When the US government auctioned nearly 30,000 bitcoins last Friday, many bidders were looking for a bargain, hoping to buy the virtual currency at a discount and flip it later for a short-term profit.
But the winner, the venture capitalist Tim Draper, is not seeking a quick hit.
Instead, through a partnership with the Bitcoin exchange start-up Vaurum, he intends to make the coins available for use in emerging markets.
“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,” Mr Draper said in a statement through Vaurum.
“We want to enable people to hold and trade bitcoin to secure themselves against weakening currencies.”
The US Marshals Service, which organised the auction of the coins seized from the now-defunct market Silk Road, confirmed on Wednesday that Mr Draper won the auction.
The Marshals Service announced on Tuesday that one bidder had won all the bitcoins, but it did not identify the winner or disclose the winning bid.
Avish Bhama, the co-founder and chief executive of Vaurum, said the goal was not to dump the 30,000 bitcoins on the open market.
Rather, he said that he and Mr Draper hoped to expand bitcoin’s use in areas of the world where access to the currency is difficult, including India, South America and parts of Asia.
“This is a very long-term thesis that we have where we want to increase the supply and facilitate the usage of bitcoin in emerging economies,” Mr Bhama said. Mr Draper was part of a group that invested $4 million in Vaurum in May.
Interest in the auction is the latest indication that bitcoin is gaining popularity. When it first appeared online in 2009, bitcoin, created by an anonymous computer programmer, or group of programmers, appealed mostly to an anti-establishment following that wanted to avoid the banking system and government regulation.
The price of bitcoin has climbed since the auction closed, reaching a high of about $655 on Tuesday, according to CoinDesk’s Bitcoin Price Index. The price fell slightly on Wednesday, to about $645. At the start of the auction, the price was about $570.
NYT
