Cameron and Tyler Winklevoss are “mirror” twins, which means that they came not only from a single fertilised egg, but that their embryo divided unusually late; they spent well over a week as the same body. When they face each other, they see a reflection. A mole on the left arm of one will appear on the right arm of the other. One is left-handed, the other right-handed. They are 6’5” tall, and powerfully muscled from decades of rowing – they competed in the Oxford-Cambridge boat race and the Olympics. They attended an elite private school in Connecticut that counts George HW Bush among its alumni, before studying economics at Harvard.
It was at university that the twins began asking computer science students to create a website for them, which they called HarvardConnection. Among them was Mark Zuckerberg, three years their junior and already involved in a networking project of his own. Neither party had a genuinely new idea – Open Diary, the first recognisable social network, had been online since 1998 – but when Zuckerberg launched “thefacebook” in 2004, the Winklevoss twins saw their website reflected in it, and sued.
Litigation is a big part of the Winklevoss story. They spent the next four years suing Zuckerberg, during which time other Winklevoss websites and online businesses launched and fizzled out, and a hundred million people signed up to Facebook. Eventually, the student whom they had never paid to fix their website gave them $65m – including $45m in stock – to leave him alone. They responded by suing him again, unsuccessfully. Then they sued their own lawyers.
The story of Facebook’s dorm-room beginnings was told in a previous book by Ben Mezrich, The Accidental Billionaires (2009), which was filmed by David Fincher as The Social Network (in which the twins were played by a digitally replicated Armie Hammer). Mezrich’s new book tells the story of what the “Winklevi” did next.
First, they went to California. Their Facebook stock, which had multiplied rapidly, was worth hundreds of millions of dollars when the company floated on the stock market in 2012, but they failed to find anyone who would go into business with them. As Mezrich tells it, the sinister influence of Zuckerberg made Silicon Valley’s most gifted programmers too afraid to work with his nemeses, but it may have had more to do with the fact that they had built a reputation for suing gifted programmers. Despondent, the Winklevi did what any depressed young centimillionaire does when they reach “rock bottom”. They went to Ibiza, where, in a very expensive nightclub, they met a fellow American who told them about a new digital currency called Bitcoin.
Bitcoin was created by a mysterious figure called Satoshi Nakamoto – almost certainly an alias – as a decentralised digital currency that could not be counterfeited, but required no central bank. Having created it, Nakamoto disappeared and has never been conclusively identified. For the Winklevi, this must have been part of Bitcoin’s attraction: there would be no Zuckerberg, this time. They bought everything they could.
The twins also invested in a Bitcoin trading business, BitInstant, and in doing so they discovered that for some, Bitcoin was a political project as much as an investment. For anarcho-capitalists and libertarians, this was a currency free from government control – and a way to evade taxes. Erik Vorhees, a gambling entrepreneur and member of the libertarian Free State Project, joined BitInstant as head of marketing. Roger Ver, a vocal libertarian who had previously served ten months in prison for selling explosives on eBay, was a fellow investor.
The Winklevoss twins became Bitcoin evangelists, attending meetings on private jets, speaking at conferences, having dinner with Richard Branson. Meanwhile, the value of Bitcoin grew, not because of their efforts, but because it offered a way to pay for things anonymously. Before cryptocurrency, when people wanted to use the internet to buy drugs or weapons or illegal pornography, they were often caught by the fact that they would at some point have to use a payment method that identified them. Bitcoin now conceals an estimated $76bn of illegal activity a year. It has repeatedly been shown to facilitate money laundering, drug dealing, people trafficking, illegal pornography and cybercrime. The libertarians with whom the Winklevi promoted Bitcoin might point out that the same could be said of the dollar, but the dollar does not derive its value primarily from its ability to facilitate and conceal these crimes. Bitcoin does.
In Mezrich’s account, the Winklevi do not reflect on the idea that their growing wealth is derived from a huge wave of corruption and misery, even when one of their closest business associates is sent to prison. Nor do they recognise Bitcoin’s colossal waste of energy (a recent study by MIT revealed that the millions of computers which perform calculations to maintain Bitcoin as a currency use as much electricity a year as Portugal).
Bitcoin Billionaires is an embarrassingly frantic piece of boot-licking that never once questions the assumed financial and moral genius of its subjects. There are moments of hilarity – the twins smash their computers with sledgehammers, and yell things such as “we’re trending on Yahoo” – but they are unintentional. It is the story of two men who embody what many suspect about contemporary capitalism: that the most reliable way to get rich is to be rich already.
Bitcoin Billionaires
Ben Mezrich
Little, Brown, 288pp, £20
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This article appears in the 19 Jun 2019 issue of the New Statesman, Bad news