THE BILLIONAIRE

Arnold Brown (Arnie to friends and family) was a programmer, cryptographer, and business-owner. Before 2008, he had the biggest IT firm in Phoenix. Mainly, his clients were real estate agents, looking to code their files. Some, he knew, were hiding something, but this was not any of his business. His concern was delivering cryptographic services to his clients at a reasonable price. Business was booming for a while; but when the housing market crashed, he had a sharp decline in clientele.

His parents lost all of their savings. They were lucky enough to have paid off their mortgage, but they were relying on his dad’s social security alone, which made for tough living. They asked him to move in with them, help by paying rent. Since he could no longer afford his apartment in Scottsdale, this made for a perfect arrangement. Work was slow but constant.

He started reading about money. He wanted to find out what happened, to make everything fail. He read about the banks, the mortgage brokers, the Federal Reserve. He was sickened by it all.

In school, Arnie did not have many friends. His life was almost entirely online. Friends existed in forums, on chat threads, in game messaging. The kids in high school thought he was weird. A computer nerd. They were right; but he knew staying focused on the future would pay off. While the rest chased girls and played sports, he studied coding, programming, and cryptography.

So, when he checked a cryptography forum that discussed a new form of currency (cryptocurrency), he felt exited.

There was a research paper by a man named Satoshi Nakamoto. It was called “Bitcoin: A Peer-to-Peer Electronic Cash System.” It was about the new money. The future of money. It was about how people would use their own computers to become the new banks. A DIY credit union, allowing the people to wrest power from the same institutions that caused all the problems and got bailed out by tax money. It was libertarian by political definition, but Arnie saw it as revolutionary in an economy based on centuries old practices.

Banks relied on a form of monetary depositing created in Medieval Europe, during the Crusades. The Lords and Ladies would deposit money in London, Paris, or Rome, receive a promissory note, go to Jerusalem, and withdraw their money with the note. Computers made this practice antiquated, but the banks still had all the power. So, this model remained, until Bitcoin made it possible to remove this power from the banks.

Arnie was excited about this. He read, reread, and read again the Nakamoto paper. He was intrigued by the technology (blockchain) that would power the Bitcoin network. He knew this would change the world.

At the start of 2009, Bitcoin was available for mining and purchase. Arnie thought he should buy some, as opposed to mining, as he wanted to focus his spare time on getting his IT firm back to its previous splendor. He met some people on a Bitcoin forum that were willing to sell some of their mined Bitcoins: one US dollar for 1,350 Bitcoins. He bought 135,000 BTC for one-hundred USD.

Life progressed for the Brown family. Years passed, his parents were putting his rent money back in their savings, his firm was picking up more clients, and he had met a woman. She was living in Mexico, well-educated, and loved practicing her English with Arnie. Her name was Luz. They Skyped each other every day, until early 2011, when her work Visa was approved. She moved to Mesa, with her brother and his family. Arnie was nervous about meeting her. But their real first date was a success. He met her family, they liked him. They went to the movie theater, saw The Lincoln Lawyer, which he liked but she did not (maybe it was too confusing for a non-native English speaker). They had a lovely Mexican dinner in Mesa. He kissed her at the end, a cute little peck on the cheek. She was a very conservative girl. He wanted more, but respected her values.

They got serious over the next month. He invited her to go to his sister’s wedding in Atlanta, which would be their first chance to make love. He was excited for his prospects. She was reserved, but he could tell she was excited for the trip too. Not just the next step in their relationship, but because she would be able to see another part of her new home country.

Money was tight. His parents had been able to get their tickets with their frequent flier miles. He got a cheap, but modest, hotel for them. He was in the wedding party, so he did not need to get them a gift, but he wanted to. He got them one of the cheapest things on their registry (a set of plates from Crate & Barrell). He wanted some spending cash for the trip, so the Monday before the trip he visited the bank.

In line, waiting for the teller, he remembered Bitcoin. Why he forgot about it, he did not know. His disdain for the bank reminded him about the potentially revolutionary digital cash. The last he checked, the value of Bitcoin was still very low (hundreds for one dollar). He pulled out his Samsung, went to Google, and typed in Bitcoin price: 33 dollars.

He stood in line, mouth agape. At first, he thought it was one dollar for 33 bitcoins. This would have made his account worth just over four thousand dollars. But it was reversed: each Bitcoin was worth thirty-three dollars. When did this happen? He had forgotten about his investment from just two years ago. He was now a millionaire.

“Next.” The teller seemed ready for a break. Arnie looked up, he was next in line. His checking account had maybe three hundred dollars that he was about to clean out. “Next.” He hated banks because they were responsible for so many of the economic problems in this country. “Sir, can I help you? Or are you just in here for the air conditioner?”

Arnie looked this teller right in the eyes, and started laughing. He laughed hysterically. Everyone in the bank looked at him like he was crazy. He had to sit down in one of the Personal Bankers chairs, which confused the man at the desk. His face turned red. He kept laughing. Finally, he got back in line, waited, still laughing under his breath, got to the teller, and closed his account.

What can you buy with Bitcoin? In 2011, not much. You could buy drugs and fake ID’s on The Silk Road. You could trade things on forums. He cashed out 35,000 Bitcoins for 1.155 million dollars-worth of gold and silver on a forum, he then visited several pawn stores to sell the metals. He retained one-hundred-thousand Bitcoins.

His sister’s wedding was spectacular. Luz had been anxious about their big trip, but was relieved once they slept together. It was her first time. While he was not a virgin, sex was not a big part of his life. So, when they made love, it was truly special.

Arnie told everyone about Bitcoin. His family was amazed, but skeptical. They had all seen the woes of people affected by the crises of the past few years, feeling the crunch of the economic bail-outs. To them, Bitcoin seemed like a pyramid-scheme. Arnie tried to explain.

“Paper money—fiat—is a pyramid-scheme, so is the banking system. You give your money to a teller (sometimes a machine). That teller gives it to his manager. The manager gives it to the regional manager. The regional managers lend it to people, who don’t pay it back. And so, the Federal Reserve prints more, which makes that initial money you had worth less. That’s why gasoline prices go up, prices on houses go up, and the price of a Whopper goes up.”

No one quite understood. How can you make money off of something that does not truly exist? Arnie soon gave up trying to explain. He just enjoyed the rest of his weekend.

Arnie was lucky to cash out when he did. The price eventually went all the way down to two dollars a coin. While he had over a million dollars in cash, his one-hundred-thousand in Bitcoin was only worth two-hundred-thousand.

At the beginning of 2012, he proposed to Luz, which she gladly accepted. He bought a house in Chandler. To help his parents, he gave them two-hundred-thousand dollars for their retirement savings, which was about double what they lost in 2008.

Business was still pretty slow, so he decided to retire. He and Luz spent the next year driving around the US. They both enjoyed these road trips, soaking up the scenery of the Southwest, Pacific Northwest, the Midwest, East Coast, and Southern States. He sporadically checked the price of BTC, which was slowly rising.

In 2013, something magical happened: the price broke one-hundred per Bitcoin. His hundred-grand in BTC was worth over ten-million now. Where would it go from here? Arnie had heard all the warnings, articles about bubbles, Ponzi-schemes, and conspiracy theories about Satoshi Nakamoto being a con artist, who was just pocketing the billions that have been invested in his cryptocurrency. Arnie made a compromise with Luz. She wanted him to sell it all; he wanted to keep it all in Bitcoin. They decided to sell half when the price hit one-thousand a coin.

In November of 2013, the price went to a thousand USD per one BTC. They sold fifty-thousand bitcoins for fifty-million dollars. Shortly after, the price went up a couple hundred, and then it dropped dramatically. Mainly because of Mt. Gox.

Mt. Gox was a company that sold Magik the Gathering playing cards. When Bitcoin exploded onto the scene, they became an exchange, growing exponentially. In early 2014, they were hacked, losing billions of dollars’ worth of Bitcoin. This caused the price to plummet, scaring most short-position investors. The market cap lost most of its value. It was fodder for all of the nay-sayers.

Arnie saw opportunity. He had cashed out, so he had capital to play with. The price was going down, almost every day was a new low (still much higher than the initial price). So, he talked to Luz about a plan that he had.

“I want to take the majority of cash that we have and put it back into Bitcoin, when the price goes low enough.”

“I don’t understand. We already sold it. Can’t we just keep the money we have?”

“This is a big opportunity for us. We can make even more money.”

“But we are already rich.”

There would be no compromise this time. Since they were not yet married, Arnie was in control of their money. He said if she would let him do this, he would spend over a million dollars on their wedding. They got married in June, at a country club in Scottsdale.

In March of 2015, the price went all the way down to two-hundred dollars a coin. He bought 200,000 BTC at 40,000,000 USD. He had 250,000 Bitcoins in a cold-storage account (an offline computer; impervious to hackers).

They still had a few million dollars in cash to play with. They visited her family in Mexico. One day, while they were driving to town, Chihuahua Police stopped them. They were looking for money from the gringo. He jokingly told Luz to translate: “Do you accept Bitcoin?” She translated, they did not get the joke. He laughed, and gave them each a hundred dollars. They escorted them to town and back.

They went to South America, Europe, Africa, Asia. They experienced so much culture. Arnie could not help but think of all the ways Bitcoin would change these countries. Greece was using it amidst their own fiscal crisis; Marrakesh had Bitcoin ATM’s all over town; Indonesia was going crazy for the digital cash. He did not check the price during all this, until 2017 saw a major bull run.

Eleven-hundred in January, almost thirteen-hundred in March, eighteen-hundred in April, thirty-two-hundred in June, August saw forty-five-hundred a coin. December…. Just under twenty-thousand. They were Billionaires.