It's been more than six years since an anonymous developer created the cyber payment system and currency bitcoin, touted by users for its tenets of decentralization and anonymity. Despite a series of high-profile criminal scandals and tumbling prices throughout 2014, the cryptocurrency may finally see mainstream acceptance as financial authorities and key industry players move toward regulated operations.

One of the most notable moves in that direction has come from entrepreneurs Tyler and Cameron Winklevoss, who recently announced plans to launch the first regulated bitcoin exchange on the US market, which they say could open in New York as early as the spring. The 33-year-old twin brothers — famous for creating a social networking site at Harvard and later receiving a $65 million legal settlement from Facebook cofounder Mark Zuckerberg — say they are ready to go once they get approval from New York's financial regulator, a step they stress is integral to their plans.

The exchange will be named Gemini — meaning twins in Latin — and they reportedly have a major US bank on board, though they have not publicly announced which one. The pair has invested their own money in the business venture and staffed up the Manhattan offices of Winklevoss Capital with hedge fund engineers and a compliance officer. As they wait for approval from state regulators, Gemini employees have developed the trading mechanism for the exchange.

Winklevoss Capital's Gemini team Michael Breu, Andy Laucius, Marcus Skala, Rose Toomey working in the offices in the Flatiron District. (Photo via Tyler Winklevoss.)

Just days after Winklevoss Capital announced its plans, however, the San Francisco-based bitcoin company Coinbase revealed it had launched its own exchange. While the company initially claimed to have received the proper licenses to do business in New York, regulators there and in California denied this was the case.

Mark Williams, a finance professor at Boston University, told VICE News that Coinbase's attempt to start business without all the required licenses was very risky. According to him, building bridges with regulators is key to the currency's future.

"One of the key ingredients of success with bitcoin is going to be building trust with regulators," he said. "[It's] strategically an error on their part to not work with regulators and instead pushing their regulators."

The Winklevoss twins have been vocal in their belief that bitcoin can match up with, or beat, the market for gold. Tyler told VICE News that if the currency can become a "better gold" — a commodity with long-term, bankable value — it could have a market cap of more than $1 trillion. But Williams questioned the premise of the exchanges in general, noting they tenuously rely on the value on an artificial commodity that has an artificial scarcity.

'The narrative of bitcoin has been hijacked a long time, I think in really misleading ways.'

There are also serious security concerns. In the last month, the Chinese bitcoin Exchange BTER had its platform hacked twice, losing more than $3 million total in bitcoin. The incident further tarnished a reputation already marred by the sudden bankruptcy of former Japan-based exchange Mt. Gox in April 2014, which saw more than $450 million worth of bitcoin that belonged to the exchange's customers disappear.

According to the Winklevosses, the security features configured into their service will be one of Gemini's "strong selling points." They said only a small fraction of all funds will be held in the online service connected to the internet. Instead, most funds will be held off-site in secure storage. Tyler explained that these features aim to protect against human error, internal malfeasance, and other factors that have led to problems in the past.

"Failure to follow these principles has led to the downfall of many bitcoin businesses," he said. "Our system was built taking into account the hard lessons learned in bitcoin and should be less susceptible to the same old problems."

With major players like Winklevoss Capital emphasizing the importance of regulation and security, Williams — a reliable bitcoin skeptic — questioned whether the currency will lose its edge considering decentralization has always been a major selling point.

"Initially, bitcoin was all about decentralization, no banks, no regulators," Williams said, noting that the trend now appears to be going toward involving financial authorities and perhaps away from the original libertarian principals. "Is it going to be a sell out? Is that really a bitcoin in the end or is it a manifestation of something new?"

In addition to embracing regulation and heightening security, Cameron and Tyler have lofty visions of how bitcoin will develop in both the short and long term. As payment systems evolve, they see the possibility of making it easier to support social movements around the world — even under the most oppressive regimes. And they see a world where, eventually, you'll order an Uber that will pick you up in a self-driving car and charge you in bitcoin.

VICE News spoke with Tyler and Cameron from their Manhattan offices to discuss their plans for Gemini in 2015 and their expectations for the future the most prominent cryptocurrency.

VICE News: So what exactly is Gemini and how will it work?

**Tyler Winklevoss: **We see it as the Nasdaq of bitcoin, it's a US-regulated, New York-based platform to buy and sell bitcoin and we have an American banking relationship. So these things may sound not that novel, but in the bitcoin world it is. There is no regulation in America, because it's still so new. And New York is the place where [the regulators] are pioneering it… So basically it's a US home for people, where they don't have to wire their money overseas, where their money can actually stay in America, where they can buy and sell bitcoin from a company that's regulated and has consumer protections. We see this as really critical infrastructure to building bitcoin and realizing its potential.

**Cameron: **The reason why most bitcoin exchanges to date have been offshore is because the US happens to be a very regulated country in terms of the financial world, if you look at the [Federal Trade Commission], the Department of Treasury, you have all these different state licenses and governments. Typically in the US, whether it's Silicon Valley or other parts of the country, we're generally leading the pack in terms of innovation and technology.

Bitcoin is a little bit different because you're dealing with young innovative companies, but they're dealing with money, which adds a sort of regulatory layer that doesn't typically exist with a startup. So when you think of some of the greatest companies in tech over the last couple decades, there are always these stories of 'it came out of a garage or dorm room.' Bitcoin's a little bit different because of the money aspect… so it creates a situation where you're trying to create a startup and, at the same time, you have to have controls and procedures and infrastructure in place that's actually much more similar to a mature company, like that you would expect from a financial institution.

'This idea that you can send value like you send an email seemed right. It seemed like something that should have existed a long time ago and it hadn't until this point.'

When we're talking with regulation, what's the process for getting Gemini off the ground? I've read you're looking at a spring launch.

**Tyler: **We're hoping to be Q1. We'll hit that ourselves, so the only gating issue would be, or will be, regulation. But we've had open dialogue with regulators for almost a year now and we feel that we're close and we want to make sure that we truly area licensed, that's one of our principles. We don't want to half bake it, or hack our way through and be on the fringe of it, we really want to do this the right way and get the blessing of the regulators. And we do feel that that's around the corner.

Are you feeling a change in how the regulatory agencies are approaching bitcoin?

**Tyler: **I think there's been a lot of interest and effort for a while now in getting this right and doing this. It's just these things are often a long time coming — there's a lot of procedures that regulatory agencies have to go through. There's comment periods and they've gotta go about [doing]. So it's a process, but there's definitely been a sense of urgency that we've felt from the regulators for a while now to get this right and get this done. It's just one of those things that doesn't happen overnight.

Cameron: Look, I think everybody, including the regulators, would have liked to have had this done yesterday, but it's just not something that's going to happen that fast. But it is in process and I think it's just around the corner. And in terms of the pace in which they're moving, I don't think they could be moving any faster. Which is great because a lot of times, because there's nothing saying they have to move at a certain pace. They clearly want to bring virtual currencies to New York, but also make it a part of the American economy and make America part of bitcoin.

With Coinbase launching its own exchange, do you see them as a competitor? Also, how does their decision to open without licenses affect the launch of Gemini?

**Tyler: **Well, the second question is easy. We want to make sure that we are licensed and we don't feel like we are licensed right now, we're not going to launch until we are. That's always been our approach and continues to be our approach. Some people are taking our approach and some aren't, so I guess we'll see, you know as the future unfolds, which approach was the wiser one. But we believe in what we're doing.

In terms of competitors, there's certainly some overlap in terms of what they're doing and what we're doing, but we feel in general that more people need to be building crucial infrastructure for bitcoin... We're excited to see other people building things that need to be built. So in the end the more tunnels, bridges, rails, for bitcoin, the better we all are. It's unclear whether bitcoin is a winner-take-all market.

**Cameron: **We just don't feel comfortable launching and don't feel it's right to our customer base without meeting whatever bar is set by regulators. We just don't think it's fair to bring people onto a platform before we've gone through that process. I think that process exists for a reason, to protect consumers and our future customers, and make sure best practice and policies are involved. So that's kind of our philosophy. That's sort of what we're doing and that doesn't change based on other people's actions or behaviors. That's been our plan and mission.

**Tyler: **A business is not built in a day. We're in this for the long run. So in our minds getting this right even if it means potentially we look like we're slower out of the gate. We're looking to consider any business to be a marathon and not a sprint. That's our mentality.

Will Gemini help address fears of volatility in the bitcoin market and will you have to do a lot of things to address those concerns?

**Cameron: **It's sort of impossible to tell what on a given point of time is creating volatility. There's been certain events that it seems more correlated, but I think that in general… the more infrastructure you build and the more people are able to participate in price discovery in the market and the more tools you give to the traders and currency providers, I think that inherently brings it out to a more mature ecosystem and a less volatile asset.

That being said, we're talking about the asset, if you compare it to things like gold, things like silver, things like oil, it's a baby. It's very new, it's a new technology. The characteristics of bitcoin and what it represents as both an asset and a payment system is really novel... In the initial conversations about bitcoin, I remember being asked a lot 'Is it a thing?' 'Can I have a physical bitcoin?' [Questions have] kind of moved a lot more towards that direction… People are sort of starting to wrap their heads around what a virtual currency means now, but the education process is still in the early phases. I think that in terms of the volatility, it's acting like an unregulated asset that's on its way to being regulated. We expect and anticipate this sort of thing with bitcoin right now. I think that if it was acting and behaving differently it would be surprising and perhaps more concerning.

We take more of a five to 10 year view, so we're just not focused on the near-term price movements, day-to-day, or hour-to-hour, or week-to-week. Obviously we want to see a trend upwards, that's good because it creates this larger opportunity and it attracts people into this space to build things on top of this protocol. But we personally have not sold a bitcoin, any bitcoins that we bought. We still hold them today. We anticipate holding them for many years. And we're just taking a more long term horizon.

Tyler: You have to look at bitcoin as a very strong, small tech stock that is illiquid and not clearly regulated. So when you throw all that together, it's acting exactly how you'd expect it to act and you'd predict it to act. So i don't see anything that's abnormal here. It's a thin market. But when you create infrastructure like Gemini, and we're working on our [Exchange Trade Fund] COIN, then you start bringing a lot more liquidity, a lot more money into the market, the market cap raises, you get more sophisticated investment tools and hedging tools and all of a sudden the volatility can be taken out a lot on that… I think it's really tempting and it's very good media bait to talk about the price rising and the price falling, but in reality Rome wasn't built in a day and bitcoin won't be either.

What made you excited initially about bitcoin and want to be apart of it?

**Tyler: **I think we loved the elegance of it, the simplicity of it. It's obviously a complex idea and it's hard to wrap your head around it, but this idea that you can send value like you send an email seemed right. It seemed like something that should have existed a long time ago and it hadn't until this point. So obviously you first hear about something and you should be a little skeptical and you start digging in and you realize this is phenomenal, I can send some value anywhere in the world right now at any time and it would get to them fairly instantly and for free. And if I tried to send them money, it would be a horrendous experience.

I can't tell you exactly why some people get hooked on bitcoin and some people don't, I've thought about it a bunch before. I think it's something about the fixed supply and the store of value, and that it can't be manipulated by one person. Also at the same thing it's completely transparent, you know what's going on and what's happening, what the source code looks like. All of those things are so different than the way I'd thought about the world, or was told how the world works… It really opened my eyes when I started to think about these possibilities, it's almost like discovering a new color — it's incredibly powerful. It just felt really right knowing more about it and the people we met inside bitcoin were so passionate about it and so brilliant. It wasn't immediately day one our whole lives revolved around bitcoin, but today, the most important things in our lives right now is bitcoin related — it's Gemini and COIN. So it crept up on us pretty quickly and now it consumes us.

'You could really support a movement or a revolution or people by literally sending bitcoin.'

Is there something in it for an average investor?

Tyler: I think so. I think if there's something in it for me there has to be something in it for everybody. Without giving financial advice — everyone should make decisions on their own and I by no means have a crystal ball — but our feeling is that the market cap, the price of a bitcoin has to increase dramatically if bitcoin works. If it's going to be a true global payment system then it should look as valuable as Mastercard, Visa, Amex, Discover, Western Union, all in one.

What about some of the negative headlines or sexier bitcoin stories like Mt. Gox, how do you separate from that?

Tyler: There's a difference between trusting the math and trusting the media. The headlines are headlines… The narrative of bitcoin has been hijacked a long time, I think in really misleading ways. It's been called a Ponzi scheme for a while and then people got over that, when it kept living and chugging along, that lost credibility, that sensationalism. Then it was lampooned as this place only for illicit activity, criminals and drug dealers. When Silk Road was busted and the price actually went up shortly thereafter, that argument lost a lot of weight too. I would never encourage someone to just read headlines in order to be informed. That's probably the surest way to be uninformed.

What do you see happening with bitcoin in 2015, or even beyond?

Tyler: So my prediction is that this is the year of infrastructure for bitcoin, I think 2015 is the year where we're going to see real, US-regulated exchanges. We're going to see other infrastructure type financial products that really lay down the foundation for all these great innovation and possibilities. Our two efforts on that path are of course Gemini and COIN. I think you're going to see more merchants adopting bitcoin. I think there's a really good chance that someone like Amazon builds their own infrastructure to accept bitcoin and cryptocurrencies.

In the future you'll get an Uber that's a self-driving car and you'll pay with bitcoin.

In the future you'll get an Uber that's a self-driving car and you'll pay with bitcoin. You will hire drones with bitcoin to bring you any sort of product that it brought from potentially a vending machine… There's the idea with bitcoin, that to shut it down, you'd have to shut down the internet. There is no company headquarters to raid, there is not one person responsible for it. I think the whole concept of bitcoin where you take the bank and all of a sudden it's distributed, you're going to see the internet become more distributed.

You can create all these triggers into you know a bitcoin address, so you could theoretically raise money borderless. So I could start a Kickstarter based on bitcoin and receive money from any part of the world, for any type of good or public service. I think it's really powerful for just obviously a utilitarian [perspective], making a better world or making a better world around you. But the social movements, certain political movements if we've seen the Arab Spring or situations in Ukraine, you could really support a movement or a revolution or people by literally sending bitcoin. If there was a certain group in Ukraine that I wanted to support, I wouldn't know how to wire them dollars or if I could do that. I'm sure I'd have a lot better chance of paying someone in Ukraine in bitcoin than dollars. It's pretty wild what the possibilities are.