According to Tyler Winklevoss: Bitcoin Is Gold, Ether Is Oil, and Litecoin Is a Testnet

ICOs According To The Experts

Tyler Winklevoss co-founder along with his twin Cameron of the Gemini cryptocurrency exchange has lent his support to an argument that has long been popular among Bitcoin bulls as the cryptocurrency is a form of digital gold where both gold and Bitcoin are scarce continuing that it is fungible and divisible. This is where Bitcoin however has better at being gold than gold is since it is much more portable with any amount of Bitcoin can be held in a single string of numbers.

Subsequently it is here the Winklevoss continues to the metaphor describing ether as a digital oil that fuels a protocol layer with Ethereum blockchain on top of which decentralized applications use their own tokens to be built.

While it was asked if he agreed that Litecoin is the silver to bitcoin’s gold, a common trope, he said the fork more closely resembled a testnet with simulated versions of blockchain that developers use to vet their designs without risking the loss of actual money as the reason he gave for this is comparison was the Litecoin is nearly identical to the Bitcoin in fact with a much smaller market cap than others. 

There is another question that is courting controversy that an audience member asked if Gemini would consider adding Bitcoin cash, hard fork of Bitcoin, to the exchange. Thereby Gemini’s sporting currently support in only Bitcoin and ether. As nicknamed, the Winklevii said in response to another question that they do not mind avoided giving an answer but seemed to indicate that Bitcoin Cash support is unlikely contrasting the contentious fork to Litecoin friendly fork. 

What To Do About ICOs?

Speaking at an event Tyler and Cameron Winklevoss marking the release of the Truth Machine: The Blockchain as well as the Future Of Everything by Micheal Casey and Paul Vigna, the event has also featured Josh Brown the CEO of Ritholtz Wealth Management and blogger and Joe Lubina a co-founder of Ethereum and the founder of ConsenSys.

The main disagreements of the evening was though the respective camps never sparred directly, there was over the regulatory treatment of initial coin offerings. Unsurprisingly it was Lubin appearing to be the party most in favor of ICOs as an innovative approach to raising capital. Hereby objecting at one point to the suggestion that ICOs are unregulated insisting that they are and advocated a self-regulatory model in which participants in the cryptocurrency community assemble a central repository for information about various projects offering tokens. Subsequently he compare the concept to the Security and Exchange Commission’s EDGAR database. 

It was here that Lubin also claimed that utility tokens which are tokens on the Ethereum blockchain intended only to provide incentives on a particular project’s network that should not be considered securities. The SEC chair Jay Clayton recently told a Senate Committee that he believes that every ICO has seen a security. 

It is here that while judgment was probably not intended to include ether itself the platform hosted so many ICOs as itself a sort of ICO with investors depositing Bitcoin in exchange for ether. In an interview Lubin after the event countered that interpretation arguing that ether fails a key portion of the Howey test which is if the Ethereum development team were to go any way other than this, the network could also generate value.

How Does The Winklevoss Twins Evaluate ICOs? 

By contrast, Tyler Winklevoss seemed to dismiss the idea that ICOs were compliant with securities law as currently written and he said that ICOs are tokens on top of tokens calling them an effort to crowdfund equity while discussing the value of Ethereum network and its tokens with Brown, Winklevoss said the value lay in ether itself. 

To this Brown countered that Tim Berners-Lee has developed much of the internet’s protocol layer with no money as the wealth derived from the internet came from the application layer Facebook, Amazon, and Google as more analogous to the tokens offered through ICOs where Winklevoss argued that HTTP produced no monetary value because it lacks a token Ethereum doesn’t have that problem.

In fact Lubin didn’t give the impression of what he was particularly concerned about when the Ethereum itself or tokens at the application layer producing better returns as he spoke about uPort a project funded by ConsenSys enabling the ownership of self as sovereign digital identities and the potential for distributed networks to reshape politics by facilitating direct democracy through plebiscites.

To Draw The Curtains On The Discussion

To speak about it when he did talk about value generation it was in the context of infinite scalability as the unlimited simultaneous transactions he felt blockchain could eventually offer thereby enabling the economy to stack those value creation event more closely in time leading to a kind of compound interest effect.

Further on lofty goals but the community is taking it one step at a time as Lubin says Ethereum will transition to proof of stake is probably around six months.