Tyler and Cameron Winklevoss expressed their conviction this week in a conversation with Fortune that Bitcoin could outperform the gold market in the marketplace if the right regulatory environment arises.
The Winklevoss twins are important players in the current cryptocurrency landscape. The brothers have been referred to as the first “Bitcoin billionaires” in the world. Together, they own Gemini, a stock exchange to trade bitcoin and other cryptocurrencies. A few days ago, they gave Fortune an interview.
What does an effective cryptocurrency regulation look like?
It is no secret that the Winklevoss twins are in favor of regulation. Headquartered in New York, Gemini is often advertised as a regulatory compliant crypto exchange. Her latest campaign, “Revolution Needs Rules,” reflects this attitude with a full-page ad in The New York Times.
In their view, it is important for Bitcoin that investors feel secure trading in cryptocurrency. That's why the Winklevoss twins believe that regulation is an important step in making Bitcoin acceptable in the same way as gold.
On the surface, of course, their call for improved cryptocurrency regulation makes sense. But what exactly is an appropriate level of regulatory oversight? On this point, there is little agreement in the crypto community. Countries around the world have chosen very different approaches. Malta, for example, has welcomed cryptocurrencies with open arms, while China often runs counterparts.
If you asked the Winklevoss twins what the ideal regulation would look like, they would probably mention some traditional fiscal regulatory practices and insist on allowing legitimate Bitcoin ETFs.
“Companies building on things like Blockchain and Bitcoin should have regulation that is thoughtful and does not hinder innovation,” said Tyler Winklevoss during his Fortune interview
Is Bitcoin comparable to gold at all?
Bitcoin, like gold, has a limited amount because the creator behind Bitcoin has set a maximum coin count. This is maintained by halving, a process that halves the reward for block confirmations by miners every 210,000 blocks. Since the launch of the Bitcoin Network in 2009, the block reward has halved twice and is expected to be repeated in 2020.
As a result of this process, the maximum bitcoin supply that will ever exist is just under 21 million bitcoins. Of course, there are also mass lost or destroyed bitcoins, which further reduces the amount of circulation.
One reason for this design decision was to give Bitcoin a value by making the currency increasingly scarce. In many ways, it reflects how investors look at gold, as gold is also scarce – even if gold's scarcity is not so clearly defined.
That the Winklevoss twins draw strong comparisons between bitcoin and gold is nothing new to the industry. Some of these comparisons have their origins in the Bitcoin white paper. Promoting Bitcoin as digital gold or value storage is one of many ways to sell the currency to people who would not otherwise be interested in cryptocurrency.
However, the current relationship between gold and bitcoin is not that easy. As recently discovered, bitcoin and gold have no significant correlation in the current market environment. Investors do not necessarily use Bitcoin to protect themselves against the instability of the stock markets, as they would with gold.
It's hard to see how far we are from knowing that Bitcoin could one day overtake gold in an appropriate regulatory environment. Partly it depends on how much you believe that regulation is the right answer.
More regulation is already on the way. Last week, the US Securities and Exchange Commission (SEC) said that reviewing cryptocurrency regulation is one of its priorities for 2019.
Author: Peter Joost – Source Post: https://www.kryptovergleich.org/wird-bitcoin-mittelfristig-gold-ueberholen-neues-winklevoss-interview/
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