Digital Gold (34 page)

70
   
Initially, he called the project Underground Brokers: RUTE GX 240A.

71
   
he soon had big black trash bags full of them: Richard Bates, RUTT, January 22, 2015.

72
   
“either don't want the spouse to see it on the bill”: Satoshi Nakamoto to BTCF, September 23, 2010.

73
   
“I felt ashamed of where my life was”: RUTE GX 240A.

73
   
he had, by his own accounting, gone through $20,000: RUTE GX 250.

73
   
By the end of February, twenty-eight transactions: silkroad to BTCF, March 1, 2011.

75
   
“i'm so stressed! i gotta”: Richard Bates, RUTT, January 22, 2015.

75
   
“
Free Talk Live
, who was broadcasting live at the time”: FreeTalk Live, March 16, 2011, https://www.freetalklive.com/content/podcast_ 2011_03_16.

76
   
“my site had a 40 minute spot on a national”: RUTE GX 1002.

77
   
he was sentenced to ten months in prison: Information on the case is available at http://www.justice.gov/criminal/cybercrime/press-releases/2002/verPlea.htm.

80
   
“Law-abiding citizens can carry on their affairs”: Jerry Brito, “Online Cash Bitcoin Could Challenge Governments, Banks,” Techland blog,
Time
, April 16, 2011.

80
   
“cuts across international boundaries, can be stored”: Andy Greenberg, “Crypto Currency,”
Forbes
, April 20, 2011, http://www.forbes .com/forbes/2011/0509/technology-psilocybin-bitcoins-gavin-andresen-crypto-currency.html.

82
   
“This was—of course—denied”: Mark Karpeles to BTCF, May 1, 2011.

83
   
Silk Road now had over a thousand people registered: Eileen Ormsby,
Silk Road
(Sydney: Pan Macmillan Australia, 2014).

83
   
“Updating a live site to a whole new version is no easy task”: RUTE GX 240B.

83
   
Gawker published an in-depth story about Silk Road: Adrian Chen, “The Underground Website Where You Can Buy Any Drug Imaginable,” Gawker, June 1, 2011, http://gawker.com/the-underground-website-where-you-can-buy-any-drug-imag-30818160.

83
   
over a thousand new people were registering for Silk Road: Ormsby.

84
   
“online form of money laundering used to disguise”: “Schumer Pushes to Shut Down Online Drug Marketplace,” June 5, 2011, http://www .nbcnewyork.com/news/local/Schumer-Calls-on-Feds-to-Shut-Down-Online-Drug-Marketplace-123187958.html.

85
   
earning $17,000 from the sale of his mushrooms, and $14,000 from commissions: RUTE GX 250.

85
   
“I was mentally taxed, and now I felt extremely vulnerable”: RUTE GX 240B.

86
   
15,000 new people joined the forums: Data on forum usage available at https://bitcointalk.org/index.php?action=stats.

86
   
He said he had long avoided determining: Martti Malmi to BTCF, June 11, 2011.

90
   
The selling continued until 260,000 Bitcoins were purchased: IRC, June 19, 2011.

95
   
appeared briefly, via Skype, on
The Bitcoin Show
: Episode 25, June 19, 2011, https://www.youtube.com/watch?v=Ye_81RH6wiI.

95
   
“Ready guys?”: An archived version of this chat is available at http://pastebin.com/d7vp06hL.

96
   
“it's likely to go the way of other”: Peter Cohan, “Can Bitcoin Survive, Is It Legal?”
Forbes
, June 28, 2011, http://www.forbes.com/sites/petercohan/2011/06/28/can-bitcoin-survive-is-it-legal/.

97
   
the founder of a small Polish Bitcoin exchange, Bitomat, announced: Kyt Dotson, “Third Largest Bitcoin Exchange Bitomat Lost Their Wallet, Over 17,000 Bitcoins Missing,”
Silicon Angle
, August 1, 2011, http://siliconangle.com/blog/2011/08/01/third-largest-bitcoin-exchange-bitomat-lost-their-wallet-over-17000-bitcoins-missing/.

98
   
The founder of the site, a man who called himself Tom Williams, was unresponsive: Adrianne Jeffries, “Search for Owners of MyBitcoin Loses Steam,” BetaBeat,
New York Observer
, August 19, 2011, http://observer.com/2011/08/search-for-owners-of-mybitcoin-loses-steam/.

102
 
“I know for sure attendees are flying in”: Bruce Wagner to BTCF, July 27, 2011.

104
 
“You can call me an idiot and yeah”: Gavin's presentation is viewable at https://www.youtube.com/watch?v=0ljx4bbJrYE.

104
 
“be making a HUGE HUGE HUGE announcement at the Conference”: Bruce Wagner to BTCF, August 14, 2011.

104
 
“If that's not enough”: Wagner's presentation is viewable at https://www.youtube.com/watch?v=pv0SdUNcBKc.

110
 
The announcement from the Free State Project: Erik Voorhees to BTCF, October 8, 2011.

111
 
The people who had been attending the New York Bitcoin Meetup: Disposition to BTCF, October 4, 2011.

112
 
“the sanctity of the individual, the priority”: Mark Lilla, “The Truth About Our Libertarian Age: Why the Dogma of Democracy Doesn't Always Make the World Better,”
New Republic
, June 17, 2014, http://www.newrepublic .com/article/118043/our-libertarian-age-dogma-democracy-dogma-decline.

112
 
“libertarian, going to replace all other currencies”: Jed McCaleb to BTCF, May 16, 2011.

114
 
MyBitcoin users went to the FBI's cybercrime unit: Adrianne Jeffries, “MyBitcoin.com Is Back: A Week After Vanishing with at Least $250 K. Worth of BTC, Site Claims It Was Hacked,” BetaBeat,
New York Observer
, August 5, 2011, http://observer.com/2011/08/mybitcoin-disappeared-with-bitcoins/.

115
 
“Have you ever thought about doing”: Richard Bates, RUTT, January 22, 2015.

115
 
“I'm sure the authorities would be very interested”: Richard Bates, RUTT, January 22, 2015.

116
 
He lied to Richard as one part of his effort to cover his tracks: RUTE GX 226D.

116
 
the site had generated $30,000 in commissions: RUTE GX 250.

116
 
in September Ross hired his first staff member: RUTE GX 250 and GX 240B.

117
 
he sold his pickup truck and moved to Sydney, Australia: David Kushner, “Dead End on Silk Road: Internet Crime Kingpin Ross Ulbricht's Big Fall,”
Rolling Stone
, February 4, 2014, http://www.rollingstone .com/culture/news/dead-end-on-silk-road-internet-crime-kingpin-ross-ulbrichts-big-fall-20140204.

117
 
He would fit in his work around trips to Bondi beach: RUTE GX 240C.

118
 
“the biggest and strongest willed character I had met”: RUTE GX 240B.

118
 
Variety Jones came up with a clever idea: RUTE GX 226D.

119
 
vendors in at least eleven countries: Nicolas Christin, “Traveling the Silk Road: A Measurement Analysis of a Large Anonymous Online Marketplace,” Working Paper, November 28, 2012.

120
 
An academic study of Silk Road: Ibid.

120
 
In March, that amounted to nearly $90,000: RUTE GX 250.

121
 
In real life, DigitalInk's name was Jacob George: Ian Duncan, “Silk Road Drug Dealer Pleads Guilty,”
Baltimore Sun
, November 5, 2013, http://articles.baltimoresun.com/2013-11-05/news/bs-md-silk-road-plea-20131105_1_drug-dealer-ross-william-ulbricht-jacob-theodore-george-iv.

130
 
“He has not broken any rules and silk road”: Sealed complaint against Charlie Shrem filed by IRS Special Agent Gary Alford, January 24, 2014.

132
 
Federal Reserve had held a daylong conference: Information about the conference is available at http://www.kc.frb.org/publications/research/pscp/pscp-2012.cfm.

133
 
Canadian government announced the launch: Emily Jackson, “Royal Canadian Mint to Create Digital Currency,”
Toronto Star
, April 11, 2012, http://www.thestar.com/business/2012/04/11/royal_canadian_ mint_to_create_digital_currency.html.

137
 
“it funds a decent percentage of the overall”: Sealed complaint against Charlie Shrem filed by IRS Special Agent Gary Alford, January 24, 2014.

141
 
group agreed that the bylaws for the foundation would be posted on GitHub: The bylaws are available at https://github.com/pmlaw/The-Bitcoin-Foundation-Legal-Repo/tree/master/Bylaws.

154
 
the company made $750 million for its investors: Eric Markowitz, “The $750 Million ‘Mistake,'”
Inc.
, December 14, 2011, http://www .inc.com/articles/201112/argentine-entrepreneur-750-million-mistake .html.

158
 
the Argentinian government ordered his company, PayPal: “Paypal Suspends Domestic Transactions in Argentina,” BBC News, September 17, 2012, http://www.bbc.com/news/technology-19605499.

159
 
35 percent lower than the rate available on the street: Historical data on the two different exchange rates available at http://dolarblue.net/historico/.

160
 
the first-ever Bitcoin Meetup in Argentina: Information on the meetups is available at http://www.meetup.com/bitcoin-Argentina/.

167
 
Some $1.2 million worth of Bitcoin: Nicolas Christin, “Traveling the Silk Road: A Measurement Analysis of a Large Anonymous Online Marketplace,” Working Paper, November 28, 2012.

167
 
seventy thousand different topics on Silk Road's forum: Eileen Ormsby,
Silk Road
(Sydney: Pan Macmillan Australia, 2014).

168
 
His work on Silk Road was done at an Internet café around the corner: Sealed complaint against Ross Ulbricht filed by FBI Special Agent Christopher Tarbell, September 27, 2013.

168
 
Over the summer, a Silk Road user had managed to follow a series of transactions: Ormsby.

169
 
paying the attacker $25,000: RUTE GX 250.

169
 
Ross explained that he was changing his writing style: Ormsby.

169
 
In November, Ross flew to Dominica: RUTE GX 291.

169
 
“put yourself in the shoes of a prosecutor”: RUTE GX 225B.

170
 
Ross decided to help nob sell his kilogram: Superseding indictment against Ross Ulbricht filed by the Grand Jury for the District of Maryland, October 1, 2013.

171
 
Ross had always been somewhat skeptical: RUTE GX240B.

171
 
“beat up, then forced to send the Bitcoins he stole back”: Superseding indictment against Ross Ulbricht filed by the Grand Jury for the District of Maryland, October 1, 2013. Ross has not yet been tried on the charges in the Maryland indictment and has not been found guilty on any counts related to murder.

186
 
“PayPal will give citizens worldwide more”: Eric Jackson,
PayPal Wars
(Washington, DC: WND Books, 2004).

187
 
Thiel advocating for floating structures: “Peter Thiel Offers $100,000 in Matching Donations to TSI, Makes Grant of $250,000,” Sea-steading Institute, February 10, 2010, http://www.seasteading. org/2010/02/peter-thiel-offers-100000-matching-donations-tsi-makes-grant-250000/.

187
 
aiming for the colonization of Mars: Adam Mann, “Elon Musk Wants to Build 80,000-Person Mars Colony,”
Wired
, November 26, 2012, http://www.wired.com/2012/11/elon-musk-mars-colony/.

190
 
In June 2012 the founders announced: BFL (Butterfly Labs) to BTCF, June 16, 2012.

190
 
a young Chinese immigrant in New York, Yifu Guo, announced: ngzhang to BTCF, September 17, 2012.

191
 
that power doubled again in just one month after Yifu's machines: Historical data on the hashing power available at https://blockchain.info/charts/hash-rate.

195
 
“This is a dark day for Bitcoin”: “Breaking: The Blockchain Has Forked,”
Bitcoin Trader
, March 11, 2013, http://www.thebitcointrader .com/2013/03/breaking-blockchain-has-forked.html.

196
 
“clarify the applicability of the regulations implementing”: The FinCen guidance is available at http://fincen.gov/statutes_regs/guidance/html/FIN-2013-G001.html.

199
 
Martti Malmi posted an entry on his company's website: Martti Malmi, “SC5'er Intro: The Bitcoin Guy,” SC5 website, February 5, 2013, http://sc5.io/posts/sc5er-intro-the-bitcoin-guy.

205
 
“As a VC, my interest in the
Bitcoin
ecosystem is not ideological”: Jeremy Liew, “Why VCs Love the Bitcoin Market,”
TechCrunch
, April 5, 2013, http://techcrunch.com/2013/04/05/why-do-vcs-care-about-bitcoin/.

206
 
The BitInstant engineers congregated with their laptops: The scene in the office was captured in unreleased footage from Nicholas Mross's documentary
The Rise and Rise of Bitcoin
(2014), shared with the author.

207
 
Mark Karpeles assured his users that the problems were due to the volume of trade: Vitalik Buterin, “The Bitcoin Crash: An Examination,”
Bitcoin Magazine
, April 13, 2013, https://bitcoinmagazine.com/4113/the-bitcoin-crash-an-examination/.