Winkdex: the name sounds like an X-rated cleaning product. But that doesn’t mean the latest brainchild from the Winklevoss twins is a bad idea.
As the New York Times reported, the Winkdex (ugh!) launched on Wednesday, and offers Bitcoin watchers a new way to track the value of the currency, by blending the value of three top currency exchanges. It looks like this:
The website has the potential to be an important new pricing metric since the cost of a bitcoin has historically varied significantly between one exchange and the next. And while other sites, like Coinbase and Bitstamp, offer price trackers too, their charts are less detailed and transparent. The Winkdex price is based on a formula based on the highest exchanges by volume (Mt. Gox, recently the biggest exchange in the world, is excluded due to its recent troubles.)
The Winkdex, then, could help the virtual currency become more mainstream by adding more price certainty, and in turn removing some of the volatility associated with bitcoin-related trades and transactions.
The Winklevoss twins, meanwhile, have a direct interest in all of this too — as the owners of a stash of bitcoin worth tens of millions, they are doing all they can to promote the mainstream adoption of the currency such as describing it as “Gold 2.0.” And, as the Times describes, they are working with regulators to launch an exchange-traded fund, which likewise promises to bring new stability to bitcoin.
The likes of the Winklevoss may be anathema to the outlaw image of Bitcoin’s early days but, as I’ve argued before, this is not a bad thing. The self-appointed leaders who speak on behalf of the currency (those who aren’t in jail) have done a poor job of developing governance mechanisms for the currency. So, in this context, transparency tools like the Winkdex are welcome.