💨 2 Min Snapshot | Bitcoin Is The Greatest Social Network
How The Winklevoss Twins Became Bitcoin Billionaires
Hello
This is a quick snapshot version of a Super Simple post. The original post summarizes an interview with Cameron and Tyler Winklevoss, by Raoul Paul on The Real Vision Finance YouTube channel, posted on Dec 20201.
You have probably heard of the Winklevoss twins due to their association with Facebook and their depiction in the film The Social Network. But they are also known for being some of Bitcoin’s earliest high profile supporters. In this episode, they break down what excites them about Bitcoin and where they see it going.
If you wish to go deeper on the topic, I recommend reading the full summary post (5 minute read).
As always, plenty is plagiarized and paraphrased in this snapshot. Even quotes. Some lines are lifted directly from the transcript.
All credit goes to Raoul Paul, Cameron and Tyler Winklevoss, and Real Vision for putting out this content for free. Links to all source content can be found at the end.
Read Time: 1.5 minutes
Prerequisites: Bitcoin (Need a refresher? Start with the basics here)
Bitcoin Is The Greatest Social Network
Catching The Bitcoin Bug
The twins were first told about Bitcoin in 2012. The big aha moment was recognizing Bitcoin’s ability to send money like sending email.
They then began to look at Bitcoin as a sort of digital gold. The properties of Bitcoin mirrored those of gold as a store of value, while also being divisible, portable and easier to store.
Their first purchase was when Bitcoin’s price was still in the high single digits and the market cap was <$100M.
Why Bitcoin?
Bitcoin was the first money built for the internet. Unlike credit cards.
‘Hardware’ money must go online like everything else
Bitcoin can dethrone gold’s role as a store of value
Developing world has billions unbanked, who can be served by crypto
Countries with weak currencies risk wealth destruction due to high inflation and even face the risk of a defaulted currency2
Unstoppable - “To shut down bitcoin you have to shut down the internet”
Bitcoin is a money network, akin to a social network
Bitcoin Has Network Effects
The more people that believe in Bitcoin and are willing to accept it, the more incentive there is for a new participant to buy it.
Raoul: you couldn’t build a better incentive for a network than money
Tyler: Exactly, people on other networks are working for retweets and likes. People here are working for value
The way you value networks is Metcalfe’s law3. Thus, increased adoption of Bitcoin grows the value of the Bitcoin network exponentially.
Institutional Investors Are Coming To Bitcoin
Bitcoin Can No Longer Be Ignored
Cryptocurrencies have primarily been a retail investor phenomenon so far.
This is starting to change. Famous investors like Paul Tudor Jones and Stan Druckenmiller invested in Bitcoin. Other have been quietly buying Bitcoin in their personal account.
The "trade of the century" (buying Bitcoin) is still out there for hedge fund managers.
- Tyler Winklewoss
Beyond Institutional Investors
One day, not too far from now, not just institutions but central banks will stock up on bitcoin. They understand the inflationary risk on their monetary supply.
Just like Michael Saylor who bought Bitcoin as a treasury asset for the publicly traded company Microstrategy4, everyone will need Bitcoin in their treasuries to preserve value.
Can Central Bank Digital Currencies Usurp Bitcoin?
CBDCs are around the corner. But they are just different a form of fiat money
Ultimately, fiat money needs disruption
Even if CBDCs were to come, the fact that Bitcoin is decentralized and not coming from the government is great
At least its competition
The Tokenization Of Everything Is Inevitable
Bitcoin is analogous to digital gold. Ether is analogous to digital oil.
But all other assets will also eventually be on the blockchain - stocks, real estate, baseball cards, everything.
Thanks for reading. If you learnt something new, don’t forget to subscribe.
If you are totally new to the topic of Bitcoin, reading just the snapshot can a bit feel like this:
I get it. The original post will fix this for you, and its only 5 minutes. Check it out:
Or start with the basics here.
Meanwhile, let’s keep up the journey down the Web 3.0 rabbit hole.
Also check out the Appendix below, which includes sources, additional readings and footnotes.
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Appendix
My Two Cents
//As bullish as the twins are on bitcoin, they clarify that this isn’t investment advice. Even as an informal suggestion, when it comes to holding Bitcoin they say: Prepare to hold it for 5-10 years. Don’t get in if its not your time horizon.
Full Summary
Source
Interviewer - Raoul Paul, Global Macro Investor and Founder, Real Vision Guests - The Winklevoss Twins, Founders, Gemini Exchange
Additional Sources and Readings
Footnotes
Link to episode. See Source above for additional information
Turkey in Dec 2021 was a recent high profile example of this
Metcalfe's law — the value of a telecommunications network is proportional to the square of the number of connected users (n squared).