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Robert Reed: One man's quest to comprehend cryptocurrency

Robert Reed, Chicago Tribune on

Published in Business News

If you ask me to stand on one leg and quickly describe what bitcoin is, I'd fall down.

Like the vast majority of people, I really don't understand this emerging, digital alternative to cold, hard cash and what it's ultimately supposed to accomplish, or why anyone would want it in their 401(k) retirement account.

Nonetheless, bitcoin is gaining popularity and notoriety with large and small investors, regulators and Chicago's two global exchanges, which in a few days will start trading bitcoin futures.

It bugs me that there's something big going on and I'm in the dark. In an attempt to overcome bitcoin befuddlement, I spent a day foraging for information about this exotic monetary newcomer and trying to get a handle on why we should care that it's out there.

Where did my sojourn begin? Netflix!

The movie subscription service offers a 2017 documentary titled "Banking on Bitcoin" that's a pretty good primer on the birth of the cyber coinage and its subsequent travails.

 

The upshot: Bitcoin was concocted by a band of self-proclaimed cypherpunks, tech-savvy anarchists who in the early part of this century were hot to create their own computer-generated marketplace and currency system. They wanted to sidestep the U.S. and other governments' centralized banking systems and regulations.

In 2008, Satoshi Nakamoto, a pseudonym for an unidentified individual or individuals, wrote a white paper on bitcoin that set the wheels in motion. Apparently, Nakamoto vanished from the scene, giving bitcoin's origins a continuing air of mystery that dogs it to this day.

Law enforcement repeatedly has claimed that gangsters, drug dealers and other nefarious types -- the early adopters -- embraced bitcoin to launder money and purchase illegal goods, including weapons, on the dark web. There are a fair number of news stories online on that topic, going back to bitcoin's earliest days.

In September, one of the most damning private-sector claims against bitcoin surfaced when Jamie Dimon, CEO of JP Morgan Chase, called bitcoin a scam used by drug dealers, murderers and outlaw government regimes.

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