The Winklevoss twins cut up their bitcoin key to protect their fortune
People laughed at the brothers in 2012 when they started buying the cyptocurrency...
Your support helps us to tell the story
This election is still a dead heat, according to most polls. In a fight with such wafer-thin margins, we need reporters on the ground talking to the people Trump and Harris are courting. Your support allows us to keep sending journalists to the story.
The Independent is trusted by 27 million Americans from across the entire political spectrum every month. Unlike many other quality news outlets, we choose not to lock you out of our reporting and analysis with paywalls. But quality journalism must still be paid for.
Help us keep bring these critical stories to light. Your support makes all the difference.
People laughed at the Winklevoss twins in 2012 when they started buying up bitcoin - lots of it.
The two Harvard-educated entrepreneurs bought about 120,000 bitcoins when they were less than $10 each, using funds they got from settling a lawsuit against Mark Zuckerberg over their claim that they came up with the idea for Facebook.
But nobody's laughing at Cameron and Tyler Winklevoss anymore. They confirmed in an interview with The New York Times that they had held on to their bitcoins as the price has skyrocketed - a coin was worth about $17,800 on Tuesday afternoon.
Their bitcoin fortune is now worth about $1.3 billion, The Times reported.
“We've turned that laughter and ridicule into oxygen and wind at our back,” Tyler Winklevoss told The Times.
A fortune that large needs protection. Because bitcoin is a digital currency, it can be stolen in a hack. Earlier this month, for example, one cryptocurrency-mining service said hackers had taken $80 million in bitcoin.
The Winklevoss twins use what's called a “cold wallet” system to store their bitcoin fortune.
Bitcoin resides in electronic “wallets,” and each has a private key. If someone has that key, they can take your bitcoin. Printing the key - and keeping it off the internet - helps protect it from people trying to steal it.
The Winklevoss twins take it one step further - they cut up a paper printout of their private key, then stored the pieces in banks around the country.
Here's how The Times explains it:
“The Winklevosses came up with an elaborate system to store and secure their own private keys. They cut up printouts of their private keys into pieces and then distributed them in envelopes to safe deposit boxes around the country, so if one envelope were stolen the thief would not have the entire key.”
The Winklevosses say they use a similar system for Gemini, the bitcoin exchange they created that's licensed in New York to hold the cryptocurrency on behalf of banks and traders. That's because if the Winklevosses were to lose their bitcoin billions, that would be a tragedy for them - but if their exchange were hacked, there would be a lot of angry financiers looking for answers.
• 11 ways one type of exercise is the closest thing to a miracle drug
• Step inside the US's new $1 billion embassy in London
• Nasa satellites spot formation of new island in South Pacific
Read the original article on Business Insider UK. © 2016. Follow Business Insider UK on Twitter.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments