked.
"This has been hacked at more than anything in history and has never been defeated. Last I checked, banks get hacked too. And yeah, Bitcoin is used by unsavory characters. Last I checked, they used U.S. dollars too."
Draper is a long-standing proponent of bitcoin and has even urged the government in India during his visit recently in April 2018, to focus on cryptocurrencies and not take steps towards banning them. He believes the use-cases of the currency are huge and will help create disruption across sectors for more profitable economies. It will also enable governments to become transparent and efficient.
Fiat At a Disadvantage?
He feels the value of fiat currencies are limited by borders. As he explained, the acceptance of a Nigerian Niger drops by 30% outside the country, Argentina’s peso is barely accepted outside as is the case with most other currencies. While the U.S dollar and Euro are the most highly accepted currencies, they have their own restrictions in conversions – this double switch from one currency to another makes you lose at least 1.4% of the value which could soon be a thing of the past with bitcoin as the uniform standard of value. Draper predicts that five years from now, buying a coffee with fiat money will be clichéd and technology will make the complexity go away over a period of time.