Unit 25 Reading Activities Plus Questions

Read the following text and then complete the activities that follow.

MegaHyperCoin, a Fintech Startup Short Story

Daniel took a sip of his coffee, taking in a deep breath. The coffee felt cold and a bit too sweet. Convincing his old friend about the new investment was taking longer than he expected. He sighed, set his cup of coffee down on the table, and decided to give it one last try.

"Look Martin, I know that you've heard stories about the dark web, pump and dump schemes, and money laundering. But, that's not what blockchain is all about. MegaHyperCoin can replace a lot of inefficient systems such as cross-border payments. And it can be fungible as well, making it just as anonymous and private as cold hard cash."

Martin looked back at his friend with a raised eyebrow.

"OK, so let's say I go with your new altcoin mining idea. How do I know it's not another..."


"Yeah, shitcoin. You're showing me these figures but online people are talking about MegaHyperCoin mooning and how it's inevitable. Inevitable! Nothing is inevitable except the heat death of the universe. I know you believe in what you're doing, but I am still feeling highly skeptical. I've got a reputation to protect. I can't be seen shilling some new shitcoin."

Daniel tapped his fingers on the table.

"Here is the thing. I am not asking you to shill anything. All I'm asking you to do is help with the mining. You've got some good computers doing nothing. It's not too late to jump in. I'm not saying that we'll be driving new lambos tomorrow either. We are just trying to make a couple hundred of dollars per day at first. We won't make any real money until there is mass adoption."

Martin's face relaxed a bit.

"Go on."

Daniel Continued.

"I understand why you're worried. The difference here is, we're dealing with two things: a well-known stable coin called Tether and a relatively new altcoin. While the market does tend to be volatile, we're sort of hedging our bets. In effect, we shouldn't be more at risk than anybody else trading regular fiat currencies."

Martin's forehead wrinkled, making him look his age. The years he sacrificed to build up his business were beginning to show. He squinted his eyes and directed his gaze straight into Daniel's pupils.

"If I do this, it's not for the lambos and it's not to help an old friend. It's because I have nothing to lose and I need to learn more about this blockchain stuff. I believe daps might be a potential threat to my business one day. Everyone says that decentralized applications are the future. The only thing is, I don't understand what they are talking about. I just need to understand this technology better. This project is how I can justify doing that."

Daniel felt his pulse speed up. If Martin agreed to this deal, he would have 100 state-of-the-art computers working for him. And, he would be making money in sleep. He leaned closer and pushed a stack of paper in front of Martin. 

"Here. Read this white paper. It explains everything, It shows how the double spend problem was finally solved in scalable fashion. It shows how to make a paper wallet just using a web browser and a common printer. That way you can keep your mad gains and private keyin cold storage and thus off the Internet. On page 15 there is a chart which explains the revolutionary new consensus process called proof of stake. Come on, if things start to look bearish we can always cut our losses and trade back into Bitcoin. Everyone could use a few more satoshis for a rainy day, am I right?'"

Martin's laughter filled the room. He could smell bullshit from a mile away. After all, one doesn't build a successful fintech company without some amount of sharp wit. Together with his team, he created a cipher that made is easier to make international transactions safely. He knew finance and software in the traditional sense, but cryptocurrency was still something mystical to him. 

"Daniel, my friend... As long as you understand that this is not the traditional way I do things, then I'm on board with all this. I can sign these documents and do this deal, but this means that you take full responsibility for the outcome. I'll cover the hardware costs and the energy bills for the first 12 weeks. But if things aren't working out as you predicted after that time, well then you're on your own."

"Yes, Sir! Thanks! That's more than enough time to get us going! You won't regret this."

"I hope not. Any final details before we put pen to paper and close this thing?"

Daniel knew better than to say anything else but, "Just thank you". Right now, all that mattered was that he could start tomorrow.

Martin looked at his watch.

"Okay see you tomorrow, I've got to get to my kid's ballgame now."

Daniel swallowed his last sip of cold coffee which had somehow turned from sickly sweet to gritty and bitter. He had a dark feeling that 12 weeks was not going to be enough time.

Quiz: Reading Questions

1. The double spend problem is difficult to solve without a blockchain or trusted third party.
2. All shitcoins are altcoins, but not all altcoins are shitcoins.
3. One bitcoin is always worth 100 million satoshis.
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