The first time I ran into the concept of virtual currency was when I was talking to a wealthy Korean industrialist in 2004. He said that a new massively multiplayer online role-playing game (MMOPG) was taking Seoul by storm. Something like 40% of the population was playing it. The game was called “Lineage.” He went on to say that he was really into playing the game and that he hired someone to play his avatar for him while he was at work so he wouldn’t lose his virtual strength while he was away from the game.

He then told me that it was his son’s birthday and he asked for a $40 sword. I wondered why he was telling me that, and I politely said, “Oh? What kind of a sword?” He said, “It is really just a picture of a sword and he can use it when he plays in the video game.”

I was shocked. “He wants you to pay for pixels on the screen?” “Yes. The sword has powers and it will help him in gameplay,” He replied. Then I got excited. People would pay for virtual products!

This revelation was an epiphany for me. It got me thinking that there was an amazing business in virtual currency coming. There were many efforts. FarmVille was a fun game that allowed people to buy and trade with virtual gold. People paid real fiat currency to buy more virtual gold. There evolved a market outside of the game for virtual gold. Some people would earn lots of it in the game and others would buy it from them to advance in the game. Something potentially important was beginning. My search for universal virtual currency was afoot.

But it wasn’t until 2011 when I discovered Bitcoin. Bitcoin was a new currency. One that could be used to store value and pay for anything, not just for advancement in a video game. It was a little retro in that it was set up as a marketplace where “miners” would have to “dig” for Bitcoin. They would do it by solving complex algorithms with their computers. Miners got their computers to run simulations that could help them mine Bitcoins faster. Once found, they could be stored in a “wallet” and then spent as needed. There was a decreasing number of Bitcoins made available to be mined over time (the so-called halving), so it was likely that the price of a Bitcoin would increase in value as fewer Bitcoins were mined and its usage increased. The system was set up so that only 21 million Bitcoins would ever be created, so people would not have to worry about their …