The Blockchain Revolution Read online

  * * *

  Two days later, he left for San Francisco and his first meeting as the bank’s representative on the BankCoin Foundation board. Ever vigilant against the threat of a chatty seatmate on such a long flight, he donned his headphones before boarding.

  But despite his precautions and downward gaze after he took his seat, someone nudged his shoulder. Just an accidental bump, he hoped. But then he was poked again. Absentmindedly, Frank turned and found himself looking into the bulging eyes of Dirk Magnus.

  Frank grudgingly took off his earphones. “What takes you to San Francisco?”

  “The same as you, of course. The BankCoin Foundation board meeting.” Magnus saw Frank frowning. “The chair of the Technical Steering Committee is given an automatic board seat,” he continued. “But not on behalf of their employer – to represent the developer community.”

  “Ah – got it,” Frank said. “I guess I’ve heard of that practice.”

  “Yes,” Magnus said, in his usual monotone. “For all my past sins, this is my reward.”

  “I don’t follow you,” Frank said.

  “Where to begin?” Magnus replied.

  Drat! Frank thought. I set myself up for that. He looked longingly at the headphones in his lap.

  “First,” Magnus continued, “I have the same duties as any other board member. But the developers think I am supposed to be their advocate to the board regarding every real and imagined issue, yes? Second, board meetings are confidential. I cannot share anything I hear with the other developers, but they refuse to believe that. And last, I am obliged to support each board decision whether I agree with it or not.”

  “Okay,” Frank said. “Makes sense. How bad has it been?”

  “Perhaps not as bad as I make it sound; I sometimes exaggerate a little. And it is amusing to see how willing the mighty directors are to kiss the butts of the technical folks. You would think the managers worked for the elite programmers rather than the other way around.”

  “Why’s that?”

  “Well, in any brand-new technology, the top programmers are in big demand. The best developers can name their price. They can even refuse to work on a project if they do not approve of it.”

  “What do you mean, not ‘approve’ of it?”

  “Well, for instance: at the first BankCoin Foundation board meeting, an executive VP from one of the largest IT companies in the world said if the board did not pick the right open source license for the BankCoin code, he could never get his developers to work on the project. And he was probably right.”

  “Interesting,” Frank said. “By the way, if you don’t mind my asking, where did you grow up? I’ve been trying to figure out your accent and can’t place it.”

  “Denmark. But I have lived in this country many years now. Will you excuse me? I have much to catch up on.”

  “Of course,” Frank said, as they each donned their headphones. He was learning to identify with this guy, quirks and all.

  * * *

  After the board meeting, the directors adjourned to an expensive restaurant for dinner. As the Golden Gate Bridge bisected the blood-red, sinking sun, Frank settled into his seat and gratefully accepted the glass of wine offered to him by a waiter. It had been a long day in the company of businessmen he didn’t know discussing things of which he was largely ignorant. Luckily, he’d been able to grab a chair at the end of the table next to the most taciturn person on the board. But there was one thing he wanted to talk about with his seat mate.

  “So, what’s Schwert like?” Frank asked.

  Dirk Magnus turned his bulging eyes in Frank’s direction, clearly disappointed that Frank had chosen conversation where silence would have sufficed.

  “As I have said before,” he replied curtly, “He is a brilliant programmer.”

  “Right, but what’s he like beyond that?” Frank pushed.

  “I would not know. We communicate exclusively by email, and we only discuss BankCoin when we do. Why does this matter?”

  Because I don’t know whether to trust him Frank thought. But instead he said, “Why? Doesn’t it seem a bit weird to you that the financial wellbeing of the world relies on someone no one’s ever met or spoken to?”

  “I have also not met nor spoken with the US president,” Magnus said.

  “But you’ve seen and heard him. You know he exists. That’s a big difference.”

  “Do I? The images and sounds you refer to could be computer-generated. It is very easy to do.”

  “Oh, come on now, Dirk. You’re just being difficult.”

  “I do not think so. But let us agree the individual I would see on television, if I watched television, would in fact be someone given the name Henry Yazzi at birth. How would I know he believed what he was saying, or intends to do what he promises he will do? He is a politician, and a politician will say anything. And even if, by coincidence and as a result of self-interest, he does believe and intend to do what he says, the Congress must vote for it. So, how much difference does it make if I could shake his hand?”

  “Well, it’s a heck of a lot better than not knowing whether Günter Schwert exists. You’ve got to agree with that.”

  “And yet I do not. What I can understand and admire and even change is Schwert’s software. That is what matters, and that is enough. Schwert himself is an unimportant detail. What the world should care about is that his code can deliver what the world needs. And I know it will.”

  * * *

  Josh Peabody leaned back and enjoyed his view of the heart of Silicon Valley. He’d spent a long time in the business wilderness after his partners at TrashTalk LLP had tossed him out. Eviction from the venture capital fund he’d co-founded had been the ultimate humiliation. True, his investment in a company called iBalls.com had led to a debacle of epic proportions. But hey, here in the Valley, people said failure was the best learning opportunity of all. Bless their gullible hearts, the investor community even believed that. Like they did almost any other outlandish idea you fed them.

  Anyway, it was great to be back on top, and he owed it all to Satoshi Nakamoto, whoever he was. Countless startups had issued cryptocurrencies, most within the last two years. One had raised four billion dollars that way! Many of these alt coins immediately soared in value. Even some of the most ridiculous ones. His favorite nonsense coin was created to pay for dental visits. Now, there was a problem the world never knew it needed to solve with a cryptocurrency!

  Yes, without Nakamoto, Peabody could never have gotten back into the game. He’d jumped on the bitcoin bandwagon early, insisting bitcoin would be the investment opportunity of the century. When he turned out to be right, at least for the time being, Peabody was able to hit the restart button on his financial career and raise another venture capital fund. At half a billion dollars, CryptoBoom! LLP wasn’t one of the biggest. But all that money was earmarked for investing in the cryptocurrency companies that kept popping up like crabgrass in a negligently tended lawn.

  That made Peabody a big deal again, and he was enjoying every minute of it. So far, he’d invested in twenty-two companies, some issuing alt coins and others providing everything from digital wallets to crypto market analysis to cryptocurrency trading exchanges. He hadn’t had such fun, or made so much money, since the heyday of the internet bubble.

  Just like then, you could make a killing on any fool scheme. He swung back to his screen and opened his favorite cryptocurrency news site to check out how this week’s ICOs – initial coin offerings of new cryptocurrencies – were doing. Yup! They were doing great. He loved ICOs!

  It was like the Wild West. You could sell just about anything. And until recently, you could “pump and dump,” too, and get away with it. Pumping meant spreading rumors about how high a cryptocurrency would rise. The dumping part, obviously, was selling out at the top of the market before the investors wised up and the p
rice crashed.

  Was this a great time to be alive or what?

  Incredibly, the Securities and Exchange Commission had taken years to decide the obvious – that anyone buying alt coins was making an investment. And therefore, that alt coin offerings should be regulated the same as offerings of stocks or bonds. Still, lots of people were ignoring that news. Others were setting up new companies in places like the Cayman Islands even though that didn’t make any legal difference at all when you sold to US investors.

  And, there was a silver lining to the SEC’s announcement itself. Now that the regulators were watching, entrepreneurs needed advice to stay on the right side of the law. Silicon Valley lawyers and accountants were all over that and profiting handsomely. But that left plenty of room for someone to advise on the nuts and bolts of promoting ICOs – the yin of salesmanship to the yang of legal compliance.

  Peabody knew he was just the person for that job. As soon as his CryptoBoom! fund was off the ground, he launched an ICO underwriting firm he named ICOBoom! He used that venture to teach startups how to set up and hype their ICOs without going over the line – or not too far over, anyway. He was making money hand over fist with ICOBoom! helping to sell the most ridiculous concepts imaginable.

  And entrepreneurs were coming up with concepts more absurd than even Peabody could imagine, which was saying a lot. Still, some ideas were dynamite. Take the ICO he’d underwritten yesterday for a ten percent cash commission. He had his CryptoBoom! fund invest thirty million dollars in that one because it just couldn’t fail: the new company’s alt coins could only be used to make anonymous purchases of pornography. What a stroke of genius!

  Peabody clicked a few more keys at the exchange site. Sure enough, his BitchCoin investment had already quadrupled in value. Ka-ching!

  * * *

  Crypto’s normal reading interests ran to the drily technical and theoretical. He was pleasantly surprised, then, to find himself intrigued by the accounts of Frank Adversego’s past adventures. Both books were written in the same breathless style, making it obvious Adversego had authored little, if any, of the first book. Still, it was clear he was, like Crypto, a loner; one who drew exclusively on inner resources and avoided human contact like snakes. It was also obvious Adversego’s intuitive approach was fundamental to his success, allowing him to discover plots and plotters that eluded everyone else. But this knowledge brought Crypto more pain than gain. There was not enough to lead him to any actionable conclusions, but plenty to alarm the voices that were his constant companions.

  * * *

  Ryan Clancy read the first report from his liaison at First Manhattan and was pleased. Some of his industry contacts filed breathless, jargon-filled updates, fantasizing that they were G-Men. This message was brief and to the point. True, the point was that Frank Adversego hadn’t discovered anything useful yet. But Clancy’s contact hadn’t taken much of his time to tell him that, and that was good enough for now.

  Chapter 6

  I Have Met the Enemy, and He is Fang

  Frank returned home dead tired from San Francisco after a sleepless night on the redeye flight. Under the mailboxes in the foyer was a large package with his name on it; it was heavy, too. What could that be? He carried it upstairs and opened it in the kitchen. Oh, right. Birdseed. After he got some sleep, he filled his new feeder.

  For the next several days, he looked for birds whenever he passed the door to his balcony. But no luck. No birds, and the feeder was still full. Oh well. It had been a nice thought on Marla’s part.

  When he returned from New York the next week, the feeder was empty. So, the birds had finally found it. Maybe Julius was back! Frank refilled the feeder and looked forward to seeing who would visit.

  But the next day, the seed was untouched. He sat down where he could keep an eye on the feeder as he worked, but then he got immersed in what he was doing. When he paused to get a cup of coffee a couple hours later, he was surprised to find the feeder half empty. No birds there now, but clearly, they must have been there today. He’d have to watch more carefully. But he didn’t see a single bird for the rest of the day.

  The next morning, the feeder was empty. He refilled it and vowed that whatever was emptying it wouldn’t escape his notice again.

  But the unknown visitor eluded him anyway, leaving the feeder empty for the third time. Frank began considering a web cam.

  That proved unnecessary because the mystery was solved the next day. When he woke up, he saw the butt and twitching tail of a well-fed squirrel sticking out of the feeder. Hah! Caught him in the act. Frank tapped on the window to scare the moocher away. It ignored him. He rapped harder. Same result. Then he opened the sliding door.

  “Scat!”

  The squirrel withdrew from the feeder and perched on its hind legs on the balcony railing, staring at Frank. Then it unleashed a long and annoyed chatter, its miniature front legs tucked up against its chest. But otherwise, it didn’t move.

  “I said scat!”

  More irate chattering.

  It wasn’t until Frank took a step forward that the animal bounded off along the railing before jumping on to the ivy vines covering the wall. And there it stayed, its tail madly twitching, bawling Frank out for his lack of hospitality.

  Hmm. Frank had nothing against squirrels as such, but the goal here was to attract birds, not rodents. He stepped back inside and rummaged through a closet. Yes, he did have picture-hanging wire. He returned to the balcony with a chair, unclamped the feeder, refilled it, stood on the chair, and hung the feeder from a bracket supporting his upstairs neighbor’s balcony. That should do it.

  He sat down and waited to see what would happen. Sure enough, the squirrel came back. It hopped onto the railing and studied the situation, cocking its head to one side. Frank felt sorry for it and went into the kitchen. It wasn’t the squirrel’s fault it didn’t have feathers.

  What else could he feed it besides seeds? He found a granola bar and broke off a few pieces, opened the slider, and tossed one toward the squirrel.

  After a few moments evaluating this intriguing turn of events, the animal approached the bit of food through a halting, zigzag series of hops. At last, it seized the morsel and retreated to the safety of the vine. Frank wondered whether he could get it to eat out of his hand, the way Julius used to. He stepped slowly outside and sat down.

  The answer appeared likely to be yes. He threw another piece of granola bar, and this time the squirrel ate the morsel on the spot.

  Frank broke off more pieces, tossing each one a shorter and shorter distance. By fits and starts, the miniature beast zig zagged closer. Whenever it paused, it tucked its right front paw against its chest, cocked its head to the side, and gazed up at Frank as if to ask, Is this some kind of trick? Soon it was close enough for Frank to see it had opposable thumbs! How cool was that?

  When only a corner of the granola bar was left, Frank leaned over and held it close to the floor.

  The squirrel waited for Frank to toss it forward, but Frank held fast. Eventually, it began its final approach, one halting hop at a time, its tail erect and occasionally snapping back and forth. Frank had never seen a squirrel so close up and was fascinated by everything about the animal. It had bright black eyes and extraordinarily long black whiskers, and advanced with abrupt, sure movements. Frank noticed another curious thing: its tail sported two layers of hairs: a short, thick covering and a longer, sparser set. Each long hair had a white end and a dark middle. How did an animal manage to grow hairs that changed color as they grew longer?

  It was only a foot away now. Each time it stopped, it froze for a few seconds, tense, almost on tip-toe.

  Now, it was only six inches away. Would it be brave enough to close the gap?

  It would.

  “Yow!” Frank yelled, jumping up, his index finger streaming blood. The infernal beast scampered off, its prize sec
ured.

  Frank stomped inside and ran cold water over his bleeding digit. Okay, you little bugger. Game on.

  The next day, the feeder was empty again.

  * * *

  Yes! Crypto exulted. BankCoin had just gone live!

  Yes! Yes! The voice agreed. It was a very great day.

  And now we will set the countdown clock, Crypto thought. He tapped a few keys and two dials appeared on his screen, a large one above a small one. Under the small one was the fraction 1/100,000. Each clock had a single hand set at the Noon position.

  What does the smaller one show? The voice asked.

  That is to give us an idea of pace; it will spin a hundred thousand times before the main clock completes its single circuit. Now we must be patient.

  For how long? The voice asked.

  Eight months, more or less. An algorithm Crypto had created would drive the clocks, taking into account how many transactions were closed on the BankCoin network, the numbers of banks and countries participating, how much money was involved, and what percentage of all transfers was being transacted in BankCoin. When the hand on the large clock completed its journey to Midnight, the time would be ripe to launch his attack. Any sooner, and the global financial system might recover too quickly for his goal to be achieved.

  Eight months! That is a very long time! The voice said.

  Yes, but not when compared to the ten years we have waited already. Crypto replied.

  But for most of that time, no one was paying attention. Now, everyone is watching! The voice said. It will be risky to wait so long.

  Yes, but that cannot be helped, so we must be patient. There is no choice.

  Crypto looked at the faster clock, wondering how long it would be before he could detect any movement.

  It would be difficult for him to be patient as well.

  * * *