Put In a Dollar, Get $100 Back: A True Bitcoin Story

2022 is bad enough with Omicron, a polar vortex, and fires, indoor and out. Now my Twitter feed is bloated with people bragging about their scores in a stupid word game.

The Plain View

During the holiday break, I was clearing out some detritus that had gathered over the years. Nestled in a stack of documents I had put aside for shredding was an envelope of receipts from a 2014 reporting trip. Before submitting it to the grinding blades, I peeked inside—and found a printout from a strange ATM I had used in August of that year. I knew instantly what it was because every so often I had done a cursory search for that printout. I had ultimately concluded that it was lost and I was out the $20 I had put into the machine—and the considerably larger sum the receipt was worth now. Finally, I would learn exactly how much.

But first let’s go back to August 19, 2014. It was the semi-annual Y Combinator Demo Day, held at the Computer History Museum, and 80 startups were presenting. (That batch has a mixed record, though one went public last year at a $15 billion valuation.) To avoid reporting conflicts, I don’t invest in tech. But on that day, a startup called Bitaccess made me pull out my wallet. That was the company that set up an ATM in the museum lobby and invited visitors to buy bitcoins on the spot.

Bitaccess was cofounded by a Canadian named Mo Adham and three partners. In early 2014, after quitting a boring job, he pursued an obsession with cryptocurrency. Working in his parents’ basement one night, he took a borrowed kiosk and reprogrammed it to sell bitcoins. It wasn’t the first time this trick had been done: In October 2013, a firm called Robocoin had installed a Bitcoin ATM in a Vancouver coffee shop. The first customer, Jason Lamarche, bought $20 worth of currency and immediately squandered part of it on a steamed milk with vanilla, served by the Bitcoin-friendly establishment. (Reached last week, Larmache declined to comment.) Though the idea has been slow to take off, the recent boom has made cryptocurrency a more common investment, and there are now an estimated 30,000 ATMs selling bitcoins in the US.

But in 2014, it was very much a novelty. Adham, who still runs the company (his cofounders are gone) tells me that during Demo Day that year, Bitaccess sold $930 worth of bitcoins to 65 people. The currency itself came from the personal stash of the company founders, who, by today’s valuation, splurged more than $90,000 for their stunt. To date, fewer than half the purchases from that day have been moved from the easy-to-lose printouts to digital wallets, indicating a lot of lost receipts. The biggest purchase—$200—was moved to a wallet in 2016, but the next two biggest buys of $100 each have been dormant.

One of those $100 buyers was Austin Neudecker, who attended Demo Day as a YC alumnus. “I came home with this receipt and didn't treat it very well,” he says. “I think it degraded over time, and I don't know if a cleaner at some point slipped it into the trash or something. But it basically disappeared.” Along with what would be $10,000 worth of bitcoins today. Another customer was Doktor Gurson, whose company also presented that day. He stuffed the printout for his $20 investment into his jacket pocket and never saw it again. At one point he asked his wife, who had videoed his own demo, to screen the recording to see what jacket he wore that day. But the pockets were empty.

Courtesy of Bitaccess

And me? I just wanted to see how Bitcoin worked. I put a $20 bill in the machine and got two pieces of paper, one of them a transaction receipt and the other a printout with two QR codes. Those codes represent public and private keys with the blockchain information that verified my claim to just over 4 percent of a bitcoin. I didn’t remember sticking those papers into the envelope; instead I vaguely recalled stashing them in a closet. Every so often I’d dig around, but to no avail. Eventually, I abandoned hope. Whatever happened, it wouldn’t be as costly as the time WIRED intentionally wiped its private key to 13 bitcoins it had mined in 2013, which now would have been worth about $567,000.

But now I’d found my receipt, and I wondered if it would still work. I got in touch with Adham, and he walked me through the process of moving my investment to a wallet. That $20 was now worth almost $2,000.

I was among the lucky few. Almost none of the investors who packed the auditorium of the Computer History Museum that day bothered to test out a machine that in seven years would pay out a hundred dollars for every dollar you fed it. “It’s kind of funny to think that had they actually just taken the money they had invested in us and put it in the machine, they likely would have done way better,” says Adham.

On the one hand, this story seems a great endorsement of the wisdom of Bitcoin investing. But in another sense, it indicates a failure. What does it say about a currency when its entire history argues against spending it? When the valuation of something is separated from its utility and its worth is entirely dependent on a fragile collective agreement that something totally ephemeral has actual value. While vast fortunes have been made with bitcoin and other currencies, the foundation itself remains shaky.

Indeed, in the first 24 hours of owning bitcoin in an actual digital wallet connected to the blockchain, the value of my holdings dropped around $100. As I write this newsletter, I’m down to $1790—and I think I was happier when I thought I’d lost the receipt in the closet. Nonetheless, I’m not ready to cash in my holdings and splurge on hot beverages. For better or worse, I’m a crypto guy now.

Time Travel

Cryptocurrency isn’t new to me, as evidenced by this 1995 article in Newsweek on “The End of Money.” Here’s an interesting trivia tidbit: My opening scenario in this story was used as “prior art” to successfully challenge multiple claims of Amazon’s patent on one-click purchases. Jeff, I thought of it first!

You're cruising the Net, hopping from link to link with your favorite browser. In a small window in the corner of your screen sits a ledger. "$100.00," it reads. As you land on a favorite website, something strikes your fancy—an annotated bibliography of every article ever written about Sandra Bullock! Only five bucks. You click on a button, and the file is downloaded to your computer. That tiny ledger on your screen now reads "$95.00."

It feels like a computer game. Until now, it has been a game—the currency, electronically minted by a company called DigiCash, was imaginary, and the "cyberbucks" were traded as freely as Monopoly money. But starting this week, it gets real. The Mark Twain Bank of St. Louis, Missouri, is using the DigiCash technology to allow holders of a special account to download assets directly into its computer. That running on-screen total will now refer to cold, hard cash, sitting inside your trusty Windows box as a string of digits. (If your hard disc crashes, those hard-earned simoleons will vaporize with the rest of your data—yet another argument for making frequent backups.) And with a click of the mouse, you've not only spent a fin, but bought into the exciting—and unnerving—future of money.

Ask Me One Thing

Chris asks, ”Do you think that the Corbevax vaccine will get approval by the US government and provide a less expensive alternative to the Pfizer and Moderna vaccines?”

Thanks for the question, Chris, though of course I’m not a doctor or a research scientist. But I can look things up! For those not inoculated with this information, let me recap: C orbevax is the invention of two Texas scientists who laid the groundwork a couple of decades ago for a vaccine that would prevent coronaviruses. It used the tried-and-true method of deploying a denatured version of the virus to stimulate an immune response. The work was shelved when the SARS outbreak died down, but the scientists went back to work last year to fight Covid. The US government wasn’t interested, but with foundation money, the team developed a vaccine that was not only effective, but also dirt cheap—costing maybe as little as a buck a shot. After viewing test results, Scientific American said it’s “perhaps one of the safest Covid-19 vaccines in use.”

Corbevax has emergency approval—in India. The government there has bought 300 million doses already. But it is not yet in the United States. Maybe our establishment isn’t ready for a vaccine whose owners are not claiming intellectual property rights and want it to cost less than a cup of coffee. That’s un-American! Our system will defend to the death (literally) the right of pharma companies to keep their patents and overcharge for medicine. Seriously, the promise of Corbevax is its potential to be a low-cost, easily transportable vaccine for billions who don’t live in wealthy countries—and maybe stop a future variant that makes Delta and Omicron look like the sniffles. But it’s incumbent upon the richer countries to spend billions on distribution.

You can submit questions to mail@wired.com. Write ASK LEVY in the subject line.

End Times Chronicle

Welcome to Cryptoland, an island paradise where your personal Lambo scoots you to parties with fellow Bitcoin bros. Satire? Too good to check!

Last but Not Least

Maybe printouts are the safest way to keep your bitcoins after all. Last year, Korean hackers raided crypto exchanges to the tune of $400 million.

In other crypto news, the once-thriving currency mining operations in Kazakhstan are now in jeopardy. Hope they held on to the receipts!

Inside the quest to save the climate by trapping that nasty carbon in stone.

After conquering chess and Go, AI is learning how to understand people’s feelings. Here’s my feeling on this—stop!