ideas behind a decentralized
currency; they were just
happy to find a way around
the expensive tollbooths that
littered
the
Argentinian
financial system. As an added
bonus, they could end up with
money in Bitcoins rather than
the rapidly depreciating peso.
This was an eminently
practical use of Bitcoin to
deal with the inflationary
mess in Argentina, but it was
so practical that it actually
swung
around
into
the
domain of the ideological
ambitions
that
Satoshi
Nakamoto
and
the
Cypherpunks had imagined.
The Argentinian hoteliers
might
not
have
been
libertarians, but they would
have
easily
understood
Satoshi’s early writing about
Bitcoin, which explained that
“the
root
problem
with
conventional currency is all
the trust that’s required to
make it work. The central
bank must be trusted not to
debase the currency, but the
history of fiat currencies is
full of breaches of that trust.”
Mismanagement
of
currencies was a part of daily
life in Argentina.
The
conference
in
Argentina attracted many of
the
more
ideologically
minded
Bitcoin
followers
from around the world. The
old team from BitInstant
gathered for a reunion of sorts
and the team members were
all given prominent speaking
spots. They lived it up in
Buenos Aires, eating steak,
drinking Argentinian wine,
and
going
to
a
tango
performance with the other
presenters at the conference.
But for them and most of the
foreigners at the conference,
the most memorable thing
about the event was not a part
of the official proceedings.
Everyone coming into the
Hotel
Melia,
where
the
conference was held, passed
two teenagers, a boy and a
girl, whose wispy, almost
ethereal features gave them
away as twins. Both of them
were wearing the same white
T-shirt
with
the
word
Digicoins on the front, and
both asked people entering
the conference, in a gentle
voice, if they wanted to buy
or sell Bitcoins. Those who
took them up on the offer
were guided to a Subway
sandwich shop across the
street. There at a table sat a
man with wavy silver hair,
dark eyes, a computer, a
white
shirt
unbuttoned
enough to reveal his chest
hair, and a backpack full of
cash.
The man, the father of the
twins, had his Bitcoin wallet
up on the laptop and he could
change money in either
direction, in much the same
unofficial way as all the other
black-market money changers
on
Buenos
Aires
street
corners. Dante Castiglione,
the owner of Digicoins, had
not created Digicoins just for
this conference. He had, by
this time, been serving as one
of
Argentina’s
most
successful
virtual-currency
exchangers for a few months.
His twins were his runners,
going out into the city each
day to visit the customers in
need of pesos or virtual
currency. When people asked
about his business, he was
stingy with details and gave a
wry smile, as if to ask, “Why
do you think I’m doing this?”
But he was willing to say that
this was only the latest stop in
an itinerant career built by
finding
opportunities
in
Argentina’s broken financial
system.
“I am a working man,” he
would say when pushed. “We
are trying to give our service.
We are earning our food and
our rent.”
Bitcoin’s evolution in the
United States and China was
showing how the technology
could become dependent on
the official financial system
and government approval.
Argentina, on the other hand,
was showing how it could
develop without any of that.
It certainly moved more
slowly,
but
there
was
something more tangible and
grounded about what was
being created.
THE MAN WHO had gotten this
ball rolling in Argentina,
Wences, couldn’t make it to
the conference in Buenos
Aires. At the time, he was
finalizing the sale of his most
recent startup, Lemon, for
$42.6 million. When he
wasn’t winding down his
work with Lemon, he was
working on the new Bitcoin
company he was creating
with Fede Murrone, his
longtime
collaborator
in
Argentina.
The core of the new
business was the system that
Wences and Fede had begun
developing early in the year
to store their own, significant
holdings of Bitcoin, having
come to distrust Mt. Gox and
the other available services.
Their main goal had been to
get the private keys for all
their
addresses
off
any
computer hooked up to the
Internet. Wences and Fede
had begun by putting their
private keys on an offline
laptop and storing that laptop
in a safe-deposit box at a
bank
in
California;
this
allowed them to delete all the
private keys from their online
computers.
Over the course of 2013,
the value of their Bitcoins had
grown, as had the number of
people who heard about their
system and asked to store
Bitcoins on the laptop. This
had provoked Wences and
Fede to take more and more
strenuous measures to secure
the private keys. First, they
encrypted all the information
on the laptop so that if
someone got hold of the
laptop
that
person
still
wouldn’t be able to get the
secret keys. They put the keys
for decrypting the laptop in a
bank near Fede in Buenos
Aires. Then they moved the
laptop from a safe-deposit
box to a secure data center in
Kansas City. By this time, the
laptop was holding the coins
of Wences, Fede, David
Marcus, Pete Briger, and
several other friends. The
private keys on the laptop
were worth tens of millions of
dollars.
The interest shown by
friends suggested to Wences
that there was a broader need
for a more reliable way to
store Bitcoins. People didn’t
want to hold the private keys
on their home computers, but
they also didn’t trust Mt. Gox
and Coinbase to keep digital
files worth millions. The
vault, as Wences and Fede
called it, was just a starting
point. Wences imagined that
this would be the first
offering
in
what
would
become a full-service Bitcoin
company that could provide a