College Connect Fall 2018: I Spent All My Bitcoin On Cookies

By Yael Grauer

About three years ago, I caught wind of an unconventional bake sale. The Cybertwee bake sale originated as a Kickstarter campaign. For 24 hours, a site on the dark web (also known as the deep web) allowed users to buy rosewater cardamom cookies using cryptocurrency.

The project’s goal was two-fold. First, it would show that something cute and innocent can take place on the deep web, even though it’s notorious for nefarious uses. Second, it would teach people how to use the Tor browser and cryptocurrency.

Even before the bake sale, I’d already downloaded the Tor browser, since it has a lot of uses beyond illegal activity and cybertwee bake sales. It’s also used for investigative reporting, for example, to help newsrooms and journalists avoid leaking their IP address and identity to the company they are investigating before they’re ready to do so. Using the Tor browser, I accessed the website for the bake sale. It was a .onion address, meaning that it could only be viewed over the Tor browser.

I also had to buy bitcoin, which I did over Coinbase. The cookies were priced at $7 for five cookies, which at the time was .0212 BTC. I decided to buy 10 cookies for $14.

The bake sale introduced me to alternative money systems and to Bitcoin itself, which I’d only heard and read about but hadn’t actually used. In that, it was successful. However, it wasn’t all rainbows and roses. At the time, the price per coin was $376.91. I spent $15.61, plus a 16-cent fee, to buy .04141532 BTC. Had I kept the money in Coinbase instead of buying cookies, I would now have $277.74 in Bitcoin. By the time I realized the value of cryptocurrency was skyrocketing, it was too late. The price had risen to $14,144.38 per coin, which meant that at that moment my cookie money would’ve been worth $585.79. Instead, I bought $15 in BTC, which was only worth .00095515 BTC. Today that $15 is only worth $6.42.

It’s hard to pinpoint a specific money lesson from this experience since cryptocurrency is so volatile. This lesson seems like it has more to do with gambling than investing. Had I taken a $15 risk on cryptocurrency instead of (or in addition to) buying cookies, I could’ve earned hundreds of dollars, but I would’ve also needed the foresight to withdraw at the appropriate time. Putting in an additional $15 after the rates already started plummeting wasn’t the wisest decision. Luckily, I haven’t thrown in additional money in response to the lower rates. The Monte Carlo fallacy, also known as the gambler’s fallacy, is a mistaken belief that if an event happens often, it is less likely to happen in the future. Gamblers who lose money in a given period mistakenly continue to bet, thinking they will be more likely to win in the near future.  That isn’t the case. With money gambled and money invested in cryptocurrency (or anything else), it’s always possible to just keep losing it.

Yael Grauer is a student at Arizona State University.

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