Cameron and Tyler Winklevoss, of early Facebook fame, are big investors in Bitcoin and spoke glowingly about the digital currency’s potential in New York earlier this month.
At an event hosted by Businessinsider, the brothers suggested that Bitcoin is here to stay as a viable currency and will at some point trade for $40,000 a piece.
Not that any investors holding 100,000 Bitcoins together would not say otherwise. Legitimacy and trust are big drivers of Bitcoin’s value, after all.
And the Winklevosses have previously announced that they are trying to create a way for people to buy Bitcoin on the stock market. In October, they filed an amended S-1 and are just getting their Bitcoin exchange traded fund underway.
Still, there is something to their claims that Bitcoins represent a better investment than gold — the original currency accepted all around the world in which the rich could squirrel away their wealth.
Bitcoin has definite advantages of the precious metal. For one, it is considerably more mobile. You don’t need burlap sacks and an armored car to carry on your Bitcoins. You also can subdivide a Bitcoin down to eight decimal places neatly (that’s 0.00000001 BTC, or one Satoshi). Finally, Bitcoins are more liquid than gold.
The Winklevoss twins later went on to claim that Bitcoin is entering a second phase, Bitcoin 2.0, an idea supported by some tech and finance experts. Bitcoin 2.0 would see the currency become both a protocol and a platform, something that would make money transfer institutions such as Western Union obsolete.
But Bitcoin first faces two big what-ifs
The first: What if people simply give up on the currency? It’s that belief in the currency that gives it a monetary value. We could all, theoretically, claim tomorrow that Bitcoin is no longer of any value, and there wouldn’t even be the paper tender left to light a fire.
The second: What if a competitor moves in and takes over the digital currency space? Ripple could be poised to do just that. Ripple has its own digital currency, but its focus is on being a platform on which users can trade Bitcoins and fiat currencies.
In theory, again, Ripple could supplant Bitcoin both as currency and platform.
The Winklevii are not betting on this, though.
“It’s a winner-take-all landscape,” they said in their speech, “and Bitcoin is the runaway winner.”