Don’t Underestimate Bitcoin: Peter Thiel
The co-founder of PayPal and ex-CEO of hedge-fund group Clarium Capital noticed that people are not paying enough attention to developments in biotechnology. While he is generally sceptical about most cryptocurrencies, people are underestimating bitcoin. As he said Silicon Valley investors are mainly focused on “companies, rather than algorithms or protocols”. However, bitcoin might be “the one exception that is very underestimated”.
Many investors are cautious about cryptocurrency, because it isn’t backed by governments. But Thiel considers it not a weakness, but a strength of bitcoin.
“The nature of the mathematics maintaining bitcoin means that it can never be dissolved by government… it can’t be hacked and it’s a form of money that is secure in an absolute way,” Thiel pointed out. “Just as the cost of mining extra ounces of gold makes it a reserve form of money and a store of value”.
Another similarity with gold is that bitcoin is a bearer instrument, “so if you have the code to the key, then you can access it from anywhere in the world”. Of course, if bitcoin does end up being “the cyber equivalent of gold” and becomes more widely used, then it has great potential for further gains. While the total value of all gold in circulation can now be measured in trillions, the total value of all bitcoin mined is still only a few billion.