Gate.io Observation: The top six cryptocurrency magnates and their ways to get rich!

Editor: Gate.io Researcher Hannah.H

Since the birth of Bitcoin in 2009, cryptocurrency has created a considerable number of billionaires. Although the ranking of the richest in the crypto field has changed hands many times over the years, they seem to have some key characteristics in common. Who are currently the richest people in cryptocurrency? How did they grow successfully? What enlightenment does it give us? Let us drive right in!

Selection Rules:

1. Excluding anonymous giants in the cryptocurrency field. For example, the mysterious Dogecoin giant who are currently holding DOGE worth nearly 12 billion U.S. dollars and the mysterious person or organization Satoshi Nakamoto who created Bitcoin.

2. Excluding the bigwigs whose wealth is held in non-crypto assets, for example, Coinbase CEO Brian Armstrong is technically one of the richest people in the crypto field, with a net worth of 8.5 billion US dollars. However, most of Brian's net worth comes from his 19% stake in Coinbase, which has a market value of $48 billion, rather than the cryptocurrency he holds.

3. This statistic is mainly from a foreign perspective, and does not count the top richest crypto holders in China.

Sixth and Seventh (Tie)

Tim has a bachelor's and master's degree from two Ivy League schools and has always been a visionary investor.

In 2001, he acquired 28% of Baidu (largest search engine in China)’s shares for 9 million U.S. dollars and became one of the first American venture capitalists to invest in Chinese companies. Baidu is now worth more than 67 billion U.S. dollars.

In 2006, Tim's venture capital firm participated in a round of Tesla's financing and possibly owns billions of dollars worth of Tesla shares.

In 2014, Tim started holding bitcoins, which came from a famous auction. Part of the BTC was confiscated by the US authorities as part of the crackdown on the Silk Road dark web market. The U.S. Marshals Department auctioned 30,000 BTC, which fell into Tim's wallet for $19 million. Tim continues to hold these BTCs and has since purchased an unknown number of altcoins, including Bitcoin Cash (BCH), XRP, Algorand (ALGO) and Tezos (XTZ).

Max's investment career began in the 1980s when he worked as a stockbroker at an investment bank in New York City. In 2011, he heard about Bitcoin and realized that it will be worth no less than digital gold. Max's exact Bitcoin holdings are unknown. He started buying when BTC was only $1 and gave thousands of BTCs to friends, most notably 10,000 BTCs to Alex Jones. In the 2013 Keiser Report show, Max announced that he has become a Bitcoin millionaire. Now, considering the BTC price at the time, this is equivalent to about 25,000 BTC. Since Max has continued to buy Bitcoin since then, this will put his crypto coin holdings on a par with Tim Draper, whose cryptocurrency’s net worth has just a little over than $1 billion.

Fifth: Vitalik Buterin, the Founder of Ethereum

The fifth largest cryptocurrency billionaire is Ethereum founder Vitalik Buterin, who currently holds more than 334,000 ETH. Vitalik also holds hundreds of millions of dollars in Bitcoin and other altcoins, which makes his net worth of crypto assets approximately $1.5 billion.

In 2012, Vitalik applied for an internship at Ripple (XRP) , but was unable to work due to VISA issues. While studying at the University of Waterloo, Vitalik had failed to create smart contracts on the Bitcoin blockchain. This failure has prompted him to create a new cryptocurrency-Ethereum. Vitalik wrote the Ethereum white paper in 2013 and dropped out of university to work on his new project full-time. Ethereum went live in 2015, and Vitalik and seven others are believed to be its founders. The other co-founders of Ethereum are also some of the richest people in the crypto space, especially Joseph Lubin, who is also the founder of Consensys.

In 2018, Vitalik's Ethereum wallet address was widely known and responded to criticisms of its early Ethereum mining on Twitter. Vitalik pointed out that he has never held more than 1% of all circulating ETH. Given that Ethereum has pre-mined approximately 73 million coins, this means that Vitalik may never hold more than 730,000 ETH. Most of Vitalik's initial ETH was sold between 2015 and 2018 for a total price of approximately US$50 million.

Fourth: Winklevoss Twins (Tyler Howard Winklevoss and Cameron Winklevoss)

Tyler and Cameron are smart people in every sense.

They taught themselves coding when they were children and founded a web development company. When they were adolescents, they learned Latin and Greek and were able to play a variety of musical instruments proficiently. Later, Tyler and Cameron both studied at Harvard and Oxford, and even participated in the 2008 Olympic Games, finishing sixth in the rudderless rowing competition. Tyler and Cameron are most famous for suing Facebook in 2004 on the grounds that Mark Zuckerberg stole their ideas. In the end, Tyler and Cameron won the lawsuit in 2008, receiving $20 million in cash and $45 million in Facebook stock.

In 2013, when Tyler and Cameron were on vacation in Ibiza, they started contacting BTC and then decided to buy 1% of all bitcoins in circulation. They believe and continue to believe that the market value of Bitcoin will grow to be equivalent to gold.

In 2014, the two founded the now-famous Gemini cryptocurrency exchange. At a Bitcoin conference in Miami, the twins pointed out that they would not even consider selling BTC until the price of Bitcoin reached $500,000. Even if it becomes so expensive, they said they are likely to use it as collateral to provide a loan for any funds they need.

Third: Chris Larsen, the Co-Founder of Ripple

The third largest cryptocurrency billionaire is Ripple co-founder Chris Larsen, who holds between 5.2 billion and 7.8 billion XRP. Now, based on XRP's price of about US$1, it is equivalent to US$5.2 to US$7.8 billion. The reason for this huge range of differences is related to conflicting information about XRP held by Chris provided by celebrities. The first is Forbes, which states that Chris had approximately 5.2 billion XRP in 2018. The second comes from the US Securities and Exchange Commission's lawsuit against Ripple and its executives in December last year, which stated that Chris has sold 1.7 billion XRP to date. The 7.8 billion figure comes from Chris's original 9.5 billion XRP distribution minus the 1.7 billion XRP in the SEC lawsuit.

Chris holds a Bachelor of Science and Master of Science degree from Stanford University School of Business. Chris has founded and sold many startup companies during his 30-year technical career and has been paying close attention to digital currencies. He co-founded Ripple Labs in 2012 with Jed McCaleb, who was also the co-founder of Stellar (XLM) and the now-defunct Mt.Gox cryptocurrency exchange. Jed McCaleb was allocated 9.5 billion XRP, but he has sold most of it, and there are 30 to 600 million XRP left for sale. All XRP allocated to the founders of Ripple are subject to a vesting schedule that will last until 2026, provided that the SEC's case against Ripple is unsuccessful. In this case, Chris' XRP will not be sold in accordance with the law. Fortunately, for Ripple, the future seems to be in its favor.

Second: Sam Bankman-Fried, the Founder of FTX

Samde's specific cryptocurrency holdings are unclear, mainly because the team distribution of FTT tokens and SRM tokens. The FTX team has also received a considerable share of the various tokens launched on its platform. Like Chris Larsen’s XRP, all these tokens allocated to FTX team members need to go through a long vesting schedule, which means Sam himself probably can fully realize all of his cryptocurrencies.

What made Sam famous was his arbitrage trading with Alameda Research in the cryptocurrency markets of the United States and Japan during the last bull market. Due to some overseas transfer regulations, the price of cryptocurrency in some Asian countries could be much higher. The most famous example is the premium for kimchi, which was trading at 30% of Bitcoin in South Korea at the beginning of 2018. Sam noticed that there had been a similar price premium of approximately 10% in Japan at the time. He decided to buy a lot of bitcoins in the United States and sell them at a 10% profit on the Japanese crypto market.

FTX Derivatives Exchange is Sam's second attempt, and since its establishment in 2019, it has become one of the most popular cryptocurrency exchanges. Alameda and FTX have been investing hundreds of millions of dollars in various cryptocurrency projects, sponsorships and advertising campaigns. The rebates for these initiatives continue to increase Sam's well-deserved wealth, and he often donates part of it to various causes.

First: Changpeng Zhao, founder of Binance

The richest crypto giant is Changpeng Zhao, the founder of Binance. Changpeng Zhao's official net worth is about US$2 billion. However, the history of CZ and the initial distribution of BNB indicate that his net worth is much higher, possibly as high as US$15 billion.

CZ was born in China and later moved to Canada to live with his father. He started to learn programming as a teenager and obtained a degree in computer science from a prestigious Canadian university. After graduation, he moved to Japan and worked as an intern in the construction and maintenance of trading software at the Tokyo Stock Exchange. A few years later, he moved back to China to continue working on advanced trading software.

In 2013, a friend told him that 10% of his net assets should be converted into Bitcoin. CZ then decided to sell his apartment in Shanghai and bet on Bitcoin. If the calculation is correct, this makes his deposit amount between 50,000 and 100,000 BTC. Later, CZ served as the Chief Technology Officer of OKCoin Exchange.

He founded Binance in 2017. In just seven months, Binance became the world's largest cryptocurrency exchange. According to CZ, Binance's success was attributed to the fact that all other cryptocurrency exchanges at the time were basically terrible, and his extensive experience in building trading systems allowed him to create a better trading exchange for crypto. Binance conducted an ICO for its BNB token shortly after its launch, and 40% of BNB's initial supply of 200 million was allocated to the founding team.

At today's price, the BNB held by CZ alone can easily exceed $10 billion, and he has also bought more Bitcoins over the years.

In conclusion

All the richest crypto giant have three things in common:

First of all, in addition to being educated to a prestigious school, almost every cryptocurrency giant will force himself to learn as much as possible on what they are passionate about.

Second, they are all willing to take risks. There were no guarantees for cryptocurrencies at the time. All of them are afraid that Bitcoin will be banned before it gets bigger, and they wonder every day whether their coins will be worthless tomorrow.

The third and most important characteristic is that all the wealthiest people in the cryptocurrency field not only invest, they also create something valuable.

If you really want to achieve financial freedom, the fastest way to achieve this goal is to build something that is good for cryptocurrency. There is no shortage of opportunities in this industry. If you look for it, you will find it, and it will change your life in the same way.

The content comes from: CryptoFlow "How do the top richest giants in cryptocurrencies make their fortunes? ", there are deletions and editing.