What do two good-looking, rich, cocky dudes do with their free time? Buy play money. The Winklevoss twins, who fleeced Mark Zuckerberg for millions alleging he stole “their” idea for Facebook (MySpace might beg to differ), have now become Bitcoin moguls. According to the New York Times, the two have amassed one of the world’s largest Bitcoin fortune valued at $11 million. I guess this is what you do when you don’t have to worry about getting chicks and you have $220 million of Facebook money to blow.
What is a Bitcoin? A virtual currency introduced in 2008 created by an anonymous programmer. The Bitcoin program lives on the web creating a limited number of coins each year until year 2140 when it will max out at 21 million coins. You can mine these Bitcoins by solving mathematical riddles–think of it as FarmVille for geeks.
Something tells me the Winklevosses aren’t the type to waste time doing math to earn Bitcoins. They probably prefer to use daddy’s money or their ill-gotten gains from Facebook. Regardless, they still have one of the world’s largest fortunes of Bitcoins. But how do they spend it? I mean if you’re a Bitcoin mogul you want to buy some cool stuff like a G6, a Maserati or at least a FarmVille golden cow. Unfortunately, very few places accept Bitcoins. One of the few is an online bazaar where the main wares for sales are narcotics. Although, the Winklevosses claim to employ a Ukrainian programmer who they allegedly pay in Bitcoins. Now one would understand why the Winklevoss employees steal from their employer since they get paid in worthless money unless you’re a drug addict. One would hope the Winklevosses’ company health insurance includes a stint in rehab. On a side note, Lindsey Lohan informed her agent she is now accepting Bitcoins as payment for her appearance fees.
“We have elected to put our money and faith in a mathematical framework that is free of politics and human error,” Tyler Winklevoss said in the New York Times. Well Tyler is pretty and rich maybe I shouldn’t be such a Debby Downer on Bitcoins. At one point people thought derivatives were a great idea so how bad can a Bitcoin be? Mt.Gox, a Japanese based company, is the world’s largest exchange for Bitcoin–you can actually trade your Bitcoins in for some evil government currency, like US dollars. That’s great! I’m not really a druggie so it would be possible for me to convert my savvy Bitcoin investment it to some cold hard cash. But, before I jump into this Bitcoin craze maybe I should find out a bit more about Mt.Gox–it’s a weird name, definitely not as hoity toity sounding as Goldman Sachs is it? Turns out it’s not. Mt.Gox is an acronym for the card game–Magic: The Gathering. Mt.Gox was established in 2010 as a platform for trading online game cards soon after it entered the honorable business of Bitcoin. I’m not as handsome as the Winklevosses but this sounds fishy to me. Would I really be as confident with my deposit in Chase if I found out they started out as online dealers for My Little Pony collectables?
According to the Mt.Gox’s website it handles over 80% of the world’s Bitcoin trading, and its source for that information: Wikipedia. It might be ok to use Wikipedia for your high school term paper on cell fusion, but to convince the public at large of your financial dominance is a bit of an overreach. After all pretty much anyone can log into Wikipedia and make changes at will so I really wouldn’t rely on it for my investing needs. On top of Mt.Gox shaky claims, the Feds seized its assets in the US for not properly registering as a money services company when opening a bank account in the US.
Given the erratic price of Bitcoins and the questionable market surrounding it Tyler Winklevoss tells the New York Times. “It has been four years and it has yet to be discredited as a viable alternative to fiat currency.” Really! Tyler goes on to say, “We could be totally wrong, but we are curious to see this play out a lot more.” At this point, one would think, the only person that’s encouraging them to buy more Bitcoins is Mark Zuckerberg!