Cameron and Tyler Winklevoss: Cryptocurrency and the Future of Money.mp4

Sure. We think Bitcoin is digital gold, gold 2.0. But it's money, the first form of money that was ever built purposely for the internet. So it's sort of like what your email did to snail mail, cryptocurrency or Bitcoin does for money.

I mean, it's very surreal. But I don't see myself when I look at Cameron, even though we look identical. So when I read this book and it's about me, I don't... you know, at least the first... you know, I saw the movie. I really enjoyed the movie, but I wasn't like, 'Oh, that's me,' but its portrayal, so it wasn't that weird because people think I'm him too.

You know, I think we didn't know there was necessarily a story. I think when you're living your life, it's like you're swimming; you can't see the color of the water, right? You're in crypto, and it's exciting, but you don't really see that larger perspective that someone else sees. But then Ben was like, 'Hey, I want to hear what you guys are up to about Bitcoin,' and we started talking. And then we're like, actually, that was really interesting and there's a story here. And it blended his genius ability to sort of draw that story arc and tell a story through Bitcoin, or tell the story of Bitcoin through us and some other characters, and sort of really humanized it and the tensions and the different philosophies that come to a head in the book. Should this thing be regulated? Should it not? Is it for anarchist libertarians, or is there something in the middle? So kind of through talking, he convinced us that it was a really interesting story. And of course, it is. But I think when it's your life, I don't think anyone wakes up and it's like, 'My life is like a movie or a book every day,' even though it might be.

So we were on an island in the middle of the Mediterranean, Ibiza. And... you're in your totally non-film cinematic story. No, very bad. On a beach, right. Not looking for the next big thing in the sky. A guy from Brooklyn recognizes us from The Social Network and said, 'Have you thought about Bitcoin or virtual currency?' I said no, and he started telling us about it. At first it sounded really weird, and then after some tequila it started to make a lot of sense.

Right, so we very much lived the Wild West days of Bitcoin. A lot of our early Bitcoin that we bought we had to buy on this exchange called Mt. Gox. And Mt. Gox is probably the best pivot in the world. It's actually an acronym for Magic: The Gathering Online eXchange. It was a magic card game exchange that went into crypto, and it was run by two Frenchmen who had cats in Tokyo. So we had to apostille documents to onboard to this exchange, wire our money overseas, it was completely unregulated. Go through, jump through hoops of fire to actually buy this stuff. The technology was really poor. And as we know, it was famously hacked, or they lost the private keys. It was either their incompetence or hackers, but they lost almost a billion dollars at the time, which by today's price is probably a lot more. So we love this technology, and when we first saw it, you think, 'Why is this different than PayPal? Why is this not a Ponzi scheme? Why is it not airline miles?' But it was really money that went over internet protocols, the same way voice now goes over the internet. So Skype, you can video chat someone for free anywhere. Before, there were long distance phone charges, and it was expensive to call someone from New York to California. Now no one even thinks about it. Millennials don't know about long distance phone charges. So this is what was happening with money with Bitcoin. So we saw the promise. And when you talk to a Bitcoin backer, Bitcoiners, what we call people in Bitcoin, the passion, these are people that are putting every penny of their lives into this thing, and you just look them in the eyes and they give great answers for every question. But it was such a Wild West. So we thought that for this to really grow, he would have to change. And investing in BitInstant and Charlie taught us exactly sort of what not to do if you're running a financial services company. And we ended up founding our own company called Gemini, that's regulated in the state of New York, to solve our own problems effectively.

It took us a year and a half to get our trust company license in New York. So we were building the platform while we were getting that license. But we couldn't get a banking account. A bank account, a simple thing like that, to hold customer funds took about a year to get.

Yeah. Luckily, banks wanted nothing to do with it. They didn't touch the word Bitcoin. Like the cannabis industry, I think was really hard for any other startup. It's really easy to get a bank account for a crypto startup, even one with a New York trust company license. That's the same license that Bank of New York, State Street, the two oldest companies in the country started out with. Still wasn't enough. And even to this day, it's hard to get new relationships. We have State Street now that banks Gemini dollar or stablecoin, but that was actually the hardest part of it. It took a year to onboard with them. They come in, do diligence for six months. And that process should probably take like a week if you're a hedge fund and you need a cash Treasury account. So we don't deal with the fiat portion; we deal with everything else at Gemini. So we rely on bank partners to take wires and things like that into our omnibus account. So that's still challenging to this day. Even banks who want to get involved in crypto, like Goldman Sachs, hasn't gotten approval from the Fed to actually handle the Bitcoin. So they do synthetic products that give you a Bitcoin exposure. But even they have trouble. The regulatory... a lot of things have sorted out with the regulation. When we first got it, it was like, is this gonna be illegal kind of thing? That was like the question, right? So we're past that. But there are still... it's still sort of slow moving in certain areas, right?

We're playing the same game but very differently, and we're playing the long game. So we think in the future, customers like big macro hedge funds will want to work at places like Gemini that are regulated, that ask for permission not forgiveness. We think the offshore game is a limited time only. But there's a lot of people going after that and definitely making money in the meantime. Our mantra is we want to be the fastest tortoise in the race. But it's still been challenging because even if you scream from the rooftops, 'Hey, we want to do this the right way,' there's still not a fast path in the US at least right now at the SEC or CFTC. So that would be my criticism or my fear about the US: that even if you want to do things the right way, there isn't a clear path in certain areas. So I think it's a big disadvantage for us compared to the rest of the world, where people are just building and innovating at the speed of innovation, not at the speed of government. It's not a US-centric technology; it's a global asset. Anybody in this room, but anybody in the world with an internet connection, can buy Bitcoin. So they're not gonna wait around for the US to catch up or take its time and do the right thing. And this is the first time retail has actually driven that, led the charge. Usually, it's Sand Hill Road VCs, accredited investors, things go IPO, and it gets dumped on retail after it goes to public markets a decade after the company's founded. This is actually retail driven, and Wall Street is asleep at the wheel. And then when they woke up, they couldn't figure out how to get their compliance departments to sign off or the regulators to get comfortable with them as a regulated bank touching Bitcoin or custodying Bitcoin or cryptocurrencies. So it's the first time where the little guy actually is there and has an advantage structurally because they don't have the compliance legal departments holding them back.

It's still very early. Institutions, everybody knows about it. Everyone's heard about it. And there's some very sophisticated people in even these banks who know about cryptocurrency, but they're still not really in the game yet. It's still very much a retail-driven market. Very much a lot of the action is out in Asia. So we still think it's at the bottom of the first inning. If you read this book, you understand how we got here and how far it's come, but it's also just sort of the beginning in a lot of ways. So I don't know. I mean, the price peaked about 18 months ago at about $20,000. It went down to about $3,000. It's recovered to about $12,000, but we're still far off that peak. But so much has happened. Gemini, we have about 230 employees today. Almost everybody's from financial services or Google, Airbnb, big name companies that you use that are a part of your everyday life. And these folks have all decided they need to be in crypto. They weren't in crypto two or three years ago. When we started, five years ago, Gemini was a core team of 10 people, and these were like really early people. But today, people are moving into this space at a rapid rate. So when I look around our office at the intellectual capital and these smart, brilliant people working in crypto...

There's a young computer engineer from Dartmouth who is likely to enter crypto. Progress has been made but there's a long way to go. We're maybe post-2000 boom and bust, like 2001 when Facebook launched. The difference now is that everyone has a powerful computer in their pocket and fast internet. There's nothing stopping people from buying Bitcoin. In the late 90s, you had to be an angel investor in the Valley to get in early. Now Bitcoin is open to all. If Bitcoin is the software version of gold, the gold market is $7 trillion, Bitcoin is $250 billion, so there's potential 30x. The use case is still buy, sell, invest. The decentralized web 3.0 hasn't fully arrived yet. There will be crypto-native applications we can't imagine.

I don't wake up thinking about it, but I get the perception from popular culture. We grew up 20 miles apart in Connecticut. We've known each other since childhood. He was at Exeter, I think on the crew team.

It's a very interesting project. Gemini is a marketplace, we trade assets. Libra is a stablecoin tied to a basket, unlike Bitcoin which is volatile. We'll look at it. The fact that a company like Facebook is talking about crypto demystifies it and is good for the space.

I think so, yeah.

Welcome to the party. What took you so long?

Bitcoin and Ethereum or something like it. Ethereum is creating a decentralized computer. There might be a few like operating systems. Zcash is interesting for privacy. Bitcoin has first-mover advantage and network effects. It's likely to survive. It's the digital gold.

There are millions of unbanked in the US and over a billion worldwide. Crypto can help bank them. With a mobile app, you can store Bitcoin and that is your bank account. Micro payments are possible because Bitcoin is cheap and instant. The current banking system is broken. We had the aha moment when we realized money should work like email. For sanctions, Bitcoin can bypass control. No country wants to be North Korea. Bitcoin can get through the Great Firewall. It's a good thing overall. Exchanges need to offer a wide range of assets, including private securities on blockchain. The private market is bigger than the public market. One day you can trade anything on Gemini.

Education. People think crypto is only for illicit activities. The US dollar has been used for crime too. Technology is agnostic. Also, Bitcoin is not truly anonymous; it's actually too open. Once people understand there are regulated exchanges like Gemini, they feel safe. There's an age gap: millennials live online and understand digital credits. Crypto enables microtransactions for the Internet of Things. It's not competing with the current system; it allows new things that couldn't exist before. Bitcoin is the first internet-native money.

Roubini is a no-coin-er; he missed out. The only people covering crypto early were crazy libertarians and drug dealers. Now these economists are late and call it a tulip bubble. They look worse every year. New technologies are held to an unfair standard. Bitcoin is only ten years old; it's still teething. Yes, there will be a Bitcoin Billionaires movie. It's the next step.