Chapter 68
Translator: Dreamscribe
“Wow……. 700 dollars.”
“If I had bought it all at 300 dollars, it would already be more than double.”
“This is seriously crazy. Isn’t this madness?”
So far, 15 million Bitcoins have been mined.
The issuance limit is set at 21 million.
“Then only 6 million are left now?”
“Yeah. But they say it’ll take until at least the year 2140 for all of them to be mined.”
“Gasp. That long? Even with just 6 million left?”
“Isn’t it because of the halving? There’s a setting like that, so the more it gets mined, the slower the speed becomes.”
At first, even the employees had a negative view of Bitcoin.
But once they dug into it, the system was better than expected.
To preserve scarcity and prevent inflation, the cap was set at 21 million, and the halving mechanism was added to prevent all the supply from being released at once.
Also, Bitcoin’s blockchain system was built to be impenetrable by hackers.
However, there were occasional stories of exchanges being hacked and Bitcoins stolen. This wasn’t the Bitcoin system itself being hacked, but rather the vaults of exchanges holding the Bitcoins being broken into.
In other words, as long as the exchange’s security is solid, it’s safe.
“Even though 15 million have been released, only about 7 million are actually circulating in the market.”
There were surprisingly few Bitcoins actually in circulation.
Some people were holding onto them long term, and above all, many had mined them long ago and forgotten, or lost their private keys, rendering them unusable.
“When we first opened the exchange, even the employees were super anxious. Everyone thought the exchange would shut down quickly and we’d all be fired.”
After KW Exchange opened.
On the first day, the number of new members was just 100.
That day, KW Exchange’s employees were terrified.
Not only did it seem like their salaries were in danger, but even the server costs wouldn’t be covered.
But things changed as the Indian rupee reform kicked off and currency reforms occurred in various countries.
As the value of currencies used for black money changed or got blocked from use, people managing illicit funds in various currencies and assets started looking for a new alternative.
And what they set their sights on was Bitcoin.
It was like digging into black money only to bury it even deeper.
However, there was one thing even those dealing in black money didn’t foresee.
As black money flowed into Bitcoin, its price naturally rose, becoming the fuse for the Bitcoin boom.
“But Bitcoin, it’ll break through 1,000 dollars easily, right?”
“1,000 dollars is nothing. Just look at the current trading volume. It’s insane. Plus, KW Exchange already surpassed 1 million users.”
KW Exchange, which previously had no new users or active traders, was now flooded with so many people the servers were on the brink of collapse.
“But did the CEO-nim really see all this coming?”
“Of course. He told us to set up as many servers as possible even before launching the exchange. That’s why, even with 1 million people rushing in over a short period, the servers are stable.”
With the sudden Bitcoin craze, everyone rushed to the exchanges.
But none could handle the massive demand, and their servers crashed.
However, KW Exchange, which had prepared robust servers even before launching, had no issues.
That was also a reason why the number of members increased rapidly in such a short time.
“That’s not all. We partnered with overseas exchanges, so there’s nowhere else in the country that sells hundreds of coins like we do.”
Moreover, what made KW Exchange attractive was its significantly greater variety of coins compared to other exchanges.
“Ugh. Should I still buy some now?”
“You can’t. CEO-nim already gave strict orders. Employees working in our group are absolutely not allowed to buy Bitcoin.”
On the surface, Bitcoin exchanges looked like lawless zones.
But in reality, opening an exchange required going through quite a complex review process.
Also, since internal employees could manipulate prices using the exchange, related staff were strictly prohibited from buying any Bitcoin.
That was a clause that came with operating an exchange.
“But if the CEO-nim anticipated that Bitcoin would rise like this, wouldn’t it have been better to go all-in on Bitcoin instead of opening an exchange?”
“Well, he must’ve had several reasons. First of all, before Bitcoin rose this much, there wasn’t that much volume. It was hard to even absorb 1 trillion won.”
Although the Bitcoin market was suddenly growing, it was still difficult to handle even 1 trillion won. But if you included Bitcoin and altcoins together, that was a different story.
“If he had gone ahead and bought up all the Bitcoin and altcoins, the price might not have even risen like this.”
“That’s true.”
“And how could people like us possibly understand what the CEO-nim is thinking? He must have seen something we couldn’t, which is why he started the exchange. Look at us now. We’re doing absolutely nothing, but the exchange is raking in fees like crazy, right? Even though we only invested 100 billion won.”
Back when the exchange first opened, employees had trembled in fear that it might shut down.
Now, they were working like crazy.
There was even talk of hiring additional staff.
At this rate, it looked like the investment would be recovered quickly.
“But other securities firms are saying the Bitcoin craze is more intense than they expected, and they’re now throwing all their money into it.”
“To be honest, except for our Kwangwoon, I bet all the other securities firms are investing in it.”
Securities firms, having caught the scent of money, had already begun putting funds into Bitcoin.
Asset management firms were also jumping on the trend and launching related products.
However, Kwangwoon was running an exchange, so all investments or products related to it were completely prohibited.
Other securities firms were continuously creating products with Bitcoin, but Kwangwoon couldn’t do a thing.
“Hey. I already told you. CEO-nim has thought it all through. People like us will never understand it, even if we die and came back to life.”
***
“…….”
It hurts.
It hurts in the gut.
Bitcoin, which had dropped to 300 dollars, had surpassed 700 dollars and finally reached 1,000 dollars.
At this rate, it looked like it could easily hit 2,000 dollars.
Moreover, with Bitcoin, the main coin, rising, the altcoins underneath it were rising too.
So it felt like a missed opportunity.
Maybe it would’ve been better not to open an exchange and just put the money into Bitcoin instead.
Even if the market was small back then and not suitable for a large investment.
But at the time, my instincts hadn’t reacted positively to buying Bitcoin.
That’s why I didn’t buy it.
As a result, while all the other investment firms were getting involved with Bitcoin, only our Kwangwoon couldn’t do so.
But that lingering regret didn’t last long.
“CEO-nim! N-news, have you seen the news?”
Employees rushed into the Chairman’s Office.
“Yes, I’m watching it now.”
[The market has overheated excessively, and compared to overseas markets, there is a price gap of over 20 to 30%. For the sake of investor protection and market stability, financial regulation has become absolutely necessary.]
Currently, the price of Bitcoin being traded on our KW Exchange was showing a gap of 30% compared to overseas prices.
The so-called Kimchi Premium.
Moreover, a flood of money was pouring into Bitcoin, and black money was being concentrated in it, something the government could no longer ignore.
[From now on, to trade cryptocurrency, a real-name verification deposit and withdrawal account system will be required. Virtual accounts will be prohibited, and minors and foreigners will also be banned from trading. Additionally, a full tax audit will be conducted on cryptocurrency exchanges.]
So far, this was actually manageable.
What was there to audit when the exchange had just opened?
The next part was the real issue.
[Furthermore, we will be suspending all cryptocurrency trading by domestic financial companies.]
That was the fatal blow.
It was a complete ban on domestic securities firms and asset management companies from entering a market with absolutely no safety mechanisms in place.
“What’s the current market situation?”
“Everyone’s in panic. The announcement came out suddenly without any warning. Financial companies that had invested money into Bitcoin now have to dump their holdings, so there’s pushback, but the government’s stance is firm.”
The Bitcoin craze was already a major point of controversy in the country.
Whether it was acceptable to treat a virtual currency with no financial safety net as a real financial product, or whether it should be considered a scam, was up for debate.
There were growing voices saying financial regulation was absolutely necessary.
So everyone assumed the government would eventually regulate it to some degree, but no one expected it to come so suddenly.
On top of that, futures trading for Bitcoin would be completely banned going forward.
You couldn’t even take leveraged short positions.
The regulation would only allow long positions, nothing else.
“Prices have already dropped 20%. Looks like the Kimchi Premium is going to vanish completely after this.”
“Wow. They’re really normalizing the market like this.”
“But if they block shorts, won’t that hurt us too? Like, if people start using overseas exchanges…”
Some level of user attrition was inevitable.
But using overseas exchanges instead of officially licensed KRW markets in Korea was extremely inconvenient.
Moreover, taking leveraged short positions is practically gambling with a direct ticket to the Han River, so most people avoid it altogether.
“At this rate, Bitcoin hitting 2,000 dollars is out of the question.”
“You never know. Even if the Kimchi Premium drops, trading is still active overseas.”
“But it’s not just Korea. They say Bitcoin regulations are coming soon in other countries too. Won’t that put a lid on the price?”
“Ugh. That can’t happen. Then our exchange would’ve just had a brief burst of profit before becoming a ghost town again.”
That was a bit concerning.
Even if Korea, being extremely sensitive to financial matters, hastily imposed regulations, there was a good chance other countries would do the same.
Because everyone knew black money was gathering in Bitcoin.
In other words, the Bitcoin that just broke through 1,000 dollars could drop back to 100 dollars at any time. If that happened, our booming exchange could quickly go back to struggling to even cover server costs.
“CEO-nim, what do you think the fair value of Bitcoin is?”
The employees all looked toward me.
“I think…….”
To be honest, in my personal opinion, even 1,000 dollars was a very high price.
But something I’d learned living in this world is that the price of something often disconnects completely from logic.
“…….”
I began writing down possible Bitcoin prices.
Two thousand, three thousand, four thousand, five thousand.
No matter how high I raised the number, nothing really stood out.
Just when I started wondering if I had gone too far with my estimates.
“……?”
At ten thousand dollars, I felt a slight sensation.
‘Over ten thousand dollars?’
That’s ridiculous.
Even just hitting ten thousand dollars seemed absurd, but the fact that I felt even a slight reaction at that level meant the price could go even higher.
‘Then… could it be twenty thousand dollars?’
I raised the number significantly again.
But again, my intuition gave the same mild feedback.
Thirty thousand… forty thousand… fifty thousand…
Still the same level of feedback.
At this point, I was scared to write down the next number.
‘Just how far is it going to go?’
***
The sudden Bitcoin frenzy.
To mine Bitcoin, you need GPUs.
So GPU manufacturers naturally had reason to smile.
However, NVIDIA, which currently controlled 80% of the global GPU market, was smiling on the outside while crying blood on the inside.
“We’ve really reached the limit. At this rate, we won’t even be able to produce the upcoming X-Force series.”
The Bitcoin boom had triggered a GPU crisis.
As a result, NVIDIA’s stock price soared, and all its products were sold out.
The problem was that they couldn’t manufacture either the current series or the next series of products.
“TSMC really can’t deliver the products?”
“The incident at Tianjin Port already caused a big blow, and more importantly, the Chinese government’s continued threats to the air routes have had a significant impact. On top of that, the sea routes are completely blocked as well.”
NVIDIA’s CEO, Tony Hwang, was having a major headache.
To manufacture graphics cards, TSMC needed to supply semiconductor chips.
TSMC, being based in Taiwan and exclusively operating as a foundry, had never once had any issues with production until now.
But one day, contact with TSMC was suddenly cut off.
They were still managing to send some products through alternate routes, but they couldn’t even fulfill 50% of the order volume.
“They’ve been rerouting shipments to get some products to us, but right now, Kwangwoon Shipping has deliberately cut off all shipping volumes heading to TSMC. So even though TSMC wants to produce semiconductors, they say they can’t, because they don’t have the raw materials.”
Finding a way to get semiconductors from TSMC was still doable.
China might be threatening the airspace, but they weren’t actually shooting anything down.
The real issue was raw materials.
To produce semiconductors, you need silicon wafers, specialty gases, chemicals, photoresists, and so on. A wide range of raw materials is required.
And to acquire those materials, they had to import from many countries including the United States, the Netherlands, Japan, and Germany.
To receive those, using the sea route was the only option, and that route had been blocked. And it was all because of a company called Kwangwoon, which was now seizing control of the entire shipping industry.
“There are rumors going around that Kangseong Group has teamed up with Kwangwoon to deliberately choke TSMC. And that the Chinese government is backing them from behind as well.”
“Even the Chinese government? But why?”
“Well, there must be several reasons. For one, the President of Taiwan rejected the ‘One China’ policy. And more than that, ever since the Tianjin Port explosion, there’ve been constant whispers of some kind of covert cooperation between Kwangwoon and the Chinese government.”
China controlled the skies, Kwangwoon controlled the seas.
And Kangseong was entering the foundry business.
With these three powers joining forces, even a semiconductor giant like TSMC was struggling to breathe.
And this wasn’t just TSMC’s problem.
Companies working with TSMC to manufacture products, like Apple and Qualcomm, were also suddenly in a desperate situation.
At this rate, those two companies would have no choice but to abandon their exclusive loyalty to TSMC and change their stance.
In other words, an ironic situation was unfolding where they’d be forced to hand over their semiconductor production to a competitor.
“CEO. I think you’ll need to sit down for a conversation soon. Word is already spreading that AMD’s graphics cards are more efficient for Bitcoin mining than our products.”
AMD.
The world’s second-largest GPU company.
But ‘second-largest’ was just a title, NVIDIA had already seized 80% of the market, leaving AMD with a minuscule share.
In fact, AMD was running so deep in the red that no one would be surprised if it shut down tomorrow.
Still, you never know what could happen in this world.
If TSMC failed to escape the current pressure and ended up shutting down, NVIDIA, whose entire operation was aligned with TSMC, would suffer an enormous blow.
Even if not immediately, it could gradually lose market share to competitors and eventually be overtaken.
“That’s the one thing I have to prevent.”
That’s why Tony Hwang had to step up personally to resolve this issue.
“Who should I go to? Kangseong?”
“Not Kangseong, shouldn’t you go to Kwangwoon?”
“Kwangwoon?”
“Yes. The reason Kangseong was able to act like this is ultimately because they established a new foundry company in Europe, and that only became possible due to Deutsche Bank’s collapse. And there are rumors circulating that Kwangwoon played a decisive role in that collapse.”
In other words, Kwangwoon was the power behind this entire situation.
What kind of company had that much influence, across Asia, Europe, and even the United States?
“Phew-”
Honestly, he didn’t want to go to Korea in person.
Back in the early 2000s, when NVIDIA was struggling badly, he had gone to Korea pleading for investment, only to be rejected by everyone. That memory had stayed with him like trauma.
That’s why he still held a grudge against Korea.
And now, to have to go back and bow his head again.
“Get in touch with Kwangwoon. Tell them I’ll fly to Korea myself to meet.”
He wanted to see with his own eyes the bastard who had taken hold of the semiconductor market and shaken it up.
*****
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