A billionaire investor who is campaigning to split California into six states and who funds entrepreneurship classes for nine-year-olds has emerged as the mystery buyer of about $18m of bitcoins auctioned by the US government.
Tim Draper, founder of the Silicon Valley venture capital group Draper Fisher Jurvetson, said he would use his stash of the virtual currency to back a venture selling bitcoin to emerging markets.
The US Marshals service, which confiscated the bitcoin when it shut down the drugs-and-guns marketplace Silk Road last year, said on Tuesday that an auction of 29,656 bitcoin had been won by a single bidder, whose identity it did not reveal.
The auction last week captivated the bitcoin community, many of whose leading entrepreneurs put in bids or arranged consortia of bidders. Supporters of the virtual currency believe it could become a viable alternative to fiat currencies or shake up the expensive and slow international payments system.
“Bitcoin frees people from trying to operate in a modern market economy with weak currencies,” Mr Draper said, in a statement revealing his victory in the auction. “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.”
The billionaire venture capitalist, a strong advocate of free markets, has used his personal fortune before to back quixotic-sounding ideas that further his ideals.
He has launched a campaign to have a proposal put before California voters later this year calling for the state to be broken into six , in order to make its government more responsive.
Mr Draper blogs under the name The Riskmaster , which is also the title of a song honouring entrepreneurs that he wrote and occasionally performs. His private initiatives to promote entrepreneurship include the Draper University of Heroes in Silicon Valley.
The grandson of general William Draper, who is often described as Silicon Valley’s first venture capitalist, he is the third generation of the family to make a fortune in start-up investing. Draper Fisher Jurvetson was an earlier backer of companies including Hotmail, Baidu and Tesla Motors .
His son, Adam, runs a bitcoin start-up incubator, and the father-and-son duo are both investors in Vaurum, a bitcoin trading platform where Mr Draper’s new bitcoin will be used for liquidity in ventures aimed at emerging markets.
“We’ve been brainstorming to come up with new ways to help grow global bitcoin adoption, and what we came up with is a way to leverage our exchanges and utilise the auctioned pool of bitcoins, as well as market making strategies, to help provide liquidity in these underserved markets,” said Avish Bhama, Vaurum chief executive.