A Fictional Story about Bitcoin
“You can’t just…invent a currency out of thin air and expect people to believe in it,” the Federal Reserve Chairman said, waving his hand. “People aren’t that dumb. Criminals might be, or rogue states, but not the masses. If they can’t hold it in their hands or eat it or screw it, it has no value.”
The chairwoman of the Board of Governors of the Federal Reserve System sat to his left, Ms. Kellen. Her legs were crossed, eyes bright under a mop of stark white hair. She nodded her agreement, but did not speak. She hadn’t spoken once yet during this entire meeting.
“I think you overestimate the common man, Mr. Bernakey,” I said. “If there’s profit to be made, people will see it and want a piece of it. It will start small, but it will snowball, and it will be huge. It doesn’t have to make sense, it just has to work.”
He stared at me like I had bananas growing out of my ears.
“And your plan is what then? Beyond this…fake money thing.” He breathed the words with a sigh, like one just wanting to finish his day so he might go home to a glass of bourbon.
I settled into my chair and looked around the formal office of the highest financial power in the world. Barring my own position, that is.
As the Chairman of the Industry and Commerce Bank of China, I’d have firm footing to argue my own office had a louder voice than this old man in front of me and his Fed and this lady’s Board of Governors. But I would say no such thing out loud, and dipped my head in what they probably took as a gesture of respect even as it hid the smirk on my face.
“Let us say, Mr. Bernakey, that we fund the development and promotion of a currency that is purely electronic, entirely decentralized, and relies on the profit-taking greed and paranoia of man to succeed. Let us also say that we let it roam free…grazing within the pasture that we’ve already fenced off.”
Mr. Bernakey frowned, tilting his head as he glanced at the woman, but I could see my words were making him curious. My English was good, and I was handsome, polite and well dressed. He couldn’t help but listen.
“And so,” I said, standing suddenly from my chair and striding very purposefully to the window, establishing a sense of control and dominance. “We allow this invisible currency to grow slowly, organically, via…how do you say it? Grassroots efforts? I expect it will remain quiet and dormant, like those sleeper cells your people are always worried about. For years it will coerce the hearts of men with promises of profit, during which we will take control of the various mining hubs as they arise.” I was on a roll now, and I smiled out the window at the cold snowy roads and bare trees of Washington D.C., pausing.
“And then?” the Fed chairman said.“Then we starting feeding the monster. Slowly, we invest money into it. Only millions at a time to start, just pennies in the grand scheme. Then billions. The decentralized nature will allow us to manipulate it however we want, since we will have more skin in the game than anyone else.” I turned to them and saw I had their full attention. “And then, the value of this false currency, this intangible asset, will come into the public eye. We’ll denounce it, of course, and your banks will denounce it, and that will make it rise all the more.” ”
“To what end?” Mr. Bernakey said, leaning forward in his high-backed desk chair. It creaked loudly in the pause. “How long do we play this game?”
I had already considered these questions. As chairman of the largest bank in the world, it was my job to know the position of every player in any game I played. And this was a game.
“We play until we win. Decades, perhaps.” I saw the dismay on their faces. “Let me tell you, Mr. Bernakey, and you, Ms. Kellen, that this is a long game. My bank, and every bank in the world, have seen the writing on the wall. The internet is a game changer. Electronic payments are a game changer. Decentralization is going to be everywhere. But we cannot have it be in the banking systems. We cannot lose control of our money. Cryptocurrency is going to be huge if we allow it. But we cannot allow it to win.”
“I don’t understand,” Mr. Bernakey said. “Why would we create it then? Why would we build it up?”
“It’s going to be created whether we like it or not, sooner or later. Some groups are already working on it. We need to get in on the ground floor and control it before they do.”
“Mr. Jianxing, with all due respect,” Mr. Bernakey said, spreading his hands. “My position here is appointed. Surely you know this. My term runs out in 2014. I may not be here to see this through.”
“Ah. Yes,” I said with a smile. “And this is why we have our good lady here, Ms. Janet Kellen.” I bowed towards her with more deference than I had shown before. “Soon, we will meet to choose your next President, possibly a woman this time, or possibly a black man, something unique, I don’t know,” I shrugged. “We will direct him to select Ms. Kellen as your replacement. And she will see this through.”
“And what, Mr. Jianxing, will I be seeing through?” The old lady spoke for the first time, and I smiled at her with something I hoped looked sincere.
“There will come a time in the near future when our combined governments — your United States and my China — will have pumped up the value of this cryptocurrency so high, and will have drawn in so many citizen investors, the value will be obscene and embarrassing for a thing that has no value. Perhaps $15,000 of your US dollars per coin. Maybe $18,000. At that point, we will sell, your government and mine. We will dump. Cryptocurrency will collapse in a heartbeat, and after that I guarantee that nobody will trust the value of a thing they cannot hold in their hands and put in their wallet.”
Mr. Bernakey and Ms. Kellen both looked at each other, and I could see silent words pass between them. Then they both nodded.
“Let’s do it.”
Editors Note: The Bit-Coin Rival Image is not fictional.