Hello everyone
Around 15 years ago I started playing with the ideas that found shape in my Leathan Wilkey novels set in Paris.
I had this idea for a man who lived on his wits. This thought led to Leathan—a man who has upset some criminals and so has to disappear. Instead of heading somewhere remote where a new arrival would be noticed and noticeable, Leathan finds himself in a major metropolis—Paris—where he can hide as just another anonymous face in a sea of anonymous faces.
How to stay off the radar
But to stay hidden—and to make himself untraceable to the people who are the reason he disappeared—Leathan can’t habitually live anywhere, since he could be found, and so he sleeps in a different bed every night.
no credit card and a different bed every night
He also dispenses with credit cards because these would allow his locations to be known. Leathan isn’t worried that “the government” will find him—he’s worried that the criminals who want him dead may have connections in financial institutions and be able to access data about him.
Leathan’s caution pushes him further away from the banking system. It’s not just credit cards that make him vulnerable, any transaction could be traced, so Leathan does not use a bank. Instead, he lives by a system of barter—he does favors and calls in favors.
Value
The notion of barter gave me an opportunity throughout the Leathan novels to look at something that interests me: value.
In a world of money, it’s simple to accord a financial price to everything. A car may cost $50,000. A watch may cost $100,000.
what price the life of a child?
Money is a convenient means of exchange, but it doesn’t necessarily correctly assess value, especially the value for intangibles, such as the price for the life of a child.
Plus, money only has value if you can spend it. Leathan can’t readily enjoy spending money, so for him, money has less value. But maybe something else can offer Leathan both a store of value and a means of exchange? Hold that thought…
What has changed?
I’ve been scratching out an idea for a new Leathan novel, so I’ve been thinking about how the world has changed since Leathan first appeared, or first disappeared if you’re the criminals who are after him.
Many changes have not been fundamental, they’re more evolutionary—Leathan was “born” after the iPhone was invented (which was pretty much the start of the modern era). But there are changes that could interest Leathan, perhaps the most interesting is bitcoin.
Bitcoin
Bitcoin has been around for longer than Leathan. However, fifteen years ago, it was seen as a theoretical novelty and let’s be frank, it was far too geeky for Leathan to care about.
But over the last 15 years, bitcoin has been far more widely used as a means of exchange: it is a recognized store of value and there are regulated exchanges which will process bitcoin transactions.
That’s not to say it’s not risky as heck! It is, and in the near 20 years of its existence, its use for non-criminal activities has not been sufficiently proven and it is questionable whether it acts as a reliable store of value.
For day to day transactions, bitcoin is not practical. But for one-off and irregular payments, there is a certain level of utility which could benefit Leathan, provided it doesn’t bring any new risks to his safety.
But what is bitcoin?
Conventional currency lives in a bank. The amount of money you or I have is recorded by the bank, and the bank is responsible for confirming my identity before it honors any transactions on my behalf.
In contrast, bitcoin lives on a blockchain, which is a fancy way to describe an accounting ledger. This ledger is then distributed—it is held by multiple individuals. This distribution means that there are many sources of truth giving greater transparency, and making fraud harder.
While national laws may apply to bitcoin/the blockchain, the nature of the distribution of the ledger means that bitcoin cannot be regulated by any government. Bitcoin may be banned by a nation, but that doesn’t stop it from existing. There are no bitcoin offices that can be raided and no government can switch off all the computers processing bitcoin.
Ownership of assets on the blockchain is verified by a cryptographic key (think of it as a complex password).
lose your key and everything is lost
Unlike with conventional currency, if you lose the cryptographic key, then your bitcoin is lost—lost to you, lost to everyone…it just remains on the blockchain. There is no higher authority to whom you can appeal—there is no bank you can approach and prove your identity to in order to recover your bitcoin.
And worse, transactions on the blockchain are “forward only”. If you accidentally pay bitcoin to the wrong person, then the transaction cannot be reversed.
Bitcoin and anonymity
Perhaps the most compelling reason for Leathan to be interested in bitcoin is the notion of anonymity. And at one level, bitcoin is anonymous.
But at another level, bitcoin is totally out in the open which could bring some challenges for Leathan.
Let me try and reconcile this apparent contradiction.
Every bitcoin transaction—every payment from one bitcoin “wallet” to another bitcoin “wallet”—is on the blockchain, the distributed public ledger that is open for anyone and everyone to inspect. Every bitcoin transaction can be viewed by anyone including the police and people looking for bitcoin they can steal or acquire by extortion.
However, while every transaction is public, the ownership of each bitcoin on the blockchain is largely hidden.
Each bitcoin effectively resides in a “wallet” accessed by the cryptographic key mentioned earlier. Technically, it’s not a wallet, hence the quote marks, but it’s easier to think of bitcoins as being held within a wallet.
There is no register of wallet ownership, hence bitcoin ownership is effectively anonymous. And indeed, the notion of ownership is a bit squishy—the real question is who controls the cryptographic keys. Whoever controls the cryptographic keys associated with value stored on the blockchain, effectively owns the associated bitcoin.
While ownership is theoretically anonymous, because all transactions are made on the public blockchain, it is possible to connect wallets to identities through a range of techniques. The most obvious way to link a wallet to a real-world identity is when bitcoin is purchased or sold through a regulated exchange when an individual can be identified and an entire history of transactions associated with that individual’s wallet can be traced.
But this isn’t the only time a wallet can be linked to an individual. Transactions with other recognized individuals can make a blockchain connection which can be leveraged to make a real world connection.
So while bitcoin may appear anonymous, if anonymity is breached, the consequences could be catastrophic for the bitcoin holder.
Disclaimer
I don’t think I need to say this, but just in case you haven’t got it: bitcoin is an incredibly risky asset (and there’s much more on this topic that I haven’t said).
This communiqué should not be taken as investment advice. Indeed, as I often say: don’t take advice from a novelist, we literally spend all day making up stuff.
And beyond the basic risks, remember that bitcoin could disappear in the same way that NFTs went away.
There are other reasons to be concerned. For one example, Michael Burry, one of the individuals who identified the subprime bubble and predicted the 2008 financial crisis—one of the individuals featured in the The Big Short book and movie—has been public in his recent warnings. Further, at the time of writing this communiqué, the price of bitcoin has just been at its lowest for over a year.
Until March
Will Leathan use bitcoin? He doesn’t want to—it’s hideously complex and the risks are immense. However, it might offer him some options and act as a useful store of value if he ever needs to permanently leave Paris.
You’ll have to wait to find what he decides and how he is introduced to the world of bitcoin. And while you’re waiting, go and read the other Leathan books to bring yourself up to date with the story.
I’ll be back in March. Until then.
All the best
Simon