Famed investor Tim Draper to back new blockchain cryptocurrency

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Famed investor Tim Draper has given a boost to a startup blockchain company called Tezos with a public announcement that he intends to invest in its “initial coin offering” as well as Dynamic Ledger Solutions Inc., the company behind the offering.

“The best thing I can do is lead by example,” Draper (pictured, right), best known for his investment in Hotmail, told Reuters Friday. “Over time, I actually feel that some of these tokens are going to improve the world, and I want to make sure those tokens get promoted as well. I think Tezos is one of those tokens.”

Tezos is being developed by a husband-and-wife team, Arthur Breitman and Kathleen Breitman, both of whom have an extensive Wall Street backgrounds. Arthur Breitman previously worked in high-frequency trading at Goldman Sachs, while Kathleen Breitman was a management associate at hedge fund Bridgewater Associates.

The platform is being pitched as an alternative to bitcoin and Ethereum “by creating governance rules for stakeholders to approve of protocol upgrades that are then automatically deployed on the network.”

The website for Tezos claims that it takes the concept of bitcoin and Ethereum “one step further.” It allows those holding Tezos tokens, called Tez or Tezzies in a plural form, to control the rules of the network in a way that allows the token to evolve over time so that “the next generation of ideas doesn’t have to start over as a new blockchain.” That reference refers specifically to the current debate in the bitcoin community as to how to evolve the bitcoin blockchain given capacity restrains. A fork in Ethereum resulted in a split into two cryptocurrencies, Ethereum and Ethereum Classic.

Tezos’ offering opens May 22 for a two-week period. While Draper’s interest in Tezos will no doubt be a boost for investor interest, it should be noted that unlike traditional initial coin offerings, the Tezos offering has no cap on the number of tokens issued. That means that though it may be easy to buy up tokens, those tokens will lack the traditional scarcity that other tokens have in initial offerings.

Photo: kevinkrejci/Flickr