DIGITAL GOLD

In which all that glitters is not gold—but the usual crowd of crooks and speculators is still part of the package.

What is digital gold? Easy: it’s a kind of electronic money that permits its users to conceal their identities from even the nosiest hacker—or government agency. As New York Times reporter Popper notes in this oddly entertaining if eminently geeky narrative, the vision of that digital gold comes to us courtesy of dystopian sci-fi writer Neal Stephenson, whose 1999 novel Cryptonomicon glossed over the practical difficulties of getting such a currency accepted at stores and restaurants everywhere, especially when jealous banks and governments wanted nothing to do with it. Of particular interest are Popper’s notes on how China, that land of the enshrined command economy, wrestled with whether to declare the manifestation called Bitcoin legal or illegal. Eventually, the government decided that the “virtual currency exchanges needed to register with the Ministry of Information,” with all the ominousness that phrase entails. Popper deftly traces the growth of Bitcoin from experiment (complete with a mysterious, elusive inventor) to open-source technology and from easily dismissed plaything to something that the world’s leading banks were alternately studying, trying to thwart, and trying to leverage—says one champion, sagely, “I think whatever Jamie [Dimon, of JPMorgan Chase] does or doesn’t do will be as relevant as what the Postmaster General did or didn’t do about email.” The story acquires urgency when the crooks come a-calling, hacking into the hackers’ digital dream world to make off with hundreds of millions of dollars’ worth of coins that had actual value in the real world.

Readers may not be any less confused about the actual workings of Bitcoin, which remain murky, when finished with this book, but they will certainly know enough to make intelligent choices about whether to buy in or steer clear.