Prologue
New York, August 2019. ETH: $224.
“I should sue the shit out of them, too,” Omar said angrily as he crossed one leg over the other. We had been colleagues and were still friends, at least for now. We were sitting in Washington Square Park on a warm summer evening, the kind when all of New York goes for a stroll and thinks, Maybe it is worth living here as the breeze spirits away the stench of hot trash and dogshit more typical of the city sidewalk.
Omar and I had only sat down by the central fountain when we took in the headline that Harrison Hines, a once rising star at ConsenSys - the world’s biggest company focused on blockchain, where Omar had once worked and I still did - had ended his lawsuit after suing the firm for a cool $13 million. Harrison claimed he had been promised equity and profit-sharing but then unceremoniously fired before receiving any. I’d heard that, supposedly out for revenge, he had hired Mark Zuckerberg’s lawyer to come after us. I imagined it was the one who had saved Zuck from the Winklevoss twins in The Social Network. “I heard” is in this case literal, because in our headquarters our legal team sat in the middle of the room, and everyone was talking about it.
I could taste the bitterness in Omar’s words. He too had been a star at ConsenSys, tossed out due to conflicts with Joe, the CEO. ConsenSys was less a single company and more an incubator for dozens of startups, and Omar had led one of the most promising teams. He too had been promised the world--equity, investments, the opportunity to build a team and use blockchain technology to completely upend the real estate industry. But when the market turned against us, leadership backtracked, and the promises turned to smoke.
“Vanessa emailed me again asking about real estate,” I said, trying to change the subject. She worked on our business development team and perpetually confused me for Ritesh or Vinay or a half dozen other brown guys, this time for Omar. “I told her I’d start calling her Victoria if she didn’t start getting our names straight.”
He smiled for a moment. “I could throw her in the lawsuit too,” he said, pausing before looking angry again. I might have felt that anger. For two years we had worked on the hottest tech of the decade and the money monsoon had rained all around us. We had tasted the addictive rush of entrepreneurial success and our turn felt inevitable. But while I admired his drive to get what we deserved, I myself was on the verge of taking a deal with ConsenSys that might save me from being laid off in the wake of the collapse in Bitcoin in late 2018. I knew I had to take the offer, too afraid of ending up in Omar’s shoes. In fact I had insisted we meet miles away from the Brooklyn office so no one would see us together. Two brown guys slinking around making secret plans for revenge? That’s what the FBI calls a sleeper cell, and I wanted to stay out of trouble. I considered explaining my thought process but realized I would only feel ashamed. Years later, when Omar had built a war chest large enough to take on even Joe’s billions, I would recall our discussion on the park bench and how many times I had slinked away from conflict. But at that time I was beyond the point of caring who was right and who was wrong. I simply wanted to survive.
This is a story about idealism. ConsenSys aimed as a company to do nothing less than to completely rewire the Internet itself, which we saw as irredeemably broken, dominated by Big Tech companies. We would succeed by using the blockchain, more specifically Ethereum, the software cum cryptocurrency cum “world computer” that our CEO and founder Joseph Lubin helped to create in 2014.
The mental image you likely have of cryptocurrencies like Bitcoin is a bunch of nerds playing with Monopoly money, trying to convince everyone of its importance. Fair. But Ethereum is an upgrade from Bitcoin - a currency combined with computer programs called ‘smart contracts,’ which can automate anything related to the movement of money - from regular salary payments to instant lending to creating digital bank accounts for everyone in the Third World at no cost. To open a bank account, governments and Big Banks required an address and a form of ID, leaving billions without either out in the cold. Ethereum would have no such requirement to transact on the blockchain. And through Ethereum, we saw a window to redefine financial services and even how money itself functioned.
Like Bitcoin, Ethereum is decentralized - no person owns it. It is a computer program run simultaneously by tens of thousands of people, rather than by an individual or a profit-motivated company. We could use that collective resource, we reasoned, to replace Facebook and Apple and the other overlords of the Internet. Once we re-built all of these profit-seeking apps on Ethereum’s smart contracts, we would have a new, decentralized Internet: what we called web 3.0. Smart contracts could provide free and secure services to everyone, rather than turning our own data against us as these corporate behemoths did.
Ben Franklin wrote that time is money, and money is time. We buy things for two reasons: either to save time, or to make our time more valuable. We value time so dearly because none of us knows how much we have. Franklin came up short. Money is not time; money is life itself. And so for us, disrupting currency was too low a target. By reprogramming money, we could reprogram society for the better.
That idealism drew me in like a magnet. After spending my twenties floating aimlessly in corporate America, I wanted a job with positive impact. In my childhood my Asian immigrant parents had given me two lifelong assignments: to make the world a better place, and to be rich. When I turned thirteen I complained these might be difficult to do at once, and my father helpfully pointed out that Bill Gates had done it. And he didn’t even have a college degree, my father added. I nodded along dutifully.
I spent my college years traipsing from NGOs in Africa to the halls of Congress to studying in the Middle East, another liberal arts student full of ideas and no direction, hunting for that magical combination. When I noticed that the NGO’s chief economist mostly spent his time booking first class tickets to conferences, I started to have doubts about my parents’ first assignment. They thought that I might be making a dent in the world when an invite came by mail to a luncheon for Muslim interns hosted Vice President Joe Biden at the White House. But the pride was fleeting, as the Obama is a Muslim rumors led to some second thoughts in the West Wing and worries about feeding the conspiracy mill, and they soon reorganized the event to be a joint Muslim-Jewish lunch hosted by an Indian flunky who was neither Muslim nor Jewish. (President Biden, you still owe me.) Without that cachet, and noting that my manager in Congress lived off whiskey and ramen given her long hours and pitiful salary, I soon decided my parents’ second assignment was more realizable. I would deal with the world’s problems later.
Now a decade later I had come across blockchain and Ethereum. I had, I thought, finally struck (moral) gold. We could use blockchain to build an Internet that was decentralized and fair rather than exploitative and foul. We could build a financial system with access for everyone. ConsenSys saw a society dominated by corporations and a path to create the tools that would inevitably lead to a better world. All I had to do was help build the movement.
This is a story about greed. “Never before have so many unskilled twenty-four-year-olds made so much money in so little time as we did this decade in New York and London,” Michael Lewis wrote in his classic memoir Liar’s Poker about the investment banking floors of Solomon Brothers. A modern gold rush, he claimed.
Well, eat your heart out, Michael, because Ethereum was not only a means for saving the world, but also happened to be one of the most profitable trades in history, returning nearly 5000x, going from thirty cents to $1400 in three years. Even more so, Ethereum was the launchpad for other cryptocurrencies, which grew ten, twenty, even one hundred times during the pandemonium of 2017. Many of our friends and enemies in the blockchain universe spent their time not writing code to save the world but trading obsessively in these “coins,” trying to make another ten or twenty times return on the 1000x profits they had already made on Ethereum. Those who bought at the right time had investing returns that made Warren Buffet look like a nobody. And those who bought at the wrong time saw fortunes vanish.
How did blockchain, an interesting if complex technology, fuel the largest bubble of this century, peaking at nearly a trillion dollars? The idea that anyone could own Ethereum, the blockchain that could be the basis for the next Internet, was what truly drove everyone into a mania. Imagine buying a piece of the Internet in 1990. That potential profit was what drove everyone crazy, from your Uber driver to your grandmother, to buy Bitcoin.
I was not immune. Since college, I’d lived the high life working in corporate, the $5000 a month apartment in Midtown and all expenses paid meals. Now I was the one booking first class. When I left to join ConsenSys, I knew the potential return in Ethereum meant my equity might someday be worth millions - and in the meantime I could trade in these obscure cryptocurrencies, doubling and tripling my money along the way. All I had to do was help spread the word.
This narrative began with idealist techies like us who hoped to make money, but we were not the only guilty party. The consultants of McKinsey and Accenture and others wanted fees, and so put out white papers encouraging companies to invest in blockchain. Venture capitalists also saw the profits from Ethereum and were dying for the chance to earn high returns without having to wait ten years for an IPO. The press and publishers saw the chance to cover a potential societal shift. Authors had a chance to write bestsellers. Blockchain Revolution. Blockchain: The Next Everything. Perhaps this memoir even sits next to one of these tomes.
And no one thought to question this tale of an amazing future, because everyone was going to make lots of money off of it.
This is a story about people. As it turns out, ConsenSys was no ordinary company. It was, in some ways, perhaps the grandest social and business experiment of our times. Joe, our CEO, chose not to give us orders or instructions on how to lead this revolution. He simply gave us funding and asked us to use blockchain to make the world a better place. He had placed a billion dollar bet on humanity, as was explained to us in our onboarding video by a cartoon unicorn.
Most of us worked hard out of gratitude to him. He could have screwed off at any point with his Bitcoin wealth and lived out his days on an island. Which, in fact, many ConsenSys employees did--a large number moved to Puerto Rico, where they could avoid paying federal income taxes. But Joe stayed the course, even through the hard times. In turn, we built the software and spread word of the revolution in order to further his experiment.
But who was scientist and who was subject?
Indeed, we were also experimenting on you. We helped write the headlines covering blockchain and cryptocurrency, and we smiled for the photos that ran above the fold on blockchain’s promise to remake finance, the government, and everything else. We fed the journalists, who we knew could not differentiate private key cryptography from hieroglyphics, and they graciously turned our words into clickbait. I myself learned some of these tricks, on how to drop just the right hints or spin up a controversy for a headline. We spun a beautiful narrative that the ‘thought leaders’ in consulting and tech and venture capital repeated like the colorful parrots they are. Groupthink based on hearsay fed the fire. Blockchain is not unique in this - in much of tech and finance, a similar polluted river runs, flowing from the builders to consultants to ‘thought leaders’ to journalists, whether the subject is “artificial intelligence” or automated drones or the ‘Internet of Things.’ Finally it flows to you, the dumping ground of empty buzzwords.
I do not want to imply we led a massive conspiracy to dupe the masses. No, we believed in blockchain’s ability to reshape finance and technology, and what that could do for the world, and so many followed us because they wanted to believe, or because they thought they could make a quick profit. Blockchain was the Rorschach test of our tech-obsessed era, the bubble within the bubble, and a moral fable of the perpetual conflict in the heart of every tech entrepreneur between greed and idealism: a battle for the soul of tech. Unfortunately, greed won.
But just your luck - your guide today is one of the very few non-coders who spent his days helping to build the blood and guts of the blockchain itself. There is yet time to pull back the curtain. And as our opening crawl comes to an end, our story, like another well known futuristic epic, begins in a space age desert far, far away...
