Free The Market, Free The World: Insights From Billionaire Investor Tim Draper
Is decentralization the coming revolution in banking and governance?
With MIT diplomas on the blockchain and leading tech companies like IBM, SAP, and Oracle offering Blockchain-as-a-Service to their Fortune 500 clients, it’s becoming clear that blockchain has moved beyond the hype and is on its way to becoming part of mainstream everyday lives.
The decentralized technology promises secure ownership of identity, data, and assets for all eternity and resolves issues that currently plague our digital society like theft, piracy and fraud. It has the potential to affect trillion dollar industries, but what seems to be generating the most excitement is what might happen once people realize they’re no longer beholden to the centralized institutions that have dominated for centuries.
According to billionaire investor, Tim Draper, geographic borders are becoming less important as more municipalities open themselves to virtual residents like Estonia, Malaysia, Kazakhstan, Gibraltar and Malta, which recently declared itself Blockchain Island. “80% of what a government does can be done virtually, including healthcare and pensions,” Draper told a packed audience at the recent Blockchain Economic Forum in San Francisco, “We’re moving into a renaissance where governments will start to compete for us.”
In conversation with former CFTC chair Gary Gensler, Draper discussed how cryptocurrencies are leveling the playing field. “The new currency is decentralized, cross border and frictionless. Why would you want a currency that’s tied to the whims of some government or central bank when you can have a currency that’s global and open and everyone sees it.”
When asked about naysayers Warren Buffett and JPMorganChase’s Jamie Dimon, Draper responded, “Buffet has a lot of fiat, he doesn’t like that there is a better currency, and Dimon who controls all of your dollars is seeing 1–5% of his biggest accounts leaving to Coinbase and Binance. You can hear the bankers panicking. The first thing the incumbents say is, Oh, it’s nothing!, then they’re like, it’s too big, we’re not going to let this happen, let’s sue them or get the government or plant press stories and create as much fuss as possible, and then they say, this is happening, I’m either going to make this or buy it.” Draper added, “In the case of Goldman Sachs, they didn’t say cryptocurrency was a fraud, so they’ve been able to jump in and now are doing something interesting.”
Draper, who is one of the richest people in crypto according to Forbes, predicted back in April that Bitcoin will hit $250,000 by 2022. He told Gensler he feels very secure in Bitcoin. “The Bitcoin blockchain has never been hacked. The banks are hacked constantly.”
“There’s been a lot of disruption in venture capital where startups can raise funds through Series A or B or crowdfund it and do an ICO. Just in Q3, more was raised from ICOs than the venture community. That’s a lot of opportunity for entrepreneurs.”
“When I invest, I never care about what could go wrong. All I think about is how high is up, how big can it get. So many things can go wrong, you can run out of money, you can not get along with your founders, the market might not evolve, you can be too early. Like all the other transformational technologies the only resistance is fear.” said Draper.