Meet the 27-year-old Stanford grad who impressed Peter Thiel at a meet-&-greet and inspired the billionaire entrepreneur to invest in his crypto startup the next day
When he was a Stanford student, Alexander Liegl hopped from economics to physics to computer science before he decided to double major in applied math and philosophy.
Liegl, who, like Peter Thiel, is originally from Germany, told Business Insider in an interview that he left his home country because he didn’t want to be “boxed into a career at 18.” In Germany as well as many other European countries, students must pick their majors and commit to a career before starting university, he explained.
“I see myself as a fox, rather than a hedgehog,” Liegl said. “I like chasing lots of little ideas, not one big one.”
Liegl’s zig-zag intellectual path would later lead him to a fateful meeting with Thiel, the maverick billionaire investor, and a $50 million investment in Liegl’s current company, Layer1 — a mash-up of Bitcoin mining and power grid stabilization.
But there were a few other experiments in between.
By the time his sophomore year at Stanford rolled around, Liegl and a few classmates had co-founded a quantitative hedge fund, Bessel Capital. In 2017, after graduating, Liegl launched Apex Labs, a platform that helped the Mexican Tax Administration Service detect fraud.
“We moved to Mexico City for 7 months and negotiated with the head of the Mexican Tax Administration Service and the treasury secretary,” Liegl explained. “We had a revenue share with the Mexican government.”
But on the heels of Mexico’s 2018 election, which saw leftist outsider Andrés Manuel López Obrador ascend to the Mexican presidency, Liegl had to switch gears.
The election led to a historic shake-up in the Mexican government, Liegl explained. The previous head of the Mexican Tax Administration Service was ousted from office, and working with the agency became increasingly difficult, Liegl explained.
Liegl and his team saw the writing on the wall and jumped ship.
As the then-25-year-old entrepreneur started plotting out his next venture, he thought back to Bitcoin, a cryptocurrency that he had started mining casually back in 2012, when he could freely use Stanford’s electricity.
“It’s an immature industry, so it’s up for grabs,” Liegl said of his 2018 interest in Bitcoin.
Before he fully fleshed out the idea that would form the basis of Layer1, Liegl in 2018 pitched an idea for an activist hedge fund for cryptocurrencies to a prospective investor who connected him with Jack Selby, a founding member of PayPal and now a managing director of Thiel Capital, a San Francisco-based investment firm founded by Thiel.
After telling Selby his personal story, Liegl said that the PayPal veteran offered to put him in touch with his colleague, Peter Thiel.
“I filter out about 10,000 deals for every one that I vouch for and send to Peter,” Selby told Business Insider in an email, “so Layer1 clearing that bar is quite an accomplishment itself.”
Liegl said he wasn’t expecting much out of the meeting.
“The objective was just meet and greet,” Liegl explained further, “not to invest.”
When Liegl finally met with Thiel in July 2018 in the billionaire’s San Francisco office, the two bonded over their German roots and attending Stanford, where Thiel received his BA and JD. Together, the two traversed topics such as ambition, entrepreneurship, and how people think in Europe vs. the US, especially in Silicon Valley, Liegl said.
Once Liegl got around to explaining his current project, he said that Thiel was “very optimistic on Bitcoin.”
“He was so involved that he offered to invest immediately and pushed back another meeting that he had afterwards so that we could just chat a little longer,” Liegl added, acknowledging his own surprise.
Thiel’s lawyer called the next day to confirm Thiel’s investment in Layer1’s Seed round.
Liegl had initially planned to use the Seed money to invest in cryptocurrencies like Grin, which “is designed to be a completely private and censorship-resistant transaction medium,” per TechCrunch. But he later decided to reframe Bitcoin mining as a way to “solve systemic energy issues,” where “the addressable market is in the trillions,” the CEO said.
His original idea eventually flourished into the current form of Layer1, where the 27-year-old entrepreneur now serves as CEO.
At Layer1, Liegl and his team have developed a way to mine for Bitcoin in places with cheap electricity — an essential element because the complex computer-driven process to mint Bitcoin consumes a lot of power. The company created “boxes” that carry out the mining.
Layer1’s model also involves coordinating with the utilities supplying the electricity in a way that the startup says can stabilize power grids. The company pays for the electricity it needs. But when the demand for power surges — as it does in hot climates when everyone is blasting the AC — Layer1’s boxes stop mining Bitcoin and allow the freed-up power to flow into the grid and help meet the peak demand.
Layer1 has developed a liquid cooling system that allows the Bitcoin-mining boxes to thrive in the climate of a place like west Texas, the location of Layer1’s Bitcoin mining factory. West Texas is full of natural gas and wind, so the region offers some of the cheapest forms of the energy so essential to mining for cryptocurrencies.
The startup sells the mined Bitcoin for US dollars so that it can reinvest the capital into the company’s transcontinental operations.
But before Liegl could build his Bitcoin-mining boxes, he needed to raise additional capital. The CEO met with Thiel in his Los Angeles office in August 2019, when Liegl discussed his idea for a wind-powered Bitcoin mining factory in west Texas. Liegl’s ambitious plans required him to buy land in west Texas, invest in hardware, and expand his team across the globe.
And it seems that Thiel was excited about the prospect.
In October 2019, Layer1 announced that Thiel, along with Shasta Ventures, had invested $50 million into Liegl’s Series A round, at a sky-high $200 million valuation, up from the $5-$6 million valuation that is typical of most Series A rounds.
Already, Liegl has developed a global assembly process that spans a number of countries, including the US, Germany, China, Russia, Croatia, and South Korea.
“As an investor in Layer1,” Selby said, “I truly believe that Alexander is one of the most innovative entrepreneurs working in the space. He is developing cutting-edge technology that will make energy assets significantly more profitable, as well as revamp legacy electric grids.”
“He’s turning electricity into money,” Selby added.
Per Thiel Capital’s internal media policy, Thiel was not available for a comment.
Movers of the Day 1-September
Top movers of the day are PowerPool and Gnosis. Metronome has risen 17.27% since 6 pm.
The crypto markets experienced a massive rally caused by Ether. An adjacent chart shows the movement of the NWSBCT Index (Blue Chips) over the last 24 hours. At the same time, the 2100NEWS DA Indexes which measure the performance of different groups of tokens and coins have recorded gains up to 5.39%. The 2100NEWS Digital Assets Total Index (NWST1100) which measures the performance of the 1100 major crypto assets by market capitalization has surged by 4.17%, Bitcoin by 3.15%, Ether has soared 11.80%.
To find out based on which criteria have been selected, please read the notes.
Metronome aims to optimize for self-governance, reliability, and portability. Founded by a number of veterans in the space (e.g. Jeff Garzik, Matthew Roszak), Metronome is founded on three key design principles: Self-governance with no undue influence from founders after initial launch and public access — contract governance starts at launch. Reliability and predictability where issuance and supply are immutable. Portability to enable maximum decentralization, even across different blockchains. The first ‘chainhop’ took place in summer 2019, between Ethereum and Ethereum Classic
Top movers of the day at 6 pm are PowerPool and Gnosis which has risen 12.70% since 1 pm. Ether made a new step-up in a massive rally but tokens did not follow, therefore only half of the 2100News indexes grow. The NWSBCT Index (Blue Chips) is among them. Over the last 24 hours, the 2100NEWS Digital Assets Total Index (NWST1100) which measures the performance of the 1100 major crypto assets by market capitalization has surged by 3.01%, Bitcoin by 2.61% while Ether has soared 11.21%.
Started in 2015, Gnosis is a decentralized prediction market built on the Ethereum protocol. Third-party developers will also be able to introduce their own services. A prediction market utilizes user predictions to aggregate information about future events, Individuals will be able to create prediction markets for events, allowing users to buy shares of predicted events. The platform employs a dual token structure: Gnosis (GNO) and OWL. GNO are ERC-20 tokens that the team sold during their ICO. OWL tokens are earned by staking GNO. The amount of OWL received is dependent on the length of the lock period as well as the total supply of OWL tokens in the market.
Top movers of the day at 1 pm are PowerPool and NIX which has risen 15.77% since 10 am. The crypto markets stopped rising. On the day the 2100NEWS DA Indexes which measure the performance of different groups of tokens and coins have recorded gains up to 3.53%. Over the last 24 hours, the 2100NEWS Digital Assets Total Index (NWST1100) which measures the performance of the 1100 major crypto assets by market capitalization has surged by 2.80%, Bitcoin by 2.39% while Ether has soared 9.52%.
To find out based on which criteria have been selected, please read the notes.
NIX Platform is a next-generation privacy currency and multi-layered interoperability platform which fuels anonymity-focused decentralized applications (dApps) and smart contracts, providing the option of adding a best-in-class privacy layer to any blockchain.
Top movers of the day at 10 am are Curve DAO Token and PowerPool which has soared 120.94% since midnight. Ether caused that crypto markets have rallied. On the day the 2100NEWS DA Indexes which measure the performance of different groups of tokens and coins have recorded gains between 0.65% and 3.33%. Over the last 24 hours, the 2100NEWS Digital Assets Total Index (NWST1100) which measures the performance of the 1100 major crypto assets by market capitalization has surged by 2.90%, Bitcoin by 2.40% while Ether has soared 9.82%.
🎱 tkns dstrbtd $CVP
🎱 CVP Token Model https://t.co/1J1l5djpyT
— Power Pool (@powerpoolcvp) August 28, 2020
Curve DAO Token (CRV)
CRV is a governance token on the Curve platform with time-weighted voting and value accrual mechanisms.
Venezuela’s Bitcoin use soars amid hyperinflation: 3rd on Global Crypto Adoption Index
Venezuelans have become increasingly interested in cryptocurrency as their country faces dire economic crisis and hyperinflation, a new study by blockchain data analytics firm Chainalysis shows. The firm’s Global Crypto Adoption Index ranks Venezuela third as “The country has reached one of the highest rates of cryptocurrency usage in the world.”
Cryptocurrency Adoption Soars in Venezuela
Chainalysis published its study of Venezuela’s bitcoin usage Thursday, which is part of its upcoming 2020 Geography of Cryptocurrency Report.
“Venezuela is suffering through one of the worst economic crises in modern history, with its national currency, the bolivar, becoming practically worthless,” the firm wrote. “Under these circumstances, cryptocurrency has taken on an important role in Venezuela’s economy … As the Venezuelan bolivar has lost value in the midst of hyperinflation, Venezuela has become one of the most active cryptocurrency trading countries on earth.” The firm elaborated:
The country has reached one of the highest rates of cryptocurrency usage in the world, placing third on our Global Crypto Adoption Index, as many Venezuelans rely on cryptocurrency to receive remittances from abroad and preserve their savings against hyperinflation.
Most of the crypto activity in Venezuela is driven by peer-to-peer (P2P) exchange activity, specifically on Localbitcoins, Chainalysis noted. “Venezuela is the third-most active country on the platform, or second-most active when we scale by the number of internet users and purchasing power parity per capita. Venezuela ranks 3rd for P2P trading volume in USD, after the U.S. and Russia.” Venezuelans are also using Bitcoin.com’s P2P marketplace to buy and sell bitcoin cash.
Chainalysis also discussed Venezuela’s national cryptocurrency, the petro, launched by the country’s “contested government, led by OFAC-sanctioned Nicolas Maduro and known for its corruption and human rights abuses.” In May, the U.S. put a $15 million bounty on Maduro and charged a number of top Venezuelan government officials with “narco-terrorism, corruption, drug trafficking and other criminal charges.”
Superintendencia Nacional de Criptoactivos y Actividades Conexas (Sunacrip) is the regulator of crypto activities in Venezuela. So far, seven crypto exchanges have been licensed to trade the petro. According to the Maduro government, petro adoption has been rising significantly. Recently, 305 Venezuelan municipalities agreed to collect tax in petro.
One of the approved exchanges is Criptolago. According to financial intelligence provider Sayari, the exchange is owned by Venezuela’s Zulia state, with the state’s governor, Omar Prieto, occupying a top management position. “Prieto is a staunch Maduro ally who is personally under U.S. sanctions for refusal to deliver humanitarian aid,” Chainalysis asserted.
Over the last year, Criptolago addresses received more than $380,000 worth of bitcoin over 3,916 transfers and sent more than $360,000 worth over 2,297 transfers. While the platform’s transfer volume grew over 13x in the past year, “it doesn’t appear that Criptolago is helping the Venezuelans struggling most,” the Chainalysis claims. The firm pointed out that crypto transactions worth $1,000 or more accounted for more than 75% of total transfer volume, but “the average Venezuelan earns just 72 cents per day, meaning very few of them could afford such transfers.” Furthermore, the overall number of transactions was under 1,000 per month.
An expert on Venezuela told the firm that “Criptolago’s transaction activity suggests the platform may be used primarily by individuals connected to the Maduro regime seeking to launder funds or move them out of Venezuela.” Nonetheless, Chainalysis affirmed:
We do however, have a lot of anecdotal evidence that people in Venezuela have become increasingly interested in cryptocurrency.
“That fits with our interviews of cryptocurrency experts on the ground in Latin America — users not just in Venezuela, but in other countries facing harsh economic conditions, turn to cryptocurrency to preserve their savings in the face of monetary devaluation,” the firm emphasized. News.Bitcoin.com has also reported on several crypto initiatives to help people in Venezuela.