Pentagon War Game Envisioned a Generation-Z Rebellion Funded by Bitcoin

The world has been hit by cyberattacks from a shadowy organization, "Zbellion," that funds itself through stealing fiat currencies from "the establishment" and converting it into bitcoin.

Don't panic, though. That scenario is the premise for a war game from the U.S. military, designed in 2018 to prepare troops for future conflicts fought on computers rather than on the field.

Reported by The Intercept, following a Freedom of Information request to the Pentagon, the headquarters of the Department of Defense, the 200-page document shows what the higher echelons of the U.S. military seem to be primarily concerned about with cryptocurrencies such as bitcoin.

The war game is set in 2025, when an organization based on the dark web, known as "Zbellion" exploits dissatisfaction in Generation Z – "Gen Z" – who, with poorer life chances than their predecessors, are increasingly disillusioned with American and Western society.

The group encourages Gen Z members to participate in a global cyberattack that steals money from organizations deemed to support "the establishment."

The Pentagon document says stolen funds are funneled into bitcoin: "Zbellion uses software programs to route any proceeds [from the hacks] into laundering programs that ultimately convert national currencies into Bitcoin and make "small, below the threshold donations" to "worthy recipients" and, if Zbellion members claim financial need, to the member who conducted the attack."

How exactly the Pentagon imagines Zbellion would convert fiat into bitcoin, whether through an exchange or using a peer-to-peer marketplace, isn't elaborated in the document. It's also possible war game designers used the term "Bitcoin" as shorthand for cryptocurrencies in general.

See also: Biden May Not Be Savvy About Big Tech, but He Understands Cybersecurity

Of course, an international cyber conspiracy worth its salt wouldn't pick bitcoin, or any other digital asset on a public blockchain, to funnel illegal funds. Being public means third parties, including the U.S military, can easily monitor transaction flows; being immutable means there's little a hacking group, such as Zbellion, could do to retroactively obfuscate historical transactions.

Furthermore, cyber-surveillance companies, such as Chainalysis, have created increasingly sophisticated tools for identifying and tracking blockchain users.

Unsurprisingly, some of Chainalysis's biggest clients come from the U.S. government: the Federal Bureau of Investigation (FBI), the Drug Enforcement Agency (DEA) and the Securities and Exchange Commission (SEC), to name a few.

Back in August, the DEA prosecuted five dealers who used bitcoin, believing it to be anonymous. “This investigation clearly demonstrates [cryptocurrencies] aren’t safe, they aren’t anonymous, and they can’t evade justice," said DEA special agent Doug Coleman at the time.

See also: Fed Paper: Central Bank Digital Currencies Could Replace Commercial Banks – But at a Cost

The Pentagon's "Zbellion" war game was designed in 2018, back when initial coin offerings (ICOs) were flourishing, and when there wasn't much serious suggestion that mainstream society, let alone governments, would actually implement the tech.

But a lot has happened since. Facebook has designed its own digital asset; China seems to be motoring ahead with the implementation of a digital yuan; even the Federal Reserve, highly skeptical about cryptocurrencies in 2018, is researching a DLT-based dollar.

The Pentagon even released a report last July, outlining a new cybersecurity shield that leverages blockchain to increase resilience to cyberattacks.