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Comment by arpit | Hacker News Reader

From Tyler Winklevoss's answer on the Product Hunt page for Gemini: "Gemini is a New York state limited liability trust company, we did not apply for or have a BitLicense which is a much lower standard. As a limited liability trust company we are a fiduciary, which allows us to accept both individual and institutional customers under New York Banking Law (unlike the BitLicense, which does not convey such fiduciary powers). In short, we can work with both Main Street and Wall Street."

Source: https://www.producthunt.com/tech/gemini-2

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So the difference is that they're trying to play nice with regulators from day 1, rather than breaking the rules and rolling with the legal punches in order to serve early adopters?

Yeah, another to way to put it is they aim for legitimacy so they can be the bitcoin counterparty of choice for Fortune 500s and wall street. And generally run things like any sane financial institution dealing with volatile securities.

Not running a bitcoin cafe out of customer funds...

> Yeah, another to way to put it is they aim for legitimacy so they can be the bitcoin counterparty of choice for Fortune 500s and wall street.

According to Coinbase, the total value of all Bitcoin is currently about $3.5 billion. This is a tiny, tiny market for "Fortune 500s and Wall Street" and is equivalent to the value of a single (smaller) mid-cap company. Even at its peak, the total value of all Bitcoin was only around $14 billion.

Daily Bitcoin transaction volume hasn't exceeded $100 million since July and has been as low as $33 million recently[1]. For comparison, daily volume in the FX markets exceeds $5 trillion.

Blockchain technology might be important but Bitcoin itself is about as interesting as the Burmese kyat or Gambian dalasi.

[1] https://blockchain.info/charts/estimated-transaction-volume-...

I'm not a real trader... but i can see the value in trading something that goes up and down 30% in a quarter..

EDIT: those currencies you mention are under prolonged inflation and are tied to the economic output of some small countries... bitcoin isn't either of those

You can trade equity options and gain or lose far more than 30% in well under 90 days.

The problem with Bitcoin is liquidity and market depth. Even if you're a small-time trader, there are better trading markets to focus your time and energy on.

Regarding the random currencies I mentioned in jest: I was making the point that any obscure currency or security is just about as interesting as Bitcoin.

If you take the view that Bitcoin is just the start and the popularity of the blockchain to secure financial transactions will grow and become mainstream over time then this has first mover advantage written all over it.

> ...this has first mover advantage written all over it.

No, it doesn't. Major financial institutions invest significantly in technology and many are already actively exploring the blockchain[1].

I wouldn't go so far as to say that the Winklevii can't stake out a position in the broader blockchain market, but a Bitcoin exchange isn't likely to help them establish a meaningful position.

[1] http://www.bloomberg.com/news/features/2015-09-01/blythe-mas...

Perhaps 'early' mover advantage might be a better choice of words.

> Major financial institutions invest significantly in technology...

That they may be, but that's no guarantee of success or domination. That's the whole point of the risk of startup. Also the reason for the explosion of interest. I'm not suggesting that Gemini will win, but they are in the space, at the beginning, unencumbered by old tech (as the larger institutions are) and are making overtures to the established order. We don't know where that will lead.

The most viable opportunity relates to the application of blockchain technology to existing markets that are already dominated by major financial institutions. There is no doubt room for new companies to become blockchain technology providers to these financial institutions, but if you look at the Winklevii's investments and ventures, they are predominantly "Bitcoin as a big asset class" as opposed to "pure blockchain technology."

That's not to say that some of the technology they develop can't be repurposed for resale to other institutions, but a lot of others are already playing in the blockchain technology space and they don't have the burdens of trying to create and manage exchanges, ETFs, etc. for an "asset class" that is miniscule and heading in the wrong direction.

There is such a thing as trading on volatility but like the other person said, the volume is so low that it's not significant.

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