Once a Bitcoin Miner: Scandal and Turmoil in the Cryptocurrency Wild West by Ethan Lou

In 2019 Ethan Lou, a young Canadian journalist and cryptocurrency investor, found himself on a Thai island, lounging beside a pool that he had just realized was shaped like a penis. Thanks to the cocktail of party drugs he had ingested, it had taken him several days to do this. Such touches are typical at cryptocurrency incubators, days-long conference-cum-parties where coding wizards with start-up ideas try to charm big bucks out of investors while imbibing psychedelics and bobbing about on ironic inflatables.

Alas for Lou, this particular event’s headiest days were already behind it — another attendee said that, in previous years, that pool had hosted orgies while those who were not joining in talked shop on the sun loungers. Still, several days in, Lou realized that he could not think of a single business-related reason to be there and instead committed himself to enjoying the sunrises and marveling at his good fortune.

In many ways much of what Lou recounts in Once a Bitcoin Miner, his book about the outlandish and often objectionable characters who inhabit the world of cryptocurrency, is a replay of gold rushes throughout history, from the tulip bubble to the yuppy Big Bang of the 1980s.

Ultimately, underneath the baffling technicalities, this is a story about the crazy things that greed makes people do, and about the ridiculous ways in which people who make a lot of money very quickly like to spend it; the organizer of the Thai incubator, an early Bitcoin adopter who had made a fortune, was sinking at least $20,000 a month into it with little clear aim besides hedonism.

However, this is a thoroughly 21st-century incarnation of that story: a whole new financial order dreamt up by the “generation [that] considered itself damned”, as Lou terms those who came into the job market in the economic landscape of hopelessness and rage after 2008.

Bitcoin’s Big Bang

The roots of blockchain, the technology that cryptocurrency is based on, lie in cryptography, the study of secure communications as practiced at Bletchley Park. At the height of the 2008 global financial crisis Satoshi Nakamoto, the pseudonymous founder of the original cryptocurrency, Bitcoin, read an article in The Times detailing how the British government was preparing a second bailout for the banks. A year later he referenced the piece in an encoded message — “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks” — contained in the first batch of Bitcoin transaction records, a clear, if encrypted, shot at the failings of Big Finance.

Today cryptocurrency has spawned its own elites, lingo, subcultures and scams. It is, on one level, simply a method for moving money that exists only as algorithms, outside the established banking system, a fact that has, unsurprisingly, attracted dubious characters and spooked the US government. Recently, Virgil Griffith, a cryptocurrency developer, pleaded guilty in an American court to conspiracy to help North Korea to evade sanctions using the technology and is facing up to 20 years in prison.

To its enthusiasts, though, it is a building block of a whole new world — decentralized, democratized and libertarian. It is a world inhabited by math and coding geniuses who, had they come of age a decade earlier, would have been sucked into the high-earning promise of the traditional finance industry, and by scammers who a generation ago would have been running pyramid schemes.

And it is this LSD-soaked world of insider jokes such as a cryptocurrency named Coinye West (after the rapper Kanye West, who did not appreciate the humor), together with its darker side encompassing murders and robberies of crypto executives as well as millennial suicides during Bitcoin’s down phases, that Lou takes us into.

A world inhabited by scammers who a generation ago would have been running pyramid schemes.

Lou himself is a rare commodity in that he understands cryptocurrency and knows how to write about it. Aged 30, he is squarely a part of that damned generation. He first heard of Bitcoin amid a haze of marijuana smoke during the second year of his journalism degree in Toronto, and on his first newspaper beats was soon interviewing the early entrepreneurs.

In late 2013 he finally decided to invest all his savings in Bitcoin, endured an instant bust cycle that reduced it to almost nothing, forgot about it for a while, and at last enjoyed vindication when its value began soaring again in 2017. Lou made enough to take him from the poverty of rookie journalism to a comfortable lifestyle where he could consider buying a house outright; others, who got in really early, saw returns of up to 50,000 percent.

Meanwhile, with a reporter’s curiosity and nose, he also threw himself into Canada’s cryptocurrency scene of meetups in strip clubs and conferences full of get-rich-quick promises. His dogged pursuit of its less savory characters is admirable and amusing in his retellings. He also gets the absurdity of the scenes he witnesses in a way that most others present probably didn’t — he writes of one party where the organizers bring in models “recruited, perhaps, because cryptocurrency itself did not tend to attract the attractive”.

Lou also traveled with Griffith on his fateful trip to North Korea, where they attended a surreal blockchain conference in Pyongyang before being hauled round the usual carousel of staged tourist sights and getting blind drunk with their minders. This section stands out from the rest of the book, serving as a serious counterweight to the irony and amorality that hang heavy over the bulk of the story.

If there is one criticism to be made, it is that Lou’s descriptions of the dark underbelly of cryptocurrency can feel overwritten, with an excess of adjectives muddying remarkable scenes that would shine best if they were left unembellished, but that is a minor flaw, and forgivable given the weirdness of what Lou is reporting on.

This book stands out as a rare example of a readable snapshot of a world we all need to get more informed about. Because cryptocurrency is not the future, it is now — and despite the hucksters, the opportunists and naysayers, it is here to stay.

Hannah Lucinda Smith is the Turkey correspondent for The Times