Bitcoin Enterprise blown to bits

A ‘pre mortem’ is the concept of writing about what is going to happen in the future. In this article David Gee is illustrating in 2018 what has happened to the new Startup company named Bitcoin Enterprise. What follows is a fictional story what weaves the rise of a new technology company and parallel to this, the emergence of a new world order with the ascension of China on the world stage.

(Any real company that resemble Bitcoin Enterprise is a pure coincidence)

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Technology News October 2019

The promise of the startup Bitcoin Enterprise has unfortunately not met the potential that we had all envisaged in late 2014. A number of lessons from this startup have been speculated but our reporter has gained access to the Founder Mr David Gee and confirmed the actual facts of this failure.

History of events

Bitcoin Enterprise was launched in Q3 of 2014, without much fanfare. There was a slow but steady takeup and a key event happened and this was that in 2016 it was becoming apparent that with China looking set to take over as the number one economy of the world, that there was speculation about the US$ (Green Back) and the safety of this currency in the longer term. We all knew that since the Bretton Woods era that the US dollar was considered to be the global currency. The US Dollar had outlasted a challenge from the Euro, however the American economy still was fundamentally weak and it was understood that they had peaked.

1st Trigger Point

Like many changes, this one crept up on you, and the dominance of China as a world power was becoming more and more obvious in everyday life. There was a so-called tipping point and what then occurred was a massive growth of transactions that saw a switch over a 6 month period of 25% to the use of the US$ as the de-facto standard for international currency to the RMB (Redback). The world took notice of this rapid change and it was widely speculated that the Chinese government may have been behind these transactions. There was no proof, but with the spread of chinese investments on a global scale it was impossible to trace back the funds.

Also in the background, and getting much less airplay was a secondary shift and that was the increased incidence of Bitcoin transactions as a preferred method of international trade.

2nd Trigger Point

As a result of this switch to the so called Redback, there was a gradual but equally dramatic appreciation of the RMB. While it was still regarded with a degree of concern in terms of how open was their banking system, it was understood that China had massive cash and gold reserves.

What transpired was a forced revaluation of the RMB as this currency gained favour with many international traders. This secondary effect was not anticipated and we then had already seen a trend for the last five (5) years of the exodus of funds from china. In fact, with the Redback at all times high valuations, the rich upper and middle class chinese had decided to ‘cash in’ and move their remaining funds out of China.

In their mind, this was the best time to take advantage of the close to 30% appreciation of the currency and they also feared that with a rise to Number 1 in the world, that there would be unrest in China. The lower class, were starting to ask, why are they not sharing in the spoils of this growth? They were now the richest country in the world, but for majority while life was better it certainly was not the richness that they had dreamt. For the average chinese person their GDP is only $16k per capita and they are asking why is the USA at 2nd place enjoy a $50k advantage?

Their preferred avenue, chosen by the Chinese upper and middle Class was Bitcoin — as this allowed a degree of anonymity and also the exchange costs were extremely low.

The next 90 days

Bitcoin Enterprise then experienced, growth that was beyond their wildest dreams, with the largest ever demand for this crypto currency that has been seen in their short history.

At first, this was manageable and while Demand was high, there was no issue to Supply the coins as the miners in the world could keep up with this demand. However the economics became such that the Bitcoin rate exploded beyond the infrastructure capacity of Bitcoin Enterprise and others in the industry.

It was thought that using Cloud resources that this was indeed ‘infinite’ and there would be no shortage of processing power. But as the Bitcoin itself, went through the roof in terms of a currency of exchange the capacity in the industry all was applied to this goal. But is just could not keep pace with the demand.

‘No confidence’ Vote

This spiralling of events, eventually meant that the Bitcoin Enterprise customers were not getting their orders fulfilled and their frustration resulted in them closing their accounts and moving into an alternative crypto currency.

Many chose Paypal’s own version of Bitcoin as it was perceived that they had the computing grunt and besides they were a more established player.

The Chinese Government were obviously very concerned about the impact on their economy and decided to flex their muscles. At one stage there were multiple agencies targeting DDOS and other cyber tactics which stopped chinese citizens from transacting with Bitcoin Enterprise. This in itself caused a ‘run on Bitcoin Enterprise’, as chinese citizens in particular lost faith in their new crypto bank.

In the end, Bitcoin survives but Bitcoin (the Startup) Enterprise died.

(A fictional story)