The Controversial Twins Who Own All The Bitcoin

this is a story of revolution and redemption a tale of obscene wealth and power this is the truth about the bitcoin billionaires [Music] by now the origins of facebook are pretty well documented mark zuckerberg meets with tyler and cameron winklevoss about being the developer for their new social network idea mark agrees to help them build their websites but ends up stringing them along for months whilst he secretly starts working on his own social network when the twins realize what's happened they sue zuckerberg for stealing their idea years later the hugely successful hollywood movie about facebook's origin would be set around this legal battle but have you ever wondered what happened next well eventually the winklevoss twins or the winklevii as they're often known were offered a 65 million settlement by facebook their lawyers urged them to take it however whilst it was a vast amount of money the winklevoss twins said they wanted payment in facebook stock instead their lawyers couldn't believe it and tried to convince them to take the cash and run however for the winklevi this wasn't so much about the money they were from a wealthy family already facebook was a multi-billion dollar company by this point and they knew it had even more growth to come so they at least wanted a piece of it that decision to get paid in stock instead of cash turned out to be a very good move when facebook had its ipo the winklevis shares became worth half a billion dollars but there was one problem going up against zuckerberg so publicly like this had ruined their reputation they were now regarded as a bit of a joke in the media and in the facebook movie they came across as pretty spoiled and entitled zuckerberg seemed like the genius who'd actually made facebook whilst many felt they were just dumb jocks trying to cash in off his work as zuckerberg himself put out you weren't the first people to have an idea for a social network and neither was i friendster and myspace existed before facebook and the last time i checked tom from myspace isn't suing me and it's pretty true ideas are cheap execution is everything so basically after the case closed the winklevia had ended up with a lot of money but most of the world viewed them as losers now ask yourself what would you do with 500 million dollars go travel the world buy some expensive sports cars or mansions well the winklevoss twins had a completely different plan they wanted to use that money to invest in other companies they wanted to prove they weren't just dumb jokes and instead tried to make a name for themselves and change the narrative of their story so they went to silicon valley and decided to become angel investors were made by shares in startup companies they believed could be even bigger than facebook but something very interesting started happening when the winklevi found a company to invest in that they liked the look of they'd make an offer but their offer would always get turned down now sure if this happened once or twice it's normal the companies might have already found other investors but over and over companies were turning down the winklevis investment money eventually they confronted one of the founders and asked we've made a really good offer why are you turning down our money as it turns out once again their problem was mark zuckerberg you see back then in silicon valley many founders viewed their end game as selling their business to facebook or at least partnering with them in some way and it was widely known that mark zuckerberg would never buy a company if the winklevoss twins were involved as a result their money and presence had become toxic people just didn't want the winklevoss twins associated with their company this realization was devastating and that the twins were unsure where to go from here this was a new low so to get away from it all they went to ibiza one night in ibiza the winklevoss twins were a club trying to distract themselves but they couldn't enjoy it they were too busy thinking about what their next move would be they knew they wanted to do something meaningful they wanted to prove themselves but how they clearly weren't having fun in the club so they got up to leave but at that exact moment someone shouted to them hey are you the winklevi one of the downsides of being six foot five twins who've just been portrayed in an oscar-nominated movie is that it's pretty hard not to stand out the guy introduced himself as david azzar and said he needed to tell them about something and what's that one of the twins asked david took a dollar bill out of his pocket and with a smile he said a revolution [Music] standing on a beach in ibiza david was passionately telling the winklevoss twins about this new technology called bitcoin neither of the twins had ever heard of bitcoin before but then again almost nobody has when david approached the twins in ibiza it was 2012 and bitcoin had only launched in 2009 as the twins listened to david's speech they felt sure bitcoin was either complete rubbish or a really big deal they just didn't know which one david explained it's digital money an electronic cash system that's completely decentralized so it cuts out the need for middlemen like banks or visa and mastercard plus they'll only ever be 21 million bitcoins created so governments can't just keep printing more whenever they want like with cash given that the banks had just been bailed out by taxpayers after the 2008 market crash it was easy to see some of the benefits of a decentralized system of money david then explained that bitcoin had been created by a guy called satoshi nakamoto who one day posted a white paper online fully explaining this new virtual peer-to-peer currency the whole thing was shrouded in mystery though as soon after this satoshi disappeared without a trace never to be heard from again plus satoshi claimed to be japanese yet wrote in perfect english so to this day nobody knows who satoshi really is finally david explained he was looking for investors in a company called bit instance which helped people buy bitcoin in an easy way basically people paid the company normal fiat cash and bit instant would send them bitcoin in return for a small commission fee and this was why david was so eager to speak to the winklevi he wanted them to be investors in bit instance now the founder of the company was a guy called charlie shrem who was running the company from his mum's basement so it didn't exactly fill the twins with confidence but it was at least a nice change that someone actually wanted the twins to be involved in their company the whole thing was a lot to process this certainly wasn't a conversation they'd expected to have whilst partying in ibiza but the winklevoss twins were intrigued by this whole concept of bitcoin and so they listened carefully as david passionately spoke about bitcoin and how he felt it could change the world you see the twins had majored in economics at harvard and could quickly see bitcoin had potential not just as a currency but as a store of value essentially digital gold now the reason gold has been used as currency for so much of history is because it's extremely durable portable hard to counterfeit easy to authenticate and it's scarce enough to be valuable but not too rare that they'd quickly run out of it the winklevoss twins realized bitcoin not only had those same properties as gold but in many ways it was much better like it could easily be divided into small fractions and was more easily transferred of course on the flip side bitcoin wasn't backed by anything the value of bitcoin was based on people believing it had value and being willing to purchase it the price you could sell your bitcoin for was based on the price someone else was willing to buy bitcoin for it's supply and demand then again this is essentially the same as any currency so the winklevoss twins felt they needed to delve further into this they exchanged contact details with david and said they'd get back to him the winklevoss twins then went away and dived into research on the world of cryptocurrency they soon realized that bitcoin had a bit of a dark reputation back in 2012 most people seemed to think it was mostly used for drug deals money laundering or tax evasion and to be fair it often was it was also very popular with libertarians who wanted a system of money where the government couldn't interfere the twins also read stories about people having their bitcoin while it's hacked or simply losing it and having to search through landfill sites to try and find that however despite these issues the technology itself seemed innovative and it was clear bitcoin had a loyal community who supported it the twins felt that if more people knew of it and understood it then bitcoin could be huge they also saw that the first known time bitcoin was used to purchase an actual product was in may 2010 when a guy in florida wanted some pizza and posted on an online forum saying he'd transfer someone 10 000 bitcoins if they ordered a couple of pizzas to his address the transaction was a success although looking back now he probably wouldn't call it a success years later when one bitcoin reached a price of sixty thousand dollars those ten thousand bitcoins would have been worth 600 million dollars if you kept them instead of using them to buy two pizzas but still back then nobody could have known what bitcoin was going to become all the winklevoss twins knew was they wanted to be a part of it firstly the twins decided to become investors in charlie shrimp's bitcoin exchange company bit instance they reportedly put around 1.5 million dollars in to become part owners of the company but that was just the start of the winklevis plans they also asked charlie to buy them a hundred thousand dollars worth of bitcoin for themselves back then charlie was used to dealing in orders of a few hundred dollars so this was huge and then a few days later the twins asked him to buy another hundred thousand dollars worth of bitcoin for them and the orders just kept coming before long the winklevi had bought around one percent of all bitcoin roughly 200 000 coins back when the price of bitcoin was below 10 per coin and luckily for them some unexpected events on a small island were about to change everything [Music] banks in cyprus had made a series of really bad investments for example they'd load a lot of money to greece and then when the greece economy nosedived they gambled and bought more bonds from the greek government as a result banks in cyprus were now broke so cyprus asked the eu for a bailout but they said they'd only help cyprus if they came up with some of the money themselves the way cyprus decided to do that was essentially taking money from their own citizens banks in cyprus were ordered to confiscate some funds from their customers to help pay cyprus's debts so if you were living in cyprus at the time one morning you'd wake up check your bank balance and find that money had been taken from you to help cover the country's debts when the winklevoss twins saw this story they knew it was big all around the world this raised alarm bells about the pitfalls of a centralized system where the governments and banks had the power to do whatever they wanted people felt they needed a store of value that governments couldn't just take and thus after the cyprus incident made headlines worldwide the price of bitcoin began to rise and then it just kept rising 100 per coin 500 per coin a thousand dollars per coin and as one news outlet picked the story up about bitcoin it caused another to pick the story up and then it spread more and more causing the price to keep rising as more people discovered bitcoin meanwhile the winklevoss twins were basically traveling around the world promoting bitcoin however the twins felt bitcoin should embrace some regulation so it could become more mainstream sure it needed to be done in the right way so it didn't kill what made bitcoin innovative but they also didn't think the totally unregulated wild west was good either they felt having more rules within the crypto space was a good thing and that it would help distance bitcoin from its shady reputation the thing is many of the early adopters of bitcoin completely disagreed with them they felt the whole idea of bitcoin was that people should be able to do whatever they want with their own money and the government shouldn't have any insight or involvement so there was a real conflict between the winklevi and some of bitcoin's early users in fact even within bit instance charlie's company which the twins invested in some of the other people involved in the business didn't trust the twins they viewed them as the suits outsiders who didn't share their vision for bitcoin and who would sue anyone they didn't agree with charlie dismissed these claims at the time but would later regret that decision when the twins decided to sue him [Music] before we get to the next chapter i want to tell you about our video sponsor incogni in the past when i've signed up to certain websites or newsletters i've shortly after i ended up getting spam from unknown senders not a coincidence the truth is thousands of companies are collecting and trading your personal data without you knowing anything about it and this is exactly the kind of thing incognite helps solve incognito data off the market by reaching out to data brokers on your behalf requesting your personal data removal and then deal with the back and forth of objections which is too time consuming for individuals like you and me and that's what i really like once you sign up you can just sit back and incognito will take care of the rest to help private details stay private go check it out at incognity.com magnates i'm right now the first 100 people to use the code magnates we'll get 20 off protect yourself now go to incognity.com magnates and use cod magnates to take your personal data off the markets [Music] charlie's company bit instant was becoming incredibly popular because the more the popularity of bitcoin grew the more people would want to buy bitcoin so bit instant was in a great position you see back then the main actual bitcoin exchange was called mount goggs a website that had originally been in exchange for the card game magic the gathering it was clunky totally unregulated and run by a crazy french man living in japan calling himself the king of bitcoin to actually use the exchange you had to go through a lengthy process of wiring money overseas waiting weeks for your account to be approved and then another week just to get your money in or out so the whole selling point of charlie's company bit instant was that it was essentially a middleman they acquired bitcoin in bulk from mount gox and then sold it to people who wanted to buy bitcoin much more easily and quickly and the business model was working well in fact since the twins had invested in the company to help it grow the incident had gone from processing a million dollars a month to around a million dollars per day and charlie calculated bit instant was processing around 35 of all bitcoin purchases at the time however the money and fame had kind of gone to charlie's heads he was traveling the world partying with models and as a result neglecting his ceo duties it was understandable charlie had been a kid most people ignored in high school and so now he was famous in the crypto space of course he wanted to enjoy it a few years ago he'd been living in his mom's basement now he felt on top of the world but the winklevii felt differently they knew if charlie didn't get things under control soon the company would be in trouble because although bit instant was processing a lot of bitcoin purchases the company itself wasn't actually profitable yet and charlie was asking them for even more money to help cover their rising costs plus everything within the company seemed a little chaotic charlie was in his early 20s and didn't exactly have management experience tensions between the winklevi and charlie got much worse over the next few months for example the twins were setting up meetings with influential people in finance to help bitcoin adoption become more mainstream and for one of the big meetings they asked charlie to come along to talk about bit instance however he turned up hungover or maybe he was still drunk but either way he was a mess and his presentation was a disaster the twins contemplated replacing charlie as ceo of bit instance and told him bluntly he needed to stop partying and traveling and get serious about running the business charlie felt the twins were overreacting though the company was doing better than ever just because they were investors didn't mean they should be micromanaging him like this but with hindsight charlie must have wished he'd listen to them because just a year later charlie would find himself in prison [Music] silk road was an online black market a kind of underground amazon for everything from illegal drugs to guns to hit men it was a multi-million dollar business and bitcoin was its currency however in 2013 silk road was suddenly shut down after the owner was caught arrested and sentenced to life in prison immediately after the news broke the price of bitcoin started falling rapidly down and down the price went and along with it fell the net worth of the winklevi but the twins decided to use this opportunity to buy even more bitcoin because they believed in the long term the death of silk road would be a good thing for bitcoin because bitcoin had become so associated with this black market that had been hurt in bitcoin's perceived legitimacy but then another problem arose the instant charlie's company that the twins had invested in suddenly shut down as well turns out that in the wake of the silk road drama the instant had lost its license which designated the company as a legal money transmitter and charlie had no choice but to abruptly close completely he posted on the bitins the website saying it was just a temporary issue but the twins knew the company was doomed shortly afterwards in january 2014 things got even worse for charlie he was at an airport minding his own business when he suddenly heard the words charlie shrem you're under arrest he was handcuffed and carted off to a jail cell by an officer he was told it was a combined arrest this wasn't just police involved but he saw people with fbi badges irs badges and even the dea charlie had no idea what was going on but it was clear this was serious and he was terrified one of the officers started asking him questions about someone with the username btc king suddenly charlie realized what this was about silk road you see for a while there had been one particularly active user on bit instant who in total had bought around a million dollars worth of bitcoin charlie knew there was a high likelihood the money was going to silk road for illegal purchases and since charlie was technically the instance compliance officer he was responsible for this and was meant to report any suspicious activity but he didn't in fact he'd done some transactions off the books in an effort to get around certain legal requirements charlie's philosophy was that it wasn't his place to question how many bitcoins someone wanted or what they did with that except legally speaking it was his place to do that as a result charlie was now being charged with conspiracy to commit money laundering failing to follow suspicious activity reports and operating an unlicensed money transmitter charlie was technically the first bitcoin felon the first person to be arrested directly because of bitcoin and thus his picture was all over the news charlie's parents had to put up their house as collateral to bail him out and he then had to go back and live with them under house arrest until his sentencing charlie's lawyer informed him he could be looking at 25 years in prison just a year earlier charlie had had all the wealth fame and success he'd ever dreamed of and was running a rapidly growing company now the company was shut down he was heading to prison and his entire life was collapsing around him when charlie's day in court finally came he pled guilty in connection with indirectly sending an estimated one million dollars in bitcoin that was used on silk road however it wasn't quite as bad as he'd feared he was sentenced to two years in prison much less than had been expected although admittedly still a scary prospect for the 24 year olds unfortunately for him though that wasn't quite the end of it when charlie finally got out of prison in 2016 it wouldn't be long before he was hit with a lawsuit from the winklevi claiming he owed them 5 000 bitcoin from a previous business deal which by that point was worth around 32 million dollars [Music] two weeks after charlie's arrest the main bitcoin exchange mount gox completely collapsed after 800 000 bitcoin was stolen from customers accounts by hackers with the fall of both bit instant and mount gox two of the main ways people bought bitcoin back then the winklevii knew that bitcoin needed a new wave of entrepreneurs and companies to make buying crypto safer for people so they founded their own crypto exchange called gemini which has been described as the most regulated crypto exchange in the world they basically wanted to try and bring some order to the chaos of the bitcoin community other companies would also do something very similar like coinbase ftx and binance for the winklevo their push to help bitcoin become more mainstream was paying off literally they claim they've never sold a single bitcoin remember they own around one percent of all bitcoin so within a few years of these more regulated exchanges opening and the bitcoin price rising higher and higher cameron and tyler winklevoss became the world's first known bitcoin billionaires of course satoshi himself the mysterious unknown creator of bitcoin does have more than them if he's still alive he's believed to have one million bitcoin which would make him one of the richest people in the world but for the twins they didn't stop there they've since expanded into other blockchain related projects like nifty gateway for nfts and they seem to be extremely focused on web3 and decentralization the idea of having web services and applications operated and governed by users instead of corporations like google and facebook as a result some have wondered if they're still seeking revenge on zuckerberg what's interesting about this story though is you can look at it in two ways on the one hand you could say it's a story of redemption for the winklevi after the facebook lawsuit their image was tarnished nobody wanted to be involved with them they'd have the idea for a social network but missed out on being part of the social media boom because of zuckerberg taking their idea so instead they found a new technology had the vision to see its potential even really early on went all in on it and helped bring bitcoin to the masses thus becoming billionaires in the process however on the other hand you could say this is just the story of two rich frat boys getting even richer through luck and fortunate timing you could say they just got in early and then help pump up bitcoin's price something they still do to this day with arbitrary price predictions plus remember they only had the money to buy so much bitcoin early on because of the settlement they got from facebook which some people think they didn't deserve in the first place since they didn't do any of the real work on facebook they just had a fairly vague idea that wasn't even exactly the same thing as facebook honestly there's no right answer on any of that the truth is probably somewhere in the middle but i do think this is a fascinating story of the early days of bitcoin as for bitcoin in the present day whilst it's clearly much more popular than it was a few years ago the price still fluctuates wildly and it's unclear if bitcoin is actually going to be useful long term one thing is clear though i will never tell you to message me about any crypto deals so please be wary of fake impersonators in the comments pretending to be me as crypto scams are completely out of control but that's perhaps a story for another day instead right now why not check out this video i made on the crazy story of tick tock i think if you enjoyed this video you are really gonna like this one either way thanks for watching to the end you are a legend and i'll hopefully see you in the next video cheers you

Channel: MagnatesMedia

Views: 1,950,385

Keywords: Bitcoin, bitcoin billionaires, billionaires, the winklevoss twins, the winklevii, winklevoss twins, winklevoss bitcoin, the bitcoin billionaires, bitcoin kings, bitcoin story, the story of bitcoin, bitcoin history, cryptocurrency, bitcoin, bitcoins, crypto exchange, bitcoin stories, wealth stories, business stories, business documentary, bitcoin documentary, how bitcoin statrted, the rise of bitcoin, cameron winklevoss, tyler winklevoss, facebook, zuckerberg, crypto, invest, money

Id: eDbge9-aqmc

Length: 21min 49sec (1309 seconds)

Published: Wed Jul 13 2022