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Bitcoin Businesses The Almighty Buck

Investor Tim Draper Announces He Won Silk Road Bitcoin Auction 115

Posted by Unknown Lamer
from the plans-to-build-moon-fortress dept.
After some speculation yesterday about the winner of the auction for the first block of bitcoins seized from the Silk Road, the winner went ahead and made his identity public. Tim Draper has won the U.S. Marshals bitcoin auction and is partnering with Vaurum to provide bitcoin liquidity in emerging markets. ... Tim offered this in a statement: “Bitcoin frees people from trying to operate in a modern market economy with weak currencies. With the help of Vaurum and this newly purchased bitcoin, we expect to be able to create new services that can provide liquidity and confidence to markets that have been hamstrung by weak currencies. Of course, no one is totally secure in holding their own country’s currency. We want to enable people to hold and trade bitcoin to secure themselves against weakening currencies.”
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Investor Tim Draper Announces He Won Silk Road Bitcoin Auction

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  • Providing bitcoin liquidity ..... If you have the interest to buy it. All those coins going somewhere to rot with the rest until more people adopt the idea, and mining is eventually rendered useless, so it becomes a "real" tradeable asset, like gold i guess. When will a candy bar cost .0001 bitcoins?
    • ...and mining is eventually rendered useless...

      Huh? With bitcoin, the mining process is how transactions are validated. No mining, no transactions. How do you think it could ever be rendered useless?

      When will a candy bar cost .0001 bitcoins?

      Difficult to say. But you can get candy bars for around .0016BTC (+shipping) from here. [bitcoincandystore.com]

  • Hold on a sec ... is he trying to say that bitcoin can help rectify problems caused by weak currencies?
    • Having an alternative currency like Bitcoin in a country with rampant inflation 'couldn't hoit'. Especially if dollar purchases are restricted like in Venezuela where holders of the Bolivar lost 56% last year due to inflation. It simply gives the victim of an inept monetary policy a way to preserve the wealth value in an asset more stable than his own currency. Gold and dollars would be better but they are hard to obtain.
    • by gstoddart (321705)

      And markets.

      So, as a currency, it is somehow magically not affected by markets or the chance of devaluation?

      I must admit, I read that and thought "I have no idea what this man is saying".

      Bitcoin is a currency, and it is subject to modern market economies. The entire summary sounds like Bitcoin is somehow magic.

  • "Of course, no one is totally secure in holding their own country’s currency"

    Just put the words "Of course" in front of any opinion and people will accept it as fact.

    • Re: (Score:2, Insightful)

      by Anonymous Coward

      Of course, it helps that what he's saying is a fact; no one is totally secure against anything. It's just a meaningless fact.

    • by Megol (3135005)

      In general: is it a truism -> just ignore it. And that is one.

    • by wbr1 (2538558)
      Of course, you may be right.
    • by TeknoHog (164938)

      Of course, just put the words "Of course" in front of any opinion and people will accept it as fact.

      FTFY.

  • Seriously, in this shady world of bitcoin, where people lie and deceit all the time how can anyone take someone word for granted?

    There is zero evidence Tim Draper was the auction winner, except for is own statement, that's not backed up by absolutely anything.

    Even more, I clearly remember the days where Mark Karpelles was a great guy, a visionary, an entrepreneur that embraced bitcoin... look at what the "bitcoin people" say about him now.

    • There is zero evidence Tim Draper was the auction winner, except for is own statement, that's not backed up by absolutely anything.

      Because if he was lying, the actual winner is extremely likely to issue a "nuh uh. *I* won the auction" statement
      • by jbssm (961115)

        Because if he was lying, the actual winner is extremely likely to issue a "nuh uh. *I* won the auction" statement

        Which would have exactly the same weight.

        Funny thing is that Tim Draper waited almost 5 days to come forward and tell that he won the auction... just when he saw anyone else was doing it. So, my statement remains: There is zero evidence he actually won the auction except for his word.

    • by AmiMoJo (196126) *

      It seems unwise to claim to the winner. A lot of people who lost money when those bitcoins were seized will be quite upset with this guy. Considering many of the dealt in drugs, weapons and other illegal material I wouldn't like to speculate what they might do to him.

      • by dj245 (732906)

        It seems unwise to claim to the winner. A lot of people who lost money when those bitcoins were seized will be quite upset with this guy. Considering many of the dealt in drugs, weapons and other illegal material I wouldn't like to speculate what they might do to him.

        On the other hand, it seems wise to make a statement. Everybody can track those bitcoins anyway. One of the concerns I might have as a buyer of them would be that no exchange would deal with me and I couldn't cash them out. By making a statement which shows he is a "good guy" he might be able to escape the communities anger about the situation and deflect it back on the person who lost them and the government who took them, which is where the blame rightly belongs anyhow.

    • by ShaunC (203807)

      There is zero evidence Tim Draper was the auction winner, except for is own statement, that's not backed up by absolutely anything. Even more, I clearly remember the days where Mark Karpelles was a great guy, a visionary, an entrepreneur that embraced bitcoin... look at what the "bitcoin people" say about him now.

      Mark Karpeles is a guy with a failed trading-card website who hired a few c0d3rZ to dabble in Bitcoin and wound up with a disaster. Tim Draper is a fairly well-known VC who's spent 30 years building both his reputation and a company worth billions of dollars. If you can't see the difference, I doubt anything I say will help, but Draper is incredibly unlikely to issue a statement like this if it isn't a) true, b) fully vetted by his legal team, and c) fully vetted by the other company's legal team.

  • by necro81 (917438) on Wednesday July 02, 2014 @12:20PM (#47369425) Journal
    Promoting a cryptocurrency to help the developing world avoid the pitfalls of its own weak currency? Wasn't that a plot element of Cryptonomicon. If I recall, however, they were going to back all of their cryptocurrency against a mountain of gold (Nazi and Japanese spoils of war).
  • Weak != Bad (Score:4, Insightful)

    by sjbe (173966) on Wednesday July 02, 2014 @12:23PM (#47369461)

    Bitcoin frees people from trying to operate in a modern market economy with weak currencies.

    No it does not. A currency that is "weak" is a relative valuation of exchange compared with other currencies. Weak does not (necessarily) equal bad. A "weak" currency benefits exporters and hurts importers. China has purposely been keeping their currency weak for some time now to facilitate their manufacturing exports. Whether bitcoin is "strong" or "weak" depends entirely on what you are comparing it with. (Never mind the fact that bitcoin is ridiculously volatile which doesn't help either) Furthermore unless you plan to actually hold bitcoins instead of using them as a fancy money order spending little time holding them, the relative strength of bitcoin as a currency is irrelevant.

    With the help of Vaurum and this newly purchased bitcoin, we expect to be able to create new services that can provide liquidity and confidence to markets that have been hamstrung by weak currencies.

    What a load of malarkey. Bitcoin is no where near stable enough nor widely accepted enough to serve this function.

    Of course, no one is totally secure in holding their own country’s currency.

    I'll take my chances with the US dollar thanks. I trust it FAR more than I do bitcoin.

    • by gatfirls (1315141)

      Yea, this guy is proof that vulture capitalists are no better than the retards trading pink sheets and posting on the yahoo finance forums about how strong their portfolio is.

      His quotes read like something from the onion.

      • I think you mean to say his quotes read like something from the onion. That is, his quotes are like something from the onion. In other words, his quotes are similar to what you would find on the onion. The onion. Onion.

      • People at that level talk with purpose, and the purpose is not always conveying well-justified facts or opinions.

        Draper is far from stupid. He is already starting to talk his book by giving increased legitimacy to *bitcoin technology startups*, which is his actual investment.

        The profits are in the fees in the payment systems.

        From which he will cash out profits in cold dollars and euros, and a few bitcoins as a lark.

        Bitcoin can't possibly be any kind of stable or useful general currency until there's a bond
        • by gatfirls (1315141)

          I wasn't speaking to his intelligence I was referencing his statements that are blatant sales pitch or mission statement type quotes. It's the same thing we have seen all over the internet about how this new idea is going to be great because...bitcoin.

          I fully expect he will (has) make a profit off of his investment.

          I guess I can be proven wrong if someone explains to me how "no one is totally secure in holding their own country’s currency". I mean I have never really met anyone who isn't totally sec

      • Okay, I'll bite. Do you really think he has amassed all his wealth through dumb fucking luck? Or all VCs for that matter?

        • by QilessQi (2044624)

          Okay, I'll bite. Do you really think he has amassed all his wealth through dumb fucking luck? Or all VCs for that matter?

          From Wikipedia ( http://en.wikipedia.org/wiki/T... [wikipedia.org] ):

          He is the third in a line of venture capitalists. His father, William Henry Draper III, founded the Draper & Johnson Investment Company in 1962 and his grandfather William Henry Draper Jr. founded Draper, Gaither and Anderson in 1958. His father also was chairman and president of the Export-Import Bank of the United States.[2] Tim

        • by gatfirls (1315141)

          See here: http://slashdot.org/comments.p... [slashdot.org]

          I take issue with the statements not the man.

    • If one has a strong currency, then one commands the privilege of the market. That means one would get first pick of new opportunities, new investments, and everyone wants to do business because of that strong currency. What you pointed out is the adverse consequence of having a strong currency--lots of buying power, but limited ability to actually generate new income. Strong currencies benefit the investor class and continues to give them privilege in the market--and to a degree, at the expense of everyone
    • His understanding of macroeconomics is on par for a typical bitcoin evangelist.

    • Re: (Score:2, Funny)

      by Wonko the Sane (25252) *

      I'll take my chances with the US dollar thanks. I trust it FAR more than I do bitcoin.

      Excellent news.

      Seriously, I love hearing that. Not everybody deserves to be a Bitcoin early adopter.

      • Seriously, I love hearing that. Not everybody deserves to be a Bitcoin early adopter.

        "Deserves"? How precious that you think yourself so clever. You go ahead and put your money on the bitcoin roulette wheel. I'm going to put mine in investments that actually do something productive and are a lot more predictable as well. Maybe you'll get lucky and exchange rates will move in your favor... but I doubt it. Your odds are better in Vegas frankly.

        • Re: (Score:2, Insightful)

          by Wonko the Sane (25252) *

          I expect exchange rates to move in my favor, but that's just a side benefit. The real advantage of abandoning the Dollar for Bitcoin is that my liquidity and savings are no longer tied up in murder-based blood money.

          Bitcoin is a human rights movement.

          • by St.Creed (853824)

            I expect exchange rates to move in my favor, but that's just a side benefit. The real advantage of abandoning the Dollar for Bitcoin is that my liquidity and savings are no longer tied up in murder-based blood money.

            Bitcoin is a human rights movement.

            Are we talking about the bitcoin that was used on Silk Road? Because i'm pretty sure it wasn't the Red Cross and the Salvation Army trading their stuff there.

    • I'll take my chances with the US dollar thanks. I trust it FAR more than I do bitcoin.

      I know a couple folks who don't have the option of using US dollars thanks to their governments. They are doing a substantial amount of business in bitcoin instead.

      • I know a couple folks who don't have the option of using US dollars thanks to their governments. They are doing a substantial amount of business in bitcoin instead.

        In other words that is a backhanded way of saying they are doing something illegal. I've been all over the world including to places where they don't allow free exchange of the local currency into dollars (like China). It is NEVER a problem to do business in dollars. In fact in places where the local currency is a bit shaky (like Vietnam) they actually generally prefer to do business in dollars.

        • Were you trying to imply narcotics trade or something like that? The world has a lot more in it than any one of us can imagine. That's my backhanded way of saying you are wrong. In place such as Argentina, there can be a lot of risk in exchanging dollars under one of the "cambio" signs, and the fees can be quite stiff. So they prefer to use bitcoin for a lot of transactions, especially where the whole transaction can be done out of country, such as contracting for online services.
          • Were you trying to imply narcotics trade or something like that?

            That is merely one of the possible options. There are countries where you cannot legally do certain activities that have nothing to do with narcotics trafficking. For instance in some countries it is illegal to exchange the local currency for dollars because the government is trying to control the money supply. I said they were doing something illegal and that can mean many things.

            That's my backhanded way of saying you are wrong. In place such as Argentina, there can be a lot of risk in exchanging dollars under one of the "cambio" signs, and the fees can be quite stiff.

            So they ARE doing something illegal and I was right.

    • by Anonymous Coward

      You do? Dude, I have more trust in there being a sunrise tomorrow than I do the dollar. I have more trust in spilling a glass of water leading to a puddle and not a cloud, than I do the dollar.
      At this moment in time, the dollar is literally less than worthless.
      You are trading in bad debt every single day.
      And now China is making a move on the US markets and is going to turn the US in to what the US turned China in to. Enjoy your awful future.

      At least with Bitcoin you will be able to make money off it if

    • by istartedi (132515)

      Yep, it's not the relative strength of the currency that causes problems. It's the stability of the currency that causes problems. Having 1 Yen == $0.0098 is not be a problem even though the Yen is weak relative to the dollar.

      Having 1 Yen == $0.01 today, $0.001 tomorrow and then $0.005 the next day would be a problem. It's an obvious problem for people with Yen in their bank accounts because they lost a lot of purchasing power. It's also a problem for anybody trying to write a contract that involves p

      • Bitcoin Instability?

        Several years ago I bought $150 of bitcoin @ $0.50 a coin. Figured I would get some for the novelty.

        Last year I sold a few off and bought 12.5 acres of land, right now I could sell some more and pay off my house.

        Sure they have gone up and down, but in the long run they have gone up.

    • by ultranova (717540)

      Bitcoin frees people from trying to operate in a modern market economy with weak currencies.

      No it does not.

      Does not what, exactly speaking? The literal meaning of the sentence is that you're trying to use several different weak foreign currencies to pay your way. Since this is finance, it's impossible to say if we're seeing bad grammar or the beginnings of yet another terribly clever instrument of economic mass destruction.

  • by Zeio (325157) on Wednesday July 02, 2014 @12:31PM (#47369515)

    Bitcoin is deflationary in a world with increasing population. Also BTC has made land grabbers and early adopters rich - it doesnt look like the currency of the future to me.

    The other issue is that it cannot be recovered when stolen - this makes the identity theft issue utterly lethal.

    If something similar to BTC came about that was convertable to energy or bullion that would be of interest - then the whole digital-only nature of the currency would be alleviated to some degree (a computer/HDD crash can wipe you out is a valid fear).

    The other thing that needs to come about is transaction escrow. Some mutually agreed on non-governmental third party should provide escrow for large transactions.

    I think that Amazon and others love BTC simply because they dont have to pay a tithe to credit card companies, but credit card companies help us deal with fraud, bad products, identity theft, etc. If you pay your credit cards off in time you get a company that can be helpful in dealing with fraud and identity theft vs nothing.

    BTC is like walking around with krugerrands and bearer bonds without security.

    • by mythosaz (572040)

      Amazon and others pay a "tithe" to their BTC processor, exactly the same was they fees to their other merchant processing services.

      Strictly speaking, nobody accepts anything other than the cold hard cash their payment processor transfers to their account at the end of the day. "MasterCard" doesn't put money in their bank account -- XYZ Merchant Services LLC does. As long as XYZ will accept BTC and give Amazon "real" money, great. The same goes for Visa, MasterCard, or truckloads of Dutch tulips.

    • by itzly (3699663)
      Right now bitcoin is still inflationary, and it will remain that way for a while to come.
      • by Anonymous Coward

        it is both inflationary and deflationary right now. or maybe just one, or niether? Its schrodingerCoin.

    • I think that Amazon and others love BTC simply because they dont have to pay a tithe to credit card companies

      That's only true if they operate their own exchange - otherwise they're paying exchange fees. (Which admittedly are likely far lower than what they pay the credit card companies.)

      but credit card companies help us deal with fraud, bad products, identity theft, etc. If you pay your credit cards off in time you get a company that can be helpful in dealing with fraud and identity theft vs nothi

      • We pay the card companies a lot of money for using their network, maintaining a secure ledger of accounts and combating fraud and identity theft, merchants pay 3% of their gross revenue through the transaction fee and the card providers also extract some of this cost from the consumer through high fees and interest. These are costs that suddenly vanish when the merchant accepts Bitcoin (or actually shrink to .1%) since the network is free, the ledger (blockchain) is free and identity fraud is impossible
    • Bitcoin is deflationary in a world with increasing population. Also BTC has made land grabbers and early adopters rich - it doesnt look like the currency of the future to me.

      No - if you're talking about money supply then Bitcoin is inflationary until it stabilises. What happens to prices in the meantime is anyone's guess. So far the price has gone up, it's gone down. Over the long run it's got a lot more valuable, but that's a temporary artifact caused by the novelty of an actually working e-cash system. No

    • by Anonymous Coward

      counter-party capability is available, multi-sig transactions ... give it a few months ..third party escrows will pop up ..and you will be able to choose them via free market.

      deflationary with an increasing population is a good thing. I think you have deflation and inflation backwards.

      identity theft, that is certainly a problem that needs to be solved, but it will be, and I think it will be solved via hardware rather than software. off OS signature devices built into phones/PCs ... probably.

      All that being s

  • It might work against hyper inflation. But other than, that its kind of worthless. And when you have hyper inflation, governments usually crack down on any kind of currency movement out of the weak currency to try and prop up the local currency.

    So this is great, if you think that your currency is going hyper inflationary in a short period of time. I don't think there are many cases in which that would be useful.

    Otherwise, if Bitcoin can be called a currency, then its also suceptible to variance in value as

    • by itzly (3699663)
      But it's easier to hide from the government that you're dealing in bitcoin, so there it could offer an advantage over strong foreign currencies.
  • Related News... (Score:5, Informative)

    by mythosaz (572040) on Wednesday July 02, 2014 @12:43PM (#47369611)

    In related news, a Sinaloa Cartel spokesperson was quoted as saying, "Thanks, we were wondering who had our money."

  • by Anonymous Coward on Wednesday July 02, 2014 @12:43PM (#47369617)

    This is nothing more than a ploy to advertise the company (which I'm not naming on purpose).
    That is also how he was able to win. He did NOT bid "X times Y" where X is the price of BC and
    Y is the number of coins. He bid "X times Y plus advertising-factor". That's how he was able
    to beat everyone else.

    WATCH. They will sell these BC within the next 30 days. I know it's a bit outside /. attention-span but that's how it is going to work.

    Fortunus dominus

  • by Anonymous Coward

    Dear Tim,

    Can I have my bitcoin back please. I think you have a few that belong to me.

    thanks,
    AC

    • They ceased to belong to you when the FBI confiscated them.

      • The FBI is not officially trying to confiscate any legitimate property. If AC has evidence that some of the BTC belong to him, and he wasn't using them for illegal purposes, AC could file a claim. AIUI, nobody has filed a claim for any of the BTC, so the FBI is treating them like any other confiscated property and selling them off.

        • Shouldn't they convict the guy before assuming that the property they confiscated from him can be sold off?

          • It wasn't his property. It was property he was holding for others- thus the reclamation process that the root poster didn't take advantage of.

  • It would have been so much more interesting if Captain Crunch was a Bitcoin zillionaire. Yeah, that wouldn't lead to anything *bad*.

  • Public: We believe! We believe! Pump pump pump!
    Private: Sell! Sell that shit! Dump dump dump!

  • Is a bitcoin a number?
    Perhaps a bunch of other site that agree you "own" them. ??
    Is it a pyramid scheme - earlier mining gets more coins?

    If I started my own eCoin what kind of thing would the algorithm or whatever do?
    No I am not going to, I have moe constructive things to do.

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