The Winklevii move out of Zuckerberg's shadow, and into Bitcoin

Is it just media hype?

The Winklevii have announced they are going to venture out from under Zuckerberg’s lengthy shadow in an attempt to re-establish themselves as dotcom entrepreneurs.

In a headline grabbing announcement, which is as devoid of substance as it is full of Hollywood hype, the two brothers intend to set up Math-Based Asset Services LLC to sponsor a Bitcoin Trust.

This trust will float on the stock exchange, initially selling $20m worth of shares. There has yet to be an answer on whether an exchange will accept the offering and the trust that will hold the portfolio is yet to be set up.

Despite most news sites picking up on the story, there are no real financial details. If media attention was the goal here, that certainly seems to have been achieved.

The SEC filing comes with a raft of risks, many of which would be enough to deter any serious investor. This one I find especially chilling: "A decline in the popularity or acceptance of the Bitcoin Network would harm the price of the Shares."

In April the twins claimed in an interview with the New York Times that they owned 1 per cent of all Bitcoins in existence. That amounts to what was worth $11m when Bitcoin was at its peak in March but is now worth $8m.

As the SEC filling reminds us, that fall of $3m over just a period of a few months is a result of nothing more than a decline in popularity. Nothing else is keeping the Bitcoin boat afloat.

The risks don’t end there. The SEC filing warns that as "the sponsor and its management have no history of operating an investment vehicle like the Trust, their experience may be inadequate or unsuitable to manage the Trust".

The twins said in the New York Times interview their faith in Bitcoin was down to it being a finite currency, that when 2040 rolled around and the Bitcoin tap was turned off it would result in the price of Bitcoin rising ever higher.

Bitcoin, though is not as finite as people seem to think. The reason being, I can divide my Bitcoin as many times as I want. Unlike tradition currencies, which are tied to physical tender, I can very simply pay someone 00000000.1 Bitcoin.

Judging by the amount of interest Bitcoin received from amateur speculators, many of which have had little or no dealings with stocks, share or currency exchange, the Bitcoin Trust could engender a similar interest.

People should be very wary of investing in something that is buoyed along by media hype, popularity and remains an unknown quantity, beset by problems.

Winklebros. Photograph: Getty Images

Billy Bambrough writes for Retail Banker International at VRL financial news.
 

John Moore
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The man who created the fake Tube sign explains why he did it

"We need to consider the fact that fake news isn't always fake news at the source," says John Moore.

"I wrote that at 8 o'clock on the evening and before midday the next day it had been read out in the Houses of Parliament."

John Moore, a 44-year-old doctor from Windsor, is describing the whirlwind process by which his social media response to Wednesday's Westminster attack became national news.

Moore used a Tube-sign generator on the evening after the attack to create a sign on a TfL Service Announcement board that read: "All terrorists are politely reminded that THIS IS LONDON and whatever you do to us we will drink tea and jolly well carry on thank you." Within three hours, it had just fifty shares. By the morning, it had accumulated 200. Yet by the afternoon, over 30,000 people had shared Moore's post, which was then read aloud on BBC Radio 4 and called a "wonderful tribute" by prime minister Theresa May, who at the time believed it was a genuine Underground sign. 

"I think you have to be very mindful of how powerful the internet is," says Moore, whose viral post was quickly debunked by social media users and then national newspapers such as the Guardian and the Sun. On Thursday, the online world split into two camps: those spreading the word that the sign was "fake news" and urging people not to share it, and those who said that it didn't matter that it was fake - the sentiment was what was important. 

Moore agrees with the latter camp. "I never claimed it was a real tube sign, I never claimed that at all," he says. "In my opinion the only fake news about that sign is that it has been reported as fake news. It was literally just how I was feeling at the time."

Moore was motivated to create and post the sign when he was struck by the "very British response" to the Westminster attack. "There was no sort of knee-jerk Islamaphobia, there was no dramatisation, it was all pretty much, I thought, very calm reporting," he says. "So my initial thought at the time was just a bit of pride in how London had reacted really." Though he saw other, real Tube signs online, he wanted to create his own in order to create a tribute that specifically epitomised the "very London" response. 

Yet though Moore insists he never claimed the sign was real, his caption on the image - which now has 100,800 shares - is arguably misleading. "Quintessentially British..." Moore wrote on his Facebook post, and agrees now that this was ambiguous. "It was meant to relate to the reaction that I saw in London in that day which I just thought was very calm and measured. What the sign was trying to do was capture the spirit I'd seen, so that's what I was actually talking about."

Not only did Moore not mean to mislead, he is actually shocked that anyone thought the sign was real. 

"I'm reasonably digitally savvy and I was extremely shocked that anyone thought it was real," he says, explaining that he thought everyone would be able to spot a fake after a "You ain't no muslim bruv" sign went viral after the Leytonstone Tube attack in 2015. "I thought this is an internet meme that people know isn't true and it's fine to do because this is a digital thing in a digital world."

Yet despite his intentions, Moore's sign has become the centre of debate about whether "nice" fake news is as problematic as that which was notoriously spread during the 2016 United States Presidential elections. Though Moore can understand this perspective, he ultimately feels as though the sentiment behind the sign makes it acceptable. 

"I use the word fake in inverted commas because I think fake implies the intention to deceive and there wasn't [any]... I think if the sentiment is ok then I think it is ok. I think if you were trying to be divisive and you were trying to stir up controversy or influence people's behaviour then perhaps I wouldn't have chosen that forum but I think when you're only expressing your own emotion, I think it's ok.

"The fact that it became so-called fake news was down to other people's interpretation and not down to the actual intention... So in many interesting ways you can see that fake news doesn't even have to originate from the source of the news."

Though Moore was initially "extremely shocked" at the reponse to his post, he says that on reflection he is "pretty proud". 

"I'm glad that other people, even the powers that be, found it an appropriate phrase to use," he says. "I also think social media is often denigrated as a source of evil and bad things in the world, but on occasion I think it can be used for very positive things. I think the vast majority of people who shared my post and liked my post have actually found the phrase and the sentiment useful to them, so I think we have to give social media a fair judgement at times and respect the fact it can be a source for good."

Amelia Tait is a technology and digital culture writer at the New Statesman.