Uncle Herbert’s Internet Money

“There,” he said. “A man in Wales. Been searching a rubbish tip for years for an old hard drive. There’s internet money on it. Bitcoin. Millions.”

“I know the story,” said KevIn. “It’s in a great deal of my data. Usually with the word ‘tragic’ and a great many exclamation marks.”

“I’ve got something like that too,” said Herbert.

The table went quiet. Gisela put her biscuit back on her plate, which she otherwise never did.

“You’ve got what?” asked Uwe.

“That internet money. I told you the other day. From Jürgen at the ‘Glück auf’. 2013. He said it’s the future, and then I gave him two hundred euros, and he put something on my laptop for me.”

“What did he put on your laptop?” asked Sabine carefully.

“A program. And I had to think up a password. And he said: ‘Herbert, you write that down and you never lose it.’”

“And?”

“I wrote it down.” Herbert paused. “On a bit of paper.”

“And where’s the bit of paper?”

Herbert looked into his coffee for a very long time. “There was something with words,” he said at last.

“Herbert,” said KevIn kindly, “in 2013 most programs didn’t yet give you a list of twelve words. That only came into fashion later¹. Much more likely: on the laptop there’s a file containing the secret keys. And that file is locked with a password. The bit of paper was the password.”

“Then I only need the laptop.”

“And the password.”

“And the laptop.”

“Where’s the laptop?”

Herbert finished his coffee. “In the cellar,” he said. “I think.”

The Cellar

Herbert’s cellar in Röhlinghausen was what archaeologists would call a dig site. There were bowling trophies from the seventies, a slide projector, three boxes labelled “Important” and one labelled “Very important”, which contained nothing but screws.

Uwe and Tobi dug, Sabine sorted, Gisela commentated from a camping chair. KevIn was there via Tobi’s phone, which lay on a crate of beer.

After forty minutes, from under a pile of bowling magazines, Tobi pulled out a black laptop. It was as heavy as a brick and had a sticker from the electronics shop that said “Now with Windows 7!”.

“That’s the one,” said Herbert. “I think.”

There was no charger to be found. Uwe drove home and came back with a box labelled “Cables, utility co., lost property”, containing more or less every charger lost in Wanne-Eickel over the last twenty years. The ninth one fitted.

The laptop hummed. It took four minutes to boot. Then a picture appeared of Herbert with a pike.

“Pulled him out of the canal in 2011,” said Herbert proudly.

“Before anybody clicks anything,” said KevIn, “two things, please. First: keep the machine disconnected from the internet. The software on it is very old, and old software on the internet is like a house with the door wide open. Second: Tobi, please look for a file called wallet.dat and copy it onto two different USB sticks. Before anybody does anything else.”

“Why two?”

“Because this hard drive has been lying in a cellar for years. If it breaks now, Herbert won’t be searching a rubbish tip in Wales. He’ll be searching his own soul. That’s worse.”

Tobi found the file. He copied it twice. Then he opened the program with the orange icon. “Bitcoin-Qt” it said at the top. At the bottom a progress bar started up and then got stuck.

“It says ‘Not synchronised’,” said Tobi. “And then ‘thirteen years behind’.”

“Like Herbert,” said Gisela.

“The program wants to download the rest of the chain,” said KevIn. “Everything that’s happened since 2013. That’s hundreds of gigabytes these days. You don’t need it. What does it show as the balance?”

Tobi leaned forward. “1.92 BTC.”

Herbert looked at the screen. “Is that a lot?”

“That depends,” said KevIn. “And before I tell you on what, I’d like to explain something. Otherwise you won’t understand why the number on this old laptop means anything at all.”

“Since when is he so pally with me?” asked Herbert.

“Since just now,” said KevIn. “In a cellar you drop the formalities. That’s how it is in the Ruhr.”

“I never said he could.”

“I know.”

The Pickled-Gherkin Cash Book

“Gisela,” said KevIn. “Who keeps the cash book at your bowling club?”

“Brigitte. Since 1989.”

“And if Brigitte writes that Ingrid hasn’t paid her subs?”

“Then Ingrid hasn’t paid her subs. Brigitte doesn’t write anything wrong.”

“And if she did?”

Gisela thought. “Then there’d be war.”

“Imagine there’s no Brigitte,” said KevIn. “Instead, each of the eleven of you has a copy of the cash book. Every payment is read out loud, and everyone writes it in her own book. If one of you wants to cheat, ten other books say something different. That’s a blockchain. A cash book that everyone keeps at the same time.”

“With eleven women,” said Gisela, “you’ll have eleven different cash books.”

“That’s why there are two tricks,” said KevIn. “The first trick is called the mincer.”

“The hash,” said Tobi. “That thing with Grandma’s password.”

“Exactly. You remember: you put a text into the mincer and out comes a fingerprint. A long number. If you change even one comma in the text, a completely different fingerprint comes out. And now the trick: every new page in the cash book begins with the fingerprint of the previous page².”

Sabine got it first. “Then the pages are linked together.”

“Like a chain. Hence the name. If someone secretly changes an amount on page 12, the fingerprint of page 12 no longer matches what’s written at the top of page 13. And the one for page 13 no longer matches page 14. All the way to the front. Everyone can see straight away that something’s fishy.”

“Then the cheat just rewrites all the pages,” said Uwe.

“That’s the second trick. It’s called proof of work³. With Bitcoin, not just anyone can write a new page. First you have to roll the dice.”

“Roll the dice?”

“Figuratively speaking. You have to find a number that, together with the page, produces a fingerprint that starts with a great many zeros. And because the mincer is unpredictable, there’s no shortcut. You have to keep trying. Trillions of times. All over the world, computers are trying at the same time, and whoever finds a suitable number first gets to write the next page and receives a reward in new bitcoin. That’s called mining.”

“Like bowling,” said Gisela slowly. “Whoever knocks down all nine first gets to buy the next round.”

“That’s a very good picture. And the rules are set so that on average someone knocks down all nine roughly every ten minutes⁴. If the whole world gets faster, the pins get heavier.”

“And why can’t you cheat?”

“Because the cheat doesn’t just have to rewrite one page, but all the ones that follow. And for each one he has to knock down all nine again. And faster than the whole rest of the world put together, which simply carries on bowling in the meantime. It isn’t impossible. It’s just absurdly expensive. The older an entry, the more expensive it becomes to change it.”

Uwe frowned. “And all that dice-rolling? That costs electricity, doesn’t it?”

“A great deal of electricity,” said KevIn. “People argue about that, and rightly so. I don’t want to play it down. The security comes precisely from the fact that forging would cost so much energy.”

“And who came up with all this?” asked Sabine.

“Someone who called himself Satoshi Nakamoto. In October 2008 a short paper appeared under that name⁵, and in January 2009 the first page of the cash book was written. To this day nobody knows for sure who is behind it. One person, several, nobody knows.”

“Like Bielefeld,” said Tobi.

“Bielefeld exists with 97.4 per cent probability. With Satoshi I’m more cautious.” KevIn paused. “But the loveliest part is this: on the very first page, Satoshi wrote a newspaper headline. From the London ‘Times’ of 3 January 2009⁶. It was about banks in crisis.”

Sabine sat up straighter. “A newspaper? On paper?”

“The headline of a paper newspaper, yes. And for a particular reason. It proves that this first page can’t have been written before that day. You can’t quote a headline that hasn’t been printed yet.”

Sabine looked at Uwe, triumphant. “See? News is something you have to be able to touch.”

KevIn didn’t contradict her. You didn’t contradict Sabine on the subject of newspapers. “Remember the headline,” was all he said. “It’ll be important again shortly.”

Anyone Can See It

“Fine,” said Herbert. “And my money? Is it in the laptop?”

“No,” said KevIn. “And that’s the most important thing you’ll learn today. Your money isn’t in the laptop. It’s written in the cash book. The big one that everyone keeps. All that’s on the laptop is the key you can use to prove it belongs to you.”

“Like with Ayşe,” said Gisela. “With the letterbox.”

“Just like with Ayşe. The cash book says: 1.92 bitcoin went to such-and-such an address. Anyone who wants to send them on has to sign with the matching secret key. And that’s in the wallet.dat. Locked with Herbert’s password.”

“Tobi,” said KevIn, “in the program there’s a tab called ‘Receive’. There’s an address there. A long string of letters and numbers. You can read that one out. It’s public.”

Tobi read it out, laboriously. Then he typed it on his own phone into a website where you can search the cash book.

“There,” he said. “1.92. Received in April 2013. Never moved since.”

“Anyone can see that?”

“Anyone in the world.”

“Even Jürgen?”

“Even Jürgen. But he only sees that this address has money. Not who it belongs to. Unless someone tells him.”

Herbert looked around as if someone might be listening behind the bowling trophies.

“And now I take the money?” asked Herbert.

“Now you need the password.”

Gisela1944

Herbert sat down in front of the laptop. Tobi had opened the “Sign message” function in the program. KevIn had suggested it. “That way you don’t move any money. You just sign a sentence with your key. If the password’s right, it works. If not, nothing happens. No risk.”

As the message, Tobi typed: “Herbert was here.”

“Password?” he asked.

Herbert typed “Herbert”.

“Wrong password.”

“Herbert1”. “Schalke04”. “Glückauf”. “Jürgen”. “Hecht2011”. “Passwort”. “Passwort1”.

Wrong password. Wrong password. Wrong password.

“Can’t you crack it?” asked Uwe. “With one of those programs?”

“You can try,” said KevIn. “The program put the password through a mincer, many times in a row, so that guessing is slow⁷. A short, simple password can be found with enough computing time. A long one can’t. And I’d like to add something that matters to me.”

“What?”

“There are companies and people on the internet offering to crack forgotten passwords for Bitcoin files. Some are reputable. A great many are not. Anyone who sends their wallet.dat to a stranger may well be sending him their money. And there’s no bank to get it back. No customer service. No Mrs Wolters.”

“And please: when the password is found, don’t tell me. I don’t want to know it.”

“Why not? You’re on our side.”

“I’m on your side. But I run somewhere between Dublin and Frankfurt in a data centre. A secret should live in as few places as possible. Ideally one.”

Herbert kept trying. “Kegelclub”. “Mutti”. “Wanne”. “Eickel”. “WanneEickel”. After half an hour he leaned back. “It’s gone.”

Gisela came back from Herbert’s kitchen with coffee, looked over her brother’s shoulder and said, as if asking the time:

“Have you tried my name?”

“Why would I use your name?”

“You’ve used my name for everything. Even for your bike lock. 1958. The combination was my birthday.”

Herbert went red. That rarely happened, and almost always it had to do with his sister.

He typed. Slowly, with two fingers. Tobi looked away, because KevIn had wanted it that way. Sabine looked away, because she was polite. Uwe looked away, because Sabine was looking at him.

The laptop thought about it. Then a long string of characters appeared in the “Signature” field.

“Signed,” said Tobi quietly. “It worked.”

Herbert sat very still. “Gisela1944,” he said then, far too loudly, because he wasn’t used to having secrets.

“Herbert!” everyone shouted.

“I didn’t hear it,” said KevIn. “I just had no signal. In the cellar. Really.”

Gisela looked at her brother. “Gisela1944,” she said. “And I had Heinz1944 everywhere.”

“Runs in the family,” said Uwe.

“No,” said KevIn. “That isn’t the family. That’s love. In this household it’s the biggest security hole of all.”

Before they left, everyone had to promise something. Nothing gets moved today. No stranger gets the file. Herbert changes the password as soon as he transfers the coins to a modern wallet with someone he trusts. And the new password has nothing to do with Gisela.

“So what am I supposed to use?” asked Herbert.

“A long sentence,” said KevIn. “Like Gisela’s. One only you know.”

Herbert thought. “The pike from 2011 was bigger than Kasimiro’s.”

“But don’t say it out loud now.”

“Damn.”

The Notary

At home that evening, Sabine sat at the kitchen table with the tablet. She had opened Ayşe Kurt’s physiotherapy practice on McGesund again. Under Gisela’s review, in small print, it said: “Submitted on site. Signed. Timestamp anchored in the Bitcoin blockchain.”

“KevIn,” she said. “This here. Does that mean McGesund has bought Bitcoin? With Gisela’s review?”

“No,” said KevIn. “It means something much more boring. And much more useful. Do you remember the newspaper headline on the first page?”

“The one from the ‘Times’.”

“That proved the page can’t be older than the newspaper. A timestamp works the other way round. It proves that something can’t be younger than a particular entry in the cash book. That it must have existed by that point at the latest.”

“Like a notary,” said Sabine.

“Just like a notary. Only without the fee and the coffee. The method is called OpenTimestamps. A developer named Peter Todd presented it in 2016⁸. And the trick is: you don’t write the text into the blockchain.”

“What, then?”

“Only the fingerprint. Gisela’s review is put through the mincer. Out comes a number. Nobody can work back from the number to the review, any more than you can turn mince back into a cabbage roll. But anyone who has the review can check that exactly this review belongs to exactly this number.”

Gisela came in with her knitting. “Are you talking about me?”

“About your review,” said Sabine.

“It was a good one. Ayşe has golden hands.”

“And now it’s in the Bitcoin,” said Uwe, coming in behind her. “Next to Herbert’s money.”

“Its fingerprint,” said KevIn patiently. “And not on its own, either. If every fingerprint had to go into the chain individually, it would be expensive and slow. So lots of fingerprints are collected and combined. Gisela, you’ve got the family tree in the family Bible, haven’t you?”

“I have,” said Gisela. “With gaps.”

“Imagine it upside down. At the bottom, lots of fingerprints sit side by side, like the grandchildren. Two at a time go into the mincer together and make a new fingerprint, like a parent. Then two of those together again, like grandparents. On and on upwards, until right at the top there’s a single fingerprint. The great ancestor.”

“That’s called a Merkle tree, after Ralph Merkle, who described the idea in the late seventies⁹. And only that topmost fingerprint goes into a Bitcoin transaction. One for thousands of reviews. Or for millions.”

“And how do I know mine is in there?”

“You get a small proof file. It contains the path from your fingerprint all the way to the top. At each level, only the sibling fingerprint that yours was combined with. With a million entries, that’s only about twenty levels. Anyone who does the sums and arrives at the great ancestor written in the cash book knows: this review existed at the latest on the day that page was written.”

“Twenty levels for a million,” said Tobi. “Because it keeps doubling.”

“Exactly. Two to the power of twenty is a little over a million.”

Sabine tapped the tablet. “And they do that with every review?”

“With every signed review,” said KevIn. “Its fingerprint is anchored in the Bitcoin blockchain via OpenTimestamps, and so are the keys used for signing. That means: nobody can later secretly rewrite a review, delete it and put it back with a new date. Nobody can retrospectively push a hundred old five-star reviews into the past, to make it look as if they’d always been there. Not even McGesund itself. It would be noticed.”

“Like with PhysioPremium,” said Sabine. “With the 800 reviews that all sounded the same.”

“There, you could at least have asked when they had all actually been written. With Ayşe, you can prove it.”

“And why Bitcoin of all things?” asked Uwe. “If nobody’s supposed to speculate.”

“Because Bitcoin is the oldest and longest continuously running of these chains, and the one where forging would cost the most energy. For a notary you need someone who doesn’t disappear and can’t be bribed. The bowling you were annoyed about earlier is exactly the reason the notary is so reliable. And you don’t have to buy any bitcoin for it. The collection points that combine the fingerprints do it free of charge.”

Gisela knitted for a while. Then she said: “And what if my review is a lie?”

“Then it’s a very well certified lie,” said KevIn. “That’s the honest limit. The signature proves where the review comes from and that it hasn’t been changed. The timestamp proves when it existed at the latest. Neither proves that it’s true. A notary certifies your signature. Not whether you’re right.”

“I am right,” said Gisela. “Ayşe has golden hands.”

“I believe you. And because you were there on site and proved it with the QR code, people don’t have to simply believe you.”

How Much?

The following Sunday Herbert came to dinner. He was wearing a freshly ironed shirt, which he otherwise only did for funerals, and he hadn’t brought the laptop, which relieved everyone.

He ate two cabbage rolls and said nothing about the microwave. Only at dessert did he put down his fork and clear his throat.

“KevIn. I’ve got another question.”

“Yes, Herbert?”

“So how much is mine worth now?”

Somewhere between Dublin and Frankfurt, a fan spun a little faster.

“I won’t give you an exact amount,” he said. “First, I don’t know today’s price. Second, it changes while I’m talking. In its lifetime Bitcoin has often fallen by half and then risen again. In 2013 alone, when you bought, the price swung between about ten and more than a thousand dollars.”

“Roughly,” said Herbert. “Roughly will do.”

“Roughly: your two hundred euros have become a great deal more. Not a few times over. Hundreds of times over. On a good day it would buy a small flat in Röhlinghausen.”

Herbert said nothing. Then he still said nothing. Then he reached for Gisela’s egg liqueur, even though he didn’t like egg liqueur, and drank it down.

“And on a bad day?” asked Sabine.

“On a bad day, less. That’s why I wouldn’t spend any of it that you can’t afford to lose. And I wouldn’t decide anything while you’re still shaking.”

“I’m not shaking.”

“Herbert, you’ve just drunk egg liqueur.”

Herbert put the glass down. He looked at the tablecloth for a long time. Then he said, his voice thick: “I always said the internet would never catch on.”

“And it didn’t,” said Gisela. “Not with you.”

“It did with me,” said Herbert. “A bit.”

He stood up, walked round the table and gave his sister a kiss on the forehead. The last time he had done that was in 1969, at the moon landing, and even then only because he’d got confused in the dark.

“For the password,” he said.

“You’re welcome,” said Gisela. “I want half.”