Cameron and Tyler Winkelvoss have been many things in a short time: Olympic rowers. Nemeses of Mark Zuckerberg. Characters on "The Simpsons." Now they can add a new label: bitcoin moguls.
The 31-year old identical twins have amassed since last summer what appears to be one of the largest portfolios of the online currency that has caused such a stir in financial and technology circles.
An array of speculators have now bid up the price of the bitcoin to the point where the outstanding supply of the digital money was worth $1.3 billion at last count. The Winkelvii as they are popularly known say they own nearly 1 percent of that, or about $11 million.
The decision by the brothers to go public signals a new stage of maturity for what has been an experimental alternative to national currencies. Created in 2009 by a programmer or programmers known only by a pseudonym, the bitcoin world has been dominated by anonymous programmers and traders.
Now mainstream investments in the digital money are starting to emerge. On Thursday, a group of venture capitalists, including Andreessen Horowitz, announced they were funding a bitcoin-related company, OpenCoin.
Other Silicon Valley venture firms, while not holding bitcoins, are starting to show interest in the technology. Tim Draper of the firm Draper Fischer Jurvetson put money into CoinLab, which is doing bitcoin-related projects. Tribeca Venture Partners announced this week they were putting money into Coinsetter, a startup trading platform for the currency.
The question, however, is whether bitcoin will end up in the same dustbin as Dutch tulips and Pets.com, or, as its backers believe, turn into a disruptive technology with the potential to revolutionize the global payments system.
The perils have been obvious over the past two days, as bitcoin has gone through its most volatile stretch ever, sinking from a high of $260 a bitcoin, to a low of $105, before ending Wednesday around $175. On Thursday it was down again to $120 when one of the major online exchanges called a 12-hour halt on trading. The volatility raises questions about whether bitcoin can even be called a currency.
"It's not something I'd want to be involved in or have any investor's money involved with," said Steven Hanke, a professor specializing in alternative currencies at Johns Hopkins University.
But the 6-foot-5 Winkelvii were unfazed by the latest tumult. Indeed, the brothers said they used the low prices to buy more. They argue that bitcoin will have much further to soar once a broader audience sees its virtues: a unit of exchange that can be moved around the world at the click of a button without payments to Western Union or American Express.
"People say it's a Ponzi scheme, it's a bubble," said Cameron Winkelvoss. "People really don't want to take it serious. At some point that narrative will shift to 'virtual currencies are here to stay.' We're in the early days."
For those whose idea of money still involves greenbacks and metal coins, bitcoins do not exist in any explicit physical form. The creators wrote algorithms that allow only a finite number of bitcoins to be created the count is currently around 11 million with new coins "mined" by programmers who solve mathematical riddles. The coins can then be bought and sold through upstart exchanges, and held in what are known as virtual wallets.
So far, few real companies accept bitcoins as payment, and the primary place they can be used is an online bazaar, known as Silk Road, where narcotics and weapons are the main wares for sale.
But the currency's believers see a future in which Starbucks and Amazon take bitcoins. For their part, the Winkelvoss twins have used some of their bitcoin to pay for the services of a Ukrainian computer programmer who has worked on the site of their venture capital firm.
While bitcoin has amassed a cult following since its beginnings, it has set off a frenzy in recent weeks as the price spiked from $35 per bitcoin at the beginning of March, to a high of $255 early Wednesday. Some of the credit for this surge is given to the banking crisis in Cyprus, which raised some questions about the viability of the euro currency.
Bitcoin is far from the first bet the brothers have made on an emerging technology. As students at Harvard College, the twins founded a social networking site, ConnectU, and enlisted their schoolmate, Mark Zuckerberg, to help them build the company.
After Zuckerberg went off to start Facebook, the brothers sued him, accusing him of stealing their idea a story that was dramatized in the movie "The Social Network." The case was settled with the brothers being given $20 million in cash and Facebook shares that are now worth over $200 million. They have parlayed that fortune into Winkelvoss Capital Partners.
The bitcoin currency itself exists as a string of letters and numbers. In order to keep their holdings secure from hackers, they have taken those codes off of any networked computer and saved them on small flash drives. They said they have put the drives in safe deposit boxes at banks in three different cities.
It's hard to verify how the Winkelvoss holdings compare with other bitcoin players given the anonymity of accounts, and the twins believe that some early users of the system probably have holdings that are at least as large.
These investments were all in an uncertain state on Thursday after the big price swings and the shutdown of trading on Mt. Gox, a Japan-based company that claims to handle 80 percent of all bitcoin trades. Mt. Gox said in a statement that the problems were a result of the currency's popularity, making it impossible to process all the incoming orders. It added that it was not the victim of hackers but "instead victim of our own success!"