Hello, and welcome to Investor’s Bookshelf.In this session, we’ll explore Digital Gold: Bitcoin and the Inside Story of the Misfits and Millionaires Trying to Reinvent Money. In about 20 minutes, I’ll walk you through the essence of this book—what exactly Bitcoin is, and how it was born and evolved.
Many regular computer users know that among the hardware determining a computer’s performance, the graphics card is a particularly important component. This is because a graphics card has powerful image-processing capabilities, which can assist the CPU and boost overall speed.
Yet starting in 2014, the price of this crucial piece of hardware skyrocketed—and it frequently sold out.
Why did this happen? It wasn’t due to a breakdown in supply channels. Rather, it was because graphics cards are well-suited for mining—and miners were buying them up in a frenzy. Here, “mining” refers to mining Bitcoin. The mining process depends heavily on the GPU’s computing speed, which far surpasses that of a CPU. As Bitcoin’s price climbed steadily from its debut, it drove a parallel boom in the graphics card market.
Just how intense was the frenzy? When Bitcoin first appeared, a single U.S. dollar could buy 1,300 bitcoins. Today, one bitcoin has already surpassed $6,000 in value—an increase of more than 780,000 times.
Since Bitcoin’s emergence, countries have responded differently: Germany, Japan, and Canada have recognized it as a currency or asset, while China, Thailand, and the Netherlands remain cautious. Why does a virtual currency receive such vastly different treatment from one nation to another? What unique qualities make Bitcoin so controversial? These questions are at the heart of Digital Gold: Bitcoin and the Inside Story of the Misfits and Millionaires Trying to Reinvent Money.
There are many books on the market that discuss Bitcoin, but most delve into technical subjects such as blockchain and fintech. While authoritative, such content can be difficult for the average reader. In fact, we don’t need to master all the specialized terms. What we do need to understand is: What is Bitcoin? How did it grow step-by-step to where it is today? Who drove its meteoric price rise? With those answers, we can discuss Bitcoin confidently.
The book’s author, Nathaniel Popper, is an accomplished financial journalist at The New York Times and a Harvard graduate. He spent several years conducting extensive interviews and research before completing this book, which covers Bitcoin’s history from its inception to March 2014. As a journalist, Popper is keenly aware of whether non-specialist readers can follow his narrative, and his storytelling is highly engaging.
Upon publication, the book earned strong praise from leading Western media and institutions, including The New York Times, The Financial Times, and McKinsey & Company.
Now that we’ve introduced the book and its author, let’s turn to its core content from three angles:
What is Bitcoin?
- Which three individuals were pivotal in Bitcoin’s development?
- Which three companies played key roles in Bitcoin’s rise—and how did they help turn it into a commodity more valuable than gold?
Let’s begin with the question: What is Bitcoin?
To trace its origins, we need to go back to the 1990s. As technology advanced and daily life became increasingly digitized, people began to feel that the government knew far too much about their personal privacy. Information they were willing to make public—yes, the government knew it. Information they preferred to keep private—the government still knew it. That, many felt, was overreach.
The greatest perceived threat to personal privacy lay in the government-controlled financial system. Money is indispensable for living, and because the flow of money was always visible to the state, one’s financial situation was entirely transparent to the authorities. For the cypherpunks—those skeptical of government—this inspired a strong desire to create a currency outside government regulation. Driven by this ever-growing conviction, idealistic programmers began exploring feasible technical frameworks to turn the abstract idea of digital currency into reality. In simplified terms, two foundational methods emerged: public key encryption and hashed cash.
Public key encryption ensures that encrypted information can be decrypted only by its intended recipient. It’s a double layer of security: only when the encrypted message and the recipient’s private key match through specific computation can the message be read. On top of this, hashed cash addressed the problem of copying electronic documents. By using reverse-computation methods, it prevents others from deducing the private key from a public data address. This means that once a unit of digital currency is transferred, the transaction cannot be reversed, and the sender cannot continue holding the currency based on the original data. In short, these two principles together secure digital currency.
In 2008, a person (or group) under the name Satoshi Nakamoto proposed a new form of digital currency called Bitcoin, outlining its operational rules. In essence, the system could be summed up in one word: transparency. All participants collectively validate Bitcoin transactions and determine their authenticity.
To illustrate, imagine a Bitcoin transaction:
A wants to give B $100. A tells the classmates nearby, “I’m giving B $100.” The classmates respond, “Do you even have that much money? Show us.” A opens their wallet: “See? Enough, right?” Then the classmates say, “Hey B, how much do you have? Let us see too.” B also shows their wallet. After that, A hands the money to B, and the classmates check both wallets again, confirming that A really gave B $100. They quietly pass the news to others, one to ten, ten to a hundred, until the whole school knows. Everyone then records in their personal ledgers: On such-and-such date, A gave B $100.
In the Bitcoin network, only when a majority of computers record a transaction as valid does it become official. Likewise, only when a majority of computers verify a bitcoin is it recognized as genuine—preventing anyone from creating counterfeit coins. While Nakamoto released the source code publicly to strengthen transparency and credibility, any modification still requires approval from the majority of networked computers.
For Bitcoin creation, Nakamoto also set clear rules: as time passes from the creation of the first bitcoin and as the collective computing power of the network increases, mining becomes progressively harder. Moreover, the total supply is capped at 21 million coins—once that number is reached, no new bitcoins will be generated.
Now that we’ve seen where Bitcoin came from, how did it grow? Who propelled it forward? In Bitcoin’s story, there are three pivotal figures:
- One invented Bitcoin.
- One brought it into the public spotlight.
- One introduced it to high society.
Step by step, they transformed a string of data into a digital currency worth more than gold.
The first pivotal figure in Bitcoin’s history is the one we’ve already mentioned—its inventor, Satoshi Nakamoto. Yet Satoshi remains an enigma; apart from the name, no one knows anything for certain about this person.
When Nakamoto first introduced Bitcoin in 2008, few believed in it. Only one person initially offered support and encouragement, but that supporter later withdrew due to illness. His role was then taken over by a Finnish university student, who continued helping Nakamoto advance the project.
Satoshi told the student, “My writing skills aren’t great—I can’t properly introduce Bitcoin. Could you help me?” So, the student wrote introductory material for Bitcoin and posted it on Satoshi’s website. Then Satoshi remarked, “Shouldn’t Bitcoin have a proper logo?” The student designed the now-famous Bitcoin symbol. Later, Satoshi suggested separating official and unofficial communications, prompting the student to establish an independent Bitcoin forum.
In 2009, the first Bitcoin exchange transaction took place on that very forum: someone traded $5.02 for 5,050 bitcoins. At that time, one bitcoin was worth roughly the cost of the electricity needed to mine it. In 2010, someone paid 10,000 bitcoins for two pizzas—an event now legendary in Bitcoin history.
By 2010, Nakamoto grew impatient with Bitcoin’s slow adoption. Once again, the Finnish student stepped in, posting the Bitcoin project on the world-famous tech community site Slashdot. This ignited interest in their niche circle, and Bitcoin’s price began to climb.
As the saying goes, “Programmers change the world.” Words alone weren’t enough—fate brought another programmer into Nakamoto’s circle. Fascinated by Bitcoin’s decentralization, he not only improved the source code but also organized a large-scale Bitcoin giveaway, bringing the currency to more people. Crucially, he operated under his real name, which Satoshi saw as a strategic advantage: an anonymous creator paired with a public promoter would reassure people that Bitcoin wasn’t part of some conspiracy.
On December 12, 2010, satisfied with Bitcoin’s progress, Nakamoto posted a farewell message and vanished entirely from the online world—leaving behind one of Bitcoin’s biggest mysteries: Who is Satoshi Nakamoto?
Regardless of his true identity, Satoshi’s role as inventor and early driving force is unmatched in Bitcoin’s history. He witnessed the first exchange, recruited a wave of talent, and used various strategies to introduce the concept to more people. From the outset, he embedded in Bitcoin’s rules the idea that it would be data with intrinsic value.
Soon came Bitcoin’s second pivotal figure—Roger Ver. He brought Bitcoin into the public spotlight. Before 2011, Bitcoin was popular only in niche tech circles. But in 2011, that began to change: mainstream outlets like Forbes and TIME published articles about it. Hearing about Bitcoin on a radio program, Roger Ver—an idealistic second-generation wealthy entrepreneur burned by government interference—was instantly captivated by the idea of a currency beyond government oversight.
Ver launched Bitcoin advertisements on highway billboards and radio shows, bought large quantities of bitcoins, and helped drive market growth. In April 2011 alone, as Bitcoin entered public view, its price jumped from around $1 to nearly $10. Ver also invested in numerous Bitcoin startups—many of which became the first heavyweight companies in the industry. His unwavering support earned him the nickname “Bitcoin Jesus.”
The third key figure was Wences Casares, a successful entrepreneur from Argentina’s Silicon Valley. He understood firsthand the pain caused by Argentina’s chronic inflation and saw Bitcoin as a promising alternative.
Casares began following Bitcoin in 2011 and started buying heavily in January 2012. He persuaded many company CEOs to join in. In March 2013, at an annual gathering of tech titans, he introduced Bitcoin to some of Silicon Valley’s most influential figures. This single moment elevated Bitcoin from a grassroots phenomenon to a high-society talking point.
Casares tirelessly promoted Bitcoin to every prominent contact he knew, prompting Silicon Valley to take it seriously. His influence also boosted companies producing specialized chips for Bitcoin mining, pushing the industry toward more centralized, large-scale operations. Around this time, the U.S. government issued a vaguely worded statement that implicitly acknowledged Bitcoin’s legality. Coupled with Europe’s economic crisis, this fueled a sharp rally—by late March 2013, Bitcoin’s price had surged to $90.
So far, we’ve covered the three people who helped Bitcoin rise:
- Satoshi Nakamoto – The inventor.
- Roger Ver – The “Bitcoin Jesus” who brought it to the masses.
- Wences Casares – The entrepreneur who introduced it to Silicon Valley’s elite.
But was Bitcoin’s growth solely due to these three figures? Of course not. While their roles were pivotal, Bitcoin’s rapid development also relied on the influence of key institutions. And in that arena, there are three companies you need to know about.
As Bitcoin began to surge in popularity, two companies emerged alongside it, becoming the first major players in its development. One was MT. Gox—nicknamed “Mentougou” in Chinese—a Bitcoin exchange platform that was soon sold to a young Frenchman living in Japan. The other was Silk Road, an anonymous online drug marketplace founded by an academically accomplished young American named Ross Ulbricht.
Among the two, MT. Gox served as a foundational bridge between Bitcoin and real-world currency. But it was Silk Road that truly fueled Bitcoin’s early price growth. The platform made it possible for illicit trades to be conducted online via digital currency—feeding the public’s fascination with Bitcoin’s anonymity. In this sense, both Silk Road and MT. Gox leveraged, and amplified, the demand for privacy in transactions, making them emblematic enterprises of Bitcoin’s formative years.
Early Turbulence for Silk Road and MT. Gox
Silk Road’s anonymous drug business quickly attracted enormous attention. After a major investigative article about it was published, thousands of new members were registering daily, nearly crashing the site. In just three days after the article’s release, Bitcoin’s price broke past $15. This inevitably drew the attention of U.S. authorities. Ross, fully aware that his operation was illegal, grew increasingly uneasy and eventually shut down new user registrations.
MT. Gox faced its own troubles. In June 2011, hackers broke into the site, stealing thousands of bitcoins and leaking user data. The exchange’s reputation took a severe hit, leaving its owner at a loss. Just as the site was on the brink of collapse, Roger Ver, the “Bitcoin Jesus” we met earlier, stepped in. Determined to protect his vision for Bitcoin, he brought friends to Japan to help with crisis management and bug fixes. Though the site eventually reopened, Bitcoin’s reputation remained damaged—this became known as MT. Gox’s first crisis.
The Rise of BitInstant
Around this time, the third key Bitcoin company emerged—BitInstant. Essentially acting as a reseller for MT. Gox, BitInstant routed all its trades through the exchange. It happened to launch just in time to catch the tail end of Bitcoin’s early growth and soon became an influential player.
The story began during Bitcoin’s downturn from late 2011 to 2012, caused in part by the earlier troubles at Silk Road and MT. Gox. Still, the New York Bitcoin Conference went ahead as planned, bringing together people who had only met online before. It was here that Roger Ver met Charlie Shrem, BitInstant’s founder. Roger promptly invested $120,000 and introduced other backers to support the company. BitInstant went on to become a milestone in the first wave of Bitcoin enterprises—yet another example of Roger’s tireless efforts to inject fresh energy into the Bitcoin ecosystem wherever it could do good.
Crisis After Crisis
As Bitcoin’s price soared, trading volumes exploded. But MT. Gox’s sluggish order processing failed to keep pace, causing users to panic and mass-withdraw their funds. Prices plummeted, dragging BitInstant down with them. Only after MT. Gox’s management assured users that the drop was due to overwhelming transaction volume did the market stabilize—marking MT. Gox’s second crisis.
Soon after, BitInstant hit its own breaking point. Its young founder, though charismatic, was inexperienced in management. Spending more time in bars with his girlfriend than running the business, he brushed off investors’ criticisms. In July 2013, the company was caught failing to report Bitcoin’s illegal uses and was shut down; Shrem himself was arrested.
Meanwhile, Silk Road continued its illicit operations, flourishing under the radar until authorities decided enough was enough. Undercover agents infiltrated the site, tracking criminal activity from 2011 to 2013 and even posing as drug dealers to bait Ross. Over time, Ross developed a grandiose sense of mission, convinced he was advancing global freedom. This belief justified, in his mind, any sacrifice—even human life.
In pursuit of this “ideal,” Ross allegedly ordered multiple hits on individuals suspected of compromising Silk Road, transforming from a shy, idealistic youth into a cold, calculating operator. He maintained extreme caution, yet his downfall came not from advanced hacking or IP tracing, but from a small digital breadcrumb: investigators found his email address in early 2011 Bitcoin forum posts, leading them straight to him.
The Fall of Silk Road
On October 2, 2013, Ross Ulbricht’s arrest was announced. Bitcoin’s price dipped briefly but quickly recovered—by then, the ecosystem was far larger, and Silk Road accounted for only 4% of Bitcoin transactions. For many, his capture was a relief, severing the association between Bitcoin and illicit trade.
Shifts in Strategy
During MT. Gox’s second crisis, Wences Casares—the man who introduced Bitcoin to Silicon Valley’s elite—lost faith in its management and decided to found a new Bitcoin company himself. Roger Ver, meanwhile, came to believe that centralized entities like MT. Gox violated Bitcoin’s core philosophy. He redirected his energy toward Blockchain.info, a startup he had invested in. Unlike MT. Gox or BitInstant, Blockchain.info held only users’ keys, not the coins themselves—a non-custodial, non-profit-driven model Roger admired for its alignment with Bitcoin’s ideals.
In Argentina, rampant inflation fueled a passionate demand for Bitcoin. While the government tried to suppress exchanges, Blockchain.info’s model kept it beyond regulatory reach, boosting its reputation.
The Final Blow to MT. Gox
As Wences predicted, 2014 brought MT. Gox’s third and final crisis. Due to executive negligence, $400 million worth of bitcoins were stolen. This time, the exchange had no choice but to declare bankruptcy. The market reaction was intense; some major Bitcoin companies even prepared for the possibility of a full-scale ban. However, most blamed MT. Gox itself—not Bitcoin.
Thus ended the story of Bitcoin’s three formative companies: Silk Road’s fall was inevitable given its criminal nature, but the other two collapsed due to human failings—especially MT. Gox, which squandered its advantages through repeated mismanagement.
From its first crisis, MT. Gox’s shortcomings were clear: an overconfident owner with limited capability who insisted on micromanaging everything, leading to disaster after disaster until the final collapse of what was once Bitcoin’s dominant exchange.
The book’s narrative stops at 2014, but Bitcoin’s story continues. Conferences are still held, Silicon Valley elites and cypherpunks still debate its future, and the ultimate fate of Bitcoin remains uncertain—leaving the world watching and waiting.
Summary
Let’s wrap up by revisiting the core of this book. You only need to remember three people and three companies.
The three people are:
- Satoshi Nakamoto – the inventor of Bitcoin.
- Roger Ver – the “Bitcoin Jesus” who brought Bitcoin to the masses.
- Wences Casares – the Silicon Valley entrepreneur who introduced Bitcoin to the tech elite.
The three companies are:
- MT. Gox – the exchange that bridged Bitcoin with traditional currency.
- Silk Road – the darknet marketplace that demonstrated Bitcoin’s anonymity.
- BitInstant – a key early facilitator in Bitcoin’s transaction ecosystem.
The book’s narrative unfolds around these figures and organizations, illustrating how their actions shaped Bitcoin’s journey from an obscure digital experiment into a global phenomenon.
A side note: the book only covers events up to 2014. Today, we know far more than the author could include—about Satoshi’s possible identity, about Bitcoin’s later evolution, and about its battles with regulation in both the United States and China. Despite intense government scrutiny, mining has continued unabated.
Bitcoin has always been controversial, and it remains so. No single explanation satisfies everyone. What makes this book valuable is its systematic account of Bitcoin’s transformation—how it grew from small to large, from weak to strong—through real people and real events. Beyond the story of Bitcoin itself, it offers lessons worth remembering.
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