Berlin Bitcoin Experts Experiencing Vertigo
This story was published in the German daily “Der Tagesspiegel” on January 3, and translated here for the benefit of the global community.
“If you invest in Bitcoin, you have to be willing to lose everything”, says Robert Küfner. He would not recommend anyone to put their savings in such a highly speculative product. But Robert Küfner also says that Bitcoin was the best thing that could have ever happened to him.
It is a December evening in Berlin-Prenzlauer Berg, at the upper end of Schönhauser Allee. The spacious apartment is not his. One of his employees lives here for a few months as an interim solution. Küfner will only stay for two nights, because he has just returned from Tokyo and soon will continue to Greece. He has not had a fixed residence for years, it’s more flexible that way. Only the laptop on the dining table, that’s his own.
“Previously, when I talked about my work, nobody was interested,” says Küfner. But since Bitcoin rocketed from USD 1,000 to USD 20,000 within a year and is constantly mentioned in the daily news show, everything is different. And Robert Küfner, 29 years of age, is a multimillionaire.
Some consider Bitcoin the currency of the future. Others think it is just a speculative object, with which very many people will soon lose a lot of money, as soon as the bubble bursts. Robert Küfner is not sure if there is a bubble at all: “What happens here will definitely stay. Quite simply because it makes sense.“ A virtual currency that can be moved around the world, person to person, anonymously and without intermediary banks. The course is governed solely by supply and demand. There cannot be inflation, since there are simply no institutions such as central banks, which could print money. “What a great idea.”
Robert Küfner brings up coinmarketcap.com, the website that is familiar to him like no other. It lists the Bitcoin quote as well as all other cryptocurrencies that have been created over the past few years: Ripple, Ethereum, Cardano, Litecoin, Dash … Küfner has set the screen of his laptop to night mode, otherwise his eyes will burn. “Crypto is the first thing I think about when I wake up in the morning and the last thing before I fall asleep.” And in between? He does not do much else. Küfner thinks for a moment. “In the past I liked to hike.”
Many founders and programmers live in Berlin
Berlin is considered one of the centers of the worldwide crypto scene. Küfner says: “It’s the capital of the world.” Because many programmers live here, including the founders of currencies such as Etherium, Iota and Lisk. Because every week there are a dozen meetings in which interested people can exchange ideas. Mostly English is spoken. Robert Küfner uses phrases like “That’s by far the biggest crypto-currency” or “The last year was over-the-top-crazy”.
He learned about the existence of Bitcoin eight years ago, in an article on the website of the “Vice” magazine. At that time a unit cost 20 cents. An eighty thousandth of today’s value. The article said that the bitcoin thing could end badly, but maybe it could get big, and Küfner thought to himself: I want to be there.
He grew up in Remscheid near Duesseldorf, Bergisches Land. After finishing school, he did not know what to do, so he first enrolled in a course for business administration at Cologne University. He was not the studious type. But all the more enthusiastic, as he dove into crypto.
He never bought a single Bitcoin. Because there is another way to get it. All transactions that have ever been made with this currency are archived in a huge, ever-growing database for everyone. A chain of juxtaposed blocks, the so-called blockchain. Every ten minutes another data packet, i.e. block, is added to it. If you want to create this block, you have to go through a complex calculation that starts every ten minutes from scratch — and which all competitors who want to work on the blockchain have to do. That requires a lot of computers, and that requires power. If you complete the calculation first and thus extend the chain for all, you will receive a few Bitcoins as a reward.
The principle is called “mining”. That’s exactly what Robert Küfner did for years. He left his studies behind, set up computers in the damp cellar of his parents’ house next door, had copper cables laid “that were as thick as my forearm”. How many bitcoins he generated at that time, he does not reveal. Only that he has given up the mining since then. One of the peculiarities of the system is that the more people participate in it, the less likely it is to be profitable. Meanwhile, Chinese entrepreneurs are dominating the game, building outright mining factories and gaining access to cheap electricity. Küfner says: “The gigantic waste of energy is one of the reasons that speak massively against Bitcoin.” In addition, the system is very slow, can handle only seven transactions per second globally. As a means of payment in everyday life, Bitcoin is not suitable. Who wants to wait for minutes at the supermarket till the blockchain has been extended by another record?
Robert Küfner founded a company in Kreuzberg. It is called nakamo.to and has 25 employees. They advise companies on how they could use blockchain technology in the future. Because the principle of creating data sets that nobody can manipulate is also suitable for other areas of life. If, for example, the distances covered by cars were documented in a publicly accessible, constantly expanding data set, nobody would be able to retroactively reset the speedometer. In the same way, the transport routes of food and their correct cooling could be monitored. “It is like 20 years ago, when the Internet was developed,” says Küfner. “The new technology has a potential that we do not even know much about.”
In search for serious hints
The more new entrants are interested in virtual currencies, the more sought-after experts become— and those who are committed to it. They write books, give lectures, give tips on Youtube channels. Absolutely repel Ripple! Where can I get RaiBlocks from? Hot tip: CannabisCoin! It is difficult for outsiders to distinguish who is trustworthy and who is a scammer.
One of the stars of the industry is the Austrian Julian Hosp, 31, a former professional kitesurfer. In September, he published a book that promises his readers “complete satisfaction, absolute happiness, and ultimate success,” including correct posture and a twist called “emotion change technology.” On the Friday before Christmas he invites to an expert discussion in the Café Moskau on Karl-Marx-Allee. It is the day Bitcoin lost a third of its value after a weeks-long, steep climb. On television it is said, maybe now the bubble bursts. Julian Hosp stands in front of his audience and says he used the situation to buy more bitcoins at low prices. His disciples applaud him for so much courage.
Hosp does not deny that there is a bubble. But he says that it is still at the beginning, is currently in the making. “And this hype is a good thing.” After all, in less well-publicized areas, such as virtual reality, the necessary innovations are slower, and start-ups often go in vain for funding.
Kool Savas is also in the audience tonight. Berlin’s rap veteran. He says he got into the crypto business three months ago, things are going well. Only sometimes he gets annoyed when he has again invested a few thousand in a new currency whose price then would not rise.
Julian Hosp says that, of course, there will be down markets. He calls it “reset”. Maybe in six or nine months. If they are short-lived, this would not be dramatic. But in extreme cases, a year-long “crypto winter” threatens. He believes Bitcoin will “definitely crack the USD 100,000 mark.” On the other hand, Bitcoin might also “fall back to USD 5,000 at some point”. The question is which of the two events occurs first.
In addition to Bitcoin, there are now more than 1,300 other cryptocurrencies. They are called SnakeEyes, HalloweenCoin, Ambrosus. They sound like ecstasy varieties from the 1990s. And new ones are added constantly. Robert Küfner says that some are technically far superior to Bitcoin. They are faster, refrain from mining and wasting energy. But whether one of them will replace Bitcoin as the most important cryptocurrency? “In the world in which I live, it only matters how much trust is placed in an idea.” And which currency in the end could bring the greatest amount of trust, that is decided by the market.
The story of the Australian Jackson Parker is probably the best example to describe the absurdity of the current situation. The 26-year-old wanted to make fun of the hysteria in the crypto world and created his own virtual currency for fun. As logo he used the drawing of a dog, which he had downloaded from the Internet. He also gave his money a name: “Dogecoin”. To Parker’s surprise, no one in the scene laughed about his joke. Instead, wild investments were made. Today, Dogecoin has a market capitalization of one billion US dollars.
Robert Küfner says his family in Remscheid had been skeptical for years about his passion. Grandma Olga, when she saw a report on Bitcoin on television, still calls him, warning, “Boy, you have to be careful.”
“Bad luck” if you forget your password
In fact, there are many ways to lose your Bitcoins. People use virtual wallets which store their coins on smartphones and then they lose the device. Or they forget the passwords. Or they were robbed by hackers. In a world without a bank account, there is no one to complain to in an emergency. Add to that insider trading. Plus the volume of misinformation and fluffy hero stories that lure unsuspecting people into risky purchases. Robert Küfner says it is shamelessly staged. He has experienced first-hand how fast bad things can happen,
In October, he flew to Florida with colleagues from Berlin to spend a month working on new projects in a vacated home. They bought wooden boards and built desks, they set up loft beds, because they were 15 people, but the flat had only three beds.
Then a photographer showed up, for a great story about Berlin crypto winners in the “Manager Magazin”, and Küfner felt honored. They positioned themselves with their laptops at the pool’s edge, “that in itself was already a very stupid idea,” says Küfner. “Who dares to take his equipment so close to the water?” In the middle of the pool also floated an inflatable unicorn, and two blonde women in a bikini. “These two were my sister and my girlfriend.”
The staging seemed strange, so he asked to shoot photos in the office at their desks. Those shots were made, but not published. Küfner says he and his friends have come across like unsuspecting newbies. In truth, no one he knows knows how to show off. He takes the taxi more often now. A buddy has switched from discounter beer to the branded variety.
The inventor of Bitcoin is a man named Satoshi Nakamoto, but that’s probably a pseudonym. There is wild speculation about his true identity. A Californian mathematician, a Finnish sociologist and the Tesla boss Elon Musk were suspected. Everyone quarreled. The only one who ever claimed to be Satoshi Nakamoto is an Australian entrepreneur. He is ridiculed in the crypto scene as an impostor.
Robert Küfner suspects that it is more likely a group of people. A collective, possibly from the intellectual left underground with libertarian anarchist ideas. “I believe that they had good intentions, marked by the pain of the world economic crisis in 2008.” But maybe the whole thing is just a slipped abstract artwork. Tinkerers found out that “Satoshi Nakamoto” is an anagram for “So a man took a shit”.
If Robert Küfner is asked what has gone wrong in his Bitcoin career, what mistake he would have liked to avoid in retrospect, he says: “It would have been best if I retired in 2013 and had not touched my account. “What annoys him most is that in between, when Bitcoin was much less valuable, he actually spent some. For example, in the bar “Room 77” in Graefestraße in Kreuzberg, where you can pay for your drinks and burgers with crypto money. “There were visits where we paid several Bitcoins for a few beers.” He remembers an evening with a red Rollberg beer on tap. Retrospectively, Küfner says, you could pay for a fancy cruise cruise just from the tip he left.