In case you were wondering what those Winklevoss Twins have been up to after that whole Facebook debacle, here it is. Bitcoin Billionaires starts right where the Facebook lawsuit between the Winklevii and Mark Zuckerberg left off, taking us on a bumpy ride through bitcoin’s earlier days.
Author Ben Mezrich first covered this trio in The Accidental Billionaires, his 2009 book about the founding of Facebook that got turned into The Social Network. In that flick, we followed a not-very-likable Zuckerberg (“We got Mark Zuckerberg exactly right,” Mezrich tells Vanity Fair) and the not-very-likable Winklevii (which he says he got wrong) as they wrangled over rights to the site.
In case you forgot, the Winklevii hired Zuck to finish coding their college social sharing site. He took the idea and started a Harvard hot-or-not, then ran with The Facebook, which has become the social behemoth, Facebook, that we all love to hate on today.
Bitcoin Billionaires starts with this lawsuit ending and the Winklevii getting their $65 million settlement, which they wisely asked for in $45 million of Facebook stock. Money burning a hole in their no-doubt designer pockets, the twins are on the hunt for their next big investment. One problem: They want into Silicon Valley but Silicon Valley won’t touch ’em — no one wants to get on Zuck’s bad side.
That’s until the East Coast-based investors find what’s new, hot, and primed for insane growth: Bitcoin.
Mezrich’s tale is a slick and fast ride through the important early players in Bitcoin, and how the Winklevoss twins came to it, found by someone who hooks them up with Charlie Shrem, a smart Orthodox Jewish kid in Brooklyn who desperately wants his bitcoin startup to get funded and go big so he can get out of his parents’ basement.
The Winklevii see the beginnings of the next big thing, and they’re on it, investing hundreds of thousands in Shrem’s startup, BitInstant, and buying their own bitcoin, which swells to over $1 billion in value when the cryptocurrency peaked in December 2017, making them the world’s first bitcoin billionaires.
Of course, every ride doesn’t last. Shrem, who liked to party hard and listen to his friends’ libertarian rants about bitcoin and the free market, gets busted for not being compliant and allowing Silk Road, a.k.a. drug money, to flow through their startup. If you want more on what happened to Shrem, 60 Minutes’ Anderson Cooper sat down with him last weekend.
The Winklevii, though, came out on top. They started their own bitcoin exchange, Gemini, based in New York, showing the world that this is one wave they don’t intend to miss out on.
Mezrich answered a few questions for us about his perceptions of the twins, the future of bitcoin, and more.
GeekWire: How did you view the Winklevoss twins before, especially when writing The Accidental Billionaires — and how did this book change your perspective on them?
Ben Mezrich: I remember meeting the Winklevoss twins for the first time in a hotel room in New York. As soon as they walked in, I flashed back to every ’80s movie I had ever seen — they look like the guys who dress up in skeleton costumes and chase the Karate Kid around the room! Although I respected the fact that they really believed in truth, in honor, that they were “men of Harvard,” I also definitely judged them — their privilege, the way they looked — and when I wrote that book, they were the cool kids on campus vs. Zuckerberg, the quirky nerd.
But in researching this book, I realized as much as we got Zuckerberg right, we got the twins wrong. They are incredibly smart, they speak multiple languages, they can computer code, and they weren’t a part of two revolutions by accident.
GeekWire: When you approached the research, interviews and storytelling for this book, did you take any different approaches than you did when writing The Accidental Billionaires?
Mezrich: I didn’t know much about bitcoin, so I had to dive into that world. I spent a lot of time with the twins, trying to see where they came from, how they fell into this. And Facebook has changed so much, but I would argue it has become the monster The Social Network warned it would become. It’s wild how things flipped, how Facebook went from being the revolution to being the establishment, and how the twins went from being the establishment to being the revolution.
GeekWire: You write that bitcoin isn’t a fad, but here to stay. How would you defend this position to naysayers who think it’s too volatile?
Mezrich: The price is volatile. Bitcoin is much more than the price. I believe the future of money is definitely crypto. We won’t be walking around with pieces of paper bartering for things 50 years from now. Money is already mostly digital. And crypto, being peer-to-peer, based on math, with no need for banks or governments, universal, it just makes sense. Bitcoin is here to stay, in some form or another. Whether it’s a currency we use to buy things or a store of value like gold, it’s not going anywhere.
GeekWire: Several major U.S. retailers announced that they will start taking bitcoin, including Whole Foods, Starbucks and Nordstrom. How quickly do you see bitcoin being mainstreamed?
Mezrich: I see it in a 10-year timeline, I think we are in the very beginnings of the acceptance of crypto. I do think that many more people need to get into it. It can’t be manipulatable by a few big whales. And I also think Wall Street has to embrace it. But I think we will get there.
GeekWire: This book turns the Winklevoss story around: They were battered and made fun of in the press after the Facebook debacle. What do you think is most misunderstood about the twins, and why they deserve your respect?
Mezrich: We judge them by how they look, where they come from, and that’s unfair. We should look at what they’ve built — in bitcoin, and possibly in the beginnings of Facebook — and also understand that their perspective is molded by a 1950s belief in right and wrong, which is admirable.
GeekWire: The first bitcoin company they invested in was BitInstant with Charlie Shrem. Even though bitcoin was still highly speculative at that time, what made them invest so much and put so much faith in an untested currency and CEO? And how much did that have to do with their fiasco with Facebook?
Mezrich: I think a lot of what the twins do is guided by their experiences with Zuckerberg and Facebook. They took a chance on Charlie because of his enthusiasm, his genius, and they wanted to have a second shot at building something big and world-changing.
GeekWire: The twins have a new company, Gemini, that’s handling bitcoin the responsible way by staying compliant. Do you think they would have started this without their experience with Charlie and BitInstant? How did that impact how they set up Gemini?
Mezrich: Charlie and BitInstant and bitcoin’s dark history of Silk Road, its libertarian and sometimes anarchistic underpinnings, definitely pushed them to try a different route — to work with the authorities and banks and make bitcoin a part of respectable financial world.
GeekWire: Do you own bitcoin? And if so, how do you use it, and what do you like about it?
Mezrich: I don’t. I’m a writer, not an investor. Every stock I ever bought went to zero. Every investment I’ve ever made has disappeared. That’s not my ballgame. I’m the guy who lives vicariously through his characters I follow and document, I live through my books. I think bitcoin is fascinating and crypto is the future, but I’m most interested in the drama of it all, the story of its origins.
Bitcoin Billionaires: A True Story of Genius, Betrayal, and Redemption by Ben Mezrich is out now.