I’ll never forget my first Ponzi scheme.

The year was 1978. I was a pudgy and shy sixth grader — or “A-former,” as sixth graders were called at the St. Albans School for Boys. It was my first year at the school, which made me new meat. Also, I was a choirboy, a further social stigma on top of my newness.

Mostly, I kept to the fringe, studying what the other boys were up to, making myself as invisible as possible, but taking copious mental notes.

Good preparation for a future writer!

One rainy day when we were trapped inside for recess, three of my classmates appeared with a homemade board game, their own invention. Inspired by the global map in the game Risk, they’d drawn up their own world of colorful countries. But unlike Risk, the goal of their new game wasn’t military domination of the world; it was economic domination: conquest by ownership.

Given the parents of these privileged boys, who were, more often than not, movers and shakers in the worlds of finance, law, media, and government, I suppose it’s not too surprising that their sons’ games should have taken such a materialistic turn. After all, prep schools like St. Albans were created in the image of English bastions like Eton, the idea being to equip young men with the skills they’d need on the battlefields of empire. Perhaps you’ve heard the quotation, attributed to the Duke of Wellington, “The Battle of Waterloo was won on the playing fields of Eton.”

Of course, Wall Street is a battlefield, too. And let’s not forget that the groovy 1970s were winding down, soon to make way for the “go-go” 80s.

But back to the Ponzi scheme. In order to play my classmates’ new game, you had to buy into it. Specifically, you had to buy a country. The cheapest countries cost a quarter, but no one really wanted those. They were small, poor, and isolated. The more desirable countries cost more. The best ones — centrally located; near rich and powerful neighbors; loaded with people and resources — cost upwards of two dollars.

What followed, once the game was explained, was a kind of feeding frenzy. Countries were bought, and instantly a secondary market sprang up, seemingly out of thin air, with students bidding up the price of the “good” countries.

I watched with amazement as scores of crinkled bills changed hands. I couldn’t believe how much spending money these kids had. The biggest smiles in the room belonged to the students who’d invented the game: they’d kept the choicest countries for themselves, and waited until the buying reached a fever pitch to announce that they were selling them off.

The cleverest students realized fairly quickly that the real goal of the game wasn’t to own the virtual world; it was to get their money out before the whole scheme collapsed. So they set about “pumping and dumping;” i.e., talking up the value of their particular pastel-colored country, using all of their skills as nascent salesmen to convince their classmates to buy, buy, buy…

Of course, after a couple of weeks, all the excitement died down, and the next fad — handheld electronic games — swept the A Form. Everybody had gotten their money out the game — except the unlucky few who happened to be a step slower than the rest. Those poor suckers were left holding the bag.

Lately there’s been a lot of media coverage of “virtual currency” like Bitcoins. If you haven’t heard of them yet, don’t worry: you will. Bitcoins — along with a growing number of competitors, all vying for market share — are an alternative form of currency that exists primarily in the digital world. No government issues or backs them. They live on a so-called “peer-to-peer” network of computer servers in various undisclosed countries, managed by various undisclosed administrators.

If all of this sounds shady…well, it is. The idea is to give people an anonymous, low-cost way of making payments to each other, free from the regulation and interference of governments. And so far, its signature use has been to enable a significant online black market in drugs and other dubious goods and services known as the “Silk Road.”

The first version of the Silk Road was shut down by the FBI in October, but another has already sprung up in its place.

Criminals aren’t the only ones who are bullish on Bitcoins. Online retailers are pushing for them as a money-saving alternative to credit card companies, which charge retailers a hefty fee. The Winklevoss twins — of Facebook fame — have bet heavily on Bitcoins, too. The U.S. Senate has begun to hold hearings to try to get a handle on the implications of a stateless virtual currency, both as a financial instrument to regulate, and as a threat to national security.

Big bucks are being made on these things. One of the challenges of managing a Bitcoin economy is that, unlike the dollar, or the renminbi, whose value is relatively stable from day to day, the price of a Bitcoin fluctuates wildly as new investors rush in to stake a claim. Bitcoins are traded on a secondary market, just like stocks.

Serious people — movers and shakers in the worlds of finance, law, media, and government — are saying that virtual currency is the next big thing.

Hm. Methinks I’ve heard this tune before.