1199 The End of Cryptocurrency

Because the encryption algorithms had already been updated ahead of time, the new commercial quantum computer technology would not impact the Chinese information security industry.

There was a small amount of chaos and panic at the beginning, as well as some old men and old ladies who went to their banks. But other than that, there wasn’t any substantial impact.

However, other countries were not so lucky compared to the calm scenery on the Chinese side.

On a P2P Foundation forum.

This was the world’s most well-known blockchain community, and nerds proficient in cryptography and regular civilians were discussing this matter.

An account that had been inactive for many years had suddenly surfaced and participated in the discussion.

[Title: The End of Cryptography.

[Bitcoin is just my attempt at the decentralization of the finance industry. It has been successful for the past fifteen years, but now, it is no longer secure.

[Perhaps we might be able to rely on new tools and new methods to survive, but as for now…

[Goodbye.]

The entire forum went silent after this post came out.

In less than half a minute, the entire forum blew up like a bomb!

If this post were made by someone else, it wouldn’t be a big deal. At most, it would attract a few comments of criticism.

However, the account that created this post wasn’t just any account.

The account owner was indeed the world-famous mathematician and cryptographer, the man who invented Bitcoin…

Satoshi Nakamoto!

…

On the other hand, inside an office at the CME Group, a Jewish man in his fifties put down the newspaper in his hand, looked at his assistant, who was standing across the desk, and said, “Bitcoin is not secure anymore.”

His name was Baruch. As a professional asset manager of the CME Group, he was responsible for managing the credit investment fund for important clients. He was managing more than 50 billion US dollars in his hands.

After he saw the Wall Street Journal’s report on quantum computers, he immediately made a judgment based on his knowledge of quantum computer technology that the price of Bitcoin was inflated.

After thinking for a minute, he said, “Prepare for short selling.”

The assistant nodded and asked in a serious way, “Using what method?”

Baruch thought for a second and said, “Start with a baseline of 100 USD.”

…

Bitcoin was the first “victim” of quantum computer technology.

The Chicago Board Options Exchange was the first to launch bitcoin futures, and they provided a platform for shorting bitcoin. They received tens of billions of dollars in bitcoin short orders in less than a day.

A short selling happened when investors or a group of people believed that the market price of something, such as bitcoin, will fall in the future. They would borrow bitcoin and sell it at the current price. After that, they would re-buy the bitcoin in the future at a lower price and pay back the bitcoin they borrowed.

If their judgment was correct, they could make a profit.

The global market value of bitcoin was only slightly over 100 billion USD, but the billions in short orders were almost equivalent to 10% of the total market value.

Basically, the essence of almost all cryptocurrencies, including bitcoin, was a bunch of “special solutions” generated by complex algorithms.

Just like a special solution for a system of equations, each special solution could solve one equation, while each special solution was unique.

Using banknotes as an analogy, a bitcoin was the serial number of a banknote. If someone knew the serial number, they would own the banknote.

The process of bitcoin mining was to constantly try and find special solutions to the system of equations through a huge amount of calculation.

This was a kind of currency based on cryptography. Due to decentralization, it had the hidden advantage of anonymity.

But on the other hand, this kind of virtual asset without any backed guarantee would be shredded to pieces in the face of a quantum computer.

Obviously, Mr. Baruch wasn’t the only asset manager who saw through this.

The second his company began to short-sell bitcoin, more than a dozen investment banks and hedge funds also quickly entered this battlefield.

Due to the massive trading volume and sell orders, the transaction price of bitcoin continued to fall. In less than half a day, it fell from tens of thousands of dollars all the way to 100 dollars. More than 100 billion dollars of market value had vanished.

Baruch and the other investors had underestimated the impact of quantum computers on bitcoin.

After seeing the declining transaction price on the screen, Baruch smacked his lips.

He thought that his reaction was fast enough, but in the end, he was still too slow. More and more competitors joined in, and short selling became more and more difficult. The fund he managed only made less than 1 billion dollars before the entire bitcoin market collapsed.

He looked at the red market ticker on his screen as he spoke.

“Fill in the short sell orders for $10.”

“Shouldn’t we wait?” The assistant sitting in front of his computer looked at Balluch and asked, “I feel like if we wait, the price will drop to $1.”

“We always execute on positive EV trades.” Balluch said calmly, “We are betting on expectations, not on Professor Lu using his quantum computer to print money.”

“Okay, maybe you are right.”

The assistant followed his boss’ instructions and placed a buy order for $10, making a juicy arbitrage trade.

With just a few clicks, they had earned one billion USD from people all over the world. This speed of making money was faster than the Federal Reserve’s money-printing machine.

The only unfortunate thing was that this kind of opportunity was once in a lifetime.

The trading was over.

The assistant looked at the funds in the account and had an emotional look on his face.

He just helped his clients make more money than he would ever earn.

However, the longer the funds sat in the account, the more money they were losing. They could be investing that money and, in turn, be making even more.

The assistant looked at his boss and spoke.

“What now? Where should we allocate the funds?”

Baruch hesitated for a moment before speaking, “Buy bonds.”

Assistant: “All of it?”

Baruch: “All of it.”

Bonds was considered to be a relatively safe financial investment. When the market was in a volatile time, especially when faced with financial risks, buying bonds from the government or large corporations was a way to hedge their risks.

This was Baruch’s professional intuition from years of trading.

Right now, his intuition was telling him that behind the calm financial markets, there was a beast lurking in the dark.

This beast was about to be unleashed at any moment.

What happened in the bitcoin market was just the tip of the iceberg…

Baruch took a cigarette out of his pocket. He was about to go to the window and have a smoke break.

Suddenly, his phone in his pocket began to ring. He put the cigarette back and took out the phone.

He picked up the phone and spoke in a good mood.

“Clement? How are you doing my friend?”

“You’re asking how I’m doing? Jesus Christ…”

The voice on the other end of the phone was full of anxiety and disbelief. Baruch, however, didn’t notice the unusual tone. He smiled and spoke.

“Dude, you have no idea what just happened…”

Baruch was about to tell in detail how he used his bravery and courage to arb the bitcoin market, but his old friend interrupted him.

“Yeah, you have no idea what just happened! I’d go check the Dow Jones Index if I were you! Jesus mother of god! Talking to you was the wrong decision!”

The call ended.

Baruch frowned as he looked at the disconnected call on his phone screen. He suddenly felt a trace of anxiety in his heart, overshadowing his positive emotions.

He suddenly realized why his old friend was speaking so anxiously.

Without hesitating, he quickly returned to his desk and sat down. He quickly opened the Bloomberg terminal and logged into his account.

He was completely stunned. He accidentally knocked over a cup, which landed on the floor.

The assistant nearby stood up and spoke.

“What was that?”

There was no response from his boss.

His boss who was sitting in front of the computer was frozen.

Baruch’s face turned red, then the color slowly faded away from his face, finally turning pale…

Oh no…

It’s too late…

It’s all over.

While they were arbitraging the bitcoin market, a financial tsunami had swept across the Nasdaq. This drove the Dow Jones Index down 34 percent, and trillions of market value had evaporated out of thin air.

The money he earned from bitcoin wouldn’t even come close to covering the losses.

Baruch felt dizzy. He tried to stand up, but his legs felt weak.

He sat back down, and he began to slowly lose his vision.

Just before he lost consciousness, he heard a voice.

“The boss fainted! Please call an ambulance!

“Now!

“…”

After that, Baruch couldn’t hear anything…

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