Cameron Winklevoss & Tyler Winklevoss, Winklevoss Capital; Bitcoin: The Internet of Money from the 9th Annual Value Investing Congress.
Cameron Winklevoss and Tyler Winklevoss are principals of Winklevoss Capital Management, a private investment firm that partners with a select number of early stage companies to provide capital. In addition, Winklevoss Capital looks to not only see companies, but also to help the companies grow. The twins provided capital to Hukkster, an online shopping tool for sale alerts;and BitInstant, a platform for moving money in and out of the Bitcoin economy. The twins also own one percent of all Bitcoin and have stated their intent to invest in more Bitcoin related ideas. The Winklevosses became famous after suing Mark Zuckerberg and claiming that they had the idea to invent Facebook Inc (NASDAQ:FB). The twins will be speaking about the digital currency today? What does that have to do with value investing? We will have to wait to find out.
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Winklevoss twins pitching bitcoin today… Bitcoin is a math-based asset which is a decentralized “crypto currency.” They see it as the “internet of money.”
Bitcoin was created by an anonymous/mysterious coder which was launched shortly after the global financial crisis. The code is open source which eliminates the need for trust or worries about insider trading as anyone can see what is in the “kimono.”
Described the classification as a commodity, a currency, and a technology. One limitation right now is its widespread use which is very limited currently. Some view bitcoin as a “gold 2.0.” Bitcoin can be stored on a flashdrive, digital wallet or even “in your brain” by memorizing a multi-digit code.
Cited Cyprus as an example of a situation that could be avoided through the use of Bitcoin. Implications: no bail-ins, no capital controls, hedge against inflation, and a hedge against the fed.
Bitcoin address = email address for cash = bank account. A global method of transferring money which could provide banking to the unbanked. Another possibility would be in micro payments i.e. sending amounts that currently do not seem feasible (<$2, etc.).
Bitcoin ETF would help reduce friction and give mainstream investors a chance at exposure. Regulation have been starting dialogue and the twins believe these troubles could be resolved in 6-12 months.
A bit more via Brendan Conway of Barron’s
“There’s a lot of pain points and friction in Bitcoin right now.”
“Buying Bitcoin today, it’s sort of a scary proposition. You store it on a USB stick, [you have to be somewhat] technically savvy … [If you’re transacting in] large amounts of money, there’s no real insurance aspect.”
“An ETF can help solve the purchasing friction in terms of security. It can offload that to the ETF… Storing Bitcoin takes expertise [and] accessibility. …. It’s similar to how [people] can’t buy gold bars.”