Bitcoin Community Narratives: The Winklevossian Initiative

I have commented on the multiple Bitcoin “communities” that have developed, including the “darknet” crowd, the populist  sovereignty segment, the “gaming” mafia, and so on.

This week, we got a big fanfare from the Wall Street faction.  The Winklevoss Twins announced a new Bitcoin exchange, Gemini, “a next generation bitcoin exchange”.  (The twins have a large holding and have been burned in earlier investments, so they have some understanding of the problem.)

By which they mean, “a fully regulated, fully compliant, New York-based bitcoin exchange for both individuals and institutions”.  (This is literally Wall Street.)

As it turns out, this is a US only institution (avoiding the nasty international issues) and Gemini has secured “a banking relationship with a New York State-chartered bank.”  Which means that “US dollars on Gemini will be eligible for FDIC insurance and held by a US-regulated bank”.

The time is obviously right for such moves, as Coinbase launches a similar exchange this week, too. Just like Gemini, it is US only, and aligned with a conventional, FDIC insured institution.

This is certainly a strong answer to those who have been whining about how impossible it is to comply with banking laws (which, I grant you, is out of the reach of hobbyists).  It is also a strong counter position to the cyberanarchist crowd, who consider such a scheme as treason.

To be honest, I’m not sure whether this sort of exchange is particularly important in itself.  Only a tiny number of people need to buy or sell Bitcoin on such an exchange, and it will do very little to help normal people actually use cryptocurrency.

However, the existence of well run, above board, exchanges connected with the legitimate banking sector will be a huge confidence builder for the conventional financial industry and large businesses.

Most of all, it pushes forward the narrative of this segment of the Bitcoin community, a story about remaking the economic system and building “your bridge to the future of money” (as the Winktwins put it).

 

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