Technology

Winklevoss Twins Buy Into Digital Currency Bitcoin

| by Sarah Fruchtnicht
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Venture capitalists Tyler and Cameron Winklevoss, famous for suing Mark Zuckerberg over Facebook, announced that they own about 1 percent of all bitcoins, approximately $11 million worth.

Created by programmers in 2009, bitcoin is a virtual form of currency that can be transferred through computers and smartphones. It is decentralized, making the trading platform for the currency rather volatile. People use real money to purchase bitcoins, and the untraceable currency can be used to buy anything from pizza to a hotel room.

Since last summer the Winkevoss brothers, sometimes referred to collectively as the Winklevii, accrued what is known to be the single largest portfolio of bitcoins in less than a year. They told the New York Times they’re excited be on bitcoin’s ground floor.

"People really don’t want to take it seriously. At some point that narrative will shift to ‘virtual currencies are here to stay,’" Cameron Winklevoss told DealBook. "We’re in the early days."

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“To say highly speculative would be the understatement of the century,” said Steve Hank of Johns Hopkins University, a professor specializing in alternative currencies.

When the twins starting stockpiling the currency last summer, the value of one bitcoin was still in the single digits. April 9th the value was up to $190/BTC. However the value took a pulunge this week, now at $77/BTC.

“We have elected to put our money and faith in a mathematical framework that is free of politics and human error,” Tyler Winklevoss said.

The number of real-world items that can be bought with bitcoins is limited, but hopeful users want to see it conquer the world. The Winklevosses say they paid a Ukrainian programmer in bitcoins to work on their website.

Because bitcoin accounts are anonymous, it’s difficult to say how the Winklevosses portfolio stacks up to others.

“It has been four years and it has yet to be discredited as a viable alternative to fiat currency,” Tyler Winklevoss said. “We could be totally wrong, but we are curious to see this play out a lot more.”

Sources: NY Times, Telegraph