The Blockchain Revolution Page 9

  “The second is we can’t expect private companies to lower profits now unless there’s a way to earn them back in the future. Boards of directors are responsible to their stockholders, so they really don’t have a choice about that.

  “And the third is that this is temporary. Alternative energy is going to claim a bigger and bigger share of the market. That will eventually lead to an oil and gas glut, so many of the areas we open up now will likely never be touched. The oil companies want guaranteed access to them in case oil prices go up, but they’re not fools. They’re not going to drill wells they can’t pump at a profit.”

  “Okay,” Yazzi said, “let’s set that aside for the moment and get back to my first question. I still want a clear answer on how long Russia can hold out. The last thing I want to see is oil prices going back up before Russia cries ‘uncle.’”

  “Sir, the anti-government demonstrations in major Russian cities are the biggest we’ve seen in years,” Wakeman said. “Poking a thumb in our eye with military exercises in Belarus will only buck up the government’s popularity for a little while.”

  Yazzi waited.

  “All right,” Wakeman said, taking a deep breath. “Not more than eight months. That’s the longest we think Russia’s cash reserves can last even with a good deal of belt-tightening. After that, they’d need to start cutting pensions and take other measures the people won’t tolerate.”

  “Good,” Yazzi said. “You can count on me to remember that answer, so you better be right. Who else can we depend on?”

  “Canada, Kuwait, Oman, and the Emirates are on board; we’re still working on Brazil and Qatar. After that, there aren’t any big producers we can expect to help. China uses all its domestic reserves, so they’re a buyer, not a seller. Venezuela, of course, would side with Russia even if it could afford to see prices go down, which it can’t. It’s not worth contacting Iran, and Iraq said no.”

  “How about domestically?” Yazzi asked, turning to the secretary of energy.

  “Four out of the five biggest oil companies are in, and the last one will have to price-drop to stay competitive. If Congress lets us open up the onshore and offshore tracts we’ve asked for, the oil companies will hold their production levels down now for a reasonable amount of time.”

  “Didn’t you hear what Hugh just said? We need a firm commitment from them for at least eight months.”

  “Yes, Mr. President. We’ll get back to them, and then to you.”

  * * *

  Everything was proceeding according to plan. Not that Crypto was surprised. The actions of capitalists were nothing if not predictable. Provide an opportunity for profit and it would be taken as surely as the sun would rise tomorrow.

  More surely! the voice echoed.

  Yes, yes, Crypto responded.

  And, of course, the voice was correct. That a capitalist cared only for his own self-interest was a lesson drummed into Crypto almost from birth. As it was to everyone attending school in the German Democratic Republic – or East Germany, as it was known to those in the West – before the fall of the Berlin Wall. Only much later did it occur to Crypto that his teachers had focused as much on indoctrination as education.

  Be that as it may, everything he’d seen since the Soviet Union collapsed had confirmed that what he’d been taught about evil capitalists and the puppet governments they controlled was largely true. Indeed, he decided East Germany had delivered more fully on its promises of social equality than Western governments had lived up to theirs – and certainly more than the overlords of the United States with their “land of opportunity” myths and discriminatory realities. Not that he could pardon either system for the abuses it perpetrated against its own citizens. Governments, he concluded, existed solely for the benefit of the governors, regardless of the ideologies they promoted.

  Indeed, earlier in life he had been one of the beneficiaries of that reality. Life might have been bleak for most people on the eastern side of the Berlin Wall, but not so much for a child of the elites. His father, as haughty and distant at home as he was at the office, was a high-ranking official in the much-feared-and-loathed Ministry of State Security – known to everyone simply as the Stasi. The families of those in power, like his father, had access to large apartments, luxury foods, and many other privileges denied to those they supposedly served.

  Their children received special care, too, to ensure their proper ideological orientation. Not only to groom them to become loyal apparatchiks in the communist bureaucracy, but to protect their parents against the possibility that an errant child might attract the attention of one of the hundreds of thousands of informants the Stasi maintained everywhere. Regardless of who you were, where you lived, or what you did, there was an informant in your building, your club, your classroom. Often enough, even in your bed.

  Then the wall came down, more abruptly than anyone could have imagined, breached in a day by cheering crowds wielding crowbars and anything else they could turn to that purpose. Once the celebratory flood of East Germans had surged through the gaps in that hated symbol of oppression, there was no turning back. Soon, the governments of Soviet Socialist States were falling all across eastern Europe and central Asia. Almost overnight, half the post-World War II world order crumbled like the wall into rubble.

  At first, his father was contemptuous of the change. Working covertly with other Stasi officers, he sought to orchestrate the creation of an interim government that publicly would promise fair and open elections while privately ensuring that authoritarian business would continue as usual. But the flood of euphoria of the masses in East Germany and throughout Eastern Europe was too great. Soon the Stasi was dissolved. Ten days later, Nicolae Ceaușescu, the much-hated dictator of Romania, and Elena, his equally despised wife, fled and were promptly captured. Within hours, they were convicted of high crimes, stood up against a wall, and executed by an impromptu firing squad. Truly, the world was turning upside down.

  Not long after, Crypto’s own family found itself in danger when a mob surged into Stasi headquarters to stop the feverish shredding of millions of pages of files going on inside. Those records included the names and identities of the decision makers whose orders Stasi jailers, torturers, and executioners had carried out. One of those decision makers was Crypto’s father.

  Then things grew worse. Before a year had passed, nearly destitute East Germany was reunited with rich and powerful West Germany, dashing the hopes of East German elites to retain any real influence at all. The very same Western leaders the Stasi had sought to manipulate were now their masters.

  Before the end of the year, Crypto’s family was evicted from its comfortable apartment. Soon after, Crypto’s father decided they must move again, this time to Slovenia, leaving behind almost all of their possessions – even their names. Crypto was both horrified and disgusted to learn their flight was the result of his father’s fear of revenge at the hands of those he had persecuted and their survivors.

  It might have been easier for Crypto had he been older or younger. One moment, he was a pampered teenager of fifteen, assured of a privileged job and career. The next, or so it seemed, he was on the run, no better than a rat scurrying one step ahead of the exterminator.

  East Berlin might have been grim, but it was luxurious compared to the primitive rural village they removed to in Slovenia, where donkey carts outnumbered cars. Crypto didn’t dare approach his father now. Daily, he grew more prone to unleashing torrents of abuse. At the slightest provocation, his voice rose and his face grew flush. Worse, the veins in his forehead bulged and throbbed in a way that alarmed Crypto’s mother. Always a quiet woman, subservient to her husband in every way, she now lived in terror of his rages.

  Throughout the long Slovenian winter, his father rarely left the tiny, squalid house, and neither did Crypto. He was unable to attend school, much less look forward to a career in a country whose barbaric langu
age he could not speak and refused to learn.

  One day, he woke up to find his father gone, away on a trip whose purpose his mother would not share. Eight days after his father’s disappearance, she shook him awake an hour before dawn, telling him to dress as quickly as he could. Ten minutes later, a strange man hustled them into a waiting car and once again they fled, leaving behind the few belongings they still possessed. A day and a night later, they were in Los Angeles, California, where the bright sun, lazy palm trees, and capitalist opulence of Hollywood stunned Crypto. His father, Crypto’s mother told him, was somewhere on the East Coast of the same country.

  Later, he would learn his father was in Washington, DC, telling the Americans everything he knew about the Stasi, the Soviets, and anything else he had not already told them in Berlin in exchange for the family’s safe passage to the US. It was three months before he rejoined the family and only a week after that when he died of a massive stroke. With all the heartless certainty of a sixteen-year-old, Crypto thought it was just as well.

  Chapter 11

  (Oops!)

  Sarah Switt saw two black SUVs drive slowly through the intersection ahead and glanced at her watch. Drat. She’d seen this movie before. Now, she’d be late to work.

  She slowed down as a third black SUV coasted to a stop, blocking her lane, and a fourth sealed traffic headed in the opposite direction. Several men jumped out of each car, darting glances in every direction. Oh well. She picked up her cell phone, set it to video, and got out to get a better view.

  Sure enough, a minute later, two joggers in dark glasses and identical running gear trotted by, scanning the scene ahead. Two more followed, this time in unmatched clothes. She immediately recognized the tall, serious-looking one with a full head of dark hair. Sarah zoomed in on him, ignoring his partner and a third pair of runners who could have been doubles of the first. Once they cleared the intersection, the glorified crossing guards hopped into their SUVs and rolled on.

  Switt stepped back in her car and resumed her commute. At the next light, she replayed the video. Excellent! She’d gotten a good clip of the president of the United States, out for his morning run. That would look great on her Facebook page.

  * * *

  Chief of Staff Carson Bekin was happy to be the president’s running companion. Otherwise, he’d never fit in any exercise at all. And that wouldn’t be good, given all the late-night junk food everyone ate at the White House.

  “So how many more votes do we need in the House?” Yazzi asked. Reluctantly, he’d agreed to the plan to depress global oil prices.

  “It looks like eight. We should pick up that many if we add increased oversight of offshore drilling platforms and promise new regulations on disposal of fracking wastewater. As usual, the problem is hitting a balance where we gain more votes on one side than we lose on the other.”

  “I don’t need ‘should,’ Carson. Before we ask the Speaker to take this to the floor, I have to know for sure she can get it approved.”

  “Well, Henry, you know this is a heavy lift. You had a strong environmental plank in your platform. A lot of candidates rode your coattails into Congress supporting you on that. How do you expect folks up for election to support more drilling on sensitive public lands?”

  “By pointing out the bill caps the new wells at a reasonable number and reminding them this is a once in a generation chance to get Russia to play ball. All we need to do is push oil and gas prices a bit lower and hold them there and Denikin will have to come around.”

  “I don’t know, Henry. To the environmentalists, every new well is a bad well. And you know most voters don’t care about foreign policy.”

  Bekin hated it when the president got worked up; it always made him pick up the pace. How did the guy manage to talk so much and run so fast at the same time?

  “Okay,” Yazzi said, “then tell the voters this: for every cheap, new well that comes into production, an oil company will probably take an older, more expensive one off-line that’s more expensive to operate. If prices stay lower than they are now, those wells will never start pumping again. And we’re standing firm on keeping alternative energy tax credits in place. Over the long-term, that will make oil less competitive, and that will shut down still more wells.”

  True, but so what? Bekin thought. Anything that couldn’t fit in a soundbite would go over most voters’ heads. But this wasn’t the time to disagree too strongly with the president, even if he was an old friend. Especially when Bekin was struggling for breath.

  “Well,” Bekin huffed instead, “that might play with the moderates. But we’ll still catch hell from the hard-core Greens. And nobody will like it when we rely on a bunch of ultra-conservative congressmen to get over the line.”

  “But you’re forgetting one thing, Carson, and that’s cheap gas. A voter will need to be mighty green not to like seeing gasoline under two dollars at the pump again. And anyway, at this point, it is what it is.” Mercifully, Yazzi ran in silence for half a block before adding, “What’s the latest on that Russian cryptocurrency project?”

  “Which one?” Bekin asked. “The public or the private one?”

  “The second.”

  “I don’t know anything beyond what’s been in the Daily Brief.”

  “Well, tell Helen to find a half hour in my schedule ASAP for a CIA briefing. I want to know just how much Russia is making selling embargoed goods for cryptocurrencies. If they can unload enough goods for Russ, they may offset a lot of what we hope they’ll lose on oil sales. I don’t want to catch hell from our base if we’re wasting our time.”

  With that, he picked up the pace again, this time leaving Carson Bekin lagging behind.

  * * *

  Walter Hansen, the young CIA analyst charged with monitoring Russian blockchain intelligence, shuffled his papers and cleared his throat. He could feel sweat trickling down his back and hoped his suit jacket didn’t show it – he’d never briefed a president before.

  “Good morning, Mr. President,” he began, “let me start by summarizing the blockchain activities the Kremlin acknowledges.” Slow down, he thought, noticing the frown on his boss’s face. Take a deep breath. “Sberbank, one of Russia’s largest financial institutions, leads those efforts. Since January 2018, much of that activity has occurred inside what it calls the Blokcheyn Laboratiya. According to the Lab’s public statements, it’s several years away from rolling out a commercial bank platform.

  “But as I understand you already know from the Daily Brief, the private efforts supported by the Kremlin are much more advanced. Most notably, they have an operational blockchain. It supports an alt coin they call the Russ.”

  “Private efforts meaning what?” Yazzi asked.

  “Good question, sir,” Hansen said. “Like a lot of their offensive cyber activities, the Russians claim the Russ blockchain isn’t a government project. The party line is it’s an open source software initiative like bitcoin, staffed by volunteers. But we know that’s not true. Our informants tell us the government controls and funds RussCoin, the private company that supports Russ development. That’s who most of the Russ programmers work for. Those that don’t are employed by various foreign shell companies owned by it. Most of the coders are in Russia, but some live in former member states of the Soviet Union.”

  “Where does the funding come from, specifically?” Yazzi asked.

  “It’s quite a mouthful, sir, even in English. The supervisor of the project works for the Finance Ministry’s Department of Information Technology in the Sphere of Budgeting and State and Local Finance Management.”

  “So,” Yazzi said, “The government has indirect control, but the actual coding is done by programmers who are spread out across the map, some even outside the jurisdiction of the Kremlin? That sounds risky. I understand they want deniability, but that’s a high price to pay.”

  “I take your
point, sir. But the Russians have a long history of using private sector black hats to conduct cyberattacks, run fake news social media campaigns, and meddle in elections. A lot of those partners live in countries that are non-Russian but happy to do business with the Kremlin. To some extent, the Russians are up to so much mischief they’ve painted themselves into a corner.”

  “How so?” Yazzi interrupted.

  “Sorry, sir. What I meant was financially. These private sector companies and individual hackers are in great demand, so they command high fees. Plus, the Kremlin protects the Russian ones when they engage in cybercrime on their own account. Between working for the government on a contract basis and hacking foreign targets for their own profit, these guys make far more than they could as public sector employees. So, no surprise, the Kremlin can’t directly hire enough top cybersecurity talent to do its own dirty work.”

  “That could be good for us,” Yazzi said. “Do we have anyone inside the Russ blockchain team?”

  “Yes, sir. We have a mid-level operative in Crimea.”

  “How about on the commercial side?” Yazzi asked. “Do we know how much money’s changing hands in Russ?”

  “We’ve got several agents in a position to monitor that, sir. We aren’t able to see individual transactions, because they’re encrypted, and the transfers are between anonymous electronic wallets. But by combining the information we get from multiple sources, we can come up with a good estimate of the Russ transaction volume.”

  “And what does that tell us?”

  “That business is booming, sir. The Russ blockchain only went into operation three months ago, but well before that the Kremlin started lining up orders of embargoed goods they can’t get through conventional channels. So, there was a backlog ready to ship as soon as the payment channel was in place.”