Forget the flack Tyler and Cameron Winklevoss have gotten for their stance on Bitcoin. It’s time to hear what they have to say.
When the investors announced they would be creating a Bitcoin ETF in July, the Internet giggled.
Now they’re explain their thoughts on the currency at the Value Investing Congress.
After the preamble (“we hope you will see it’s the Internet of money by the end of this,” they said), the Twins explained exactly what Bitcoin is — who created it and how transparent and track-able it is.
But we know that’s the easy stuff. Bitcoin gets intangible when you try to figure out exactly what it is.
In this presentation, things really started getting interesting when the twins got through Bitcoin as a currency or commodity, and on to Bitcoin as a technology. “The technology promise is… perhaps the most impressive,” they said. It’s the part the gets Silicon Valley excited.
Bitcoin has some major implications in industries like financial services. It’s immune to price runs. It’s immune to bail-ins — you can store it on a zip drive or in your head — and it’s hard to appropriate.
Think about a country like Argentina where the inflation rate is… questionable. Argentines want to preserve the value of their money, and sometimes they want to move it out of the country. With Bitcoin that’s much easier. In fact downloading Bitcoin clients has spiked in the country as people want to exchange their pesos for a currency that isn’t impacted by capital controls or inflation.
They argue that it could even be a hedge against the Fed.
In short: There are a lot of possibilities here. What about remittances, they suggest. Or even better, a Bitcoin e-mail address that serves as a bank for people that are underbanked? What about micropayments — “it’s generally understood that sending under $US2 over the Internet is impossible,” said one of the Twins.
Not with Bitcoin. You can donate a penny to the Salvation Army, or get behind a newspapers pay wall for just a day.
Regulators are starting to talk to Bitcoin and set some ground rules, “over the next 6 to 12 months” the Twins estimate. Yes, this could stifle some growth and innovation in Bitcoin, but it helps that there’s no centralized source for the coins.
For now, they see their ETF as a legal way to get in the game.
So do you believe this is the Internet of money or what?