Draper Associates founder Tim Draper. Pedro Fiúza/NurPhoto via Getty Images Tim Draper , a venture capitalist , believes bitcoin , blockchain technology, and artificial intelligence will disrupt major industries, including healthcare , finance , and government . The transformation of those industries will create huge opportunities for entrepreneurs and investors such as himself, Draper told Business Insider in a recent interview. Draper has bet big on bitcoin and has been investing in bitcoin- and blockchain-related startups. Though he's had some big investment successes, including Tesla , his track record on forecasting the future of government and innovation is somewhat checkered by his failed effort to split up California and his backing of the healthcare startup Theranos , which has since been shut down amid allegations of fraud. Click here for more BI Prime stories .
In the past two decades, internet and digital technologies have transformed industries from publishing to food delivery.
But Tim Draper, a longtime venture capitalist, thinks a new generation of technologies could have an even bigger effect by shaking up some of the biggest sectors in the world, including healthcare, commerce, finance, insurance, and government. Artificial intelligence, big data, and especially cryptocurrency-related technologies, such as smart contracts, will decentralize power, tie the globe closer together, and yield some big opportunities for investors such as himself, Draper told Business Insider last week in an interview.
"This is going to be a really interesting transformative time," said Draper, whose track record includes backing companies including Tesla and Cruise Automotive, which was acquired by General Motors . "And I'm excited to be a venture capitalist during that time because it's the entrepreneurs and the venture capitalists that benefit the most when the biggest industries get transformed."
It would be fairly easy to set up an insurance company or program using some of the new technologies, Draper said. Smart contracts — agreements built on blockchain technology in which the terms are written into lines of code — can automatically determine eligibility for benefits and pay them out. Artificial intelligence can be used to catch fraud. Add in some good actuaries to determine risks, and you're in business — ostensibly without having to hire a bunch of workers.
"All that can be done right now," Draper said. Draper thinks government will be transformed by new technologies
But that capability has obvious applications for governments, he said. Much of what governments do involves offering kinds of insurance, including for health, retirement, and disasters, he said.
"What is government, but a bunch of different insurance companies," Draper said. He added: "Government is one of the biggest industries in the world, and that's about to go through a transformation."
But Draper said the new technologies promise even more profound change. Bitcoin, blockchain, and smart contracts are all decentralized systems. Governments and companies have little direct control over them. Smart contracts don't require courts and government to enforce them, for example; they're self-enforcing via software.
They're also global systems. Bitcoin can be exchanged around the world and isn't subject to controls by national governments. Holders of the cryptocurrency in different countries can conduct transactions using the same coins without worrying about exchange rates.
Governments to date have been directly tied to particular geographic areas. But the new technologies will eventually decouple that relationship, Draper said. They will allow governments to serve, compete for, and be accountable to citizens around the world, he said.
"Geographic borders are going to be less and less relevant as more and more governance happens virtually," he said. Draper's effort to reshape California failed
Draper has a somewhat checkered history when it comes to governments and borders. For years, he pushed an effort to break up California, first into six separate states and then into three via the state's initiative process. The first effort died when it didn't secure enough valid signatures to get on the ballot.
The latter effort failed when opponents challenged its constitutionality. After the state Supreme Court blocked Draper's initiative from appearing on the ballot — but left open his ability to show its constitutionality and get on the ballot at a later date — Draper withdrew the effort . Public polls said that more than 70% of California respondents opposed the breakup.
In follow-up email with Business Insider, Draper said internal polling by his team suggested that initiative's chances were much closer, with more than half of respondents either in favor of his three-state-breakup plan or undecided about it. After the Supreme Court decision, he decided not to continue to fight in favor of the initiative because he felt the fix was in.
"I would face...