CHAPTER 16
BLOCKCHAIN AND BJØRN
When he was a child growing up in Norway, Bjørn Bjercke used to have a recurring nightmare that his television wouldn’t turn off. He’d push the button, pull the plug and even dismantle the box, but nothing could stop it. He sometimes wondered if those dreams were the reason he ended up studying computer science and became an IT security specialist: some mysterious deep-rooted need to regain control over machines. Computers suited his personality too. He liked the precision of code, its exactitude and certainty. In his twenties, when his friends were out partying, he would happily spend hours digging around the latest bit of software, scrolling through the impenetrable languages C++ and Python.
By 2013, around the same time Ruja and Sebastian first met in Singapore, Bjørn’s circle of fellow IT guys and hackers in Norway were also talking about Bitcoin. But they were less interested in the price and more interested in the fact it had been running for three years without breaking. “Bullshit,” thought Bjørn, when he was first told about this apparently un-hackable new technology. “Everything can be hacked.” For the next year or so, Bjørn spent his evenings and weekends trying to stop Bitcoin running. For a decade he’d been fixing IT problems at some of the world’s top companies, and so knew every hacking technique, every angle of attack. But Bitcoin was so beautifully designed that Bjørn got nowhere. He couldn’t break it; in fact, he couldn’t even improve one single line of code. It was his nightmare again—a system that couldn’t be stopped. But the childish fear was replaced by fascination. Once you’re fluent, computer code is much like the written word: It can be jumbled and clumsy, or poetic and elegant. The Bitcoin code was the most perfect Bjørn had ever seen.
As far as Bjørn saw it, the real breakthrough was the strange database that powered it all, the blockchain.1 It transcended technology; it was about trust and truth. “When you enter something onto a blockchain,” Bjørn would tell people enthusiastically, “it’s like carving it into stone.” If they struggled with the technicalities, Bjørn sometimes pulled out his other favorite pastime—a Rubik’s cube. He would jumble it all up into a multicolored mess before solving it again in under three minutes. “You don’t understand how I’m doing this,” he’d say, as his fingers rapidly shuffled the colors back into their rightful positions, “but you can verify it’s correct because all the colors match. Blockchain is the same.” To someone like Bjørn, Bitcoin was a once-in-a-generation idea, the sort of “upstream” technology that transforms whole societies. The printing press, the telephone, the internet, and now money controlled by the unbending rules of code rather than unpredictable bankers and politicians. “Why should banks, [who have] not updated their systems and business model for 60 to 80 years, get paid for you to do all the work with your money?” he posted on LinkedIn around this time. “It is time banks stopped taking advantage of us.”
Although he was in his mid-thirties, Bjørn switched careers and became a full-time Bitcoin consultant, and, by 2015, was helping companies create and use their own cryptocurrencies or blockchains. His particular specialism was to take a company’s old SQL or Excel database (often containing customer records or supply chain data) and transfer the entries onto a new blockchain. He was good at it too and soon became one of Norway’s top specialists. So it wasn’t unusual when, on September 29, 2016, Bjørn found a private message in his LinkedIn account from a recruitment agent called Nigel Chinnock. Nigel had a client who needed Bjørn’s skills—someone who knew how to transfer standard database records onto a blockchain.
“It’s a billion-dollar financial firm specialising in cryptocurrency,” Nigel said, when they spoke on the phone a couple of days later.2 “The salary is around €250 thousand a year plus a new apartment in London and one in Sofia.”
“What’s the company called?” Bjørn asked. It sounded intriguing. Especially the salary.
“OneCoin,” replied Nigel, a little coy. Bjørn had the impression Nigel didn’t really want to tell him.
Bjørn only vaguely recognized the name, which was strange because he knew every major cryptocurrency, especially those worth over a billion dollars.
“So what will I have to do?” Bjørn asked.
“It’s a cryptocurrency company that has a coin, but they don’t have a blockchain. They need you to build them a blockchain,” Nigel said.
“What?!”
Bjørn was in disbelief. It made no sense. Cryptocurrencies are built on blockchains. A cryptocurrency without a blockchain is like a car without an engine. “I don’t really understand it myself,” said Nigel. “I’m not technical.” All he knew was they had a “normal database.” Nigel suggested Bjørn talk to the CEO, a brilliant woman called Dr. Ruja Ignatova. She’d explain it.
Bjørn asked Nigel for a few days to think it over. When he went online to research OneCoin, he was even more confused. There were rumors on sites like BehindMLM that it was a scam, a gigantic Ponzi. But then again Ruja’s credentials were impeccable, and hundreds of thousands of people had already invested. But Bjørn couldn’t escape the killer fact: a billion-dollar cryptocurrency without a blockchain is impossible. Something was very wrong, but he didn’t know what.
Bangkok, October 1, 2016
At the very moment Bjørn was mulling over the strange job offer, 10,000 excited OneCoin investors were descending on Asia’s second largest exhibition center, the Muang Thong Thani Impact Arena in Bangkok. (The rock band Queen had played there the night before.) They were there to witness history: the launch of the new 120 billion-coin blockchain that Ruja had promised in London—bigger, faster and smoother than anything the crypto world had ever seen, processing transactions ten times faster than Bitcoin and propelling OneCoin toward global currency status. The same blockchain that Bjørn had just been asked to build.
“Bitcoin cannot go aggressively into payment systems because they cannot do the transactions that they need to do,” Ruja said just before the event. “Bitcoin is not for the masses.” It was also the moment everyone’s coin holding would be instantly doubled, making hundreds of thousands of people rich overnight. Posters around the venue read: New Blockchain. Double Your Coins. Whole downlines had travelled together from China, Brazil, Uganda and beyond to be there. “Watch me double my coin with OneCoin and become rich in two years,” wrote one investor in a Reddit thread about the event. “I will be laughing at your sorry asses!”
Every week in 2016 was a selling frenzy, but the three months between London and Bangkok were frenetic. Ruja spent most of it on the road, speaking at a succession of huge events all over the world to capitalize on the buzz: Kuala Lumpur in late June, then Tokyo in July, where thousands of Japanese investors turned up, followed by another big event in Sofia in August. It was non-stop. Every promoter went into overdrive pushing the double-your-coins special offer. Kari spent practically every waking hour between flights and events, visiting dozens of countries. Saleh Ahmed in London pressured his downline, telling Layla Begum that she had to put more money in quick in order to benefit from the doubling opportunity, which she did. Ruja even rushed out a brand-new package—a €118,000 “Ultimate Trader” package, which promised returns of €14 million once the new blockchain was launched.
The doors didn’t open until 11 AM but by 9 AM a queue was already forming. The early arrivals could see Frank Ricketts and Aron Steinkeller, the guy who’d first persuaded Igor to fly to Dubai, doing a last-minute sound check. When the venue doors swung open, hundreds of excited OneCoiners flooded in, grabbed their lanyards and buzzed around the foyer chatting to fellow coiners, making the OneCoin hand gesture and loitering by the sleek black Ferrari, which was a prize for that month’s top promoter. One team of sellers had made special T-shirts with Ruja’s face printed on, which caused a minor commotion. As the motivational talks began, anyone ranked Diamond or above sat down at VIP tables just in front of the stage: Igor and Andreea (wearing matching gold Dolce & Gabbana), Kari Wahlroos and Juha Parhiala took their seats at the front. Farther back, the Rubies and Sapphires clustered in their teams. There were a few lucky souls in the crowd who’d bought their €5,000 Tycoon Trader packages in November 2014 when Ruja and Sebastian took their first promotional tour of the region. After today’s coin doubling, that €5,000 investment would be worth almost €700,000, a return of over 10,000 percent in two years. Almost as good as that Norwegian guy who invested $27 in Bitcoin in 2009 and… everyone knew the rest.
After the various warm-up acts (including Frank Ricketts announcing that his and Sebastian’s old company OPN/SiteTalk would be “joining the One Family”), Ruja finally walked onstage at just after 4 PM local time, wearing a flowing purple gown. There were so many people in the hall that anyone past row 50 could only see her on the hanging 20-meter screen.
“One Family!” Ruja said as she walked out, waving. “Today is really a very very special day.… Today we will be switching on the new blockchain!” A cheer went up.
A few eagle-eyed watchers in the crowd noticed that Ruja’s appearance was starting to change. It looked like cosmetic surgery, perhaps? Was it her lips, her cheekbones?
“We will become officially the number one cryptocurrency globally,” she went on. With the doubling of coins, she explained, the market capitalization would also double, catapulting OneCoin above Bitcoin into the biggest cryptocurrency in the world. (Market capitalization is a crude method used in the crypto industry, where total coin circulation is multiplied by coin price to create an approximate total company value.)
At 4:28 PM local time, Ruja switched on a live feed of OneCoin’s usually top secret blockchain. Nothing was happening. But then a flashing red light on the screen started blinking.
“I think we are mining about two billion coins now,” she said nervously, glancing at the large screen. In other words, the coins on the “old blockchain” were—at that exact instant—apparently being transferred to the “new blockchain.” Just as they had two years earlier, when the original blockchain was turned on, people in the crowd tried to imagine what that actually meant: numbers whizzing through cables and wires from one machine to another? Columns of ones and zeros stacking at the speed of light? A billion coins cut and pasted by a supercomputer? It frazzled the mind just thinking about it.
“Go Go Go—mine!” shouted Ruja. The crowd held its breath.
Suddenly a new message popped up on the screen: “Genesis Block Is Mined.”
Back in the Sofia HQ, where it was still morning, there was a collective sigh of relief. Everyone’s coins had moved from the old blockchain to the new one.
“Yes! We did it!” Ruja shouted, clutching her microphone and staring at the monster screen behind her. “All of you now should have double coins—congratulations!”
People in the crowd excitedly logged into their accounts and within an hour or two there were, as Ruja had promised, twice as many coins as 24 hours earlier. And the price hadn’t changed either: each coin was still worth €6.95. As the promoters and investors filed triumphantly out of the Impact Arena that evening, they were twice as rich as when they’d walked in. And OneCoin had a new top-of-the-range blockchain ready to take on the world.
After a weekend of reflection and a couple of chats with close friends, Bjørn emailed Nigel to let him know he wasn’t interested in the position. He didn’t know anything about the big event in Bangkok where a blockchain he’d been asked to build was being launched. But something didn’t smell right about OneCoin. Nigel didn’t reply and Bjørn forgot all about it. A few months later he spotted a OneCoin promoter criticising Bitcoin online. Bjørn was surprised the company was still around. A few clicks later he learned that not only was OneCoin alive and well, Ruja had launched, in front of 10,000 people, the very thing that Nigel had asked him to build. Without giving it much thought, Bjørn dashed off a reply, saying he was confident OneCoin didn’t have a “new blockchain” and that without one, the whole thing was a lie.
Within hours, Bjørn was contacted by a Finnish man called Ari Widell who sometimes contributed to BehindMLM. Ari wanted to speak to him urgently. “This could be huge,” he said.