Unsolved-podcast.com
Date: Oct. 24, 2089, 7:48am
Transcript: “Season 5: Starting from the Beginning - The Bitcoin Downfall”
Episode 1: The Rise
Hey guys,
You’re listening to Unsolved, and this is your host, Sasha Nakai. After so many requests and the upcoming 30th anniversary of the massive crash, I found it very suiting to dedicate a short season to the end of Bitcoin. This is episode 1, “The Rise.” It is still somewhat unclear as to how it fell, however thanks to my connections, that I cannot share, I have some insider knowledge. In order to get a grasp on how the cryptocurrency fell dramatically from being the global currency, let's first get a glimpse of how it rose the ranks and at the major events that happened over the years that led to its ruination. Bitcoin was first released in early 2009, by creator(s) Satoshi Nakamoto, to this day we do not know their identity. Bitcoin was created on a system that was intended for there to be no need to place trust in others, as it was built on consensus, and a public ledger visible on the block chain. It was meant to separate money from politics, similar to the separation of church and state.
Bitcoin did not gain popularity right away, as people were still so reliant on the central banking system. Because Bitcoin had no central authority, it became attractive for illicit activities and transactions in the early days. However, Bitcoin experienced a quick rise in users by 2030, as global remittances were increasing exponentially, so people wanted a way to send money without massive fees and obstacles created by banks. Over the next 10 years Bitcoin continued to grow, and more businesses began to accept Bitcoin as payment. The culminating event that led to widespread adoption, was the fall of the petrodollar.
In 2048, gas cars were becoming obsolete, and there was a massive climate movement, putting pressure on major industries to switch to renewable energy. Oil was losing its value as a commodity because the livability of the planet was finally a concern for the majority of people, regardless of political affiliation. The US government foresaw this inevitability, and actually began mining Bitcoin in 2032. Between the years 2032 and 2048, the US government created a new role in the executive branch called, “The United States Cryptography Currency General,” or Crypto Gen. for short. By 2048, countries were no longer paying for petroleum, and all transportation services had begun investing in renewable energy. Transportation industries all came to a consensus to only accept Bitcoin, which snowballed other industries to join the movement.
Anticipating this change, the United States government appointed Robert Fritzland, a well renowned cryptographer and Bitcoin advocate, as the Crypto Gen. in 2048, and he created a cryptocurrency task force by 2050 for the US government.
I am lucky enough to have excerpts from Robert Fritzland’s personal journal, donated by The United States Cryptocurrency Museum, where they will have an exhibit displaying the journal on the 30th anniversary of the Bitcoin crash. Lucky for you, I will read some excerpts from his journal, and if you are curious to see the real thing, please go to the museum when they open the exhibit on November 21st! Funny enough, despite being the Crypto Gen., Robert believed that the safest place to keep his thoughts, besides his own mind, was through handwriting them and keeping his journal at his side. In his journal he explained that he did not care if people read his journal after his death. Some believe his deliberate choice of a less secure method of writing his thoughts was intended to be found. Robert wanted to make history, and he did. However, whether he knew this or not, his actions were the beginning of the demise of Bitcoin. Please tune in to next week’s episode to hear how the U.S proceeded, what Robert did, and what were his true intentions. Thanks for listening to Unsolved. This is your host, SN.
Unsolved-podcast.com
Date: Oct. 31, 2089, 7:51am
Transcript: “Season 5: Starting from the Beginning - The Bitcoin Downfall”
Episode 2: Appointing Robert Fritzland
Hey guys,
You’re listening to Unsolved, and this is your host, Sasha Nakai. Happy Halloween and welcome back to the season on Bitcoin, and this is episode 2, “Appointing Robert Fritzland.” To recap, last time we did a brief overview on the rise of Bitcoin, mostly due to the fall of the petrodollar, a climate movement, and major industries only accepting Bitcoin. This led the US to create the Crypto Gen. position, appointing Robert Fritzland to help the US get ahead on the Bitcoin transition.
Robert came from a family of cryptographers. His father Prescott, was very active in the early days of Bitcoin, he was an avid user and a big proponent. Just before Bitcoin increased in popularity in the 2030s, Prescott developed a new wallet, called PrezBit in 2024, which was meant to be more suitable for bigger industries, wherein they handle much larger transactions. This wallet was made so that multiple people could use the same wallet with different, private keys. Each company could put a limit on the maximum number of Bitcoin per transaction, and require various private keys for a transaction to go through. This allowed for companies to be more secure and have greater access to the same wallet to certain employees.
Robert learned much of his crypto knowledge from his father, and was easily one of the most skillful cryptographers of his time. Before Robert was appointed as the Crypto Gen., his main goal of Bitcoin seemed to be to keep it decentralized. During the 2040s, Robert heard rumors that China was close to having 30% of the mining power. He feared that once a selfish miner, they could easily attempt a 51% attack on Bitcoin. Because of this, Robert and Prescott advocated for an adjusted hash function that included an additional hash that many GPUs could compute, but mass ASICs could not immediately. However, this was not an easy task. It took Robert and Prescott three years to gain enough support from Bitcoin Core, users, and other miners to flag for a soft fork update that added an ASIC resistant proof of work. The soft fork was officially activated in November of 2045. Because of his new client, many ASICs had to be updated to adjust to slightly different hash functions, this was to avoid what is called a push out attack on Bitcoin. In a push out attack, the miner with majority hashpower is likely to mine blocks much quicker than others, thereby decreasing the profitability of mining for others. Other miners would eventually sell their hardware, as its value has decreased, leading to a snowball effect of reduction in the number of miners, and increased concentration of power. Not only did this act by the Fritzland family prevent selfish mining and the potential for a 51% attack, but it also made Robert stand out as a great contender for the new Crypto General position.
So how did Robert get appointed then? Well, Robert and Prescott had contacts, one named Richard, that were close to the U.S. president. They often had dinners with them to explain Bitcoin and keep them up to date. After Robert told Richard the plans to adjust the hash, Richard was able to get a head start. Shortly after, Robert received a letter from the president thanking him for his patriotic act, and described Robert as a hero, as he allowed the U.S to advance in mining hardware, while ASICs miners around the world were adjusting. After Robert received the letter, he wrote this in his journal:
“Just received a letter from the president thanking me. Things are going as planned, soon enough I should have more power.” -February, 2046
Now this seems awfully ominous, could this be a villain origin story? Well … you will find out if it is on next week’s episode. Happy halloween! Thanks for listening to Unsolved, this is your host, SN.
Unsolved-podcast.com
Date: Nov. 7, 2089, 7:46am
Transcript: “Season 5: Starting from the Beginning - The Bitcoin Downfall”
Episode 3: The Crypto Gen. Beginning
Hello all,
You’re listening to Unsolved, and this is your host, Sasha Nakai. Welcome back to the season on Bitcoin, and this is episode 3, “The Crypto Gen. Beginning.” Last time we talked about Robert Fritzland’s upbringing, and how he became the first, and soon we will discover, the last Crypto Gen. for the United States. So, a year and a half after the thank you letter from the president, Robert officially became the Crypto Gen. on July 2nd, 2048. For the next two years, Robert was building the US cryptocurrency task force. His team consisted of many other talented cryptographers of his time, including his father Prescott. In the first two years of running the task force, Robert and his team effectively created a close to smooth transition of currency, integrating Bitcoin into the U.S economy. However, this task force was solely meant to help the United States to make wise crypto decisions, it was not created to take over Bitcoin. They are not to be confused with Bitcoin Core, the team of developers that write code for Bitcoin. This was a standard practice of developed countries, and the majority of Bitcoin users did not contest the creation of a team of cryptographers, as the government and an individual user are different entities on Bitcoin, and therefore perceived as self-governing bodies in Bitcoin. This is to say, the government on Bitcoin at that time, did not have, or should not have had control of the individual user activity, and most people believed it was reasonable for the government to hire a team to use the network properly.
The task force worked on converting banks to either mining facilities, nodes, or facilities that employed and trained cryptographers on the macroeconomy of Bitcoin. Major trades were now done using Bitcoin, thanks to the Prezbit wallet. Things seemed to be running as smoothly as possible. However, the story certainly does not end here. Prescott was a strong advocate for decentralization, which was not reflected in the actions of the U.S government. The president made deals with England, Germany, France, and other European countries, to join mining forces in 2053. Some of the task force advised the U.S not to do this, however the decision and power was not in the hands of the Bitcoin specialists. In response to this decision Robert wrote in his journal:
“These people simply cannot understand Bitcoin like my father and me. After so many discussions about the consequences of extreme centralization, I would have thought that the president would not commit such an act. The government just wants to win the race against other countries. This agreement will allow the U.S to gain 51% hashrate within the next few years, or earlier. I took this position because I saw a bright future for Bitcoin and father, and I believed that we could guide governments in the most sustainable direction. It seems that our efforts may be futile. Father is concerned that Bitcoin will become something unrecognizable. He says he’s making a plan.” -November, 2053
A month after the agreement, Prescott held a virtual, public meeting in which anyone could join. He warned the public of the dangerous actions of the U.S government, as they were close to 33% of the hashrate, and soon may reach 51%. He told the public that such an attack would destroy the Bitcoin economy, and that people need to advocate for decentralization. Robert was unable to attend this meeting, however his journal excerpt suggests he supported the cause. Not much arose from this meeting, many Bitcoin advocates agreed, but they had too much confidence in the protocol to take action.
For the following month, Prescott continued to try to raise awareness of the potential of an incoming doom, but no one seemed to listen, or so it seemed. On February 11th of 2054, Prescott was found dead in his home at 10:03am, his cause of death was deemed as a heart attack in his sleep.
Okay, so let’s connect these massive dots here. Prescott openly spoke against the government’s actions numerous times, and now he’s dead. Coincidence? Tune in next week, to find out more about Prescott’s death, and the actions Robert took that led to Bitcoin’s demise. Thanks for listening to Unsolved. This is your host, SN.
Unsolved-podcast.com
Date: Nov. 14, 2089, 7:45am
Transcript: “Season 5: Starting from the Beginning - The Bitcoin Downfall”
Episode 4: Bitcoin Recycling, A Ruse
Hello,
You’re listening to Unsolved, and this is your host, Sasha Nakai. Welcome back to the season on Bitcoin, and this is episode 4, “Bitcoin Recycling, A Ruse.” To summarize last week’s episode, we talked about the efforts of the crypto task force and the U.S government, ending with Prescott’s death in 2054 after speaking against the government. To start, let's look at an excerpt from Robert’s journal on February 12th, 2054:
“I was notified of father's death yesterday morning. I am devastated, he taught me everything I know. He was old, but still healthy. They were so quick to rule his death as a natural cause. It seems like no one seemed to care about the coincidental timing of his anti-government rhetoric. For now, I will keep my speculations and suspicions to myself.”
This was the only comment that Robert made regarding the cause of his father’s death in the following few months. Succeeding his father’s death, was the accumulation of dirty, tainted Bitcoin. The U.S government wanted to tackle this issue and assigned Robert to do the job. Ever since the beginning of Bitcoin, one of its many uses was for illegal activities, and over the years, a need for an entity that has the authority to label and maintain a list of dirty Bitcoin arose. The United States government partnered with one of the largest nodes in the country in early 2048 (before Robert’s appointment), and created what they call “The United States Anti-Money Laundering and Scam Institution '', or the AMLSI. The U.S and the other countries involved in the consolidation of mining agreements all endorsed this institution. These countries’ endorsements and power were a driving force of mass acceptance of the institution. Miners and users could report transactions, addresses, and even miners to the AMLSI for investigation. The AMLSI could then label Bitcoin as dirty, or tainted and therefore it was unable to participate in transactions. The AMLSI even made strides to label older Bitcoin and addresses from the past that were known to be tainted, but not yet labeled.
However, the creation of this institution backfired, as it was not so accepted by the many users worldwide. Because much of the global hashpower was in the hands of prosperous governments, especially the U.S, they could better control which transactions were confirmed on the blockchain with the AMLSI list. In protest, over the years many users began to intentionally send their Bitcoin to dirty addresses, thereby taking that Bitcoin out of circulation. This would in turn raise the value of Bitcoin overall, but because this was done in uncontrolled ways, a new instability and volatility arose within Bitcoin. During this time, the accumulation of dirty Bitcoin was one of the major issues facing the global economy from the perspective of the president. As Robert explained:
“Not using the massive amounts of tainted Bitcoin does not necessarily affect the Bitcoin economy severely, if everyone ignores it, the remaining Bitcoin simply rises in value. However, the president sees this stash as a pot of gold. And duty calls.”
While Robert was contemplating how to approach the dirty Bitcoin problem, he was secretly looking into his father’s death. Months after his father’s death he finally wrote about his detective activities. He wrote about how he looked into his father’s medical records, and the autopsy results. He found that Prescott had recently gone to the doctor prior to his death, and there was no sign of heart disease, or any issues. Furthermore, the autopsy results provided to Robert by the hospital showed signs of a heart attack, and the document was signed by the U.S. government. However, Robert used his crypto skills to hack into the computerized records within the hospital. He revealed that there were signs of heart attack, but they were due to an unknown chemical found in Prescott’s body. By this time, Robert determined his father’s death was not due to a natural cause, or accident. He concluded that Prescott was murdered by the U.S. government.
Robert was stunned at this revelation, and disappointed that it was clear Bitcoin was no longer this decentralized, peer to peer system that Satoshi envisioned. He disclosed this statement in his personal journal:
“Father was right. Bitcoin is no longer what it used to be. And now he is dead. I have decided to no longer combat the 51% attack the U.S instigated. Bitcoin has changed, and people need to see this. With how the government proceeds, Bitcoin will fall, and I may as well speed up the process. Father would have been proud.”
Following this statement, Robert went straight to work on tackling the dirty Bitcoin problem. He ended up finding a way that the U.S. could absolve dirty Bitcoin, through an exchange. In 2055 he developed an exchange called C. Bitex, meaning Cleaned Bitcoin Exchange. On C. Bitex users could keep their dirty Bitcoin on the exchange, and whenever they desire, exchange their dirty Bitcoin for clean ones that the U.S. had mined or bought from others. The caveat for the users was that the exchange rate for “cleaning” their tainted Bitcoin was awfully high, where they would receive less Bitcoin than trading in. To the average user this was an amazing deal, because they could never use their dirty Bitcoin on the blockchain regardless. Once the U.S. acquired this Bitcoin, an automatic message was sent to the AMLSI explaining that this tainted Bitcoin went through C. Bitex, in which this process de-identified the Bitcoin as dirty. These bitcoins were sent to a U.S. government address.
In September of 2056, the U.S government announced that people could recycle dirty Bitcoin they have received, and exchange it for usable, untainted Bitcoin. The president claimed that the U.S would reinvest this cleaned Bitcoin into the public, decrease budget deficits, and ensure a slow diffusion of cleaned Bitcoin back into the market, as to prevent a crash. Because no other country had done this, the exchange was open to any user at the time. Upon notifying the public of the new exchange, C. Bitex released a statement for users to keep in mind that the exchange was new and a trial for a solution to dirty Bitcoin, users must proceed with caution and at their own risk. In response, many people were uncertain about the exchange, and had many questions about the repercussions for the users using the exchange to be identified as criminals. A press release from the AMLSI, C. Bitex, and the U.S president in October, 2056 elucidated how it was supposed to work. The release explained that because of years of intentional Bitcoin tainting, there is no way to determine which Bitcoin was actually involved in illegal activities. Therefore, all Bitcoin will be treated equally; any involved in the exchange will receive an amnesty.
Despite the U.S claims to reinvest the C. bitcoins, Robert unveiled in his journal in 1957 that:
“only a small percentage of the C. bitcoins were used to reinvest in the public, solely to maintain public appeal. The rest, well, I’ll just say Bitcoin became much more US centralized.”
He later uncovered that the U.S. government was secretly using the majority of the C. bitcoins to buy out miners, including ones that have persisted since the beginning of Bitcoin. Later on, Robert explained that the agreement to join mining forces had fallen through, and the U.S ended up buying a large portion of the facilities of the countries involved in that agreement. Robert described these actions as a buyout and pushout attack, which would eventually lead to a 51% attack on Bitcoin. He estimated that by the end of 2057, the US had accumulated nearly 43% of the hashrate, and within a year could certainly get over 50%.
Robert certainly assisted the U.S. in gaining the bit capital they needed to dominate in the economy. Though soon, not to Robert’s surprise, Bitcoin would fall. Thanks for listening to Unsolved, come back next week on the 30th anniversary to hear the culmination of the Bitcoin story. This is your host, SN.
Unsolved-podcast.com
Date: Nov. 21, 2089, 7:53am
Transcript: “Season 5: Starting from the Beginning - The Bitcoin Downfall”
Episode 5: The Finale, Bitcoin crashes in 2058
Hello listeners,
You’re listening to Unsolved, and this is your host, Sasha Nakai. Welcome back to the season on Bitcoin, and this is episode 5, “The Finale, Bitcoin crashes in 2058." So last time we talked about how Robert uncovered his father’s murder, and created a ruse that enabled the U.S to increase their hashrate immensely through a cleaning Bitcoin exchange, C. Bitex. Since the C. Bitex release in late 2056, the average user quickly jumped the gun and traded in their dirty Bitcoin. At this time, it was estimated that 23% of all the Bitcoin had been tainted. Throughout the first half of 2057, C. Bitex was seeing a lot of activity, and the U.S. had been accumulating a lot of Bitcoin and hashpower. Robert was an eyewitness to this massive success for the U.S government; they by far had the most hashpower in the world.
Robert was keeping track of the U.S. hash gains, he wrote in his journal in November of 2057:
“The U.S government ate up the idea of C. Bitex, they found no issue with essentially confiscating tainted Bitcoin for a profit. Now, we have 53% of the hashpower, I suspect within days to a few weeks miners will see their loss in profits. I just need to wait a little longer for the right time to strike.”
One week later, public forums began firing up with upset. Two days later Robert released a statement to all public forums, here is an excerpt:
“It is obvious to all that mining is no longer profitable. I’m sure most of you have suspected the centralization from the U.S, perhaps finally a 51% attack that everyone was sure could not happen. Well I regret to inform you all that the U.S. government has accumulated 54% of the hashpower and is gaining more everyday. Bitcoin is no longer what it used to be. Us users once had the power, but mass centralization has taken over, the power is back in the hands of those who aim to control us. We will not stand for this. I suggest we all race to the door, show the world the threat we users pose to them. Bitcoin will fall, but the idea of peer to peer consensus lives on. I suspect another form of decentralized currency will emerge soon, one that encompasses what Satoshi imagined, it just won’t be Bitcoin. Bitcoin is dead.”
Soon after this statement, miners quickly abandoned ship, selling their hardware, and the U.S. gained even more hashpower. The value of Bitcoin was dropping, users began to sell their Bitcoin, trying to use what was left of its value as soon as possible. There was a true race to the door, people were deserting Bitcoin, its price was plummeting. The U.S. officially caused an entire crash of the market. By January of 2058, Bitcoin’s value had decreased to 0.12% of its initial worth. The U.S. government tried to recover these losses, however too many people had left Bitcoin, looking for an alternative. The government truly didn’t believe that people would abandon Bitcoin because of their gained control. However, Bitcoin was built on consensus, and with consensus it perished. In February, Robert unveiled in his journal that Bitcoin was officially dead, it had very few users left, as other people turned to altcoins and other digital currencies in the meantime. Robert shared his thoughts on the future of crypto:
“Bitcoin is gone, and the power is out of the hands of the government once again. The market is destroyed, however let this be a lesson that we must stick to decentralization, with users in power, we can accomplish a sustainable network. In the meantime, a new consensus of digital money awaits.” -February 18th, 2058
One month later, the government accused Robert of treason for using United States resources to create a money laundering scheme. Within 8 months of this, he was sentenced to life in prison. Through the lens of the public, Robert was merely a scapegoat. To Robert, the outcome of the 51% attack was inevitable. But, what do you guys think? I hope you guys enjoyed this season dedicated to Bitcoin! This was season 5: Starting from the Beginning - The Bitcoin Downfall. Please stop by the The United States Cryptocurrency Museum, their exhibit on Bitcoin opens today! Thank you for listening to Unsolved. This is your host, SN.