【Bitpush Biography Series】Social Media Moguls To Bitcoin Billionaires: The Winklevoss Brothers Are Paving The Way Towards A Crypto Revolution

Tyler and Cameron Winklevoss have had a long road to success and are possibly the two most polarizing figures in the crypto industry.

They first stumbled into public consciousness after suing Facebook CEO Mark Zuckerberg alleging that he had stolen their idea for a social networking site. The suit won them a $65 million dollar settlement deal and the legal drama landed them leading roles in the Oscar-award winning movie The Social Network. In the film, the pair are depicted as stereotypical Harvard golden boys earning them mixed reviews in the public sphere.

Since then the pair have carved out new roles for themselves as leaders of the crypto revolution. Together they invested their settlement earnings in large amounts of Bitcoin, a risky move in 2012, but the gamble paid off and today they are two of the earliest Bitcoin billionaires.

PC: Winklevoss Capital via Instagram

Early Days

The twins' familiarity with tech started by watching their father, Howard Winklevoss, run his company Winklevoss technologies. Their family was based in Greenwich, Connecticut where they founded their high school's rowing team, a hobby which would eventually earn them spots on Harvard's rowing team and later Olympic rowing careers.

As rowers, the Winklevoss boys were made to man a boat. Cameron and Tyler are mirror twins, meaning that Tyler favors his right side and is thought to be 'right-brained' while Cameron favors his left side and is thought to be 'left-brained.' As teammates, they manned the opposite sides of the boat, rowing in almost perfect synchronization. Their shared entrepreneurial spirit combined with complementary skills made them unstoppable both as athletes and as business partners.

PC: Winklevoss Capital via Instagram

Facebook Fiasco

Their entrepreneurial spirit and intellect won them acceptance to Harvard University where they created a site called ConnectU aiming to help fellow students meet and connect with each other. They temporarily brought classmate Mark Zuckerberg on as a programmer, but he soon left the operation and built the site which later became Facebook.

The twins sued Zuckerberg in 2004 claiming that their idea had been an important early stepping stone for the development of Facebook. A year later, Facebook filed a countersuit against ConnectU arguing that the Winklevoss brothers had hacked into Facebook's user data and tried to steal users by spamming them.

PC: Actors playing the Winklevoss twins and ConnectU co-founder Divya Narendra in The Social Network

The dueling lawsuits would drag on for six years, but finally resulted in a settlement deal to close out all claims in 2008. The Winklevoss twins gave up ConnectU in return for a $65 million dollar settlement which — against the advice of their lawyers — they accepted mostly in the form of stock. The bet paid off and their holdings in the company are now estimated to be worth $500 million.

Later in 2008, the Winklevoss brothers alleged that they had been lied to about the value of Facebook's stock at the time of the deal and applied to an appeals court to negotiate the settlement. Their appeal was denied, but they still had an eventful year and went on to compete in the 2008 Beijing Olympics.

The brothers made it through two rounds of heats, a semifinal and the grand final to make it to the final event of men's pair rowing event where they placed sixth out of six boats. While they left without any medals, making it through to the final round is a significant accomplishment.

They soon retired from their Olympic rowing careers and were eager to enter back into the technology world. In 2012 they founded Winklevoss Capital and were on the hunt for investment opportunities.

However, the drama of the suit had caught them a lot of bad press with the President of Harvard at the time of their enrollment, Larry Summers, even calling the twins "a-holes." On top of that, in 2012 Facebook was the king of Silicon Valley and startups were wary of taking on investors who were disliked by the company, which made finding new opportunities difficult for the twins.

Bitcoin Billionaires

Eventually, that golden opportunity found them while they were vacationing in Ibiza, Spain in August 2012. They were approached by a man named David Azar who recognized them from The Social Network and first told them about Bitcoin and his boss, Charlie Shrem, who was running a crypto startup called BitInstant. Once back from vacation Azar sent them reading materials about Bitcoin and the twins were hooked on the concept.

"I think what really resonated with us was that it offered a greater choice, independence and opportunity like a new system and I think a lot of early bitcoiners focus on destroying the old system and for us, it's more about creating a new system with new opportunities," Cameron Winklevoss said in an interview with Peter McCormack about his early thoughts on Bitcoin.

The brothers ended up making a bet unfathomable to most and used $11 million of their Facebook settlement winnings to purchase 120,000 Bitcoin, 1% of the circulating supply. Back in 2012, Bitcoin believers were few and far between, but the Winklevoss boys were sure that the currency was going to take off even as most regarded it as mysterious and dangerous.

"[We bought Bitcoin] especially when the Silk Road was busted because the Bitcoin price tanked because most people were like well that's 90 percent of the use cases and we said no, look at the blockchain, look where this thing is going, this is digital gold," Cameron said in a recent interview.

Tycoons of tech and finance in more traditional markets didn't see the vision and piled more ridicule on the twins for what they saw as a foolish investment. But the twins had conviction and today even see their lack of experience in the finance world as the advantage that allowed them to succeed in the crypto space.

"We entered this space and it was more about how does this work how can we get this to work, rather than how can we kill this idea or this doesn't fit into the framework that I spent 20 years becoming a master of and perfecting I am so emotionally tied to the 20 or 30 years I put into finance over here that I cannot let go of that and accept that this is the future," Cameron said on a podcast in May.

When the twins invested Bitcoin was selling at $120 a coin, at the time of publication its trading hands at $11,060 and the pair are still strong believers in the currency.

"We believe bitcoin is better at being gold than gold," Tyler Winklevoss wrote in an Ask Me Anything segment on Reddit last year. "If we're right, then over time the market cap of bitcoin will surpass the ~7trillion dollar market cap of gold."

PC: Winkevoss Capital via Instagram

In 2015, the brothers made the move from investors to innovators and launched Gemini, one of the community's leading exchanges and the first licensed Ether exchanges in 2016. In 2018, they launched Gemini dollar — a dollar-backed stablecoin — once again ahead of Facebook given that the social media giant announced its own stablecoin project — Libra — in 2019.

Controversy Strikes

While on their Bitcoin investing spree, the brothers also invested $1 million in Charlie Shrem's company BitInstant, one of the earliest companies to facilitate Bitcoin transfers. However, Shrem was arrested in 2014 after accusations of money laundering and supplying drug markets with Bitcoin. BitInstant folded soon after.

Tyler and Cameron's relationship with Shrem also soured several years later when they claimed to have discovered that Shrem had cheated them out of Bitcoin. In 2018, Winklevoss Capital filed a suit against Shrem alleging that the Winklevoss brothers had given him $1 million dollars in 2012 to purchase Bitcoin for them and Shrem had not paid them back the full amount of Bitcoin owed. The case was dismissed after a private settlement in 2019 and Shrem still maintains that the claims against him are bogus.

Where Are They Now

Since purchasing masses of Bitcoin in 2012 the brothers have held onto all of it, except for a small portion which they exchanged for fiat to start Gemini 2015. To protect their private keys, the twins printed them out on pieces of paper, cut the papers into sections, and have the sections stored in safe deposit boxes across the country, as reported by The New York Times.

PC: Winklevoss Capital via Instagram

Cameron and Tyler's most recent efforts in the crypto community have been to create the first-ever Bitcoin exchange-traded fund (ETF). The twins believe that bringing Bitcoin into a more regulated space would help the public to feel more comfortable with the asset and help pull it into the mainstream.

“ETFs, historically, have been a huge boon for industries like the gold market,” Cameron Winklevoss told the Financial Times in a recent interview. “It’s something that people understand. ETFs have been around for at least 25 years, so it’s not reinventing the wheel, it’s creating GLD [the biggest gold ETF] with bitcoin. The investor public understands that product.”

However, the brothers have had trouble getting the project approved by regulators. They filed an application with the Securities and Exchange Commission (SEC), but it was rejected for the second time in 2018 with the agency citing concerns about investor protection and fraud in a release. Despite the setbacks, the twins are not known for giving up and reaffirmed their commitment to creating a Bitcoin ETF in a Reddit Ask Me Anything segment.

By Emily Mason

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