Peter Thiel and Bitcoin

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It is no secret that Peter Thiel, one of the founders of PayPal with Elon Musk, does support Bitcoin as a high-value asset other than gold. How far?

source: www.theguardian.com

Thiel's general statement against Bitcoin is quite open, at least in October 2017 at a conference in Saudi Arabia.

“Although I have doubts about most of Bitcoin, I think few people would underestimate Bitcoin. If Bitcoin eventually becomes the equivalent of gold, then Bitcoin has great potential, "said Thiel at the time.

Then in May 2018, Thiel said he would support Bitcoin in the long term.

"But that support is not Bitcoin as a new means of payment, but as a means of hedging in the midst of a shattered economy," he said, quoted from CNBC in an interview with the Economic Club of New York.

Earlier, in January 2018, the San Francisco-based venture capital firm Founders Fund, which was founded with Thiel in 2005, reportedly bought the US $ 15-20 million worth of Bitcoin.

According to The Wall Street Journal, it was unclear at the time whether the Founders Fund had sold some of their Bitcoin. However, within 24 hours of that news, Bitcoin's price jumped 9 percent, according to CNBC.

And most recently in September 2020, news broke that Thiel-backed Valar Ventures had invested the US $ 52 million in the European-based Bitpanda crypto-asset exchange.

As part of the deal, Valar's founding partner Andrew McCormack, one of Thiel's former colleagues at PayPal, joined Bitpanda's board of directors.

Peter Thiel's Involvement in Bitcoin Mining

In addition to investing directly in a crypto-asset exchange company, in 2019, Thiel invested the US $ 50 million in Bitcoin mining company Layer1 Technologies.

source: layer1.com

Unlike other Bitcoin miners, which tend to prefer cooler climates so that computer miners don't overheat when mining, Layer1 chose Texas in the US instead.

In February 2020, Layer1 announced the opening of its first Bitcoin mining facility, 100 miles west of Midland, Texas. The facility covers more than 30 hectares and costs tens of millions of dollars.

The reason is very simple and makes sense, namely the sloping electricity rates in the big city because it uses wind power.

To keep Bitcoin mining tools cold, Layer1 immerses them in a special liquid container. This is similar to engine oil which lubricates the engine so that friction does not cause overheating.

For Layer1, which is led by the CEO, Alex Liegl, using an air-cooled engine or an ordinary fan is very unlikely, given the extremely hot Texas climate. If you do that, the engine will burn.

Alex Liegl claims, using a special liquid against the Bitcoin mining machine, the machine will work twice as fast as an ASIC type mining machine. This method also prevents dust from getting into the machine.

Interestingly, Layer1 actually gets money from mining Bitcoin. The trick is to sell electricity to the town's private power company. In principle, electricity is not used, because Layer1 is willing to extinguish most of its mining activities.

The reason for extinguishing mining equipment is also because the price of Bitcoin is inadequate. In this way, the company can maintain its cash flow.

So, when Bitcoin mining is temporarily stopped, unused electrical power is sold to the private power company that supplies the company with electricity.

PayPal has been successful so far thanks to Peter Thiel's cold hands who have a far-sighted vision.

Could it be that Thiel's massive support for Bitcoin will bring a new, bigger atmosphere in the world financial sector and raise the prestige and price of Bitcoin in the future?

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