Tyler and Cameron Winklevoss, the twins whose names you may know from “The Social Network” movie, hold about $25 million in Bitcoin. They recently announced the launch of their own price tracker for the digital currency. Since MtGox, known as the most prominent Bitcoin exchange, prevented withdrawals a few weeks ago, sources of information on Bitcoin like RTBTC have become unreliable. Winklevoss’ project, “Winkdex”, is going to solve the problem.
Cameron Winklevoss, the chief executive officer of the company behind Winkdex, believes that they will establish an accurate spot price which will reflect the real value of Bitcoin and resolve the price confusion existing thanks to the different exchanges. His brother Tyler is the president of the company. Twins say that the creation of an index reflecting accurate pricing will help to ensure wider acceptance of Bitcoin as an asset class.
Winkdex takes an amalgamation of Bitcoin prices over 6 exchanges, including Japanese MtGox, British Bitstamp and Bulgarian BTC-E. Then the prices are averaged together through a “proprietary, patent pending Winkdex formula”. The later takes into account volume and timing of transactions, providing more weight to transactions that have had more trades in the last couple hours.
The Winklevoss twins will use Winkdex internally to price their own Bitcoin holdings. Those have never been publicly disclosed. One year ago, the brothers admitted their holdings amounted to 1% of all Bitcoins in existence. Thus, some can make a conclusion that it would equate to an investment of $11 million in last year prices. If the Winkdex sets price of Bitcoin at $592, it will mean that the Winklevoss have more than doubled their money in the interim.
A decade ago, the brothers sued Facebook’s Mark Zuckerberg for $140 million, accusing Mark of stealing their idea for the social network. Four years later, the case was settled for $65 million.