Bitcoins-2017/11/04-US

How Winklevoss twins used $11m Face-book payout to become world’s first Bitcoin billionaires

The twin brothers who sued Mark Zuckerberg claiming he stole the idea for Facebook are worth more than $1bn after capitalising on the astonishing rise in Bitcoin. An $11m (£8m) bet on Bitcoin made by Tyler and Cameron Winklevoss over four years ago has ballooned by almost 10,000pc after last week’s price surge. It is believed to be the first billion-dollar return made by a cryptocurrency investor, a landmark moment for the controversial asset. Bitcoin hit $11,395 last week, capping a boom that started a year ago and accelerated dramatically in recent days, despite a chorus of warnings about its threat to financial stability and potential for criminal exploitation. The rise has made millionaires out of many of its early backers but the Winklevoss twins are believed to be the first public figures to have turned an investment into more than $1bn. The pair, who attended Harvard with Mr Zuckerberg, won a $65m payout from Facebook in 2008, claiming he had stolen their idea. In March 2013, they used $11m of the settlement to buy roughly 1pc of the world’s supply of Bitcoin in March 2013, when one coin was worth around $120.

The hoard has not been disclosed but is estimated to be around 100,000 Bitcoins – worth over $1bn at the cryptocurrency’s peak last week. Since their clash with Facebook, the twins – who rowed for the US at the Beijing Olympics – have re-styled themselves as Bitcoin entrepreneurs, launching their own online exchange and venture capital fund.

Afbeeldingsresultaat voor bitcoinThe pair are believed to have held onto their Bitcoin investments in the hope of launching an exchange-traded fund in New York, although they have struggled to gain approval from financial regulators. “We’ve never sold a bitcoin, we’re in it for the long haul,” Cameron Winklevoss said two years ago. Tyler Winklevoss, who has said the total value of the currency could be trillions, told The Telegraph last year that bitcoin was “like a better version of gold”. A spokesman for the twins did not respond to requests for comment. Only a handful of Bitcoin wallets have holdings worth more than $1bn, inclu-ding the cryptocurrency’s mysterious inventor, who has never been unmasked and is known only by the online pseudonym Satoshi Nakamoto. The Winklevoss twins are among the most high-profile of its big backers.

Bitcoin, which is not backed by any central bank but maintained by a network of its users, hit an all-time high last week despite Lloyd Blankfein, the chief executive of Goldman Sachs, joining other financial heavyweights in dismissing it as a fraud. The Federal Reserve also issued a warning that it could pose a risk to financial stability. “While these digital currencies may not pose major concerns at their current levels of use, more serious financial stability issues may result if they achieve wide-scale usage,” Fed governor Randal Quarles said. Last week the Chicago Mercantile Exchange won approval to launch Bitcoin futures trading and plans to offer contracts later this month. The move is seen as a mark of legitimacy that could boost institutional interest in the virtual currency and boosted its price. However, the cryptocurrency is still largely unregulated. The Government is seeking to bring virtual currency exchanges into money-laundering regulation under proposed amendments to EU legislation in the coming weeks.

Afbeeldingsresultaat voor bitcoin

FAQ | Bitcoin

What is it?

A digital currency, used to make payments of any value without fees. It runs on the blockchain, a decentralised ledger kept running by “miners” whose powerful computers crunch transactions and are rewarded in bitcoins

Who invented it?

Satoshi Nakamoto, a secretive internet user, invented bitcoin in 2008 before it went online in 2009. Many attempts to identify Satoshi have been made without conclusive proof

What’s it for?

People see value in money free from government control and the fees banks charge; as well as the blockchain, to verify transactions. Bitcoin has been seen as a tool for private, anonymous transactions, and it’s the payment of choice for drug deals and other illegal purchases

Is it worth anything?

Yes. As of November 2017, there were around 16.7m bitcoins in circulation. Each was worth around $10,700 resulting in a total value of $180 billion.

 

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