Digital Gold

A Poker Game at Lake Tahoe

Picture a Lake Tahoe living room in early 2014. Six players sit around a poker table at the home of Dan Morehead, a Princeton-trained hedge fund manager who has been buying Bitcoin in serious size. The crowd is odd. A former Walmart executive from China whose grandparents fled Mao with only the gold they could carry. A recent college graduate from Slovenia. A banker from London. Two fraternity brothers from Georgia Tech. And a twenty-nine-year-old named Erik Voorhees, who eighteen months earlier was unemployed in New Hampshire and buried in credit card debt.

Voorhees got into Bitcoin when a coin cost a few dollars. He spent two hundred and twenty-five dollars on a gambling website called SatoshiDice in 2012 and sold it a year later for around eleven million. He helped convince the Winklevoss twins, last seen suing Mark Zuckerberg, to put a million dollars into a Bitcoin start-up called BitInstant. He has recently moved to Panama with his girlfriend, picked up an SEC investigation for selling start-up stock in Bitcoin, and watched a former business partner get arrested on money laundering charges. He owns a fortune in coins.

Just weeks before the Tahoe gathering, Mt. Gox, the largest Bitcoin exchange in the world, announced it had lost about four hundred million dollars in customer money. The entire Bitcoin market is worth, all told, about the same as Urban Outfitters. Morehead shrugs at the comparison and tells the table, "I think when they dig up our society, Planet of the Apes style, in a couple of centuries, Bitcoin is probably going to have had a greater impact on the world than Urban Outfitters."