PayPal founder bets big on Bitcoin

400The price of Bitcoin increased by 13.5 per cent to US$15,017 ($21,187) after a report found billionaire Peter Thiel, an early investor in Facebook and co-founder of Paypal, had heavily invested in the cryptocurrency.

Co-founded by high-profile investor Peter Thiel and based in San Francisco, Founders Fund has bought $15 million to $20 million worth of bitcoin across several of its recent funds, the Wall Street Journal reported, citing anonymous sources.
Although it is not entirely clear when the transactions were made or whether the firm has now sold any of its digital assets, the report said one of the funds began the investment as early as mid-2017.  Bitcoin rose as much as 13% to $15,392 on the CoinDesk price index in the 24 hours since news of the Founders Fund holdings broke.

As such, the firm now reportedly touts hundreds of millions of dollars in returns for its investors.

When Thiel started PayPal, he never saw it as simply a payment mechanism for eBay sales, or a way for millennials to split bar tabs. In a Reddit “Ask Me Anything” session in 2014, Thiel talked about his failure to deliver on his original ambition to turn PayPal into a “new world currency.” 

PayPal was founded in 1998 by Thiel, an avid libertarian, and others. He wanted to use cryptography to send money online, according to Nathaniel Popper’s 2015 book Digital Gold. But the company ran into roadblocks over concerns that it could help foster illegal activities like money laundering. As restrictions mounted, PayPal scaled back its ambitions and Thiel eventually left the firm. Digital currency was seen as an “unfulfilled dream of Silicon Valley,” Popper writes.

At a conference in late October, Thiel said people are "underestimating" bitcoin and compared the digital currency to gold. "If bitcoin ends up being the cyber-equivalent of gold it has a great potential left," he said.

Most mainstream investors have not bought large sums of Bitcoin over fears about cybersecurity and liquidity.

Launched in 2009, Bitcoin is a virtual currency created from computer code. It and other virtual currencies use blockchain, which records transactions that are updated in real time on an online ledger and maintained by a network of computers.


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