Cash Equivalent?

04.04.13

My Bitcoin (Mis)adventure

They’re creepy, confusing, and skyrocketing in value. Who wouldn’t want to buy some bitcoins? Winston Ross checks out the online currency everyone’s buzzing about.

I first heard about the online currency known as Bitcoin on Monday, when a friend from Facebook who has the distinction of being the only person in my life ever to have punched me in the nose posted this, as his status update:

“Who out there (1) uses Bitcoin and (2) reads my status updates?”

I scored a 50 percent on that little quiz, which I have since learned is proof that I live under a boulder. I’m no Buzz Bissinger, but the idea that some newfangled way to spend money had come into being without me knowing about it was a huge shock, from which it took two full days to recover. On Wednesday morning, having finally yanked myself from bed/depression, I decided I would make bitcoin my bitch.

I’m late to this party, I know. Bitcoins have been around since 2009, and they’re booming. The price for a single coin jumped from $35 to $145 in the past month alone, and there are $1.6 billion worth of bitcoins in circulation worldwide. The whole point is basically to sidestep the banking industry—and government, for that matter. Which doesn’t seem like a terrible idea, at least not after seeing a bunch of people in Cyprus recently pulling money out of their banks before Big Brother could reach in and seize some of it to allay the country’s financial crisis.

Even now, I cannot begin to tell you exactly how the whole bitcoin system works, but I do know it’s virtual money, supposedly kept safe by a clever encryption scheme. People say the booming market for bitcoins is a bubble waiting to burst. I think bubbles are fun. 

So I am now going to embark on a bitcoin spending spree, while writing about it in real time. This is history in the making, people.

First I need some bitcoins. But before I can even buy them, I need to download an app from the Bitcoin website called “bitcoin Qt,” which either means “bitcoin Cutie” or bitcoin Q.T. (as in, “quiet tip or “down low,” perhaps.) My computer refuses to recognize the app. Ten minutes and 35 increasingly furious clicks later, I finally get my computer to open the app.

Well that was reassuring, weird scammy cryptic online currency company. Now how do I buy the coins?

Bitcoin itself is no help at all. On the “how it works” page I have discovered the worst infographic in the history of infographics. There are three people-shaped shadows, one with a question mark on it, “you” in the middle, and a “friend” on the right. Then there’s a weird box with some ellipses and other random numbers like “1sd9” and it’s all called “The Blockchain (a shared public transaction log”).

WHY IS THIS SO HARD!??!

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Bitcoin Charts
The grand total for a large pepperoni Thin-N-Crispy pizza: .1397 bitcoins.

But I press on, because my mercurial editor is emailing me, “When are you filing that bitcoin story!??” every five seconds.

I find another site called “Coinbase,” which is much less confusing, I think. All I have to do is link a bank account to these random strangers, hand over my banking username and password, my father’s middle name (seriously) and I can buy my “first bitcoin.” This is awesome! It’s also one of those days where I wish I had my mom’s checkbook lying around.

Why? Because EACH bloody bitcoin costs $113! (Though I heard the price was $145, so maybe I’m getting a hot deal?) Coinbase is telling me I should maybe start by buying 10 of them. How about a half of one? How much for one rib?

I ask to buy one. And then comes more bad news:

“Sorry, the maximum number of purchases on Coinbase has been reached. This is a 24 hour rolling limit with no specific start time. Please try again later. We’ll continue raising this limit over time.”

Well, shit. This is part of the bitcoin deal, it turns out, to keep the currency from getting hyperinflated and underdevalued and such. Back to the drawing board.

Eventually I figure it all out, after going to Bitinstant.com and then wiring some cash via MoneyGram to “ZipZap” and getting the coin itself from Coinapult, after passing the most amazing CAPTCHA test I have ever seen. Instead of typing a word, you park a car. This has to be legit. Finally I’m told where I can go wire the cash: a nearby grocery store. I am out of milk, in real life. This is fate.

I have now returned from the grocery store, where the confused clerk at the customer service counter pointed me towards a red telephone and instructed me to pick it up and say “Hello” into it. A human being with a thick Spanish accent eventually answered and eventually cleared the way for me to hand over $116.95 in cash to the clerk, who pressed some buttons and printed me off a receipt and off I went, back home, to discover four emails waiting for me verifying I was now, indeed, the proud owner of a bitcoin.

Well, .84787416 bitcoins, anyway. Apparently I mucked up the conversion somehow.

Now I just have to set up a “wallet,” a place to safely store my eight tenths of a bitcoin—though “safe” is an increasingly relative term in the bitcoin universe, I already knew. As I was in the middle of all the downloading and printing and driving to the grocery store, one such “wallet” provider announced with some urgency that it had been hacked, which I presume means all the bitcoins it was hanging onto might now have evaporated.

But surely this wallet recommended to me by Bitinstant via Coinapult which I paid for via Zipzap — hey, it’s called “Blockchain”—could keep safe watch over a paltry .84787 bitcoins, I figure. Once successfully in, I can see my Hash 160 and Taint Analysis, among other things. Then I just have to “retrieve payload” from Coinapult, trot on back over to Blockchain and BAM! My final bitcoin balance is .84787, only three hours after I started this process.

Now, what to buy? It seems I can spend bitcoins on hookers and drugs, at a site called “Silk Road,” which is not to be confused with this very PG human resource software company. To get there, says Gawker, you have to download some kind of anonymizing software first and then visit this URL. But I’m gonna pass. I have yet to (explicitly) pay for sex, stopped doing hard drugs years ago and I have a neighbor who hands marijuana across the fence.

I could also buy a pizza, but I’ve been smoking a big pork shoulder on the grill all day and  pizza is kind of fattening. Still, I’m curious to know how that works. So I head for Pizzaforcoins.com and start clicking up a storm. My choices are Domino’s, Pizza Hut, or Papa John’s, all of which make horrible pizza. I click Pizza Hut, the lesser of three evils. That directs me to a weird backchannel Pizza Hut web site, I click delivery, punch in my address, figure out what I want, go back to Pizza Coins, punch in all the stuff I’m ordering and put it in my cart. Man, that was so much easier than just calling Pizza Hut!

The grand total for a large pepperoni Thin-N-Crispy pizza: .1397 bitcoins, which is 16.47 percent of the bitcoins I bought for $116.95, which means that large pizza comes out to… $19.26. Just for shits and giggles, I go back to Pizza Hut, to find out how much it’d cost me to buy a large pepperoni Thin-N-Crispy pizza from pizza hut. $10, plus a $2.50 delivery charge. But if I buy my pizza with bitcoins, I’m sending a big fat fuck you to the banking oligarchs, without them actually knowing I’m doing it. Totally worth the $6.76, if you ask me.

I didn’t actually buy any pizza, though, and need to dump these bitcoins fast. The price of a bitcoin is surging, and though I’m not really clear on what effect that has on the goods purchased, the damn thing is burning a whole in my virtual pocket. At bitcoinWorldMarket.com, I learn I can buy gold, coins, miniature cannons, alpaca socks, T-shirts, and electronic cigarettes, among other things. I can somehow “bid bitcoins” to “get more bitcoins as a surprise,” which doesn’t make any sense to me. There’s a place called “Anonymous Ads” that is an “unusual and transparent advertising network.” But nothing is really jumping out, so far, until…

BOOM. George’s Famous Baklava. I would kill for some of George’s Famous Baklava right now. And you can get a 1.5-pound order for the very reasonable price of .1463 bitcoins, which by my calculations is exactly what George is asking for in cash. All I have to do now is copy the encrypted address on George’s site, go back to Blockchain, click “send money” and we’re done! (I hope.)

I still have money left, though: .70157 bitcoins, to be precise. Let’s see, buy gold, teach English, designer jeans labels, private Swiss detox clinic, PornStore, used boat parts, Diablo 3 gold, short-term apartment rentals in Rio de Janeiro, erotic self-hypnosis, a barbecue restaurant in Salt Lake City, an electronic store that only ships to Europe, a grass-fed beef place that only ships to Australia, Israeli beach paddles, BOOM! Puro Express, a company that claims it is located in Switzerland and will ship me authentic Cuban cigars—in nitrogen packaging, even, for an extra .05 bitcoins. Sign me up.

I purchase a five-pack of Cohiba Siglo IV, for .55 bitcoins, toss ‘em in my cart, copy the encrypted address, send the money to that address, and my order of Cuban cigars is complete. How they’ll deal with the whole “You’re not supposed to export Cuban cigars to America” thing I’m just going to let them figure out.

I’m also going to hang on to my remaining .08107416 bitcoins, because I realized something today as I was busy sticking it to the man: this is an investment, and if it increases in value—if bitcoins become more and more expensive to buy—then my bitcoin becomes more valuable; it pays for more stuff. I know, you already figured that out a long time ago. But I live under a boulder, remember?