I bought a Bitcoin. How could I not? I'd been hearing about it for years, which isn't to say I remotely understood what it was. What I did know was more than enough to lure me in: that it was being hailed as the Way of the Future by some of the young lions of the investment world, who saw it as a natural next step in the evolution of money. I'd seen the story about the Norwegian man who bought $27 worth of bitcoin, and then found out, years later, that it was worth $886,000 and change. And the one about the Welsh IT worker who threw out a hard drive, forgetting that it contained the equivalent of $7.5 million. Today it resides somewhere in the Newport landfill site.
Make-believe amounts of money, sky's the limit, no labor? This was precisely the sort of commonsense investment I'd been looking for. I'd watched the new crypto-currency as it charted from a ha'penny to a fortune. Bitcoin was real. But what would this strange, shimmering future look like? How would it feel to spend a bitcoin?
I logged on to Coinbase.com and entered my account information. Then I waited. For a week. During the time it took for my money to crawl through the financial system, Shawshank-style, and come out clean on the other side, the value of Bitcoin had begun a steady decline from its four-figure peak and settled, for a while, in the mid-$800s. Though I'd first tried to buy bitcoin while it was selling for $1,042, I wasn't actually able to complete the purchase until it had dropped to $834. It all felt aptly symbolic: My New World money needed to rise out of the Old one's poky, cobwebbed structures.
I wanted to spend my bitcoin immediately, that very night, but I was at a loss. What did people actually do with bitcoin? Clearly I needed a spirit guide, someone who would impart wisdom but who would also provide some idiot-level tech support. In my estimation, that would have to be Charlie Shrem, the 24-year-old Bitcoin millionaire who prided himself on being an "evangelist" for the new virtual money.
Two years earlier, Charlie had started a company, BitInstant, one of the first and most visible at handling bitcoin transactions. I first met him at EVR, the bar he invested in on West 39th Street in Manhattan. It was one of the few in town that accepted bitcoin.
I liked Charlie Shrem from the moment we met, with his winning smile and the improbable five-o'clock-next-Tuesday shadow on his chin. There was a nervous, distracted charisma about him. He rarely laughed, but just beneath that serious veneer, he was affable and smart. And distinct from the thousands of words I'd read and heard about Bitcoin, Charlie didn't drag me through computer code or diagram the cryptographic innovations of the new currency. He didn't go all A Beautiful Mind on me, because I assured him that I was never gonna comprehend the technical depths of Bitcoin. So, for my benefit, he used big, primary-color analogies, and for the first time, I understood the larger role this new money could have, the niche in the financial market that it had been created to fill.
"Bitcoin is two things!" Charlie explained, abruptly raising his voice. "There's lowercase bitcoin and uppercase Bitcoin. It's both the currency you send and the means by which you send it. While banks, PayPal, and Western Union are all the things that help move money around the worldâ€"the finance systemâ€"Bitcoin is both blood and vein. It's not only the payment system of transfer: It's also the unit of value being transferred across the system."
He emitted information just like that: in sudden, discrete transmissions, as if signaling from a ship at sea. The entire concept of Bitcoinâ€"the platform upon which Charlie made his millionsâ€"had been the brainchild of a programmer (or for all we know, a small group of programmers) using the name Satoshi Nakamoto, who first described the Bitcoin concept on a cryptography mailing list in 2008. It wasn't fleshed out, but the basics had shimmer. Bitcoin would be a peer-to-peer network, Satoshi wrote, in which payments didn't have to flow through third-party financial institutions. It was based not on trust but on data, such as time stamps, the kind of hard numbers that even the most anarchic libertarian could bank on.
And Bitcoin is inescapably a small-l libertarian force of nature. In a fiscal sense, it's the libertarian spirit made flesh. To earn and spend directly, no longer under the boot of middlemen or banks or the Federal Reserve, would return some power to the individual, and for every Bitcoinian I've met, that lies close to the heart of things.
The whole time Charlie was explaining this, his girlfriend, Courtney, was buzzing around, attending to all the details of the couple's upcoming trip to Argentina. By which I mean they were leaving in a few hours. Courtney Warner, at 33, was a former dancer who had "acted in a feature film in Denmark." Tonight, she was doting. The two couldn't even list all the countries they'd been invited to recentlyâ€"Austria, Morocco, the UK. A coming Amsterdam gig, Charlie said, was going to net him $20,000 in speaking fees. The couple seemed to have friends wherever they went, and they liked to rent mansions.
Before the night flight to Argentina, there were errands to run. We all rode around in a black SUV and, speaking in Charlie's natural rhythms, had staccato fragments of conversations about Bitcoin. "We've been around a long time," Charlie said proudly. "Well. Since 2011. Which is a long time in the Bitcoin space.
"And we have good KYCâ€"'Know Your Customer,' " he added. "As long as you KYC, you're not gonna go to jail." Which was nice to hear, because there was a lot of that going around lately. In the wake of the notorious Silk Road bust of October 2013, everyone was on edge.
Argentina was meant to be an important trip for Charlie and the Bitcoin movement. He'd hoped to make that country's Bitcoin foundation a charter of the Bitcoin Foundation, which would allow the two to multiply their outreach. But the Canadian Bitcoiners, he said, were trying the same gambitâ€"so his job was "to woo the Argentineans, to charm them," and that was very much Charlie's line of expertise.
"He's gonna eat them for breakfast!" Courtney said, clearly having heard him say this before.
"Eat them for breakfast," Charlie said along with her, for punch.
As we rode a surprisingly long way to a dry cleaner, the National Security Agency came up in conversation. "They're following us," Charlie said, sounding more irritated than paranoid. "Right now. I've seen black cars. Near my parents' house in Brooklyn, too. Following my movementsâ€"seeing if I'm involved in drug stuff." He was wrong, of course. It wasn't the NSA that was following him; it was the IRS and the DEA. And they were looking into drug stuff. But I didn't know that at the time, which explains the extraordinarily poor taste of my response: "So, in the Bitcoin Foundation," I joked, "you put the 'vice' in vice chair."
"That's great," he replied tonelessly. "That's great."
It wasn't. Within two months, I'd be visiting Charlie Shrem at his parents' place, where he was wearing an ankle monitor and living under house arrest.
I'd been sitting on my single bitcoin for weeks, and frankly, it was getting a bit embarrassing. It just wasn't immediately clear how I could spend the stuff, or on what. Through the late winter and early spring, new markets were being announced almost every day, like railroad stops: Now Reddit accepts it...now you can buy pizza, lasers, baklava...now you can use it to fly Virgin Galactic into space.... But none of them seemed quite in sync with my life. And then, a gift from the heavens: Overstock.com announced that it was now accepting bitcoin. I grabbed the opportunity with both hands.
For a Bitcoinian of my caliber, Overstock seemed like the ideal marketplace. It was as basic and old-timey as a website can get, the CompuServe of e-commerce. Sadly, there was nothing on its pages that I desperately needed, soâ€"in the grand tradition of online shoppingâ€"I browsed for things I just sorta wanted.
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