Bitcoin & Crypto Can't Be Stopped with Tim Draper

their product. And all those great products are happening outside the US, and all those customers are able to innovate from that new platform, and we're not because there's this big dark cloud that is the sec today.

managed cold wallets, and NFT wallets. Many institutions trust Bitco with its top level security and incredible services such as being able to deploy your capital wallet's in custody, which includes lending, borrowing, trading, staking, DeFi access and more. If you'd like to learn more about bitco, please visit bitgo dot com link in the description. Welcome into the Thinking Crypto Podcast. I'm your host, Tony Edward and with me is Tim Draper, who's a legendary investor, the founder of DFJ,

Draper University, Draper Venture Network, and Draper Associates. Tim was an investor in many different companies such as Tesla, Skype, SpaceX, Twitch, Robinhood, Coinbase, and many others, and he also wrote a book, How to Be the Startup Hero.

for math. And I got bumped up from second to third grade, and third to fifth grade, and fifth to eighth grade, and then I was in eighth grade math for about four years in a row. They didn't have any other math. And then I went away to high school. I went to Andover and turns out Andovers not an accredited high school, but it's the number one high school in the world, so it makes you think about the accreditation in a new way. And then I loved Andover.

I then flew home to Stanford. I lived near Stanford, and I went to Stanford studied electrical engineering. I was on their football team for a couple of years. Coach Walsh. Bill Walsh was my coach, who was a big forty nine er coach that brought five Super Bowls to the forty nine ers. Oh yeah. I studied electrical engineering and physics and creative writing. So it was kind of an interesting combination of things that I learned. I was the

I was a student senator. Well, I was at Stanford I and I was going to be a physics major. It was it's where my mind was headed. But my dad said, yeah, you get a good job in physics if you get a PhD. And I was thinking, no, it's time to get out and doing something, a job and whatever, and he said, but if you're electrical engineering major, there are a lot of jobs for you. And so

he guided me in the right direction. And then I worked for Hewlett Packard for a couple of years and created something called Stamford the Game, which was a board game which was great also great fun. And then I went to Harvard Business School and just got back from the reunion for Harvard and worked as the assistant of the president of Apollo Computer while I was there, and Apollo was competed with Sun Microsystems at the time, and

now it's all a part of Microsoft. Everything is a part of Microsoft, all the all of those advanced computers. And then and then when I got out of business school, I worked for Alex Brown, the investment bank for a year, and after a year, I felt like I was ready to go create a venture capital business on my own. And I'm not. I am always willing to just jump in and see how it goes. And so I did that. For I took over an SBIIC that my dad had.

My grandfather was the first Silicon Valley venture capitalist. My dad was a pioneer venture capital. I took over an sbi C that my dad had, small business investment company that had three or four companies in it. They were all private, nobody knew what they were worth. BA valued them at two million dollars. I was able to borrow six million from the SBA on that two million of private companies and get into business. And that's how I

built my record, and that's how I got started. And after three years it looked like I had lost all the money. And then the IPO window opened up and I had five IPOs al and one was Parametric Technology and still to this day, Parametric, I think is the largest software company in the New England area. And then from there I just took it one step at a time. Brought in a partner, John Fisher. We worked together on

a fund. Brought in another partner Steve Jervidson. We worked together on a fund and then we kept growing and growing and growing, and then we became kind of the number one venture fund in the world in say two thousand and three, after the boom and the but during the boom we were number one, and after the bust we were number one because I took us international and that worked out very well. We did Baidu and Skype internationally.

And then after a number of years, I started to get pretty rich myself personally, and so I was able to spin out from DFJ and start my own business again. So I did it again. And when I did that, I had the freedom to do a lot of other things, a lot more experimental things. Why commoner Nator had just started, and I thought, wow, that's an interesting model and maybe I should be doing something about that. I started Draper

University and that ended up. At first it was very difficult and we had all sorts of problems, but it got better and better and better, and now it's I mean, it's by far than the place to go if you're going to be a venture capitalist, I mean, if you're going to be an entrepreneur. Because we've had I don't know five thousand entrepreneurs through there. They've started about twelve hundred companies and five or unicorns in about fifteen are

worth more than one hundred million dollars. And they all started at Draper University. So that's been a huge success. But it was you know, I didn't know what was going to happen, and I just started it. I started Meet the Drapers, which was a crowd funding where the viewer could crowdfund a show where I interview entrepreneurs and the winner goes to the next level. And that has ended up. At first I could hardly get my mother to watch, and now we have I think we have

I think we have two hundred million viewers. Wow, so they're all over the world. It's a huge thing. We've got to deal with TikTok now and and Draper Associates. The venture Fund has done extraordinarily well, better than I did with DFJ, and we we've done extraordinarily well, and we have really embraced AI, not just as investors into AI,

but also as users of AI. It helps us with doing diligence on our companies, doing diligence on those industries, diligence on the individual entrepreneurs and and now we even have you know, if you go to DRAPERTV Draper dot tv, you can see our show, but you can also see this thing Draper Decentralized, and that is my digital twin. That is my fake. And I've read we've now done more than fifty of these where the deep fake is talking about one company or another of ours, and it's fascinating.

It's like I, I mean, generally I don't want to even look in the mirror, but I love it because it gives me that one minute view of what's going on in each of those companies at that time, and those are key events because they tend to be press. Really is that I that my deep fake is reading? So you know, we also have se or, which one of our companies, that can detect if somebody is lying,

so we can wrin videos through that. And we have Otter, which where we take videos and it transcribes all the meetings that we have and we can look back and say, wait, what was that company and how did they You know, isn't there another company that does an artificial kidney? You know, isn't there another company that is doing hyper speed and rocketry or you know, all those things, and that has been really exciting, and so AI has really captivated me.

During the time when I was leave, I had left DFJ and I was starting Draper Associates well, starting to super charge Rape Associates. I also had an opportunity to buy a whole bunch of bitcoin, and I did at a very cheap price, and then I lost it all to the Mount Gox thing. I bought it at four dollars, like forty thousand bitcoin four dollars, it's all gone to

Mount Gox or whatever. And then but I realized how important bitcoin was going to be, and so I bought a bunch from the US Marshall's office and that has been a fantastic investment and it continues to be. I mean, I'm still a buyer of bitcoin, net buyer of bitcoin because it really looks like it's something that will transform the world. It's I mean, I know, every you know, country leader is always very concerned about their own fiat currencies.

But bitcoin's just better currency. It's a better way to store value, it's a better way to buy and sell. It's easier to move from one place to another, so there's less liquidity issues, and it's just you know, it's global, it's open. Doesn't matter what happens within a country, you can always use bitcoin. It's always acceptable. I just talked to Propy, which is one of our companies, and they have real estate. They're doing real estate on the blockchain,

and that includes doing title on the blockchain. And I started to think about it, and it's like, now you can have your own bank and you can keep your own tithe in a decentralized, safe, verified way without dealing with a central government, without dealing with you know, the files of the county or whatever. This is a whole new transformation this world that's opening up to all of us.

That's the decentralized world where everybody gets to participate and you're not isolating certain people because they come from one country or another. So long answer to a very short question.

It was a fabulous thing. Those things come to me, and what's great is that people will come to me and go, wow, you know, somebody talked about you in Brazil, and then they talked about you in Saudi, and then they talked about you in Chicago, and then they and I heard about you in all these different cities. You've clearly done something. And I think just by grabbing this one thing, which was to spread entrepreneurship and venture capital

around the world, I do. I do get to look back and say, wow, almost everywhere in the world they have venture capital, and almost everywhere in the world they have entrepreneurs, and that was not true when I got started. It was Silicon Valley in Root one twenty eight and nobody else. And so now that has had a big that that has made me feel very good. But there's so much more to do, and I'm hitting my stride. I mean, Dad, everything's great, you know, and any I

can do little things that can have big impacts. So work continues to be more and more fascinating as I get older. I love it.

to happen. We were going to have digital money. And they said, what do you mean, And I said, you know, I talked to this guy in Korea who was from Korea, who was talking about how half of the people in Seoul were playing this game and I think it was called Lineage and that game he paid real dollars for a digital sword for his son for his birthday, and I went what. And then I thought, oh, my god, real money, digital products. And then I thought digital money.

And so I thought that eventually digital money would happen and go game to game, but I think people just did it within games, so that there was you know, gold for Farmville and something else for some other game. I thought those things would connect and they'd all be a currency that we would all use, and that way it would be game to game or you know, all that trading would happen and we'd have multiple currencies that we would all use in this virtual world. But then

bitcoin showed up. Something I wasn't thinking about at all was the security of the money in game, because I was thinking, oh, it's just play money in the game. But when they came up with bitcoin, that the ability to have a trusted third party that was all software, that was a major breakthrough, and it jumped out at me and I was intrigued enough to make an investment

in coin lab and in the bitcoin with Peter. But it wasn't until I lost the bitcoin to melt Cox and bitcoin only dropped a little bit in value on that news that I knew that there were lots of uses, and so I went and I dug into all these uses. And it was like people who were unbanked or using it to pay each other and build their own little economy. People who were making money in the US were using

it to remit money to another country. People who ran big businesses were using bitcoin to pay employees out there, and you know, in lands where there were no banks. So it was clearly going to improve the world economy. And I thought, wow, that's really exciting. And then I ran into this guy, Sebastian Serrano from Argentina, and he said, my family has created a fortune three times in the last thirty years, and every time we've lost it to

currency manipulation by the government. Bitcoin is our savior. Bitcoin is this is going to save our business. We're going to be able to build something of great value and keep it. And that was where I knew that bitcoin would be great store of value, but it would also be a currency that at least that country, Argentina would

want to use for their economy. And then you know, of course El Salvador followed, and then and then Panama and Japan and Malta and Gibraltar, and they all made bitcoin a national currency and it started a really you know steam roll, and now bitcoin is actually challenging fiat currency. People are saying, wait, why do I hold dollars? If I can buy my food, clothing, and shelter all in bitcoin,

dollars I know are going to depreciate in value. Even if I'm I've got it in a you know, CD or whatever I put my money into, I'm still losing it to inflation. If I hold, spend, and invest, and pay taxes all in bitcoin. First of all, the accounting is easy because it's all done on the blockchain and it's all honest. And second of all, it's a better way, more efficient, better way to run your business. So eventually we're going to get there. So that's where I'm going.

That's where I'm going. I believe the world is going. And you know what, I think both Warren Buffett and Jamie Diamond believe that too, and they're scared to death and they're going, but I have all these dollars, and when there's a run on the dollar, they're going to be at the bank saying, get me my dollars out and get them into bitcoin. I mean it will be like I mean, you should have seen the panic on people's face when Silicon Valley Bank stumbled yeah we had.

I had about fifteen companies call me and say, I need emergency money to pay my payroll for the next two weeks because all my money's in Silicon Valley Bank. So after that, I said, Okay, any company we fund your treasury has to have some of the money in a big bank. And everybody goes, yeah, yeah, of course, some of your money in a small bank. And they're saying why, I say, because the US government can still bail out a small bank, not a big bank. And

then some of your money in bitcoin. And they're saying why why bitcoin? And I say, because if these banks go out of business and small you are personally liable. You and your border personally liable for payroll for your company. And you might have a company with one hundred thousand employees and you're personally liable for no matter what happens to the banks, and so if you have bitcoin to cover it, you're good. And I think that you know, more and more women now have bitcoin wallets, and women

control about eighty five percent of retail spending. So when the retailer recognizes that they can save two percent every time somebody buys something in bitcoin, they're going to start saying bitcoin accepted. And then at some point they're going to say only bitcoin accepted. And that is the point at which everybody's going to run to the bank and try to get their dollars out, and they're all going to go at once, and it's going to be chaos.

People who have bitcoin, who just thought ahead and bought some bitcoin are going to be able to relax that day and go okay, so the dollars are gone. I had my dad gave me a million dollar note and the million dollar note was a Confederate million dollars. Confederate money. Wow, but the South. I said, oh great, what can I spend it on it? And he said nothing, And I said, what do you mean? He said, the South lost the war, and so everybody wanted to They printed money. It was inflationary,

it was all this stuff. But the only dollars anybody would take were the Union dollars because they won the war, and so the Confederate money became worthless. The same thing is happening now. It's happening slowly, but it's happening. We're huge inflation in the dollar. It's getting to be worth less and less in a shorter and shorter time. Meanwhile, the purchases in power a bitcoin it's much higher relative to the dollar. So you know, no wonder Warren Buffett's screaming,

yeah Jamie now and no wonder Jamie Diamond screaming. They're controlling all the dollars. It's not going to go well for them unless they unless they get on the boat.

dollar or the dollar, euro, yen or the something. Right. Well, when the dollar collapses and inflates out of business, so does the USDC and USDT, So you've got to I mean, sure, it's more efficient, it's a better way to move dollars around. Those things are better. It's just better to hold. But it's really a bridge to bitcoin, where you have a currency where we know how many there are out there.

No government can go in there and start screwing around with it and change the number of you know, nira or pesos or whatever, just because they're the king of their land. So we're gonna this is coming, do you foresee?

what happens with bitcoin. You get the trust that you had with gold with bitcoin, and then you have the second the second layer, double second and third layer. Are they called layers somehow, I'm a metal block of bitcoin. So you got Bitcoin that's a blockchain and it's a slow blockchain. Then you've got the second what do they call it? Layer two? Yeah, so you got the layer twos and layer threes. They're like when you go off

the gold standard. So they allow people to go off and go trade as much as they want on other blockchains, on other side chains, and then come back and equalize on the Bitcoin blockchain. So they'll go off and they'll trade on Lightning Network or on you know, any any number of these side chains, and then they'll, after a lot of transactions, then they will remedy or or reenact on the Bitcoin blockchain, which moves slower but keeps absolutely perfect records. Yeah.

than to hold an ETF a bitcoin. Yeah, so there's a a three three different levels of what I perceived to be risk. And yes, you're exactly right. In fact, I haven't ever bought an ETF, but I'm kind of tempted by Kathy Woods ETF because she's really cool.

So that's been a great success for us. We've had bezos bank or Propy way back when we did handshake. Yeah, so we've had quite a few, and more recently we've got a bunch of investments in companies that are issuing tokens for one purpose or another. But before anybody issues a token in my portfolio, I always say, what is the purpose? Why is someone going to pay real fiat dollars or real bitcoin dollar bitcoins to buy your token? Why? And they've got to have a real reason and after

just other than speculation or whatever. Right, And sure, DeFi is important to create more liquidity in the marketplace and all that stuff, But I think the most important use is of bitcoin and other cryptocurrencies are retail use, which is coming, investment use, and running businesses use because you're going to want to run your business without having accounting, auditing, bookkeeping, whatever,

you want to run it just that way. And then smart contracts because you can create a great contract say, you know, I invest in you with twenty bitcoin, you give me ten percent of your business, and we're off to the races, and we can do that all on a smart contract, and even in the negotiation we can tweak the smart contract and then everything gets written up in legal ees. But the smart contract is the thing

that drives the whole deal. So that I think those are probably the best uses now, all sorts of uses to the blockchain, all sorts of uses to a wallet. You can hold everything from your passport to your real estate deed, to your bitcoin, to your ordinals, to your whatever ruins. All that stuff can be held on and eventually will just be a part of your phone whatever. That ends up being.

were going public. Yeah, and that's interesting. The SEC went after all the groups that were trying to comply and they left alone FTX and I mean no method to their men. So yeah, I think that there will be other ways to raise money, and that's just Tokens are a type of ownership. Stock is another type of ownership, and when we invest in a company, we usually take both.

will hold. And it's kind of funny because people come to me and they go, yeah, that thing you said ten years ago happen And I look at him and I go, what thing? I don't remember? I just say what I just tell it the way it is, and I tell it the way I expected to go. And then ten years later people go Oh yeah, I went just the way you said. And it's nice of them to remember that I did it. I said it, but generally I don't remember.

who are fighting end up adopting this. What are your thoughts on where we're at in that timeline.

their product. And all those great products are happening outside the US, and all those customers are able to innovate from that new platform, and we're not because there's this big dark cloud that is the SEC today, and the SEC is living in the past. It's an eighty year old set of laws that they're clinging to, and it's just time to change. You know, the world's moved on.

And if you want to compete in this world, if you want to be the US and still compete and still encourage all the innovation, all the great things that happen in the Silicon Valley, you've got to embrace this. And I think both both presidential candidates understand that Trump did. First he said, I'm going to be the crypto president. You're Againstler's going to be fired. I'm going to do it and uh, and so he grasped it early. But I'm also seeing Kamala have the same some of the

same thoughts. So I'm I'm encouraged that we're getting to that place where it's it's either embraced or accepted. I mean it's hard. They're fifty fifties, fifty million Americans with wallets, with bigcoin wallets or crypto wallets. That is not a voting block you can ignore.

he just said, let's just see how it goes. And by seeing how it goes and not putting like a dark cloud over every entrepreneur trying something new, he he really allowed us to create some incredible businesses, trillion dollar businesses that would have been created outside the US if he had regulated or taxed the Internet. And so part of me says, let it rip. But since they already are messing with us through the SEC. Yeah, some clear regulation would be awesome because it's clear and then we

know how to operate. But I think you need people who kind of understand what's going on in the future to try to regulate today because the fact that I can't airdrop in the US is ludicrous. The fact that I can't bet on a baseball game in the US with a with a crypto bet is ludicrous. The fact that I can't, Oh, we've got entirely different rules for giving stock away and giving crypto away. Why why is it?

I mean, if it's a currency, it's a currency. But if they're they're going to call it an asset, it should be treated like all the other assets. It is. They have put so much of a you know, I call it the dark cloud, but it's there. They're overlapping regulations that get in the way of progress of innovation, of technology and all that progress, all that innovation, all

that technology is taking place in other countries. And if we don't wake up soon, we're going to lose all that regulator, I mean, all that innovation, and regulation really does kill innovation. So the regulators have to be open to future, allow future experiments to happen. I was at this Harvard Business School reunion and the guy said, the success of a business long term is how many experiments

an hour that business runs. And he compared having an idea and a big business and having to get it through your boss and your boss's boss, and possibly before it eventually gets to see the light. Versus an innovator who comes up with something and he goes to fifty different venture capitalists on sand Hill Road and he only

needs one of them to say yes. I think that that attitude needs to happen in innovation, and the regulators need to allow things to rip for a while before they think, hey, something dangerous has happened, as opposed to thinking something dangerous might happen, and so whatever might happen,

we're going to make illegal now. I mean, that's really backward thinking, and that will push the US into the dark ages, and you might see countries like El Salvador and the New Argentina and probably Switzerland and Singapore become the super wealthy countries because they're the ones who are letting it rip. Yeah.

off top in twenty twenty five? Do you have a bitcoin price prediction?

was in twenty eighteen, and it didn't. And part of that was all the fear, uncertainty, in doubt spread by the SEC, and that slowed down growth. It slowed down innovation, it slowed down progress, it slowed down technology, I mean just generally technology, and and so it didn't hit that number yet. Well, eventually the government is going to have to come to see the light. And the moment they see the light two hundred, they're going it's gonna blow

through two hundred and fifty thousand dollars so fast. And it might be bitcoin on the way up, and it might be a dollar on the way down, but it's going to blow through two hundred and fifty thousand.

bail us out of debts or trouble or whatever. So yeah, I think if you're running a company the size of a US government, you should probably have ways of covering your debts, your obligations, your expenses that are not your own currency, because as we all know, if the dollar gets a lot of inflation we got you know, the dollar is not going to be worth for I much, people won't trust them and they are going to run to bitcoin.

aside from bitcoin. Bitcoin is different. But like these smart contract platforms like eth and Avalanche and whatever it may be, what do you envision will happen there?

some other way. So I think you will always have I mean, like right now, we have Microsoft, and they were the operating system for everybody for years, But then there were companies like into It or whatever that that kind of were able to survive even though Microsoft was the center of gravity and it was where all the spreadsheets, in the word processor and the data pass they all went into Microsoft. So I actually think that the DeFi and the ordinals and the smart contracts and whatever else

is all going to go into Bitcoin. But there are other all current all currencies that have specific uses that are going to be valuable that there aren't on pitcoin.

They're saying, well, wait, you know, how do I control my patent or how do I you know, they were panicked about that. Humans figure out how to adapt, and we are adapting faster and faster and faster, and we get more and more innovation. And with AI, our innovation is going to take a huge leap forward. So better to get on the train than try to fight it. And I think if you fight it, it's a losing battle because it's too good. It's so awesome to use AI,

so awesome. Yeah, I'm I'm looking forward to having robots that go around and have AI and they can be intelligent and I can talk to my robot and say, hey, I forgot my wallet at the restaurant. Will you go pick it up? And you know, and if it's a drone and you know, it can go and shoot over there and say this is you know, my owner's wallet and pick it up. I think all those things are

going to happen. It's going to be really amazing. Also, transportation and space, Wow, they're changing in a big way. And a lot of that is AI. It's like you ever get in a way moa car or a cruise car. Oh god, it's fantastic. It's great experience.

Jerry McGuire. And then Risky Business where he you know, he runs in effect of House Ofville repute in his house. And I like and I like science fiction, but I actually like reading science fiction more than I like and reading comic books more than I like watching the movies,

because the movies it all feels sort of normal. But you read it, read the books and you're going, oh god, that could happen, and you have you have time to sort of ruminate on it, think about it, and so things like Dune, everything by Asimov, Foundation I Robot, all that stuff. I like Stranger in a Strange Land another great book. So yeah, there you go, books, movieseter.