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Bitcoin Businesses The Almighty Buck

The Winklevoss Twins Are Now Bitcoin Billionaires (theverge.com) 155

Posted by msmash from the change-of-fortune dept.
The twin brothers who gained notoriety for suing Mark Zuckerberg over the claim that they started Facebook have done remarkably well in the wake of Bitcoin's record gains. From a report: Cameron and Tyler Winklevoss won $65 million from the Facebook lawsuit, and invested $11 million of their payout into Bitcoin in 2013, amassing one of the largest portfolios of Bitcoin in the world -- 1 percent of the entire currency's dollar value equivalent, said the twins at the time. Their slice of the Bitcoin pie is now worth over $1 billion after Bitcoin surged past $10,000 last week to now trade at $11,100, according to CoinDesk. The cryptocurrency has surged over 10,000 percent since the Winklevoss' investment, when one coin traded at around $120.
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The Winklevoss Twins Are Now Bitcoin Billionaires More

The Winklevoss Twins Are Now Bitcoin Billionaires

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  • LOL (Score:5, Insightful)

    by Anonymous Coward on Monday December 04, 2017 @02:02PM (#55673449)

    Try selling that off. I guarantee they won't get anywhere close to $1 billion, as the price drops while selling.

    • right. only billionaires if they sell but can't sell

    • Reality of All Billionaires (Score:5, Informative)

      by sycodon ( 149926 ) on Monday December 04, 2017 @02:15PM (#55673591)

      This is the same reality faced by Bill Gates, Bezos, Musk, Buffet, etc.

      Billionaires don't have a billion dollars. In fact their actual income is quite modest compared to what you think when you say, "Billionaire". Wealth doesn't mean cash in your bank account.

      To be sure, they have NO financial hardship, even if they spend like idiots. But they don't "have" a billion dollars in cash.

      • You don't need a billion dollars (or really even a million for that matter) in cash for any reason. What the hell would you actually buy with it? Perhaps you could perform a (hostile) takeover of some other company that's publicly traded or just for sale by the owner, but the kinds of people who'd do that would be looking at it as an investment instead of like buying a car.

        You don't even need to be cash rich at all as long as you're just rich. Banks will always be willing to lend you money when you have

        • Re:Reality of All Billionaires (Score:4, Insightful)

          by sycodon ( 149926 ) on Monday December 04, 2017 @02:52PM (#55673881)

          Even with a hostile take over, most of the consideration is in the form of shares.

        • Re: (Score:2)

          by sinij ( 911942 )

          What the hell would you actually buy with it?

          Bill, you lack imagination.

          You can borrow some items from my list:
          a. Secret Moonbase
          b. Underwater dome city
          c. My personal scramjet orbital-capable shuttle
          d. A modern pyramid for personal mausoleum
          e. Opening temples of Church of Spaghetti Monster across the nation.

          • Re: (Score:2, Funny)

            by Anonymous Coward

            "I'll tell you what I'd do, man: two chicks at the same time, man."

        • The human brain doesn't comprehend numbers that large consciously. Even 1/10 of a billion dollars will last 1,000 years spending $100,000/year. This is not even accounting for any interest on the principal, and considerably higher than median household income in the US. If they were able to recover even a fraction of the amount, they are set for life even if they spend exorbitantly.

        • What the hell would you actually buy with it?

          Today's stylish billionaire starts his own space program.

      • Exactly! I've tried to explain this many times and usually get modded down. Valuation of personal wealth based largely on securities should not be compared to cash in the bank.

        This is a real problem for the Gates Foundation because it limits how much they can cash out to spend before it disrupts the stock market.

        • This is very often made clear. You just say that they have over a billion dollars "on paper".

      • This is the same reality faced by Bill Gates, Bezos, Musk, Buffet, etc.

        Yes and no.

        Founders cashing out does temporarily lower the stock price, but it's usually not too bad unless investors believe they're bailing because they know something (the knowledge can't be specific, current non-public data; that would be insider trading, but it can be application of the same level of insight that led them to become successful in the first place). This is true even when the Founders own significantly more than 1% of the stock. Divestiture of a mere 1% would rarely cause a big downwar

        • Re: (Score:2)

          by skegg ( 666571 )

          but it's usually not too bad unless investors believe they're bailing because they know something

          Very true. That's why founders at this level only cash-out small amounts (small by their standards, not mine !) and even then announce the share sale well ahead, so that the market is minimally spooked.

      • Re:Reality of All Billionaires (Score:4, Informative)

        by mindstormpt ( 728974 ) on Monday December 04, 2017 @03:34PM (#55674173)

        Slashdot: Jeff Bezos Just Sold $1.1 Billion in Amazon Stock [slashdot.org]

        You're funny.

      • Because it seems like it's on the tip of your tongue, I think the word you're looking for is "liquidity."

      • Re: (Score:2)

        by Kjella ( 173770 )

        Bezos, Musk they're still leading and building their rapidly expanding company, no idea what Buffet is up to... Gates? Microsoft is an established giant and he's stepped down as chairman and diversified his portfolio, owning just 1.3% of Microsoft now.... he could probably cash out $10 billion tomorrow by just selling across the board.

      • Billionaires don't have a billion dollars. In fact their actual income is quite modest compared to what you think when you say, "Billionaire". Wealth doesn't mean cash in your bank account.

        At a certain point finding places to put your wealth becomes an actual problem. Wealthy people don't have a big vault where they keep their money like Scrooge McDuck, they have to invest it in things. That's one of the reasons I detest class warfare and demonizing the successful. It's those evil wealthy people that invest in companies and hire employees, that buy expensive products and who pay the majority of the bill for the social safety net. And yet people keep accusing them of not paying their "fair

        • Re: (Score:2, Informative)

          by Comrade Ogilvy ( 1719488 )

          And yet people keep accusing them of not paying their "fair share" when they are already paying their share along with a lot of other peoples' share.

          Depends on what you mean by "fair share". The most common argument, endorsed by some people of significant sophistication and perspective like Warren Buffet, is that most very wealthy pay a lesser percentage of their income in taxes than the typical middle class taxpayer.

          • And yet people keep accusing them of not paying their "fair share" when they are already paying their share along with a lot of other peoples' share.

            Depends on what you mean by "fair share". The most common argument, endorsed by some people of significant sophistication and perspective like Warren Buffet, is that most very wealthy pay a lesser percentage of their income in taxes than the typical middle class taxpayer.

            Fairness always depends on the specific metric of interest. Aside from the ability to contribute financially, owners of more property also consume more governmental services and resources. For example, a rich person has a greater need for fire protection services than a homeless or indigent person. Transportation infrastructure yields convenience for poor people but is a business necessity for business people.

        • It's those evil wealthy people that invest in companies and hire employees, that buy expensive products and who pay the majority of the bill for the social safety net. And yet people keep accusing them of not paying their "fair share" when they are already paying their share along with a lot of other peoples' share.

          Do they pay the majority of the bill for the social safety net? People who carry water for the wealthy often cite the percentage of the federal income tax that the wealthy pay (which is going down greatly under the new tax plan), but most of the safety net (Social Security and Medicare) are not paid from income tax revenue. Since Social Security is only paid on the first $127k of income, wealthy people end up paying a much lower percentage of their income for this tax than the middle class. The Medicare

      • Bezos doesn't have any issues selling a Billion or so of amazon stock each year. He does that with regularity to finance Blue Origin [bloomberg.com].

    • What are you talking about? You can use tons of exchanges to cash in our out. Sure you take a percentage based transfer hit but come on. Hell buy gift cards from Amazon and resell them yourself.

      • Re:LOL (Score:5, Interesting)

        by Megol ( 3135005 ) on Monday December 04, 2017 @02:25PM (#55673671)

        That the value of bitcoins will reduce drastically if they try to cash out. And I'll add that the exchanges doesn't have to $$$ to give.

        • For these kinds of amounts, it's probably better to do a direct trade with an investment fund or other rich person who wants to get in.

        • That the value of bitcoins will reduce drastically if they try to cash out.

          I just checked Bittrex and $50k of BTC was sold in the last 60 seconds, and that is pretty normal all day every day.

          And I'll add that the exchanges doesn't have to $$$ to give

          Neither do banks or the share market, or the gold exchange for that matter. Money doesn't really get moved as cash in suitcases anymore. As long as it can be used as a security (which it can) it's as good as cash.

    • Bitcoin does over 6 billion a day in trade volume though. Would 1 billion really affect it that much? How about just do 100 million a day over 10 days? Or do it over a month.

      • Bitcoin does over 6 billion a day in trade volume

        Says who? And how much of that volume is trading bitcoin for bitcoin?

        When the trend is up, most of the orders are buy, you can bet your ass $100MM USD a day in sell orders would be noticed.

        • Bitcoin does over 6 billion a day in trade volume

          Says who?

          Really? Market trades are public information https://coinmarketcap.com/ [coinmarketcap.com]

          And how much of that volume is trading bitcoin for bitcoin?

          What? That makes no sense. Why would I trade Bitcoin for Bitcoin? Trading means exchanging something for something else

          When the trend is up, most of the orders are buy, you can bet your ass $100MM USD a day in sell orders would be noticed.

          $100M in one trade might, but no-one is that stupid. A fund I'm associated with dumps millions a week across multiple exchanges and it's not even a blip. But why cash out? Bitcoin is a currency and a security, they can buy things directly with it use to borrow against. Just like Shares, Gold or Cash.

          • I can show you 3 other sites that appear to give different figures, why is that one trustworthy?

            Apparently the Chinese used to love trading bitcoin for bitcoin: https://www.coindesk.com/real-... [coindesk.com] but regardless, moving 'value' from one person to another is trading bitcoin for bitcoin.

            Who the fuck is taking bitcoin as a security? That might just be the dumbest thing I've heard this year.

            • I can show you 3 other sites that appear to give different figures, why is that one trustworthy?

              Yet you didn't post them. I find that odd...

              Apparently the Chinese used to love trading bitcoin for bitcoin

              Ok so you've demonstrated that you have no idea how an exchange works. Probably best to stop right there.

              Who the fuck is taking bitcoin as a security? That might just be the dumbest thing I've heard this year.

              The funny thing about reality is that it doesn't care what you think. And this sums up nicely the anti-bitcoin rabble. I have no idea how it works, therefore it must be crap.

    • There are many small-cap stocks out there whose price will be impacted if you sell $100K all at once. If you sold $1 billion in Apple stock in a single day, a large portion of its current average daily volume, you'd impact the price pretty dramatically. As with any asset that is only worth as much as the next buyer will pay, a mega-investor would have to sell Bitcoin at a pace compatible with the daily trade volume.

      Given that the daily volume of bitcoin trade is topping $1 billion right now, you could proba

      • If you owned one billion dollars in Apple stock and sold all of it all at once, provided there were instant buyers, you might get your one billion. If the stock tanked, it might not hurt you, just everyone else that owned Apple stock. The key is finding buyers all at once.

        • Yeh, good luck on that. You'd have to find a moment where there are sell orders for nearly six million shares without buy orders to match. You might find such a moment during a price plunge, but that wouldn't be a smart time to take advantage of it. Looking at the recent charts, I do see some end of day moments when 6 million shares traded, but those moments had buyers in the market for those shares. If you dumped your six million at that moment, you'd have 12 million shares for sale and be short on buyers.

    • Re: (Score:2)

      by leonbev ( 111395 )

      Yeah... if someone got word that they were selling their stash, the value would probably get cut in half within 6 hours.

      Just the kind of thing you want from something that's supposed to be a currency... wild price swings :)

  • wait for it to drop when someone trys to unload that much. Just like the stock market.

    • So you don't unload the entire block all in one go. Just like people do on the stock market. Demand for BTC remains pretty strong (still plenty of speculators eager to take a gamble), so they can sell smaller blocks on the way up. I bet they've already started doing that a while back.

      • the exchange does have the cash to pay out much and with no gov regs they just give you an IOU and keep the coins.

        • Wait, no government regs? Who told you that? Not a lawyer, that's for sure.

          I'm not a lawyer either, but I at least know that all currency is government-regulated, including private currencies. It is obvious if understand that the US only had private currencies at the beginning!

          "The Securities and Exchange Commission (Commission) treats securities crimes committed with Bitcoin and VCs as money"
          https://en.wikipedia.org/wiki/... [wikipedia.org]

          Anything you use as money is already currency and already regulated. If you don't l

        • Re: (Score:2)

          by torkus ( 1133985 )

          The exchange facilitates your purchase or sale...and transfer of funds to/from your bank account. They don't hold the cash to buy everything out...

          You want to sell, 10BTC...well when theres 10BTC looking to be bought at your asking price, that money goes from the buyer, through the exchange, and to you. Why is this complicated to understand?

  • Maybe worth a virtual billion dollars (Score:3)

    by qzzpjs ( 1224510 ) on Monday December 04, 2017 @02:06PM (#55673485)

    Unless they can actually cash out that billion at any moment, I wouldn't consider it real.

    • Re: (Score:3, Insightful)

      by Anonymous Coward

      So I guess the stock market isn't real either.

      You can't take that much money out of a bank in one go either. I guess banks aren't real.

      • Re:Maybe worth a virtual billion dollars (Score:5, Interesting)

        by 110010001000 ( 697113 ) on Monday December 04, 2017 @02:15PM (#55673583) Homepage Journal
        Correct. Until you sell your stock investment you haven't made any money at all. That is why you are taxed on sale.
        • I don't know how true this is, but I've heard that many of these wealthy people will take out large loans and default on them and pay it off with stock, which doesn't count as a sale. Essentially it allows them to get around the taxes. There may be more to it than that, or it may have been some loophole that's since been closed, but it seemed like the type of scheme bankers would dream up.

          • There is a similar scheme involving whole life insurance. If I understand it correctly (and I don't promise that I do) you can put your money into the whole life policy. As it grows you would have to pay taxes on it if you pull it out. Instead of pulling it out you get "loans" against the policy which is tax free. Then, when you die, the policy passes to your heirs tax free as part of the policy pay-out. https://www.nerdwallet.com/blo... [nerdwallet.com]

            It looks good on paper but I actually question how well it really works

            • I'm sure the insurance company loves this scheme.... I'm also sure that they profit handsomely from selling folks on the idea that it works.

              What's that saying? The only sure things in this world are "Death" and "Taxes" and you may delay them for a time, but you cannot cheat them forever.

            • Re: (Score:2)

              by Rolgar ( 556636 )

              Your loans are going to cost you interest which will reduce your cash in your policy, unless the loan is small enough that the interest growth on your remaining cash is strong enough to counter the interest on the loan. If you outlive your policy because the cash value evaporates, you will have to pay the taxes, and there will be no death benefit.

              You can however take out the initial principal, as a return of premium which is money you already paid taxes on, without having to pay any taxes.

          • That scheme seems very unlikely to pass the IRS' smell test. I can see it happening one year, but the IRS would tighten the regulations immediately. They have large discretion with figuring out how to determine income, for exactly that reason.

          • I'm guessing transfer of ownership is a sale, but like you I'm unsure. The only sure way I know of avoiding paying taxes on the transfer of asset title is inheriting them. When a person dies the cost basis of the assets is reset to their value as of the date of death. Of course the estate owner isn't seeing any gain. The value of the estate my result in the estate paying inheritance taxes which might reduce the value of the inheritance. Any income tax due the heir would come from the increase in value of th
            • I should have mentioned that when a spouse inherits upon the death of a husband or wife, there are nor taxes owed

    • Try withdrawing $1 billion from a bank account at any moment. Maybe that's not real money either.

  • I think they found a better business model. Facebook sells user data, especially to the NSA, spies on everyone, abuses monopolies and patents, violates multiple countries' laws, and lies about everything all the time. Bitcoins fight oppression and discrimination from the World Bank and UN, fights manipulative billionaires, fights Wall Street assholes, and fights oppressive governments. Bit a difference there.

    • Re: (Score:3)

      by icejai ( 214906 )

      If you think Bitcoin fights manipulative billionaires and Wall Street assholes, you're in for a seriously rude awakening once Bitcoin futures starts trading on the CME.

  • I hope they didn't put it in Mt. Gox (Score:5, Funny)

    by poached ( 1123673 ) on Monday December 04, 2017 @02:13PM (#55673577)

    Because you know, that would be sad.

  • Slashdot (Score:5, Funny)

    by gatfirls ( 1315141 ) on Monday December 04, 2017 @02:15PM (#55673589)

    ..The premier news source for bitcoin.

    • Re: (Score:3)

      by leonbev ( 111395 )

      I'm convinced that the new owners of Slashdot have a big stake in Bitcoin, and this is how they make their money.

      Hey... it beats interstitial advertising, anyway.

      • Re: (Score:2)

        by c ( 8461 )

        I'm convinced that the new owners of Slashdot have a big stake in Bitcoin

        Naw. The old owners pushed Bitcoin stories... minimum one story per week. It was annoying then, too.

        I suspect the new guys just haven't figured out where the Bitcoin-story-approval cron job is being run from.

      • Hey... it beats interstitial advertising, anyway.

        My adblocker blocks interstitial ads. Bitcoin stories, not so much.

    • bitcoin site:arstechnica.com [google.com] :: About 48,700 results (0.51 seconds)
      bitcoin site:slashdot.org [google.com] :: About 4,460 results (0.46 seconds)

      • hyperbole
        hprbl/Submit
        noun
        exaggerated statements or claims not meant to be taken literally.
        synonyms: exaggeration, overstatement, magnification, embroidery, embellishment, excess, overkill, rhetoric; More

        Anyway, it's not the fact that pretty much 1 out of the 10 stories a day is about bitcoin, it's that they are completely uninteresting. This one is basically "Rich people have money"

        • Re: (Score:2)

          by ceoyoyo ( 59147 )

          To be fair, this story is more like Winklevoss twins were crazy enough to dump $11 million into bitcoin back when it was $120/coin.

  • More of a tangible currency than BC.

  • With a hard cap of 21 million bitcoins in total, nobody will ever be a Bitcoin billionaire. I'm not even sure if there are Bitcoin millionaires, though Satoshi could well be one.
    • Also, why say "1 percent of the entire currency's dollar value equivalent"? They have 1 percent of total coin supply, and that won't change whether you compare 1 BTC to Euro or whatever.

    • He's a billionaire in America because the current value of those Bitcoins exceeds one billion dollars.

      In case you're pedantic rather than ignorant, I'll remind you that net worth is calculated by converting all assets and liabilities to dollars at current market prices. This is entirely consistent with how traditional stock-and-bonds billionaires are assessed.

      • He's a billionaire in America because the current value of those Bitcoins exceeds one billion dollars.

        I agree with that. However, in the greater world, simply saying "billionaire" is not enough, so it's better to specify the currency. For instance, a dollar billionaire might not be a euro billionaire. Using the same logic, a bitcoin billionaire would mean having a billion bitcoins. Of course, this assumes that you treat Bitcoin as a currency.

        Stocks etc. are different because you might have different types of share for each company. There's no single unit of Nokia share, for example, so it's easier to agr

  • They only need 1 000 000 people investing $1 000 into bitcoin to cash out.

    • Re: (Score:3)

      by ghoul ( 157158 )

      Over 300 million folks have bought iPhones when you can make calls from a 5 dollar flip phone. Sometimes a need is not known to exist till a product is created. BTC is a product and needs are constantly getting invented for it.

  • Satoshi Nakamoto Did it First (Score:5, Interesting)

    by DanielRavenNest ( 107550 ) on Monday December 04, 2017 @03:49PM (#55674305)

    Whoever he/she/they are, they have an estimated 800K bitcoins, from being the first miner, in the days it was easy. We know those coins have never moved since being mined, because the blockchain tracks every transaction. So they would have become a billionaire for the first time, when the price peaked in Nov, 2013, then again in Mar and Apr of 2017 when it crossed $1250/BTC.

    It is always possible those early coins are lost, or the private keys intentionally destroyed. It is also possible Nakamoto is waiting until they can buy HSBC, just because they can. The message in the Genesis Block (the first one in the blockchain) is "The Times 03/Jan/2009 Chancellor on brink of second bailout for banks", so they are not a fan of banks.

    • Classic pyramid scheme... The folks in on the ground floor make money. Other people may make money as the scheme progresses... Then Everybody left loses all they invested once it falls apart.

      Looks can be deceiving I guess, but not unusually.

    • Re: (Score:2)

      by Xyrus ( 755017 )

      The message in the Exodus block is "Drink Your Ovaltine."

  • Will they convert to something less volatile before bitcoin value crash?

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