Nathaniel Popper, a business reporter at The New York Times – and author of critically acclaimed Digital Gold: Bitcoin and the Inside Story of the Misfits and Millionaires Trying to Reinvent Money fell into the digital currency by chance.
It was Spring 2013, Popper said, and both him and The Times watched on as bitcoin was taking off, trying to figure out whether it was worthy of coverage or just a passing fad.
The answer to their question became apparent after the Winklevoss brothers – Internet entrepreneurs better known for their lawsuit against Facebook founder Mark Zuckerberg and now the masterminds of upcoming bitcoin exchange Gemini – approached the newspaper to discuss the cryptocurrency and eagerly opened up about their private bitcoin stash (at the time worth approximately $11m).
“I liked the fact that we could sort of talk about it in concrete terms, through some people that actually owned [bitcoin]. It was people sort of putting their reputation on the line a bit, nobody with any name or reputation had been really willing to do that before,” said Popper.
The response to the article, he added, was completely unexpected, in a positive way. Popper attributed part of its success to the Winkevoss’ public profiles, but also highlighted peoples’ increasing interest in this new idea of money, “independent from any other currency”.
Although Popper inadvertently became The Times’ de-facto bitcoin reporter, he said he was, and still is to an extent, largely skeptical about the digital currency.
“I similarly found it pretty fascinating, although I was very skeptical that it would survive,” he said, adding “if people lose confidence in it, it dies.”
Initially, Popper resisted proposals from book agents, telling them he didn’t believe bitcoin was a long-term phenomenon and didn’t warrant a book nor the effort required to write it.
He was, however, eventually compelled to write Digital Gold due to a confluence of factors.
“One was that I just continued talking with sort of serious people who were taking this [bitcoin] seriously and talking about the fact that there was something really interesting and new in the technology and the network.”
Then, Popper met Charlie Shrem – approximately two weeks before the former CEO of BitInstant and Bitcoin Foundation board member was arrested – and engaged in a “very vibrant conversation” with him and Nic Cary, co-founder of wallet provider Blockchain.
Seeing how passionate they both were about bitcoin struck a chord with Popper, who finally decided to pursue the book, which he said was never meant to be about the technology, but rather a story of bitcoin and the people behind it.
A social movement
Popper sees bitcoin as a social movement.
“The technology might be interesting but if people hadn’t adopted it and been willing to spend money on it, it would not matter,” he said, adding “and so, it’s only when you understand why people adopt it that you understand what it is”.
With questions continually emerging about bitcoin’s quest to achieve mass consumer adoption, Popper signalled that its failure to do so was “pretty simple”:
“There’s nothing for an ordinary person to use [bitcoin] for right now … in a place like Argentina where there is value in bitcoin, it does something right now, better than the alternative.”
In places like China, Popper added, it is more of a speculative gambling game, but still a step up from the existing online lotteries. Elsewhere, in the US, he said bitcoin had mostly been used in online gambling and drug purchases.
“It needs to be better at something for people to want to use it and that includes the whole experience of, not just the actual transaction, but getting money in and out.”
Like others before him, Popper noted that finding bitcoin’s killer app is what would lead to the digital currency’s adoption.
“Bitcoin needs to find those things that it does better than the alternative, it can’t just be equal to … it has to be much better. I think it’s still very much looking for that or to create a new use.”
Bitcoin in the media
Bitcoin has been misrepresented by the mainstream media in the past, with journalists sometimes including inaccuracies in their definition of the currency and its underlying technology.
Popper explained how as a journalist, you often have to describe something quickly. “It’s not the way a bitcoin person would want to have it described … there is a lot of misrepresentation … I mean it is an incredibly complicated technology.”
However, Popper said, that the media’s understanding is changing.
“I think a lot of the media does kind of get it generally right now … I do think some of the things bitcoin fans think are misrepresentations in the media are sometimes just bitcoin fans being overly sensitive about some short-hand way of describing something.”
This change, Popper said, could potentially be attributed to journalists taking bitcoin more seriously.
Early on, bitcoin probably seemed like a joke, added Popper. “I took it pretty lightly as well. Now people take it more seriously and so they are trying to understand what it is and how it actually works.”
Bitcoin on Wall Street
As the media is becoming increasingly well-versed in bitcoin and blockchain technology, so is traditional finance.
Bankers, Popper believes, must have gone through the same kind of process as him, slowly realising the blockchain’s potential in the wider financial market.
Blythe Masters – widely credited with creating the credit default swap – for example, joined Digital Asset Holdings as CEO.
“She particularly got peoples’ attention because she is not just any Wall Street executive, she was one of the ten best known bankers of the last 20 years.”
Beyond this, Popper also alluded to the increasing interest of traditional finance institutions on blockchain technology.
“I’ve been amazed since the book came out and dealing with bankers and financial folks just how they are more interested in this than I even grasped.”
Popper thinks traditional finance will continue to focus on blockchain tech. “It may not be on the bitcoin blockchain … a lot of these guys, what they want is to find a way to do this without using the bitcoin blockchain, but I think that’s where some of the most intense work is going on these days.”
Is adoption by Wall Street necessary to legitimise bitcoin? Popper doesn’t think so.
“I think that bitcoin was doing pretty well at growing slowly … I think that’s how a good technology [succeeds], it doesn’t bite off more than it can chew … I think it will probably continue developing at that pace. That being said, now that these [Wall Street] guys are involved, it will increase the pace of development.”