STEVE INSKEEP, BYLINE: The writer Andy Greenberg says he missed his chance. More than a decade ago, in the early days of cryptocurrency, he grew curious about something called bitcoin.
ANDY GREENBERG: I actually did, in the course of reporting my first story about bitcoin in 2011, try to buy about $40 worth of it, which would have been 40 bitcoins. And there was a bug in the exchange that I used. And I wasn't very persistent about it, and I gave up. And that was a potentially multimillion-dollar mistake that I try not to think about too much.
INSKEEP: Because bitcoin later soared in value. It has since periodically crashed as well. It's a wild world of commerce and speculation where people make fortunes and lose them. Just in recent days, one of the main cryptocurrency exchanges collapsed. Greenberg's new book, "Tracers In The Dark," explores the growth of illicit commerce with crypto. In the style of a thriller novel, he also follows some U.S. law enforcement agents who tracked illegal transactions around the world.
GREENBERG: Around 2011, the Silk Road appeared, which was this new phenomenon - a vast market for practically every drug imaginable, like narcotics, available on the dark web. And bitcoin had enabled the Silk Road to allow people to create this eBay for all manner of contraband. And soon, the Silk Road and its kind of mysterious creator, who called himself the Dread Pirate Roberts, was transacting in millions and millions of dollars' worth of narcotics.
INSKEEP: I want to explain to people who don't visit the dark web. The Silk Road was just the name of a website, right? But it's one that you could visit without being traced yourself. Or you thought you could visit without being traced.
GREENBERG: Right. The dark web was years-old technology, but it had never seemed like it was possible before to do e-commerce on the dark web because it seemed like any kind of PayPal or, God forbid, credit cards that you used could easily be traced. The bitcoin changed that and opened up this new world where the Silk Road and its many, many drug dealers believed that they could do millions of dollars' worth of narcotics deals and nobody could follow the money.
INSKEEP: You interviewed at one point, I believe, the person who identified himself as the Dread Pirate Roberts. And he described this not just as a way to make money illicitly, but a kind of ideology. What's the ideology here?
GREENBERG: Well, the Dread Pirate Roberts, who turned out to be this 29-year-old Texan named Ross Ulbricht, he did have a kind of ideology of victimless crime. And he saw bitcoin as the secret ingredient that was going to allow him to launch a revolution where the states - you know, capital S, as he puts it - would no longer be able to control what people bought and sold or put in their bodies or all sorts of other things that you can do with truly untraceable money, as he believed that it was.
INSKEEP: Many people believed bitcoin transactions were untraceable. That's because you go on some online exchange; you send cryptocurrency to somebody; and both the sender and the recipient are identified only by some random string of letters and numbers. Here's our producer Kaity Kline reading such a string.
KAITY KLINE, BYLINE: 1-5-T-7-S-A-G-S...
INSKEEP: Understandably, Andy Greenberg himself used to think there was no way to track a transaction.
GREENBERG: There was this kind of slow-motion epiphany among, first, technology researchers and then a few technology entrepreneurs and then finally law enforcement that, in fact, bitcoin and many other cryptocurrencies are anything but untraceable.
INSKEEP: Even if the transaction is masked, it has to be posted in public to prove it ever happened. Law enforcement agents can use that fact and other clues to track transactions. Greenberg's book tells of the collapse of the Silk Road and also of an IRS agent who followed up on that case.
GREENBERG: And found, by tracing bitcoins, that not one, but two federal agents - a DEA agent and a Secret Service agent - had stolen hundreds of thousands of dollars' worth of bitcoins in the process of their investigation. These were corrupt agents. So those two agents were identified and, in fact, served prison terms because their bitcoins were traced. And that was the first case where anyone actually traced bitcoins to prove someone's guilt.
INSKEEP: So let's talk about the bottom line for cryptocurrency. It seems to me, as you describe it, there's a fundamental problem with the idea of private cryptocurrency transactions in that the assurance that the currency even exists is that something about the transaction is public. Is that right?
GREENBERG: Right. I mean, the only sense in which a bitcoin can be said to exist or to move or whatever is because that is recorded on the blockchain. And I think once it became clear that the blockchain actually makes bitcoin just the opposite of private, there are now, I think, very few cybercriminals left in places where they are still vulnerable to Western law enforcement who are using Bitcoin under this illusion that it is untraceable.
There are, like, the people who are using it for legal purposes just as an investment or whatever. Then, there are criminals who are still using cryptocurrencies, but very often, they're based in Russia or North Korea, places where they know that even if the money can be traced, they're still beyond the reach of Western law enforcement. And then, maybe there is still this group that's small and perhaps dwindling of people who still are working under the misapprehension that if they're clever enough, they can still prevent their cryptocurrency transactions from being traced. And they are doing something that they want to be private or maybe even illegal and playing that cat-and-mouse game and hoping to stay a step ahead.
But the kind of remarkable thing about this cat-and-mouse game is that every time the cats catch up, these, like, essentially blockchain surveillance agents and companies, they don't just gain the ability to trace the mice going forward. They can actually go back in time and look at the past transactions on the blockchain, which cannot be changed - they're a permanent record - and catch people doing criminal things from years or even, like, some cases, a decade earlier.
INSKEEP: Does the success of law enforcement in this area mean that the ideology of cryptocurrency has failed?
GREENBERG: Well, I think that the ideology of cryptocurrency has certainly changed. There was once a belief that bitcoin was going to be cash for the internet in the sense that you could buy a cup of coffee with it and in the sense that it was essentially anonymous, the same way that cash can be. And then - I think very few people believe that today. People now see a new ideology in bitcoin, which is that it's sort of, like, better gold than gold.
But it's worth noting, too, that in the larger cryptocurrency community, people are still trying to build truly private and even untraceable cryptocurrencies, like Monero and one called Zcash, that used new tricks to try to ensure people's privacy. I think that in some cases, law enforcement will find ways nonetheless to trace those, and it will be an unpleasant surprise for some of those users, just as there was for bitcoin.
I actually have to say that I do think that it is technically possible to build an untraceable currency. Zcash, for instance, fully encrypts its blockchain. And if that catches on and there is truly untraceable money of the kind that people once mistakenly thought bitcoin was, but now for real, that could change societies in ways that are really hard to predict.
INSKEEP: Andy Greenberg's new book is called "Tracers In The Dark: The Global Hunt For The Crime Lords Of Cryptocurrency." Thanks so much.
GREENBERG: Thank you, Steve.
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