Getting Bitcoin in 2013
In 2013, buying Bitcoin was not what it is today. There was no Coinbase with a clean mobile app. There was no "link your bank account." The on-ramp was a Rube Goldberg machine of sketchy intermediaries held together by forum reputation systems.
Here's how I bought my first Bitcoin:
- Find a seller on a forum (BitcoinTalk or similar) willing to accept payment via MoneyGram
- Go to a physical MoneyGram location — usually a Walmart or a check-cashing store
- Fill out a paper form with the seller's name and destination country
- Hand over cash plus a $12 fee
- Wait for the seller to confirm receipt
- But the seller wouldn't send Bitcoin — they'd send Second Life Lindens (L$)
- Take the Lindens to a different exchange — VirWoX was the common one
- Exchange L$ for Bitcoin at whatever rate VirWoX offered
The whole process took anywhere from a few hours to a few days. The spreads were terrible. The counterparty risk was enormous. But it worked. The entire pipeline existed because payment processors had already blacklisted Bitcoin exchanges, and MoneyGram didn't know or care that someone in Florida was wiring $200 to someone in Slovenia for video game currency that would be converted to magic internet money.
The Altcoin Casino
Once you had Bitcoin, the next step — at least in 2013-2014 — was altcoins. Not Ethereum (it didn't exist yet). Not stablecoins. The altcoins of the era had names like Feathercoin, WorldCoin, and Dogecoin. Most were Litecoin clones with a different name and a slightly modified mining algorithm. The thesis was simple: Bitcoin went from $1 to $1000, and if any of these caught even a fraction of that momentum, you'd be rich.
Cryptsy was where you traded them. Launched in 2013 by Paul Vernon (who went by "Big Vern" on the forums), Cryptsy was the dominant altcoin exchange. At its peak it listed over 200 trading pairs. The interface was ugly — think early-2000s PHP with Comic Sans — but it worked, and it had the liquidity.
I accumulated a portfolio spread across maybe 15 altcoins. Nothing life-changing in dollar terms — a few hundred dollars total, bought with Bitcoin that had itself been bought with money wired through a Walmart. But the potential returns, in the logic of 2013 crypto speculation, were infinite.
The Warning Signs
Exchanges died constantly in this era. Mt. Gox collapsed in February 2014. MintPal had its funds stolen. Every few months another exchange would announce it had been "hacked" (a term that covered everything from actual security breaches to founder exit scams). The community developed a gallows humor about it: "not your keys, not your coins" was not yet a slogan, but the sentiment was there.
Cryptsy showed the classic warning signs through 2015:
- Withdrawals slowed from hours to days to weeks
- Support tickets went unanswered
- "Big Vern" stopped posting on the forums
- The exchange started delisting coins without explanation
- Reports circulated of large withdrawals being processed only for VIP users
I ignored all of them. Moving coins off the exchange meant transaction fees, wallet setups, and accepting that the speculation was over. It was easier to leave them there and check the portfolio value every few days, watching the numbers bounce around.
January 14, 2016
On January 14, 2016, Cryptsy went offline. The homepage was replaced with a message claiming the exchange was under maintenance. A few days later, Vernon posted that Cryptsy had been the victim of a hack in July 2014 — nearly 18 months earlier — in which 13,000 BTC and 300,000 LTC had been stolen. He'd been operating the exchange as a fractional reserve ever since, using new deposits to cover withdrawals.
The numbers were staggering: approximately 13,000 BTC (worth roughly $5 million at the time) and 300,000 LTC were gone. But the real loss was in the altcoins — tens of millions of dollars in Feathercoin, Dogecoin, Vertcoin, and dozens of others that the exchange held in custody.
My portfolio was gone. Not just the Bitcoin I'd bought through the Linden dollar pipeline, but all the altcoins I'd accumulated over two years of speculative trading. The total was maybe a few thousand dollars by 2016 prices — though if I'd held some of those positions a few more years, it would have been considerably more.
A class-action lawsuit was filed. Vernon fled to China. In 2021, he was indicted by the U.S. Department of Justice on charges of wire fraud, money laundering, and tax evasion related to the theft of over $1 million in customer funds. As of 2026, he remains a fugitive.
What I Kept
I didn't lose everything. I had some Bitcoin in a local wallet — the version of Bitcoin Core that took three days to sync and used 60 GB of disk space. That Bitcoin, bought through the Linden pipeline, survived because it was never on an exchange.
The Cryptsy collapse taught a lesson that the crypto industry would relearn many times over the next decade: custody is everything. An exchange balance is an IOU from a company that may or may not exist tomorrow. The whole point of cryptocurrency was supposed to be that you didn't need to trust anyone — but the infrastructure wasn't ready, and most people (myself included) trusted the exchanges anyway.
I stopped trading altcoins after Cryptsy. The few Bitcoin I kept became, over the next several years, worth more than the entire altcoin portfolio I'd lost — not because I was smart, but because I was too lazy to move them. That laziness, it turned out, was the best investment strategy I've ever had.