AUSTIN, Texas -- Massive swings in bitcoin’s value and a series of cybersecurity and regulatory setbacks haven’t shaken the Winklevoss twins’ faith that cryptocurrency has the potential to replace gold as a preferred store of value.
The internet entrepreneurs, who once accused Facebook founder Mark Zuckerberg of stealing their idea and ultimately received a $65 million settlement, told a packed crowd at the South by Southwest conference that younger generations are gravitating toward cryptocurrency as a means of transferring and storing money. Cameron and Tyler Winklevoss argued that bitcoin has the potential to “kill” gold as the public familiarizes itself with blockchain technology and develops trust in cryptocurrencies.
“The only thing that’s truly precious, in my mind, is bitcoin. If you tell that to someone who’s my parents' age, they’ll probably look at me and tell me I’m crazy, and I’m willing to accept that,” Cameron Winklevoss said. “But you talk to someone who’s playing Fortnite and say, okay, two options, bar of gold or the equivalent in bitcoin, they are 10 times out of 10, 100 times out of 100, going to take the bitcoin. They want software, they don’t want hardware.”
The Winklevoss twins founded Gemini, a cryptocurrency exchange that is licensed and regulated by the New York State Department of Financial Services. They are also longtime investors in bitcoin, the leading cryptocurrency that rose in value to nearly $20,000 per coin in late 2017, only for prices to crater in 2018. At present, bitcoin prices are hovering just below $4,000.
Crypto proponents have seen efforts at mainstream acceptance hampered by cybersecurity concerns and a persistent belief among critics that the largely unregulated, decentralized exchanges are havens for criminal activity. After being personally victimized by the collapse of Mt. Gox, a Japanese bitcoin exchange that imploded after a series of hacks and scandals, the Winklevoss twins are attempting to establish Gemini as a trustworthy platform.
“In order to build the future of money, we need to build trust,” Cameron Winklevoss said. “You wouldn’t store your money in an unregulated financial institution. It just wouldn’t cross your mind."
Gemini has taken various steps to build trust, including the introduction of insurance coverage for digital assets on its platform, but obstacles remain. The U.S. Securities and Exchange Commission has repeatedly rejected efforts by the Winklevoss twins to gain approval for a bitcoin ETF, citing concerns about investor protections.
Tyler Winklevoss asserted that formal regulation of exchanges will help to stabilize leading cryptocurrencies.
“The healthiest markets in the world today, outside of crypto, are the ones that are thoughtfully regulated,” he said.
While the twins repeatedly noted their awareness of cybersecurity and data privacy issues that leading tech companies have experienced, they were evasive when asked to comment on specific incidents. For example, Facebook has faced unprecedented scrutiny, and the threat of regulation, since a data breach exposed up to 87 million users last year.
When asked for what advice they had for Zuckerberg, their old Harvard classmate, the twins turned evasive.
“I think he’s got a lot of good advisers around him,” Tyler Winklevoss said. “I don’t think he needs to hear from us.”