The Winklevoss twins, Cameron and Tyler, are well-respected authorities in the world of cryptocurrency, so when Cameron Winklevoss compared cryptocurrency to the Dot Com boom in a recent Tweet, people took notice.
There is a mixture of reports and reactions to the Tweet, including detailed analysis. Most agree that Cameron Winklevoss is in a position where his analysis is typically correct, or at least likely. So, what does his recent Tweet tell us about crypto?
The Actual Tweet
Before getting into the analysis of the Tweet and why experts feel you should pay attention to his statement, take a second to read what he wrote:
Cyberspace assets = domain names
Cryptonetwork assets = tokens
1990: 4-letter domain name = $10. Same domain today = few millions max
2009: bitcoin pizza = $10. Same pizza today = ~ $80 million
Ability to own a piece of Cryptonetworks > Internet.
Winklevoss posted the Tweet on May 23 and it already has 354 retweets, 781 likes, and 49 comments.
Understanding the Comparison
Since Twitter has a character limit, Winklevoss had to rely on shorthand writing to get his point across. Luckily, crypto experts broke down what Winklevoss said in the Tweet, making it much easier to understand.
The Tweet specifically refers to domain names that are short and to the point, as these are almost all taken. In the last decade, those who managed to grab a concise or useful domain name are able to achieve amazing profits if a big brand expresses interest. According to Winklevoss, this is similar to the limited supply for Bitcoin.
When domain names first became available, you could buy them for about $10. If you purchased those now in-demand domain names at this time, it could be worth millions now. Similarly, you could buy a large quantity of Bitcoin for $10 when it first arrived. Winklevoss references the example of the first official purchase of Bitcoin for a real-world item, the pizza. The Bitcoin that was worth $10 in 2009 is now worth about $80 million.
From there, Winklevoss makes the assertion that given this exponential growth, investors in cryptocurrency can lead to even more profit than those in domain names.
The Advice in the Tweet
When it comes down to it, Cameron Winklevoss used this Tweet to strongly suggest that people invest in cryptocurrency as he sees a great deal of potential for it. Winklevoss expects those who invest in crypto to see dramatic returns. The Tweet cites the returns early investors have already seen as the perfect example of Bitcoin’s potential.
The way in which Winklevoss compares cryptocurrency to the dot com boom and domain names serves to show just how disruptive crypto can be.
Why Winklevoss’s Input Matters
Among the various people that can provide input on the subject of cryptocurrency, most people are inclined to take analysis and predictions from the Winklevoss twins to heart. This is because they were early investors in cryptocurrency and are co-founders of the famous Gemini cryptocurrency exchange.
Furthermore, the Winklevoss twins seem to have a thorough understanding of cryptocurrency, particularly Bitcoin. They earned the title of the first Bitcoin millionaires in late 2018. In 2013, they were the first prominent millionaires with virtual currency. At the time, other Bitcoin millionaires used their funds or diversified, but the twins stuck with Bitcoin and expanded into other cryptocurrencies.
Winklevoss Also Has Experience With Growing Tech
Not only does Winklevoss already have extensive experience with cryptocurrency, but he also has experience with other growing technology. In addition to their Olympic-level rowing skills, one of the reasons that the Winklevoss twins rose to fame was their creation of ConnectU. This was the social media platform, originally called HarvardConnection, that the twins made in 2004. They were two of the three co-founders.
Many view ConnectU as one of the first major social networks, as users were able to update profiles, send messages, and add friends. The Winklevoss twins ended up suing Mark Zuckerberg for stealing the idea of Facebook from their ConnectU page. They settled for $65 million and dropped an appeal for more in 2011.
Although the Winklevoss twins have not been part of social media since the lawsuit was resolved, they were key players in the early history of social networking. Given the prevalence of social networking websites today, this is a very strong indication that the twins have always had their eyes on the next up-and-coming thing, from social media to cryptocurrency.
The Gemini Exchange Shows Winklevoss Follows His Own Advice
If you look at the investments and business ventures that Cameron and Tyler Winklevoss have, they clearly practice what they preach in terms of cryptocurrency investment. In 2014, the twins started Gemini, officially known as Gemini Trust Company. Gemini is a licensed exchange for digital assets as well as a custodian. The Winklevoss twins created it for institutions and individuals and the New York State Department of Financial Services regulates the company.
The fact that Gemini is based in New York and regulated there is significant for a crypto business. Many cryptocurrency exchanges attempt to place their headquarters in locations with minimal to no regulations or restrictions. Since the NYSDFS regulates Gemini, this business is held to a higher standard than some of its international competitors.
Specifically, Gemini must follow capital reserve requirements, banking compliance standards, and cybersecurity requirements of the NYSDFS as well as in accordance with NY Banking Law. New York State registers Gemini as a trust company, indicating consumers’ needs are a higher priority than those of the firm, something called fiduciary duty.
The main goal behind Gemini at its creation was to create a world-class digital asset custodian and exchange that was based in the U.S. This continues to be the driving point of Gemini today.
There are a few key takeaways from Cameron Winklevoss’s Tweet given the Gemini company he runs with his brother, Tyler. One is that as mentioned, Winklevoss follows his own advice. Even more importantly, he has always followed that advice in relation to cryptocurrency. Between his early investments by purchasing Bitcoin then expanding to other cryptos and the creation of Gemini in 2014, the Winklevoss twins clearly invest their own funds into crypto, indicating a strong belief in its future success.
The other crucial point is that Gemini is successful and based in the United States. As mentioned, many companies decide to avoid the United States due to regulations or taxes. The U.S. does have many benefits for crypto companies, but some other jurisdictions, like Malta, are still more appealing. Gemini is not only based in the United States but complies with all of the banking regulations of its New York location.
It is common for cryptocurrency companies to find ways to get exceptions to these types of regulations, but the Gemini can succeed despite complying with all of them. That indicates that the Winklevoss twins may be right, and cryptocurrency has the potential to work with our current banking regulations, at least to some extent.
Gemini Stands Out With Insurance Offerings
In addition to its high level of compliance unlike that typically seen by cryptocurrency custodians or exchanges, Winklevoss’s Gemini also stands out with its insurance offerings. This insurance arrived in late 2018 and looks to enhance confidence and trust via insurance and assurances on digital assets. This should further reduce the gap between traditional financial instruments and cryptocurrency, simultaneously reducing the hesitations many have about purchasing digital currencies. This type of insurance shows a prioritization of risk management, which consumers will appreciate.
As few were aware this type of cryptocurrency insurance was even possible before the Winklevoss twins announced its arrival for Gemini, most have interest in the details. The coverage comes via a global insurers consortium that Aon Plc arranged. This supplements the FDIC deposit insurance that Gemini already had.
Winklevoss Also Looks to the Future With the Gemini Dollar
The Winklevoss twins also show their forward-thinking nature with the Gemini dollar, which is the very first regulated stable coin in the world. Some see stable coins as being more likely to bring in the future of cryptocurrency since they have all the benefits of digital currency without the volatility. With the Gemini Dollar, GUSD, the Winklevoss twins take the price stability and creditworthiness of the USD and combine it with the advantages of the blockchain. To top it off, there is also U.S. regulation.
Before releasing the Gemini Dollar, the Winklevoss twins had to get approval from New York State. Although the Gemini Dollar received its approval at the same time as another stable coin and other stable coins, like Tether, already existed, it stands out with the regulation. The Winklevoss twins specifically created the Gemini Dollar to have more transparency than other available stable coins.
Gemini is up-front about the specifics involving the Gemini Dollar, including the bank holding U.S. dollars that correspond with issued GUSD and monthly audits. BPM, a San Francisco firm, audits reserves for both the associated USD reserves and the cryptocurrency every single month to ensure the figures match. This transparency helps overcome much of the distrust and concerns associated with Tether. Furthermore, Gemini holds the U.S. dollars with State Street, a bank that has been around since the 18th century.
Gemini Continues to Grow Its Trust
Not only do Cameron and Tyler Winklevoss show their commitment to and belief in cryptocurrency via Gemini, but they continue to expand that company. In January, they made headlines by further expanding the trust people should have in their firm.
This began with Gemini achieving a SOC for Service Organizations Type 1 examination. This examination typically only applies to financial services and tech firms that are run incredibly strictly. This examination supplements the other indications that Gemini wants to earn trust, such as the NYSDFS regulation.
The achievement of this examination for Gemini serves several important roles. As mentioned, it enhances the perceived trust for Gemini by indicating that the exchange and custodian complies with rigorous standards. Additionally, it lets other cryptocurrency companies know that it is possible to show this level of cooperation and trust, encouraging them to do so.
Speaking to Forbes, Yusuf Hussain, the Gemini Head of Risk indicated that the recent actions were part of Gemini’s demonstration of its security maturity. According to Hussain, the SOC 2 review from Deloitte helps validate that Gemini follows high standards for confidentiality, availability, and security. Those high standards assist with consumer confidence and trust.
Gemini’s achievement of SOC 2 Type 1 Report from Deloitte & Touche, LLP should sound impressive to anyone familiar with it. It is the very first cryptocurrency custodian and exchange to achieve this high security compliance level. Later in the year, Gemini will supplement the SOC Type 1 report with a SOC 2 Type 2 review, which will be another first for a cryptocurrency exchange.
Gemini Also Grows Its Offerings
Gemini simultaneously works on multiple tasks, including increasing trust in the platform and making it easier to spend cryptocurrency. Gemini partnered with Flexa, which is a global payment network for crypto, to create the SPEDN mobile app. This wallet application lets crypto holders spend their cryptocurrency at participating retailers. Retailers do not have to make serious changes to accept the cryptocurrency; they just have to configure their scanners accordingly. Additionally, the crypto deposited on SPEDN stays under Gemini custody so it gets the security benefits of the Gemini wallet.
SPEDN is still in its infancy, but it has dramatic potential benefits for both retailers and cryptocurrency holders. Crypto owners find it easier to spend their digital currency as they can be used in more places than before. At the same time, retailers do not have to make expensive upgrades or take time to understand cryptocurrency to begin accepting it. With the acceptance of cryptocurrency, participating retailers will also expand their potential customer base.
Winklevoss and the Future of Money
The Tweet comparing cryptocurrency to the dot com boom is far from the only Tweet in which Cameron Winklevoss strongly encourages people to invest in cryptocurrency. On May 20, he continued referring to cryptocurrency as the “future of money” in a Tweet. That Tweet gives the same idea as all his other advice on Twitter: invest in cryptocurrency. It reads:
Some people think it’s crazy to invest in crypto. Maybe. But definitely not as crazy as sitting on the sidelines when the future of money is literally being built before your eyes.
That Tweet acknowledges that there are risks to cryptocurrency investment and many people still do not understand it. At the same time, it stresses that changes are paving the way for cryptocurrency to become the currency of the future and those who do not become involved as soon as possible miss out on opportunities.
As with the other, more recent Tweet comparing Bitcoin to the dot com boom and encouraging people to invest, it would be wise to listen to Winklevoss’s advice. Not only has he already dramatically increased his fortune via cryptocurrency, but he actively invests in it and works hard to grow its usefulness and acceptance.
Both Winklevoss Brothers See Great Things for the Future of Crypto
If you look at Cameron Winklevoss’s Twitter stream, you will see that these are far from the only Tweets strongly encouraging people to invest in cryptocurrency. Some promote his Gemini exchange, but others just promote cryptocurrency in general. On May 30, he compared cryptocurrency and Bitcoin to space travel. The idea behind the Tweet was that we have no limits in our minds with space travel so there should not be any with the future of money either.
The same is true of Tyler Winklevoss’s Twitter feed. On May 20, he referred to Moore’s Law that indicates processor speeds double around every two years. Since this applies to other computing metrics, Winklevoss indicated it should also apply to blockchain. He then uses that as a strong point showing that blockchain’s scalability, one of its biggest criticisms, should improve exponentially in the future.
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