An excerpt from

Bitcoin

Dominic Frisby

­­­Bitcoin Meet

'Informal Bitcoin get-together,' says the link I've been texted. 'Saturday 1pm to 4pm. Meet under the blue awning at St James Square in Spitalfields.'

I arrive about 1.45. There is no blue awning. But fifty or so people are milling under a white one. It's bitterly cold.

'Ask me,' says a sticker on the coat of a young chap with a bowler hat. So I do.

Yes, this is the Bitcoin get-together.

He's a computer programmer for a financial services company. Late 20s I'd guess. He's been into Bitcoin for a while and thinks the price has got ahead of itself but he's still into it. We start talking about the future of Bitcoin and whether it's going to change the world, that kind of thing.

A dude with a gold tooth and a blue leather jacket approaches us and starts listening in.

'You got any bitcoins , then?' he asks after a while.

'A couple,' I say.

'How did you get them?'

'I was given them a while back'.

'Ah.'

He thinks for a moment.

'But have you ever actually used, them?' he asks.

'Yeah. A few times. I bought weed on the Silk Road.'

'What's that? I've heard of that, I think.'

'It's a website where you could buy drugs and stuff - using bitcoins.'

'What and it actually arrived?'

'Yeah. A couple of days after I order it. From Mr Clonk'.

'Wow!' he says thoughtfully. He's impressed. I can see all sorts of ideas going through his head.

Next I meet a middle class kid with tatty clothes and a confident air. He's developing a system by which you can buy and sell goods on Amazon with Bitcoin. He's hoping to close the deal with Amazon next week. Then I meet Fabio, an Italian computer programmer, who wants to convert his brother's pizza delivery company in Dubai to Bitcoin. There’s an Eastern European whose name I didn't catch who bought bitcoins because Max Keiser told him to.

I meet Seshu from Bangalore who's developing a Bitcoin bank, which pays 80% interest. 80%! It also allows people to make leveraged bets on bitcoin.

'When I talk about leverage and gearing in my PR, do you think people will understand what that means?' he asks.

This is all in about fifteen minutes. I'm amazed at the creativity Bitcoin is inspiring and the opportunities it’s creating.

A chubby posh chap in an oil skin coat stands on a table.

'All right, we're going to have a live auction. Could everybody gather round? The people who are selling over here. The people who are buying over here. So what am I offered?'

'Five hundred and thirty pounds.' comes a call. 'Five thirty for one bitcoin.'

'Five thirty for one bitcoin,' calls out the posh chap.

'Five fifteen,' comes an offer from a bloke with a beard who looks like Captain Birdseye.

'Five twenty-five,' suggests the seller.

'Meet at five twenty?' ventures our auctioneer.

After a moment, they both nod.

'Sold. We have our first sale of the afternoon. Right five twenty-five is the price. Do we have any more?'

He's clearly done this before - and is a natural.

Over the course of the next few minutes I watch as several bitcoins - or 'satoshis' ('satoshis' are divisions of bitcoins, rather as cents are to dollars or pence to pounds) - change hands. Wads of notes are passed and bitcoins are transferred via mobile phone or computer.

I remember the pyramid schemes in the late 1990s. You paid £1,500 to get your place on the pyramid and then had to find eight people beneath you each paying £1,500 to you, so you made £12,000. They then had to find eight more. The large wads of cash flying about reminded me of then. Alarm bells are going off. It's a pyramid scheme, a ponzi scheme, a scam.

Now, like then, there are all sorts at the meeting - people from all over Europe, Asians, Africans, the full gamut of London-born diversity from City bod to Shoreditch twat to Caribbean dude, a load of grungy-looking guys who are either homeless or perennials on the festival circuit (complete with tracksuit bottoms, hoodies, roll ups, cans of lager and bad teeth) and goodness knows what else. Heck, there's even a transvestite. I've never seen so much variety in so few people - except for the fact that most are blokes. All are there enticed by the lure of easy riches.

I get talking to the chubby auctioneer. Adam's his name. He’s extremely polite and respectful - but cagy when I ask him what he does. He's a former fund manager from the city and he's obviously been given stick for working in the City. I put him at ease by saying I work for Moneyweek.

It's impossible to make any money now as an independent, he says. He used to buy distressed companies, but there are no distressed companies any more. Low interest rates have meant that what should have died lives on. If he wants to set up a fund, the regulation is so onerous that he would need to raise £100 million to make it viable. That's impossible. Regulation has just re-enforced the monopolies of the banks. Big corporations like regulation because only they can afford it. It's a great big barrier to entry.

'But Bitcoin. There's none of that in Bitcoin. It's the future,' he says.

He's been called over to start another auction. A canny East End Jewish lad in his mid-30s, Paul, seems to be running things. I want to talk to him.

As the auction begins, Paul offers to buy one hundred pounds of bitcoin at £500 a coin. I want an excuse to talk him, so I accept.

'One hundred pounds worth of bitcoin at five hundred. Sold,' calls out Adam.

Paul walks over to me.

'I've got to go to the cash point,' he says. 'Come on. I'll buy you a coffee. It's freezing. I need to warm up.'

The auction continues as we make our way to the cafe.

'Five hundred anyone?' shouts Adam the auctioneer from the table on which he's standing.

'Yes!' calls out one of the homeless/festival perennials, just as we pass them.

His mates snigger.

'Yes what?' says Adam.

'Er.'

The guy doesn't know. He looks at his mates. They snigger some more.

He's skinny, about five foot eight, mid-20s maybe, unshaven, wearing dirty grey tracksuit bottoms and, not one, but two hoodies, both up over his head. Under the hoods I make out a mischievous pair of dark eyes. A badge has been sown on to the outer hoody. It's a CND logo with the words 'Sean's Outpost Homeless Outreach.'

'So he is homeless,' I think. How come the homeless are interested in Bitcoin?

Underneath 'Sean's Outpost Homeless Outreach' are the words 'Satoshi forest,' but I barely notice. I'm too busy wondering why on earth there are so many homeless at a Bitcoin meet.

The auction continues.

'Five-twenty anyone?'

'Yes. Five twenty!' calls out the homeless dude.

'Bid or offer?' asks Adam.

'Er ... Offer,' he guesses.

He's confused again. There's a pause as he tries to register the question. He looks to his mates for help.

'Do you want to buy or sell?' asks Adam, patiently.

He's stumped again. His mates snigger some more.

'Yes,' he guesses. Then he shouts out, 'Don't know'.

'You're not really cut out for capital markets, are you,' heckles my Jewish bitcoin buyer Paul.

Everybody laughs.

But my first thought is concern. 'You can't take the piss out of a homeless person like that.’

I go for my coffee with Paul. He's a derivatives trader. Friendly, open, extremely knowledge-able, a fantastic source of information and contacts and very confident. We exchange emails and he sends me all sorts of links to interesting bitcoin reading later.

'It was funny what you said to that homeless dude. How come there are so many homeless at a Bitcoin meet?'

'Homeless? Ha! That's Amir,' says Paul.

'Amir? Amir Taaki?'

Amir Taaki is one of the world's most dangerous/talented computer hackers - and one of bitcoin's key coders. I thought he was in Spain developing a dark wallet. I have to talk to him.

We go back to the meet. Everybody else wants to talk to Amir as well. They're all asking him who Satoshi is. Paul introduces us. Amir's happy to meet.

At 11 the following morning, I find myself standing outside a squat in Bow.