Bitcoin Billionaires

by Ben Mezrich

“You’re right,” Cameron said. “And neither do you. Look, Charlie, you need to understand. These meetings—we’re trying to mainstream Bitcoin. We don’t want it to be some kind of circus novelty riding on fringe ideology. If this is going to be gold 2.0, it has to appeal to everyone. Investment banks aren’t going to set up trading desks for an asset marketed by drug dealers that’s supposed to kill governments.”

  Charlie rubbed his eyes.

  “None of us are drug dealers.”

  “Right now, that’s exactly what you look like. You need to clean up your act.”

  Cameron felt his breath coming more easily. Just getting it out into the open helped, like uncapping a bottle of soda. He could tell that Tyler hadn’t finished with the CEO discussion, but for now, they had made their point. Hopefully, it had landed.

  “That’s what you guys are for,” Charlie finally responded. “You’re the keynote speakers.”

  Cameron had to give him that one. Cameron and Tyler were supposed to be the camera-ready ambassadors—which freed up Charlie to be a ringleader in the sideshow.

  A part he seemed eager to play.

  “Let’s chalk this up to a learning experience,” Cameron said, before his brother could end on a more pointed note. “At the conference, let’s make sure to be on our best behavior.”

  The conference was still months away, but if Charlie hit Bitcoin 2013 like he’d rolled into the meeting they’d just escaped, there was no telling what trouble he’d cause. But then again, he’d said it himself: he wasn’t giving the keynote, they were.

  Charlie reached out to shake both their hands.

  “You guys are right, of course. What I just did in there—that was inexcusable. And it won’t happen again. Really, it was just a speed bump.”

  His palms were wet, and he was trembling, like the first time they’d met.

  But as Cameron watched him walk away down Lexington Avenue, Charlie’s little form was engaged in what could only be described as a strut.

  18

  BRIGHT LIGHTS

  Almost two weeks later, the travesty of the Abercrom meeting fading into a bad memory, Tyler sat in a Starbucks, watching the crowds of tourists and Manhattanites moving along Eighth Street through the window. It was unusual for him to choose such a visible table where he’d be on display, but the place was crowded for 11:00 A.M. on a Tuesday; then again, it was Astor Place, one of the liveliest spots in the city, smack in the middle of the East Village and a stone’s throw away from NYU. Tyler had chosen the table, but not the Starbucks itself. He searched the crowd outside for any sign of their quarry.

  “There he is,” Cameron said, pointing in the direction of a dapper man moving toward them through the traffic jam of coffee addicts.

  Tall, hair flecked with silver, chiseled facial structure above a criminally square jaw, wearing what appeared to be a Savile Row suit and an ascot tied around his neck: the guy looked like he’d just stepped out of an F. Scott Fitzgerald novel. Certainly from a different era, and only as he got closer could Tyler make out the lines around his eyes, the cellular log of the psychic distance he’d traveled in his fifty-odd years.

  “Lads,” he said, taking the seat Cameron offered him, then smiling at the pastries and drinks spread out across the table. “Quite the buffet you’ve set up. I hope I didn’t keep you waiting too long.”

  “Just got here ourselves,” Tyler fibbed.

  Matthew Mellon II was the sort of guy you didn’t mind waiting around for. He descended from two of the most prominent financial families in the country: on his father’s side, Judge Thomas Mellon had founded Mellon Bank in 1869, once one of the largest banks in the world, which in 2006 had merged with the Bank of New York, the oldest company in the United States, to become Bank of New York Mellon. On his mother’s side, he was a direct descendent of Anthony Joseph Drexel, the founder of Drexel Burnham Lambert, a Wall Street investment bank created in 1935 that had gone bankrupt fifty-five years later, in 1990, following the indictment of its rainmaker Michael Milken, dubbed the Junk Bond King.

  So Mellon had been born to banking royalty—and with that came all the ups and downs one would imagine. His father had killed himself when Matthew was in college at the Wharton School at the University of Pennsylvania. During his senior year, the younger Mellon had inherited $25 million at the age of twenty-one—and promptly bought himself a six-bedroom apartment off campus, a red Ferrari, and a black Porsche.

  After graduating, he’d decided to cut his own path and had moved to Los Angeles. He’d chased careers in acting, modeling, and fashion before becoming an entrepreneur. Like his father, he suffered from bipolar disorder and had fought public battles with various addictions. Despite his struggles, he was one of the most charming, creative business thinkers in the country and, most importantly, one of the most open-minded. He’d cofounded Jimmy Choo, a high-fashion shoe company, with his ex-wife Tamara Mellon, whom he’d met at a Narcotics Anonymous meeting. In 2017, Jimmy Choo was bought for over a billion dollars by Michael Kors Holdings. Few people in the world understood the cross-section of the finance, fashion, entertainment, and politics better than Matthew Mellon II.

  Mellon fit perfectly into Tyler and Cameron’s ongoing Bitcoin tour. Although they usually met with institutions like hedge funds, proprietary trading firms, family offices, and other financial companies, they’d decided to expand their outreach leading up to the Bitcoin 2013 conference to anyone interesting enough, and interested enough, to take their calls.

  It was a strategy that had landed them in front of some pretty spectacular people. Only days earlier, they’d dined with Richard Branson, the Virgin billionaire, at the Soho Beach House in Miami. At the dinner table, they’d used some of their bitcoin to prepurchase $250,000 tickets on Branson’s Virgin Galactic, a suborbital rocket cruise. With only a few taps on their iPhones, Tyler and Cameron had become future astronauts, numbers 700 and 701.

  Branson had already gotten involved in Bitcoin by investing in a company called Bitpay, which helped retailers and other merchants accept bitcoin as payment. After reading the front-page article in the New York Times about the twins’ swan dive into bitcoin, the head of Branson’s “astronaut relations” team had reached them through a mutual friend. He’d recognized the potential PR value of connecting with the twins and seeing if they might be interested in purchasing tickets to space with bitcoin through BitPay, which had led to that dinner. During dinner, Branson had explained that before they went on their suborbital journey, they would have to spend a week at astronaut school in the Mojave Desert—training for space, which hopefully wouldn’t be quite as strenuous as training for the Olympics.

  But Tyler knew that the sit-down with Mellon was different from many of the meetings that had come before. Mellon was not there to learn; he was there to confirm. His excitement and conviction reminded Tyler of how he and his brother had felt in the days leading up to their own headfirst plunge into the new economy.

  “Here’s the deal,” Mellon said, once they’d exchanged pleasantries and a few stories about people they knew in common. “I’ve done a lot of reading since we connected over email, and I’m more than intrigued. I think you boys are onto something. I think you’ve found a rocket ship.” He paused. “My problem is, I don’t know how to get on.” Mellon hadn’t reached out because he needed their knowledge, or a crash course on Bitcoin; he needed their access—more specifically, a safe and secure way to buy himself a seat on their rocket ship, just like they’d bought theirs on Branson’s.

  Cameron and Tyler immediately agreed to help Matthew solve his Bitcoin problem. They also realized the significance of the request. If a man like Mellon—a scion of American banking royalty, literally a descendant of the people who created the banking system in the first place—had trouble getting access to Bitcoin, well then Bitcoin still had major kinks to work out.

  Following coffee, the twins facilitated Mellon’s request by promising to introduce him to Charlie—a risk after the unbearable
meeting with RRE, but one they’d had no choice but to accept. Unlike the many business moguls they’d met on their road trip, Mellon was ready to buy, and buy big. And he—and everyone else who followed the twins into the pool—was about to do very well.

  “My family and friends are going to think I’ve gone crazy,” Mellon said, grinning. “And that’s saying a lot.”

  “Crazy is a relative thing,” Tyler said.

  “You could just start small by buying a handful of coins,” Cameron said. “Watch the market and build a position over time.”

  “That’s not the way I approach things. I’m an all-or-nothing kind of guy.”

  It made sense, especially in the context of Bitcoin. It was like this bug—you either caught it, or you didn’t. Once you were hooked, you were hooked for good. No matter how many people called it a Ponzi scheme or a tulip bubble, you weren’t going to be swayed.

  “Then buy as much bitcoin as you’d like,” Tyler said.

  “I want you to know that I’m pro–Wall Street, pro-business, pro-banking, pro-America,” Mellon said. “And I think that’s exactly where Bitcoin should live.”

  Mellon was a believer, but he was a believer cast in their image, not Ver’s or Voorhees’s. He knew that Bitcoin had to find its place within the financial framework that already existed. Facebook didn’t bring down the internet, it had just pushed the internet in a direction that worked for Facebook.

  As far as the twins were concerned, getting the Bitcoin story out there was only the first step in the journey. Getting people into Bitcoin was the next; it wasn’t a coincidence that they were spending most of their time discussing Bitcoin in New York, which was ground zero of the world’s financial system—where it all began. In 1792, twenty-four stockbrokers signed the Buttonwood Agreement under a buttonwood tree located outside 68 Wall Street, creating the New York Stock Exchange.

  No matter what the ideologues believed, no matter how much they brayed about bringing down banks and governments, the twins knew that if Bitcoin was going to succeed, Wall Street was going to have to get involved.

  After Mellon was off, blending into the foot traffic on Astor Place, Tyler turned back to his brother.

  “Let’s get Charlie on the phone,” Tyler said.

  Although they had reservations about having Charlie broker a deal for Mellon, the alternative was to send him to Mt. Gox, which posed a whole different set of risks that were potentially even worse than their boy wonder CEO. In any event, Charlie should be able to help Mellon buy a meaningful amount of bitcoin, just the same way he had helped them.

  Cameron dialed the number, waited, made a face.

  “What now?” Tyler asked.

  “He’s not there.”

  “What else is new,” Tyler said, sarcastically.

  “No, I mean I’m getting an international ring tone.”

  “What?”

  “He’s got to be out of the country.”

  “You’ve got to be kidding me.”

  The kid had left town without telling them? Their CEO?

  “Where the hell is he? Where did he get the idea that this was okay? He has a business to run.”

  “I’ll give you one guess.”

  19

  THIS SIDE OF PARADISE

  Charlie leaned forward over the Plexiglas balcony, staring out at the blinking lights of a city sprawl both modern and tropical, state-of-the-art skyscrapers mingling with squat, hacienda-style buildings with arched windows and tiled roofs. Everywhere he looked, there were cranes, the accoutrements of a burgeoning economy on its way up.

  It had to be well after three in the morning, and yet the city was just coming alive. Part of Charlie wanted to get back down there, among the cars and the smog and the people, the energy of the packed discotheques, cafés, and restaurants that lined what was a bona fide Red Light District. And another part of him was content to just watch it all from the balcony of his shared, two-story penthouse. After all, why go down to the party, when the party so badly wanted to come to you?

  The balcony extended all the way around the corner of the building, offering nearly 360-degree views of Panama City; from the Pacific Ocean and the famous canal, to the rolling greenery rising up on the other side of the old city behind. But the view over the balcony didn’t hold a candle to the view on the balcony. He counted at least nine women—Panamanian, Colombian, Costa Rican, Mexican—mixed in among his friends. They were all stunning, and the combined effect of so many different flavors of perfume had turned into something palpable.

  The girl next to Charlie was named Kitty and she seemed to be the leader of the group that had come home with them from the nightclub an hour before. A nightclub that didn’t even have a name, lodged at the end of an alley not two blocks from their apartment. Before that, they had spent the better part of the night at the Veneto Casino. Its pink stucco exterior walls and huge, garish neon sign out front would have been right at home on Fremont Street in Las Vegas.

  Charlie wasn’t sure whose idea it was to move the traveling circus back to their place, and he definitely hadn’t invited the girls—Courtney wasn’t with him in Panama at the moment, but she was (and would always be) his everything. Somewhere inside, in the chef’s kitchen on the first floor of the penthouse, their butler was making empanadas; yes, a butler had come with the apartment rental. The smell of frying meat and boiled egg wafted through the open double doors leading out to where Charlie and the rest were congregated.

  Charlie didn’t speak Spanish, so he couldn’t exactly follow everything she was saying as she described the part of the city where the penthouse was located. But he’d read a guidebook during the flight from JFK, and he knew that the posh district—El Cangrejo—had actually been founded by Jewish immigrants more than a half century earlier. The city still bore many clues to its original inhabitants. In fact, earlier in the day, just a few blocks over, Charlie had walked past an enormous stone statue of Albert Einstein’s head, squatting in the yard of what appeared to be an apartment building.

  Since the 1950s, most of the Jews had moved out, and the neighborhood was now diverse, cosmopolitan, and so very much alive.

  This sliver of Central America really was the Wild West: there didn’t seem to be any laws at all, at least laws that you had to follow. Just about everything was negotiable. Not only was prostitution perfectly legal, but Panama’s banking laws were also some of the most lax—or, one could say “innovative”—in the world. The city was rife with companies that would face much harsher scrutiny if they were located most anywhere else. Online poker companies, sports books, money-lending facilities, and now a growing number of bitcoin companies, large and small.

  Charlie looked over to Ver, Erik Voorhees, and Ira, who were gathered around an open laptop, pretty much ignoring the girls. It was no surprise that Ver and Voorhees had gravitated to Panama. Its laws and mores dovetailed perfectly with their belief system. From the minute they’d stepped off the plane from New York, Voorhees had begun planning to make his stay in the Central American country permanent. Having a head of marketing living a thousand miles away, on a different continent, might not have been ideal—but in the age of Bitcoin, Charlie figured there was no real reason why they all had to be in the same physical location.

  For his part, Charlie had left New York basically on a whim to come along with his friends. Since he’d gotten here, he’d avoided checking his email: he knew exactly what he’d find. Reluctantly, he moved away from the balcony and retrieved his own laptop out from under one of the lounge chairs between two tanned, bare ankles. He found a quiet spot close to where his roommates were sitting.

  There they were: Cameron Winklevoss. Tyler Winklevoss. Cameron Winklevoss. Tyler Winklevoss. Multiple emails from both twins, all of them flagged as urgent.

  Even their names somehow looked angry. As he started reading through their messages, he could picture them typing away, maybe in their new glass offices at Winklevoss Capital, maybe back home in Greenwich, maybe in the
ir parents’ house in the Hamptons. Sitting across from each other as they typed, their faces would be equally livid.

  To be fair, he probably should have given them some warning he was leaving town, headed to Panama. But he knew that was only part of the problem. To them, it wouldn’t just be that he was in Panama, it would also be that he was here with Voorhees and especially Ver.

  Honestly, the invitation had come right when he needed it most. It wasn’t just the pitiful meeting he’d attended after the night out of partying; he knew the twins had been justified in berating him about his behavior. It was the constant phone calls, emails, the continuous surge of suggestions that weren’t really suggestions; sure, Tyler and Cameron were the primary investors in BitInstant, but did that give them the right to micromanage Charlie, like he was some sort of twelve-year-old delinquent?

  There was no doubt in his mind. If it were up to the twins, by now they would have replaced him as CEO with someone in a suit, or at least a blazer that fit properly.

  “Look, Charlie,” Ver said from his deck chair, as if he could read Charlie’s worried thoughts. “I think I see them rowing through the canal. Any minute now they’ll be scaling the side of the building to drag you back to New York.”

  “There’s plenty of room for them to join us,” Voorhees said. “I think there’s a pull-out couch in the second-floor living room.”

  Charlie was still scanning their emails. “I think I might have pushed them over the edge this time. They’re really pissed.”

  “Maybe this is a good thing,” Ver said. “Maybe this is the stroke that sends them back to Greenwich.”

  Lately, things had been especially heated between the twins and not just Charlie but his associates too. Tyler and Cameron had started to view Voorhees and Ira as people who were being paid like full-time employees but only working part-time—building their own projects on the side—one of which was a Bitcoin gambling site. The twins believed BitInstant required full-time dedicated employees, not people with one foot in, one foot out. That was how they approached everything, and Charlie could understand it: you didn’t make the Olympics by being a part-timer.