In his remarks, Thiel said that while he is "skeptical of most [cryptocurrencies]," he believes bitcoin has a promising future depending on the trajectory it takes…
"I'm skeptical of most of them (cryptocurrencies), I do think people who criticize are a little bit… underestimating bitcoin especially because… it's like a reserve form of money, it's like gold, and it's just a store of value. You don't need to use it to make payments," Thiel said.
The PayPal founder and venture capitalist compared some of bitcoin's features to gold.
“If bitcoin ends up being the cyber equivalent of gold and it has a great potential left and it’s a very different kind of thing from what people in Silicon Valley focus on – companies, not algorithms not protocols, but this might be maybe one exception that is very underestimated,” the Silicon Valley elite said.
Even so, in Thiel’s opinion, like gold, it’s difficult to mine, making it more worthwhile…
“You can ask the same questions about gold. What is gold based on? Why is gold valuable?…
It’s a tangible asset but it’s also hard to mine. So if it was easy to mine then it wouldn’t be that valuable and we would just have way more gold.
So bitcoin is also, it’s mineable, like gold it’s hard to mine, it’s actually harder to mine than gold and so in that sense it’s more constrained,” he said.
In September, JPMorgan CEO Jamie Dimon famously called bitcoin a “fraud” and said it will eventually blow up.
"The currency isn't going to work. You can't have a business where people can invent a currency out of thin air and think that people who are buying it are really smart," Dimon said while speaking at an investor conference.
However, Thiel proposed a different take:
“The argument it’s based on is the security of the math which tells you it can never be diluted by government… it can’t be hacked and it’s a form of money that’s… secure in an absolute way.”