CHAIN GANG: TWO TOUTED TAR HEEL INVESTORS AIM TO BE IN FRONT OF A MOMENTOUS TECH TREND THAT COULD UPEND TRADITIONAL CURRENCIES.

• Author: Tosczak, Mark
• Position: NC TREND: Tracking tech

For those just hearing about the "blockchain" technology that underlies bitcoin and other so-called cryptocurrencies, you're about five years behind Chapel Hill hedge-fund manager Mark Yusko. That's when a friend told him of plans to start a bitcoin fund. "He'd been successful, and he was basically shutting down a multibillion-dollar hedge fund to go into a new business, so I had to at least pay attention," says Yusko, founder of Morgan Creek Capital Management LLC, which oversees more than $1 billion ("Trading places," Page 74).

Now, Yusko incorporates cryptocurrency technology into his investing business, extols its potential at conferences and is raising $25 million for a fund to invest in blockchain-technology ventures. In March, Morgan Creek bought Raleigh-based Full Tilt Capital LLC, an early-stage in vestment firm, as part of a plan to raise up to $500 million to buy blockchain security tokens that represent ownership of assets.

He's not alone in envisioning a virtual currency that could replace dollars, Euros, yen and other government-issued currencies. Walmart Inc. is using the technology to track produce as it travels from farms in Mexico to U.S. stores. Law firm Ward and Smith PA, with five offices in the state, started accepting bitcoin as payment in June. Bank of America Corp. holds 45 blockchain-related patents, more than anyone else, Fortune magazine reported. CEO Brian Moynihan and his peer at JPMorgan Chase & Co., Jamie Dimon, are bullish on the technology, though less so on bitcoin. JPMorgan has launched a blockchain-powered payment processing network with banks in Canada and Australia.

Wilmington-based Reeds Jewelers started accepting bitcoin for payment four years ago. "In 2014, it was probably a lot more of somebody who was an investor in something a little more speculative," says Mitch Cahn, vice president of marketing for the jeweler, which sells online and at 58 stores in 13 states. "It's gotten a lot more mainstream."

Blockchain evangelists imagine a day when the technology will proliferate, though few will understand how it works, much like how smartphones befuddle their users. Here's a brief explainer: Blockchain is the technology that undergirds bitcoin and other cryptocurrencies, as well as new applications. A blockchain is a series of digital files linked together in sequence, with older files toward the beginning of the chain and newer files toward the end. Each block contains transactions similar to an...