Pether (4)
Seigniorage.
The word meant the profit made from minting money. If it cost 2,000 won to produce a gold coin worth 10,000 won, then the state made 8,000 won in profit every time it struck one and put it into circulation.
Gold and silver coins at least contained some actual metal, but the cost of making modern currency was practically zero. You didn’t have to mint coins or print bills anymore; you could just type numbers into an account. The more those numbers were inflated at will, the more of it became pure profit for the state.
That was why governments monopolized the right to issue money, and why counterfeiting or distributing fake currency was punished so severely.
And yet...
In the cryptocurrency market, the same thing was happening with complete impunity.
Everyone and anyone was making coins, listing them on exchanges, and pumping up their prices. Then the original issuer would sell off the coins they’d created and walk away with enormous seigniorage.
And still, no real regulation touched the market.
I thought back to the future I’d seen in my first life.
The metaverse Sid was building was already on a scale bigger than most countries. If the currency used there could be printed however we wanted, then it could generate wealth so vast it would make everything I had now look trivial.
And yet...
Sid was saying he wouldn’t do that.
That was the difference between Leonard Chang and Sid.
The cryptocurrency market was controlled by a handful of whales, and standing at the very top was Leonard Chang.
To Leonard Chang, money itself was an investment asset, a source of wealth creation. That was why he was trying to seize control of the crypto market through Pether.
But to Sid, cryptocurrency was just a tool—something needed to build and activate the metaverse economy.
Once you created an economic ecosystem through currency, wealth would generate itself.
Leonard Chang was nothing more than a merchant, but Sid was the creator of a world.
From the very beginning, the scale of what they saw and thought about was different.
“I really hate people who just issue crypto however they want and pocket the profit. I’m glad you’re different from those guys, hyung.”
“Yeah. I’m different.”
Inside, I felt a little prick of guilt.
To be honest, I wanted to print my own crypto and take a cut too.
The only reason I’d said so firmly that I wouldn’t take any profit was because I knew Sid despised that kind of thing with a passion.
“Cryptocurrency is absolutely necessary in the digital world.”
Traditional money was traded and stored only through banks.
In the case of overseas remittances, money had to pass through multiple banks, which took time and racked up fees. And if a bank’s servers went down for maintenance, no transaction could go through at all.
But cryptocurrency let individuals send money to one another freely without going through banks, and every transaction was recorded on the blockchain.
The blockchain didn’t just record things that had already happened, like transfers and payments. It could also record things that would happen in the future.
Through a smart contract system, you could precode the timing, amount, and conditions so that the contract executed automatically, preventing fraud or ensuring future profits went to distributors or rights holders.
“But it has to be under government control.”
“Why?”
Sid answered as if the answer were obvious.
“The real world exists even if the virtual world doesn’t. But the virtual world can’t exist without the real world.”
He wasn’t wrong.
No matter how beautiful the metaverse was, you still needed a physical body in the real world to log into it.
“So you’re saying the currency of the virtual world has to be linked to the real world too?”
“Exactly. The people making and investing in crypto criticize governments and shout about decentralization, but I wonder whether they can really do a better job than nations can. The creator of Vantcoin probably thought that if a lot of people participated in the blockchain system, transactions and distributions would become more equal. But what happened in the end?”
“It became a target for speculation.”
Human greed had no end.
The more coins someone owned, the more influence they gained. Wealth kept concentrating in fewer and fewer hands, until those few could control everything.
If that was the case, could they really be called any more righteous than a state?
“That’s why we need a fiat-backed stablecoin. It can’t be issued however people want, and it won’t become a pure speculation target either.”
I nodded.
“That makes sense.”
Sid’s thinking would later be proven right.
Just think about it.
A few developers put out some white paper, then start printing coins like crazy—so why don’t Enple, Guble, and AMZ launch their own cryptocurrencies?
With their credibility, they could mint hundreds of millions of dollars’ worth of crypto and not a single person would doubt its value.
Strictly speaking, it wasn’t that they wouldn’t launch one. It was that they couldn’t. Even if crypto itself had slipped out of regulation, the companies themselves were still regulated.
What if a company used its own credit to issue a cryptocurrency?
That would be no different from challenging dollar hegemony.
In fact, Facenote had tried to launch a stablecoin called Debra, only to give up under pressure from regulators.
Snow Crash was also one of the giant firms known as the Cloud Big Four.
If it went around issuing crypto however it wanted, the government wouldn’t sit still. But if, on the other hand, it stepped willingly into a regulatory framework that didn’t even exist yet?
There’d be no reason to stop it.
“What should we call the stablecoin?”
Sid thought for a moment, then said,
“How about Penny?”
Penny.
A word meaning small change, or a coin of little value, in English-speaking countries.
I nodded at once.
“Not bad. Let’s go with that.”
“What are we going to use it for?”
“To start, we should think of it as a kind of prepaid balance. We’ll make it usable inside Snow Crash’s cloud first, and then expand it to Block Valley, Night Light, Legend Store, JR Blackwood Hotel, O’Connor Burger, and the rest.”
It was earlier than in my first life, but there was no reason it couldn’t work now. Capital wasn’t the problem; Continue Capital could back that up easily enough.
“It’ll take some time if you want to build it properly.”
“Can’t we add the features after issuance? For now, transfers and the basic platform functions are enough.”
“Is there a reason you’re rushing this?”
Now it was time to tell him why.
“You know about Pether, right?”
“Of course.”
I summarized everything I knew so far.
Sid’s eyes widened in surprise.
“Wait—are you saying Pether is a scam?”
“Yeah. They probably issued Pether without any real reserves. Nobody’s ever checked the assets behind it.”
“If they issued one Pether without one dollar in reserve, then Leonard Chang basically pocketed that dollar for himself.”
“Exactly. That’s why I want to see how much is actually sitting in his pocket.”
I explained the strategy to him.
“We make a DeFi protocol. People stake Pether, and we pay them Penny as interest. Then they use those Pennies as collateral to borrow Pether and sell it short. And Penny should always be convertible into dollars through the app whenever they want.”
“That doesn’t sound too hard.”
“Sorry, I know you’ll be busy.”
Sid shook his head with a smile.
“It’s fine. It actually sounds fun.”
He didn’t just say it; he really did look excited.
Seeing that made me feel reassured.
“Let’s go eat. You haven’t had dinner yet, have you?”
I checked into JR Blackwood Hotel, then flopped onto the bed without even bothering to shower.
With a JRB Card, I could use any suite or above for free. After confirming my name, the staff gave me a room that was at least twice the size of a suite.
It was absurdly spacious for one person.
In the past, even when I was on business trips, I’d search for the cheapest hotel I could find. It was strange now not having to do that anymore.
Come to think of it, just two years ago I’d still been an ordinary office worker.
Back then, if a stock dropped even a little, my heart would pound, and losing a few million won felt like the sky was falling down.
But now the stakes were ridiculously higher.
“Cryptocurrency, huh...”
Could I really pull this off?
Since this had never happened in my first life, my head felt tangled up.
I was half-asleep when my phone rang.
When I checked the caller ID, it was Kang Seon-woo.
I answered while still lying down.
Kang Seon-woo: What are you doing?
Me: I’m at the hotel.
Kang Seon-woo: With who?
Me: Alone. What’s up?
Kang Seon-woo: The move-in went fine. This place is nice. Close to home too.
Me: Yeah, it is.
Kang Seon-woo: What are you up to?
Me: What do you think? I’m making money to invest in a game my friend’s building.
For the record, I called it an investment, but in practice I was really just handing him the money.
The company that owned 100 percent of SW Games was K Holdings, a paper company in the tax haven of the Virgin Islands. And the owner of that company was none other than Kang Seon-woo.
Kang Seon-woo: What are you investing in these days?
“Crypto.”
My answer made him jump.
Kang Seon-woo: Huh? You’re doing coins?
Come to think of it...
The first time I’d ever set foot in crypto had been because of this jerk.
Back when I was a freshman in college, dreaming of becoming the second Aaron White, I’d joined a campus club and started dabbling in stock investing.
Under Senior Dongho’s guidance, I studied companies hard and invested earnestly, but my results weren’t all that great.
Then Seon-woo lured naïve little me into investing in cryptocurrency.
Crypto is the big thing. It’s going to be the currency of the future, so you need to invest now while you still can. This is blockchain, see? It’s a protocol that runs on a distributed computing system and—well, something like that. The age of Web 3.0 is coming, and then—
I didn’t understand a single word of it, but since the top engineering student at Korea’s best science university was speaking with such fiery conviction, it somehow sounded convincing.
Back then, it was the crypto boom in its purest form.
Vantcoin, which had once been worth less than 1 million won, shot up to 10 million, then 20 million in no time at all, and experts and reporters alike kept shouting that it would eventually hit 100 million won.
The funny thing was that Vantcoin had been one of the less dramatic rises. Among altcoins, there were plenty of cases where something worth one won yesterday would be worth a hundred by the time you woke up.
It was an era when money seemed to be printing itself.
My first taste of crypto investing was like stumbling into a whole new world. It got to the point where I couldn’t understand why anyone would bother getting a job if money could be made that easily.
And so we evolved from stock rookies into crypto rookies.
And the result...
Let’s just say the rest didn’t need to be described in detail.
Later, after some time had passed, I realized there was one huge contradiction in what Seon-woo had said.
If cryptocurrency was going to be used as actual money, its price needed to be stable. But if it was an investment asset, its price had to keep rising.
In other words, becoming the currency of the future and having prices keep climbing were fundamentally incompatible.
To be fair, even experts were split on whether crypto was an asset or a currency, and regulations differed from country to country.
“You don’t invest in coins anymore, right?”
Kang Seon-woo: Me? I quit a long time ago. A lot of people around me still do, though.
“Really?”
Kang Seon-woo: Yeah. It’s the second crypto boom again these days.
In fact, both crypto market cap and exchange volume had been steadily climbing.
Koreans’ feverish enthusiasm played a huge role in that too.
The old idea that “investing” automatically meant stocks had already faded. These days, the trend wasn’t stocks—it was coins!
Just by the numbers, average daily retail KOSPI turnover was 15 trillion won, while cryptocurrency trading volume was a whopping 18 trillion won—twenty percent higher.
No wonder a crypto exchange used mostly by Koreans had proudly climbed all the way to fourth place in the world.
Kang Seon-woo: The game industry’s in chaos over coins too. You know Winner Factory, right?
“The Legend of the Dragon?”
Kang Seon-woo: Yeah.
It was a mid-sized game company founded about twenty years ago.
The reason it had recently become famous wasn’t because it released Legend of the Dragon 5... but because it launched its own coin, Remix.
When Winner Factory released Legend of the Dragon 5, it had pushed the idea of Play-to-Earn games—games in which players could make money from in-game assets earned through play.
To do that, it created a coin called Remix, allowing in-game currency earned through its games to be cashed out through Remix.
The strategy worked exactly as intended. The price of Remix soared, and Winner Factory’s stock price jumped nearly tenfold as well.
Then Winner Factory sold off roughly 300 billion won worth of the inflated Remix and raked in massive profits.
Most of last year’s operating profit came from selling Remix coins, so by that point it was hard to tell whether it was a game company or a coin company.
Kang Seon-woo: The announcement they just made is insane. They’re saying they’ll launch a stablecoin, Remix Dollar, and build an ecosystem centered on Web 3.0 services to activate DAO, DeFi, and NFT stuff...
“Does anyone even understand what that means?”
Kang Seon-woo: Who knows? The people saying it probably don’t understand it either. Anyway, the coin price went up after the announcement.
“...”
What did it matter what a coin was actually used for? As long as the price kept rising, that was all people cared about.
By then I was starting to get sleepy.
“I have to get up early tomorrow, so I’m going to hang up.”
Kang Seon-woo: Where are you going?
“Washington, D.C.”
Kang Seon-woo: Why there?
“I’ve got a meeting with a senator.”
Kang Seon-woo: ...Huh?