Winklevoss brothers:Bitcoin billionaires
Twin brothers Tyler and Cameron Winklevoss have been described as the first bitcoin billionaires. According to estimated figures emerging this past week, the twins placed a bet of $US11 million on bitcoin more than four years ago and has since grown by almost 10,000 per cent after this past week’s price surge. This should act as a reminder to financial institutions around the world that bitcoin is here to stay and they should brace themselves as cryptocurrency is gaining popularity with no intention of slowing down. Bitcoin is an electronic currency created by mathematical computations, and is kept on a public ledger in the cloud along with a record of all bitcoin transactions. For those who don’t know, bitcoins were invented by the mysterious Satoshi Nakamoto, who some believe is alias for Australian computer scientist Craig Wright who identified himself last year which was covered by your blogger. New coins are given to “miners”, people who use powerful computers to solve complex mathematical problems for the network. So far 16.6 million bitcoins have been created and its rules limit total production to 21 million.Its not hard to get them contrary to what many writers have indicated because online exchanges make buying bitcoin easy. You can create an account and a secure bitcoin wallet, then pay your money, plus a service fee, usually by credit card. Bitcoins can be used to buy anything from a merchant willing to accept them. In practice the best gains have been made by speculators cashing in on the rapid rise in value. The types of things that most people might buy Bitcoin for, is for making transactions that they don’t want governments to see and could be done by an increasing amount of other crypto-currencies.Consumers should understand the risks involved. One friend who knows how your blogger who bite the dust after Mt Gox exchange closure recently that people have this natural gambling mentality. They are trying to find the next big win, he dded. As a professional banker, he believes the wealthy folks are staying away from it because there’s no money to be made from it. If there was a lot of money to be made, most of them would already be there,” he said.One of the things that worries him is that Bitcoin is completely unregulated and there’s need to regulate it for people’s own safety.
Estimates show Winklevoss twins bought roughly 1 per cent of the world’s supply of bitcoin when one coin was worth around $120. Although it has not been disclosed, it is estimated to be around 100,000 bitcoins worth more than $1 billion at the bitcoin’s peak last week.Bitcoin hit US $11,395 in the last seven days, a boom that started 12 months ago and has accelerated significantly, despite warnings about challenges it brings to financial stability and potential for criminal exploitation.Despite the growing acceptance of bitcoin in countries like Japan, US and the EU, the use of bitcoin in most parts of the world has yet to be regulated and it is not recognized as a currency.The digital currency that has delivered spectacular financial gains although it faces rising pressure amid government crackdowns, a surge of copycats and fears that its bubble will soon burst.The world’s first crypto-currency which is created on computers and is not backed by any assets has surged in value from $100 to more than $10000 in five years.The rise has made millionaires out of many of its early backers but the Winklevoss twins are believed to be the first public figures to have turned an investment into more than $1 billion.Its rapid rise has led to the creation of hundreds of other digital currencies, prompting calls for greater regulation, scam warnings and concerns that anyone trying to buy into this sector today risks losing their money.Bitcoin supporters say its benefits include that it is a global digital currency independent of any government, can be transferred anywhere immediately, does not require middlemen such as banks, and has extremely low transaction fees.All transactions are kept on a public log but people’s personal information is hidden. Governments around the world are introducing laws to regulate digital currencies, while others like China have announced a ban on Bitcoin exchanges.Few days ago, the Chicago Mercantile Exchange was given go ahead to launch Bitcoin futures trading. Many experts believe that move was firs step in mainstream market legitimacy that will enhance interest in the bitcoin and grow its price.Already, investors are getting involved with bitcoin,further pushing the price to over $10,000 but the price is being predicted to rise to new heights of up to $100,000 in the next few years.