Topic: 2013-08-04 WSJ: Famed Trader Joe Lewis Backs Bitcoin (hoax) - page 10. (Read 15505 times)

200M to secure a confirmed portion of what might be the new financial backbone of the world? surrrre why not, got billions more

+1

I don't see why the merchants, users & other miners should care too much if some massive miner starts building a chain of blocks with some other ruleset.  

I know how it works. If you control the mining, you control the voting of the bitcoin network. Once, the masses jump in, all of us "decentralization whores" and libertarians aren't going to have a voice. The Big money will control the mining and the forking of the network and they will lead the masses, who don't understand the need for decentralization, along with them.

Please learn how bitcoin works first

Please learn how bitcoin works first

Not good that a big-time thief like this guy is getting involved with mining. Mining is the way to control Bitcoin. Once you control the mining operation, you can do anything with Bitcoin you want. It not longer is beholden to limited supply or anything. They know this. Once the masses jump into Bitcoin and these mega douches control everything Bitcoin is over, it will be just another exploited currency. The problem is that we are still in their system of monetary control - i.e., they can buy up anything they want and that includes Bitcoin. The only time to strike is is when their system has collapsed.

No way the WSJ would publish a story like this without checking everything out.




When I said $200, I meant he could buy enough to drive the price to $200 dollars. Not that he could buy $200mil worth.

Keeping the price up would increase the value of his mining chip investment.

This guy is mainly a ForEx trader.

Also.. if you were about to drop $200Million into a mining outfit... you'd probably have dropped a massive chunk straight into buying bitcoins just before publicizing the news.

I still smell a stinking ball of incestuous journalists feeding off the same rumour.  Would love to be wrong though!

There isn't even close to $200M on the orderbooks combined.
I think he can get a little bit under 100K Bitcoin's for 200M, after slippage

Sure, and the total bitcoin market cap is around $1 billion.  This guy could personally bid it up to $200.  If he has a huge investment in chip capacity it would be in his interests to keep the price going up in order to sell chips.

Also.. if you were about to drop $200Million into a mining outfit... you'd probably have dropped a massive chunk straight into buying bitcoins just before publicizing the news.

I still smell a stinking ball of incestuous journalists feeding off the same rumour.  Would love to be wrong though!

Why would it cost anything like $200m to take the Avalon design to the latest, narrowest chip tech?
Surely a few million would be enough. Doesn't make sense.

200M to buy a whole generation's worth of mining (while leapfrogging a few others while they're at it), first mover advantage, why the hell not!!!
got a couple  more billions in his pocket...

vision: set it to "nothing's impossible"

200M to secure a confirmed portion of what might be the new financial backbone of the world? surrrre why not, got billions more

At $100/btc the entire mining industry only makes about $131 million a year.

In order to justify investing spending $200 million dollars in bitcoin mining these people must believe the price will go far higher then that.

Hopefully this will cause some more people to want to buy

Investor Joe Lewis isn't investing in a bitcoin venture called Avalon and doesn't lead a Zurich-based private-equity fund called the Phoenix Fund. An article on the supposed investment was inaccurately published and has been removed.

Joe Lewis, a billionaire foreign-exchange trader who teamed up with hedge-fund manager George Soros in 1992 to bet against the Bank of England, is the latest high-profile financier to throw his weight behind the virtual currency called bitcoin.

Mr. Lewis leads the Phoenix Fund, a Zurich-based private-equity fund that on Tuesday plans to invest $200 million in Avalon, a company that makes computer servers aimed at creating bitcoins, according to people familiar with the situation.

Bitcoin is a virtual currency that exists online and isn't backed by any government or central bank. Bitcoins were invented in 2008 by a computer programmer who goes by the pseudonym Satoshi Nakamoto, who describes it as a peer-to-peer electronic cash system.

The Phoenix Fund's investment in Avalon reflects the growing popularity of virtual currencies, which are also coming under scrutiny from regulators. Other bitcoin enthusiasts include Cameron and Tyler Winklevoss, who are best known for their role in the creation of Facebook Inc. FB +1.50% They have proposed an exchange-traded fund that is tied to bitcoins.

Bitcoins are created through a process called mining, in which computers solve complex mathematical algorithms to earn the bitcoins. The total number of bitcoins that can be mined is limited to 21 million. There are now about 11.5 million bitcoins in circulation, according to Blockchain, a website that monitors bitcoin transactions.

The Phoenix deal will also involve Taiwanese microchip maker Taiwan Semiconductor Manufacturing Co., 2330.TW +0.50% which is set to supply the state-of-the-art microchips that will power the hardware.

The Phoenix Fund was set up this year to invest in bitcoin mining-hardware companies. It looked at several of Avalon's rivals in the sector, including Butterfly Labs and KnCMiner but decided against investing, according to a person familiar with the private-equity firm's strategy.

Investors in the Phoenix Fund, which includes a small number of individuals who made their fortunes in currency trading, believe that the currency will become more stable and popular if more parties are involved in the mining process, this person said.

Mr. Lewis moved into currency trading in the 1980s and 1990s. In September 1992, Mr. Lewis teamed up with Mr. Soros to bet on sterling crashing out of the European Exchange Rate Mechanism, an event that was later named "Black Wednesday." Mr. Lewis didn't respond to a request for comment.

Mr. Lewis had big losses investing in U.S. brokerage firm Bear Stearns Cos, in which he began amassing a stake during 2007, The Wall Street Journal reported at the time.

Mr. Lewis is the main investor in an unlisted company called Tavistock Group, which has investments in more than 200 companies across the globe.

Tavistock Group includes ENIC Group, which has a Bahamas-registered subsidiary called ENIC International Ltd., through which Mr. Lewis owns 85% of the shares in U.K. soccer club Tottenham Hotspur.

The Phoenix Fund is independent of Tavistock.

The bitcoin deal was put together by Andrew Laurus, a former government-bonds salesman at Lehman Brothers who is also an investor in the fund. Avalon was set up by Yifu Guo, a pioneer in the bitcoin-mining industry. He was part of the team that developed the first ASIC bitcoin mining hardware. ASIC stands for application-specific integrated circuit, a type of custom-designed microchip. Mr. Guo couldn't be reached for comment.

Separately, Coinflash, a company that planned to set up kiosks for bitcoin enthusiasts to buy the virtual currency, is shutting down before it even opened its doors. "Due to an unforeseen change in our personal circumstances, we've made the difficult decision to suspend Coinflash's services indefinitely," the San Diego-based company said in an email statement.

Coinflash was established earlier this year and had planned to open the bitcoin kiosks in California and New York this summer.

As part of the deal, Avalon will gain access to TSMC microchips based on 20-nanometer processes, which are much faster than other chips. TSMC recently won a contract to supply chips to Apple. The increased processing power should give Avalon an edge in solving the algorithms that control the supply of bitcoins.

—Robin Sidel contributed to this article.
Write to Harriet Agnew at [email protected]