It is July 2008. The world is going through an unprecedented financial crisis.
In the United States, high-risk home loans, the infamous subprimes, have poisoned the entire banking system. In the spring, the investment bank Bear Stearns, more than eighty years old, collapsed over a single weekend and was bought for a pittance. In July, it is the bank IndyMac that goes under. Markets plunge, and savers, shareholders, entire pensions watch their savings go up in smoke.
Somewhere in the world, a computer scientist watches this shipwreck and asks himself a simple question: how, exactly, does money work? He starts searching, reading, understanding. And what he finds staggers him.
Money is thin air. Most of the money in circulation is not printed by a state: it is created on demand by banks, every time they grant a loan. A loan is signed, and the sum appears, out of nothing, through a simple bookkeeping entry. When the loan is repaid, that money disappears. The money supply is only a promise, inflated or deflated according to confidence, and it is precisely that confidence which has just collapsed.
Going back in time, he also discovers that it was not always this way. For decades, currencies rested on the gold standard: each banknote was a promise, exchangeable for a precise quantity of gold. Citizens thus had the guarantee that their national currency was backed by a real metal, scarce, impossible to manufacture at will. The Bretton Woods agreements, in 1944, had even built the entire post-war system on this anchor: the dollar remained convertible into gold at a fixed price, and other currencies were pegged to the dollar.
Then, on 15 August 1971, the American president Richard Nixon suspended that convertibility. Within a few years, over the course of the 1970s, the link between money and gold was severed for good. Since then, no major currency has been guaranteed by anything tangible: its value rests solely on confidence and on the decree of the state. This is what is called fiat money, and it is fiat money that the 2008 crisis lays bare.
He then decides to offer the world another solution. A currency that would depend on no state and no bank. A currency whose every transaction would be recorded publicly, and therefore traceable, but where the users would be only pseudonyms, and therefore anonymous. A currency that anyone could create, not by granting loans, but by putting their computer to work.
