Riding the Bitcoin Bubble in Panama
Jun 29 2013
A photo from the author’s Bitcoin-funded trip to Bocas del Toro.
In March I flew from San Francisco to Panama City with less than $200 in my bank account. I wasn’t worried about my lack of funds. A week earlier, a guy I’d met online had bought me a plane ticket to help him crew a sailboat from the eastern end of the Panama Canal back to the states—and I had a stockpile of bitcoins that could support me down south.
A year earlier, I’d bought a bunch of bitcoins at $4 per bitcoin after reading about the decentralized, unregulated, peer-to-peer currency. At this point, its only practical function still seems to be facilitating shady deals online and making fast cash for chubby guys who like to stare at computer monitors—but they say it has potential. I tested out Silk Road (the internet drug market) and bought some junk, but for the most part, my digital cash just sat there. It was nothing more than my own amateur market speculation, but I knew the Mickey Mouse currency would tide me over if anything went wrong on the trip.
And of course, it did.
My first night at sea, I went below the deck to puke and wound up staring into a toilet filled with bloody vomit. The captain turned the ship around, and at the port, a Panamanian doctor told me getting back on the boat meant risking a perforated ulcer, which at sea meant bleeding out. I told the captain I was staying behind on doctor’s orders.
After watching the boat sail off without me, I hitched a ride to Panama City, where I checked in to a hostel and spent the night drinking ulcer-friendly coke at a rooftop bar (the doc had banned me from touching liquor). The club had a lovely view of the ersatz metropolis and was packed with wealthy Latin American expats. With the exception of the Colombian prostitutes the expats had hired as arm candy, everyone seemed like they worked in finance, which makes sense considering they call Panama City the money laundering capital of the Americas. There are apartment towers scattered about seemingly at random, the rumor being that half the floors are empty—nothing more than projects built as a way for drug lords to own legitimate assets.
In other words, Panama City was the perfect place to live on digital speculation. My second day in town, I sold ten bitcoins for $52 each on the digital currency exchange website Mt.Gox and then used BitInstant, a Brooklyn-based service, to turn a Mt.Gox voucher into digital dollars of the PayPal variety. In three days, PayPal wired my funny money to my Chase Manhattan account, magically no longer funny. And bitcoin kept shooting up—each time I made a withdrawal from my Mt.Gox account the value of bitcoins was higher than before.
But I didn’t like Panama City. I may have been making easy money, but I didn’t like spending my time with seedy white guys who hung out in bars discussing the vague financial jobs that brought them to a wannabe South Beach. So I hopped a bus to Bocas del Toro—Panama’s backpacker party islands—for spring break.
What I did there, besides feel just a little too old, was slowly get over the fear of my alleged ulcer by turning bitcoins into dollars, dollars into beer, and beer into awkward dancing with Israeli girls who had no interest in gentiles.
I lived the high life, but I couldn't bring myself to look closely at the numbers—I knew this boom was a bubble. Midway through the process of buying a tan Scandinavian girl a beer, I became anxious about my bank account, but confidence returned between the dollar tequila shot and chaser. Bitcoin was a bubble, but damn it if I couldn’t ride that bubble straight into a Swedish girl’s pants. If I could play this market right, I could transform this cycle of bleary mornings and oh-so-close nights into a lifestyle.
I got tired of Bocas del Toro—its humid debauchery had run its course. So I hopped a bus to the breezy mountain town of Boquete. When I arrived, I realized my bitcoin money had bought me a gut that was swollen enough to make me look like I had a potbelly. I was done with Panamanian piss beer and slutty Danish girls no matter how nice their thighs were.
Bitcoin peaked at $266 while I was in Boquete. I went out and bought a huge meal, ate ice cream, went on a tour of a coffee plantation, sent presents home, and bought strangers mojitos. Two days later Bitcoin crashed to $60 and I stopped eating.
I left for Costa Rica hoping that Bitcoin would rebound, but ran into problems with my passport at the border. They wouldn’t let me through, so I blew my last $20 on a bus back to Panama City, where I had to barter my sunglasses on a cab ride back to a hostel that has a free pancake breakfast and doesn’t make you pay up front. I sold my iPod for food money, slipped my belt a notch tighter, and sat back to watch the bitcoin market churn, praying for another bubble that never came.
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