Why The Winkelvoss Twins Are Betting Bitcoin Will Go Big
The social media mavericks have launched their own U.S.-based cryptocurrency exchange
Best known as the maligned twins in the Facebook origin story, Cameron and Tyler Winklevoss are hoping to gain attention for being involved in another possible Internet giant: Bitcoin. They adopted it early, back in 2012, when cryptocurrency was still a fringe concept. In October, they got approval from financial regulators to launch their own U.S.-based exchange: Gemini. Here’s why they have bet that Bitcoin will go big.
TW: We are fascinated with Bitcoin because it is the first iteration of money that’s actually built for the Internet, by the same type of engineers who built the Internet itself.
CW: It sends payments over protocols, the same way we send data and voice today.
TW: With just a cellphone and a Bitcoin address, you now have a bank account. You have a way to accept payment. You have a way to store value that isn’t your mattress.
CW: How it’ll affect your life in the U.S. might be substantially different than in another part of the world. If you’re in Argentina, and there’s currency debasement of 25 to 30 percent a year, Bitcoin is sort of like disaster insurance. Plus you don’t have to give over a lot of personal information to a retailer like you do with a credit card, so things like identity theft and consumer protection are actually improved.
TW: Early Bitcoin operators, like Silk Road, definitely did it a disservice. But the irony is that Bitcoin is not good for illicit behavior. We know that because Silk Road was busted. And then two of the federal agents who made the bust and embezzled some of the Bitcoin were arrested too. The provenance of every coin—where it’s traveled, what marketplace it’s been on, what addresses have touched it—is all transparent and completely public.
CW: So how’s it going to affect your day-to-day? Through transactions we can’t even contemplate right now.
TW: Things like property deeds and title insurance could be moved to a blockchain-type transaction, such as Bitcoin. Computers and self-driving cars can’t go open up a bank account at JPMorgan or Wells Fargo, but they can plug into protocols. So if your power meter needs to purchase more energy, you can program it to do that with Bitcoin. The fact that the government is now regulating Bitcoin shows it understands that the currency is hugely transformative. This decentralized blockchain-type technology is here to stay. And it’s going to completely rewire the way the Internet works.
This article is part of the Future Of Money feature from our January/February 2016 issue. Read the rest of the feature here.