The Winklevoss Twins on Bitcoin Industry Growth: "Let's Build That Bridge to the Legacy World"
The Winklevoss twins recently made an appearance at SXSW Interactive 2016, where the early Bitcoin adopters discussed how the industry has changed and matured over the past three to four years. The keys points made by the Winklevi in terms of Bitcoin’s maturation had to do with clearer regulation, better protections for consumers and the increased availability of professional-grade exchanges.
When asked about how Bitcoin has grown as a technology and an industry over the past few years, Cameron Winklevoss said, “I think Bitcoin still does what it has done since day one. I think probably the biggest change is really the types of people building inside the system today.”
Bitcoin Companies Are Now Protecting Consumers
One of the major signs of maturation in the Bitcoin industry has been the creation of regulated exchanges. During his appearance at SXSW Interactive 2016, Cameron Winklevoss, who co-founded the Bitcoin exchange Gemini with his twin brother, Tyler, stated:
“With Gemini, we’re a regulated trust company in the state of New York; we’re regulated under banking law, so we operate and have the same controls and procedures that you would expect of any financial institution (like your bank). That didn’t exist in the early days of Bitcoin. Quite frankly, it didn’t exist a year ago . . . It was a Wild West in the early days.”
The Winklevoss Twins are of the belief that the existence of regulated exchanges will calm some of the fears institutional investors have when it comes to speculation on the Bitcoin price.
Cameron Winklevoss noted:
“You’re seeing a lot of the same kind of consumer protections in things that you see in other financial areas that are regulated coming to Bitcoin. What that enables is getting people comfortable buying and selling Bitcoin, especially from both the individuals to the institutions.”
Whether the existence of Gemini has led to increased activity from institutional players is debatable. As of March 12th, Gemini was the 13th largest Bitcoin exchange based on 24-hour volume (according to Bitcoinity.org). Having said that, there are other Bitcoin exchanges aimed at institutional investors in the United States such as Coinbase Exchange and itBit.
The Professionals Have Arrived in the Bitcoin Space
Building off of Cameron’s previous comments, Tyler Winklevoss added that the people building companies in the Bitcoin industry today are much more professional than the early adopters of the technology. He noted:
“A lot of the professionals just weren’t in the space [in the early days]. The best entrepreneurs were building companies outside of Bitcoin, and I think a lot of times early adoptions are not the mature actors. So it was kind of like kids in a garage, for lack of a better metaphor.”
The most obvious example of the “kids in a garage” Tyler was referring to would have to be Mt. Gox, which filed for bankruptcy in early 2014 after losing hundreds of thousands of their customers’ bitcoins.
Tyler Winklevoss added that he and his brother are taking a more legitimate approach to building a Bitcoin exchange:
“We, entrepreneurs obviously building a company, have kind of the garage mentality, but we’re taking a more legitimate approach to it because we’re dealing with money. We’re not dealing with people’s pictures or even getting them from point A to point B, and if you lose somebody’s money, it’s a really bad thing. It’s very different from losing your text message or your picture. It really hurts your welfare.”
Although it’s easy for any kid to build his own Android or iOS app, things can be problematic when a single programmer, who may not be following the best security practices, is essentially controlling millions of dollars worth of other people’s money (as seen in the case of Mt. Gox.)
Building a Bridge to the Legacy Financial System
One of the key points that the Winklevoss Twins have routinely made in regard to their own endeavours in the Bitcoin industry is that they’d like to build a bridge between digital currencies and the legacy financial system. Tyler Winklevoss made this point again at SXSW Interactive 2016. He stated:
“Let’s build that bridge to the legacy world. Let’s not become it, but let’s take the safe parts about it and take the new innovation and marry the two.”
The main point the Winklevoss Twins made during their recent interview at SXSW is that it’s now much easier and safer for anyone to gain exposure to the Bitcoin price as a speculation thanks to platforms such as Gemini. Near the end of their chat with interviewer John Biggs, Tyler Winklevoss stated:
“We’re regulated by the same people who probably regulate your bank, and I think that says a lot.”
Kyle Torpey is a freelance journalist who has been following Bitcoin since 2011. His work has been featured on VICE Motherboard, Business Insider, NASDAQ, RT’s Keiser Report and many other media outlets. You can follow @kyletorpey on Twitter.
Photo SXSW / YouTube