Joe: In 2010, a programmer in Florida named Laszlo Hanyecz paid 10,000 Bitcoin for two Papa John's pizzas. Lewis: Okay, a bit of a weird fact, but I'm listening. What's the punchline? Joe: Today, that 10,000 Bitcoin is worth, depending on the day, anywhere from 400 to 700 million dollars. Lewis: Hold on. You're telling me someone paid hundreds of millions of dollars for two pizzas? That's not just a bad deal, that's a level of financial regret I can't even comprehend. Who in their right mind would do that? Joe: That is the central, electrifying question at the heart of Nathaniel Popper's book, Digital Gold: Bitcoin and the Inside Story of the Misfits and Millionaires Trying to Reinvent Money. And Popper, who's a technology reporter for The New York Times, tells this story not as a dry tech manual, but as a gripping human drama. It was so well-told, in fact, that it was shortlisted for the Financial Times Business Book of the Year. Lewis: A business book that reads like a thriller? That's a rare beast. Joe: Exactly. Because to understand that pizza purchase, you have to realize the goal wasn't to make a good investment. It was to prove a point. You have to go back to the very beginning, to a small group of people who weren't trying to get rich, but were trying to start a revolution.

Lewis: A revolution? That sounds a little dramatic for digital money. What kind of revolution are we talking about? Joe: The kind that aims to separate money from the state. The story really begins with a group called the Cypherpunks. Lewis: What even is a 'cypherpunk'? It sounds like a character from a 90s sci-fi movie who wears a leather trench coat and hacks the planet. Joe: That's not entirely wrong, aesthetically. But ideologically, they were a group of cryptographers, programmers, and activists in the 90s and 2000s who believed that privacy was essential for a free society. They saw the internet emerging and predicted that governments and corporations would use it to surveil everyone. Their weapon against this was cryptography—unbreakable codes. Lewis: So they were privacy advocates, basically. Joe: Fierce ones. And their holy grail, the one thing they'd been trying to build for decades, was a form of digital cash. Money that was anonymous, untraceable, and couldn't be controlled, frozen, or devalued by any government or bank. They tried and failed many times. Then, in late 2008, right in the ashes of the global financial crisis, a mysterious figure appears. Lewis: Ah, the legendary Satoshi Nakamoto. The man, the myth, the mystery. Did they ever figure out who he, or she, or they, actually were? Joe: To this day, no one knows for sure. And Popper's book does a fantastic job of chasing the shadows. But what mattered was the paper he published. He, or they, posted a nine-page white paper to a small cryptography mailing list. The title was "Bitcoin: A Peer-to-Peer Electronic Cash System." Lewis: And people just… read it and believed it? Joe: Not everyone. Most ignored it. But a few people, the true believers from that Cypherpunk world, saw it instantly. They realized Satoshi had solved a problem they'd been stuck on for years: the double-spending problem. How do you stop someone from spending the same digital dollar twice without a central bank to verify everything? Lewis: Right, you can copy a digital file a million times. How do you make a digital coin unique? Joe: Satoshi's genius was the blockchain. A public ledger, a giant, shared, global receipt book that everyone could see and no one could alter. To add a new "page" of transactions to the book, computers on the network had to solve a complex math problem. This was called "mining." Lewis: Okay, what does 'mining' actually mean here? Are they digging inside a computer with a tiny pickaxe? Joe: It's a great analogy. They're not digging for gold, they're "digging" for a number. By spending massive amounts of computing power to solve this puzzle, they prove they've done real work. As a reward for their effort, the network gives them newly created Bitcoin. It's what secures the network and also how new coins are born. It's elegant. Lewis: It sounds incredibly complex. Who was the first person to actually jump on board? Joe: This is one of the most powerful stories in the book. It was a man named Hal Finney. Finney was a legendary cryptographer, one of the original Cypherpunks, and a brilliant programmer. When he saw Satoshi's paper, he got it immediately. He downloaded the software and started mining on his home computer. Lewis: So he was Patient Zero. Joe: He was. And he received the first-ever Bitcoin transaction in history: ten Bitcoins sent directly from Satoshi Nakamoto. It was a test, to make sure the system worked. For Finney, this was the culmination of a life's work. But there's a tragic, poignant layer to his story. Lewis: What happened? Joe: Around the same time he discovered Bitcoin, Hal Finney was diagnosed with ALS, Lou Gehrig's disease. It's a progressive neurodegenerative disease that slowly paralyzes you. Over the next few years, as Bitcoin grew from an obscure hobby into a global phenomenon, Finney was losing his ability to move, to speak, to even type. He continued to code and contribute to Bitcoin using eye-tracking software. Lewis: Wow. That's incredible dedication. Why was he so passionate about it? What was the big deal for him? Joe: Because for him, and for the other early adopters, Bitcoin wasn't an investment. It was a political statement. It was a tool for freedom. He saw a future where this technology could protect people from corrupt governments or failing banks. He was racing against his own body to help build this new world. He eventually passed away in 2014, but he chose to have his body cryonically preserved, hoping that future technology might one day revive him. His Bitcoin, which he mined in those very first days, was left to his family. Lewis: That's a powerful story. It puts a very human face on what seems like a cold, mathematical technology. It wasn't about Lamborghinis and getting rich. It was about an ideal. Joe: Exactly. It was born from this pure, almost utopian vision of a new kind of money. But for an idea to change the world, it has to leave the lab and enter the messy, unpredictable real world. And that's where things get complicated, chaotic, and frankly, a little dark.

Lewis: Okay, so this is where the infamous pizza comes in. Joe: This is where the pizza comes in. So you have this beautiful, idealistic project. But for it to be money, it needs a price. It needs to be exchangeable for actual stuff. In May 2010, Laszlo Hanyecz, that programmer in Florida, posted on a forum: "I'll pay 10,000 bitcoins for a couple of pizzas." Lewis: He just threw it out there? Joe: He just threw it out there. And someone in England took him up on the offer. They called a Papa John's in Florida, paid with their credit card, and had the two pizzas delivered to Laszlo's house. The first real-world transaction was complete. Bitcoin had a price: about 0.004 cents per coin. Lewis: It's a funny, historic moment. But it also sounds like the peak of its innocence. You mentioned a dark side. Joe: I did. Because once Bitcoin had a price and a way to be traded, it attracted a different crowd. The book introduces us to Jed McCaleb, a programmer who had previously created a file-sharing network. He decided to create a Bitcoin exchange. He bought the domain name 'MtGox.com'—which originally stood for 'Magic: The Gathering Online eXchange'—and repurposed it. Lewis: Wait, the world's first major Bitcoin exchange was built on the bones of a website for a fantasy card game? Joe: That's the kind of scrappy, misfit energy that defined the era. Mt. Gox became the gateway. If you wanted Bitcoin, you went there. And this new accessibility, this ease of use, enabled the creation of something far more notorious: Silk Road. Lewis: The Amazon of illegal drugs. I've heard of it. Joe: Popper details how its creator, Ross Ulbricht, a young libertarian idealist, saw Bitcoin as the perfect currency for his vision of a truly free market, where anything could be bought and sold. Suddenly, Bitcoin had its first killer app. And it was buying drugs online. Lewis: That can't have been good for its reputation. How did the early idealists, like the ones who were in it for the philosophy, react to that? Joe: It created a massive rift in the community. Some were horrified. They saw their beautiful project being co-opted by criminals. Even Satoshi Nakamoto, in one of his last public messages, expressed concern, saying the project had attracted the wrong kind of attention too soon. Others, the more hardcore libertarians, argued that this was the point—a currency free from anyone's moral judgment. Lewis: So the project was already being pulled in two different directions. But the real disaster was Mt. Gox itself, right? Joe: The absolute, world-shaking disaster. Jed McCaleb, the creator, found running the exchange too stressful. So he sold it to a French programmer living in Japan named Mark Karpeles. And Karpeles was, to put it mildly, not up to the task. The book paints a portrait of a brilliant but disastrously incompetent manager. The exchange was buggy, security was a mess, and he was running the world's largest Bitcoin bank essentially from his laptop. Lewis: That sounds like a recipe for catastrophe. Joe: And it was. In early 2014, Mt. Gox abruptly went offline. After weeks of silence, Karpeles announced that the exchange had been hacked over a period of years. They had lost 850,000 Bitcoins. At the time, it was worth nearly half a billion dollars. It was their customers' money. And it was just… gone. Lewis: He just lost half a billion dollars of other people's money? How is that even possible? Did he go to jail? Joe: He did face legal trouble in Japan, but the story is a cautionary tale about an unregulated frontier. There was no FDIC insurance, no safety net. People who had trusted Mt. Gox with their life savings were wiped out overnight. The price of Bitcoin crashed. To the outside world, it looked like the whole experiment was over. A failed, nerdy currency used by criminals and run by incompetents. Lewis: Honestly, after hearing that, I'm shocked it survived. It sounds like it should have died right there in 2014. Joe: It absolutely should have. And many people declared it dead. The media had a field day. But this is where the core insight of Digital Gold really shines.

Lewis: So how did it pull through? What saved it from the scrapheap of failed tech ideas? Joe: The idea was bigger and more resilient than any single person or company. While Mt. Gox was imploding in a spectacular fireball of incompetence, the book shows us that a different kind of person was getting interested. People like Wences Casares, a respected tech entrepreneur from Argentina who had lived through hyperinflation and understood the need for a non-governmental store of value. He started quietly buying Bitcoin and convincing his powerful friends in Silicon Valley. Lewis: So as the first wave of misfits and cowboys were crashing and burning, a second, more professional wave was just getting started. Joe: Precisely. The book shows that Bitcoin isn't a company like Mt. Gox that can go bankrupt. It's a protocol, an idea, a network. It has no CEO, no headquarters. Its survival depended on this strange, decentralized, and constantly evolving mix of cypherpunks, libertarians, speculators, and eventually, serious venture capitalists and engineers who saw its true potential. The collapse of Mt. Gox was a painful, necessary cleansing. It forced the ecosystem to grow up. Lewis: It had to almost die to prove it couldn't be killed. Joe: That's a perfect way to put it. The chaos was a stress test that proved the underlying network, the core idea of the blockchain, actually worked. It was the centralized, human points of failure that broke, not the decentralized technology itself. Lewis: That's a fascinating distinction. It leaves you with a pretty big question, though. Joe: What's that? Lewis: Can a system born from such rebellious, anti-establishment, and frankly, chaotic roots ever truly become mainstream without losing its soul? Can it be both a tool for Argentinians escaping hyperinflation and a regulated asset in a Wall Street ETF? Joe: That is the fundamental tension that still exists today, and Popper's book lays out its origins perfectly. It's a question we're still trying to answer. Lewis: It's a great question. We'd love to hear what you all think. Does Bitcoin's messy, wild-west history make you trust it more, because it survived? Or less, because of where it came from? Find us on our socials and let us know your take. Joe: This is Aibrary, signing off.