It almost seems like a setup for a bad joke: “The Winklevoss twins and Bitcoins walk into a bar.” But it’s true, the Winklevoss twins have bet big on a cryptocurrency technology called Bitcoins, and they may just change the financial landscape with their new company, Gemini.
Who Are the Winklevoss Twins?
For most people, the Winklevoss twins are a forgotten memory. In case you’ve forgotten, the twins got into a rather heated legal battle several years ago with Facebook CEO Mark Zuckerberg. The Winklevosses (actual twins by the name of Tyler and Cameron) claimed that they had hired Mark Zuckerberg as a programmer to develop a new kind of social network, and Zuckerberg had taken their ideas and used them to create Facebook.
While the Winklevoss twins ultimately dropped their challenge, they did settle with Zuckerberg for a hefty sum of money. Since then, they have been involved in multiple technology related investments through their investment firm Winklevoss Capital. However, their main focus has been Bitcoins. They have been an early investor, and they’re now trying to create a legitimate market for Bitcoins.
What Are Bitcoins?
Bitcoin also feels like a forgotten memory; it’s a cryptocurrency that is based on a very, very complex algorithm. The number of Bitcoins in circulation is not fixed; it actually grows. A computer can “mine” for Bitcoins by working to solve this complex algorithm. But the currency itself is purely digital; there are no physical coins. You keep your Bitcoins in an encrypted digital wallet.
Before you go out to try to mine “free” currency, understand that the algorithm is so complex that most computers (even high-powered servers) will cost more to run in electricity than the value of the Bitcoins it produces. One user on the tech forum Stack Exchange calculated that using even the most advanced video card (video cards are optimal for solving complex algorithms), it would take about 98 years before you produced one block of Bitcoins (25 Bitcoins to a block). That was back in 2013. As more more people mine bitcoins the complexity of the algorithm increases. If you want to get really technical, you can visit Bitcoin Wisdom to calculate the return on investment of mining Bitcoins. Using the math there, it could take thousands of years before you produce the equivalent of even one Bitcoin.