Peter Thiel Claims Bitcoin Has the Potential to Change the World

By Jon Southurst

Peter Thiel, co-founder of PayPal and famed Silicon Valley investor, has revealed he believes bitcoin could make some serious waves in the world of finance.

Speaking at the Thiel Foundation Under 20 Summit, last weekend, Thiel said he gave a talk back in 1999 that mentioned the end of monetary sovereignty and how encrypted money was going to “change the world”.

“I do think bitcoin is the first one of these that has the potential to do something like that,” he added.

The investor addressed the anti-bitcoin arguments that digital currency is “fake”, a temporary “bubble” and “doesn’t represent anything real” by stating that a lot of these arguments actually apply to the US dollar too.

“It is worth thinking about money as the bubble that never ends. There is this sort of potential that bitcoin could become this new phenomenon,” he continued.

Thiel hasn’t always been so positive about digital currency, in fact he has been rather ambiguous in his confidence regarding bitcoin’s future.

His venture capital company Founder’s Fund led a $2m investment in BitPay in May 2013, the same week Dwolla and Mt. Gox were having their funds seized by the DHS. Yet in person he’s been less sanguine, telling German-speaking audiences and interviewers bitcoin had only a 20% chance of succeeding as a form of payment in the long-term.

It’s rare in the bitcoin universe for someone to make major investments into related companies, yet be anything less than bullish about its future. So what are his reservations?

It seems they stem not from concerns about its purpose or inherent value, but that its anonymity might provoke governments into attacking it. At the recent summit, Thiel opened up a little more on the topic. He said:

“The cautionary note I’d put on it is … that, as far as I can tell right now, it’s being used for speculation and illegal activity – illegal payments, and therefore it is possible that it will be scrutinized in an increasingly difficult way in the years ahead.”

He described his own experience in 2000 making PayPal operable with e-gold, which issued certificates backed by real gold that could be used for anonymous payments. Upon discovering that the main use for e-gold was laundering money from credit card thefts, he disconnected it from PayPal just three months later (he was subsequently sued for libel by e-gold for stating his opinions about e-gold in a Wired interview).

e-gold was eventually shut down by the US District of Columbia after being charged with being an illegal money transmitter in 2008. Its CEO Douglas Jackson was fined $200 and sentenced to home detention, and its precious metal reserves were liquidated for $90m. Naysayers often invoke the sorry tales of illegal activity and regulation surrounding companies …read more

Source: CoinDesk