Bitcoin billionaire endorses Tezos crowdfunding

Billionaire venture capitalist Tim Draper, known for his investment in Bitcoin, has revealed his intention to make his first investment related to a new virtual currency since Bitcoin.

Draper’s underlying aim is not to uncover a new star virtual currency but rather to demonstrate to a broad range of investors that virtual currencies are safe, by participating in an initial coin offering (ICO) for the blockchain platform Tezos.

 

Many investors nervous of virtual currencies despite Bitcoin’s strength

Initial public offerings (IPOs) are a well-established way for companies to procure substantial funds. In the same way, virtual currency ICOs are intended to generate working capital via the sale of newly issued virtual currency tokens to investors.

Besides the fact that, because the investment is a virtual currency, virtual currency exchanges fulfil the role that securities houses play in an IPO, there is no great difference between IPOs and ICOs in terms of investment mechanism and concept. Investors put funds into a new virtual currency in the expectation that it will rise in value, and issuers use the funds procured for development and promotion activities.

A prime example of success in fund procurement using an ICO is Ethereum, which procured the equivalent of $18 million (around yen 2 billion) in its Ether presale in 2014.

However, many professionals view ICOs, which are not regulated in the same way as IPOs, as risky investments. Although the profile of virtual currencies has been raised by the strength of Bitcoin, it has not yet reached the level of recognition enjoyed by ordinary stocks.

Draper sees Bitcoin as unassailable

Draper, who founded venture capital firm Draper Fisher Jurvetson in 1985, was an early investor in Skype and in the leading Chinese search engine Baidu and was one of the first to appreciate the potential strength of Bitcoin.

Draper initially purchased 30,000 Bitcoins in 2014 (for an estimated US$19 million) and, thereafter, continued with serious investment in Bitcoin regardless of the ups and downs in its price.

Various virtual currencies have since vied for investors’ attention. However, Draper has always asserted that Bitcoin remains the leader and that, although other virtual currencies such as Ethereum do indeed have potential, none will overtake Bitcoin.

 

Tezos team includes Wall Street thinkers and computer scientists

Source: Shutterstock

It was in this context that Draper surprised the market by participating in Tezos. This platform, based on the digital community concept, was established in 2014 by a team that included a Wall Street think tank, computer scientists, and mathematicians.

Tezos has similarities with existing blockchain platforms such as Bitcoin but differs significantly in having decentralized management.

With existing blockchain technology, there is a tendency for authority to become concentrated in a few hands. Tezos strives to remedy that weakness this by decentralizing blockchain governance.

 

Broad appeal of safe and beneficial virtual currencies

Draper says that, in investing in the Tezos virtual currency, he can lead by example and demonstrate to investors nervous of unregulated ICOs that virtual currencies and ICOs are safe and beneficial.

Draper is convinced that financial markets are facing a major turning point, and he stresses the importance of more investors turning their attention to new investment products such as ICOs. He has demonstrated his willingness to take a lead in this new investment sector.

By attracting famous investors such as Draper, Tezos can have high hopes that its credibility will rise. General information is available on Tezos’ website. Full-scale launch is at the end of May. Investors interested in a new star virtual currency should take a look.

(By ZUU Japan)

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