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Winklevoss Twins Revealed As Owning 1% Of All BitCoins
Think the 75% plunge in BitCoin values in two days has crushed all former supporters of the virtual currency (which truth be told is only back to levels from a month ago)? Wrong. As the NYT reports, a very unexpected supporting genepool (split into two identical halves) has emerged in the shape of two names previously linked to yet another pre-bubble frenzy name, FaceBook: Cameron and Tyler Winklevoss (collectively, the "Winklevii"). Following stints as Olympic rowers, Simpsons characters, and antagonistic Facebook litigants, the two 31 year-old identical twins are now indirect investors in the latest "currency" craze, whose heyday may well have come and gone, courtesy of owning a whopping 1% stake in all of the entire outstanding supply of BitCoin which at last count was worth $1.3 billion (if maybe a little less now).
An array of speculators have now bid up the price of the bitcoin to the point where the outstanding supply of the digital money was worth $1.3 billion at last count. The Winklevii — as they are popularly known — say they own nearly 1 percent of that, or some $11 million.
The decision by the brothers to go public with their position signals a new stage for what has been an experimental alternative to national currencies. Created in 2009 by a programmer or programmers known only by a pseudonym, the bitcoin world has been dominated by anonymous programmers and traders.
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The 6-foot-5 Winklevii were unfazed by the latest tumult. Indeed, the brothers said they used the low prices to buy more. They argue that bitcoin will have much further to soar once a broader audience sees its virtues: a unit of exchange that can be moved around the world at the click of a button without requiring any payments to Western Union or American Express.
“People say it’s a Ponzi scheme, it’s a bubble,” said Cameron Winklevoss. “People really don’t want to take it seriously. At some point that narrative will shift to ‘virtual currencies are here to stay.’ We’re in the early days.”
The brothers began dabbling in bitcoin last summer when the dollar value of a single coin was still in the single digits. In addition to the purchase of bitcoins, they also say they have invested in a bitcoin-related company, but declined to disclose which one. The currency itself exists as a string of letters and numbers. In order to keep their holdings secure from hackers, they have taken those codes off networked computers and saved them on small flash drives. They said they have put the drives in safe deposit boxes at banks in three different cities.
Nothing like having a string of letters and numbers in safes in flash drives in three cities as a store of value...
To some more cynically inclined observers, for the two brothers who lately have been desperate to get back into the public arena, this latest "investment" is nothing but a rather expensive PR campaign, and one which depending on their cost basis, may have already proven to be a huge loss. However, that will not step them. Or many others desperate to ride on the coattails of the next parabolic bubble:
Other Silicon Valley venture firms, while not holding bitcoins, are starting to show interest in the technology. Tim Draper of the firm Draper Fisher Jurvetson put money into CoinLab, which is doing bitcoin-related projects. Tribeca Venture Partners announced this week that it was putting money into Coinsetter, a start-up trading platform for the currency.
Sadly, a somewhat notable problem with BitCoin, the currency and not the bubblicious asset, is that one can't really use it for much other than to buy more bitcoin, or convert it into fiat currencies: the same fiat currencies that BitCoin is trying to replace:
So far, few real companies accept bitcoins as payment, and the primary place they can be used is an online bazaar, known as Silk Road, where narcotics are the main wares for sale. But the currency’s believers see a future in which Starbucks and Amazon take bitcoins. For their part, the Winklevoss twins have used some of their bitcoin to pay for the services of a Ukrainian computer programmer who has worked on the site of their venture capital firm.
But the drop dead punchline:
“We have elected to put our money and faith in a mathematical framework that is free of politics and human error,” Tyler Winklevoss said.
That's funny - it is more or less what the heads of the Federal Reserve and all other central banks have said for the past 100 years.
As for the future of BitCoin? Well, if its credibility can survive a collapse like this...
... maybe it just does have staying power. Unless, of course, the other sizable "investors" are none other than the central banks the currency hopes to supplant, just biding their time until they launch the next avalanche selloff...
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as long as I can buy adderall and a rocket launcher with BTC i could give a flying fuck about what a Wrinklewoss or Zher thinks
Why do you need bitcoin for that? Can't you use cash?
lol why would i spend my hard-earned money when i can just have my computer mine for me all day long
"If I had a rocket launcher, I would not hesitate" - W. Zevon
Bet of the week: Which dies first, Bitcoin or Facebook?
Face book should die first. Bitcoin actually does have a use. You can buy illicit drugs online and the bitcoin can't be traced to the dealer. We buy all of our kindbud online and have it FedEx'd.
Yeah baby !!!
Silver or Bitcoin first to $10 silver 7/2 bitcoin 5/2
I can't wait to see all the forthcoming lawsuits from Shitcoin investors/buyers after this shitstorm. Oh wait, their won't be any because there aren't any contracts or laws protecting their Shitcoins from crooks. I guess they could try and use the 30 day refund rule, like you use for the shit you buy on TV. {laughs}
Tally sticks have been used for more than 2,000 years. A BitCoin is a digital tally stick. Do people really think governments are going to be able to continue to separate people from their money as easily as they did in Cyprus? Looks to me that humans are developing options to fiat paper and government seizure.
https://www.google.com/search?q=tally+sticks&safe=off&hl=en&tbm=isch&tbo...
Only invest as much as you can afford to lose. I still believe Bitcoin has a fighting chance and is worth betting on.
I must say I agree with Tyler Winklevoss more than "Tyler Durden" on this one.
Junk if you must. That's how I see it.
There are thousands of merchants that accept Bitcoins (BTC) to buy all kinds of things. Thousands more are signing up every month too.
@ Exodus11:
Is there a master list somewhere, of all these merchants that are accepting it? Just curious.
BITCOINs is the new replacement of VIX. When market is going up artificially, some people try to take refuge in BITCOINS.
It has failed the way VIX has failed over the time.
In Equity markets, Bulls Make Money, Bears Make Money, Pigs Get Slaughtered.
The Winklevoss twins. Wow. What idiots. They have no business doing anything bitcoin related.
If they weren't effing morons, they would have memorized part of their private keys mentally and only stored the rest of the key in the vaults. But, they obviously don't care that much about security. Or, for that matter, valuation, because clearly right now bitcoin's survival is very much in question.
I'll be putting in a buy order @ $1.00 or less, just to pick up some free money, courtesy of the Bitcoin Cultists. I think it will survive, only because the market will be propped up by "believers who swear they saw Bitcoin appear in a tortilla in Mexico".
Yea that's a good idea. It will not die immediately. No way. Still tons of denial out there. I think 5-15 is actually a pretty good time to buy. 1 would be pretty much death already.
Who needs subprime lending for real estate when you can buy a house with Shitcoins?
You guys are so happy to see something crash.... since you're waiting since 2008 market to crash. LOL
Tylers,
Comparing Bitcoin to the central banks . . . are you fricking kidding me?
Where'd you get that price chart?
Man, I really love ZH, but this article looks like something off CNBS. I suppose none of you are bothered getting your arses sniffed and searched at the border (of your country, state, county, and then finally your town) for your PMs? Any room in your world for alternatives to the Bernanke/PM duopoly?
Just sayin.
Mt Gox?
I think I speak for Yen Cross .... I'm his mentor, afterall .... we applaud experimentation in the marketplace of ideas .... we're just not ready to part with PMs or fiat .... at this time .... for this brave new idea .... Godspeed to all you daring Bitcoiners .... I'll sit this one out !
I'm heading down to my local precious metals dealer on monday to pick up 100 oz of silver. It has intrinsic value, can't be created out of thin air and it has been used as money for thousands of years.
Bitcoins are created by hackers. It's just a computer algorithm than can be manipulated at will. The fact that this scam is reaching this level of hype is absolutely baffling.
If you're buying 100 oz on Monday, I'm going tomorrow. Shit is getting real crazy out there. Holding cash is freaking me out.
I'm getting phyical delivery of more than that. Shit is getting crazy. Holding cash is freaking everyone out and that is why we saw the bitcoin bubble. I'd go put your order in soon because the mint is already on back order.
In other news, I hear these guys are rich: http://www.theonion.com/articles/leading-social-media-site-harvardconnec... Yup. Americas finest news source.
One more reason to ignore bitcoin. Gold, bitchez!
I suggest that they first reign in the volatility of BTC which seems to be a bit of a problem.
There are, of course, historical precedents and best practice approaches.
Why not create something called Bitcoin Rate Mechanism (BRM) where a central authority, let’s call it Winklevii Tranquillity Fund (WTF), sets a trading range against an undisclosed basket of currencies and PMs and buys or sells unlimited quantities of BTC to maintain a quote within the set boundaries.
Track record is a bit mixed, but maybe better than this rollercoaster.
Two Winkle's are better than one, but no accounting for taste. Tell the boyz Goldman Sachs is hiring, maybe they can get ahead of the magic 8 ball!
http://bitcoin.clarkmoody.com/widget/chart/
This is the best chart. It's hilarious to watch, not holding bitcoin, that is.
I tried to buy ONE bitcoin awhile ago for $4 because it is a fascinating currency development.
I was turned off by the intrusive mtgox personal identification required and I didn't like linking my bank account either.
It just so happens I also bought a $100,000,000,000,000.00 Zimbabwe note on ebay... for $4
LOL