Problematica Excerpt

Sag seemed to have his mind caught on something. "So, going back to what you saw before they saged you out, what did you say the woman was talking about?"

"I dunno, something about doing a dump, stopping the blocks, like a mining operation or something. So they're into strip-mining too, I guess. Figures."

Sag shook his head slowly. "No, not physical mining. This is about virtual currency."

Gavin perked up and joined the conversation. "What, like Bitcoin? Well that makes more sense, vis-a-vis their obsession with all things money."

Jess turned to Sag. "What do you know about it?"

"Uh...not much...but we do use several cryptocurrencies as an alternative to hard cash sometimes. You know who might know more is –"

"Terry," Gavin interrupted. "Of course! He actually gave us a tour of his mining operation, it was pretty rad."

After lunch, Noly drove them a few miles from the farm so she could use his cell phone to call Terry, as Star didn't want any comms taking place at the ranch.

As they climbed the creaky steps of an old abandoned church surrounded by corn fields, Noly handed her the phone. "Don't use the phone app, use Facetime instead," Noly advised.

"Huh? Why?"

"Facetime is encrypted end-to-end; it's clean. Phone calls can still be tapped and the metadata obtained by warrant."

"OK," Jess replied, opening the Facetime app, "learn something new every day."

Terry answered on the third ring - he was in the back garden, and quite sweaty. "Jess! Good to see you! Did you get what you needed from Jeremy?"

"Yeah, in a manner of speaking, but it was a wild ride, lemme tell 'ya."

"But you're no longer 'existentially dispersed', yes?"

"Yeah, feels good to be stuck in the timeline like the rest of you captives. Gosh, I almost forgot how awful that was. But yup, me good now."

"That's great news. I knew he could help. He may be a little off, but he knows how to deal with the nasties."

"I wholeheartedly agree with both statements." She didn't want to go into details of Jeremy and the watch, and the out-of-place objects, as that would have taken up Noly's minutes. That would have to wait until later. "So anyway, I didn't have time to tell you, but when I visited the place these guys told me about, I overheard a conversation. Sag said you would know what it meant, it had to do with cryptocurrency."

"OK – shoot."

"Well this woman was on the phone, and she was angry, and she was saying things like 'the dump is not happening', and 'stopping the blocks', and 'the miners will overpower us' or something. Do you know what that means?"

Terry paused. "Well, yeah, in a sense I guess. A dump is when you push the price of a coin higher over time, then get rid of it all, leaving others to hold the bag as the price plummets. Now 'stopping the blocks' – well each coin is built on top of a blockchain, which is a package of historical transactions that have occured. If they are going to stop it, then that would shut down the coin completely. But you can't do that for most of the larger coins, you would need a huge mining operation, and there's too much mining power distributed across the globe already. So this must be a small-potatoes coin they are going to dump, but those aren't really worth it, if the funds they need are anywhere near what you mentioned.

"Well they must be doing something, cause she also talked about using their 'quants'. So I assume they must have hired a bunch of those high-frequency trading geniuses away from their Wall Street firms to pull this thing–"

"Hold on a sec, Jess. She said they had 'quants'?"

"Yeah, you know, like those mathematical wunderkinds."

"No, Jess. Uh-uh." Terry paused. "Huh. Now it makes sense – Jess, she is not talking about people, she's talking about computers. Quantum computers. Wow."

"So what does that mean, I mean isn't that like Star Trek type of stuff, like fiber-optic computing or something?"

"Well no, not exactly. Large scale quantum computers are only theoretically possible right now: the whole banking infrastructure, along with most of the big cryptocoins, are based on algorithms like SHA-256 that are unbreakable in a million years...unless you have access to quantum computing. Everybody figured the NSA would be the first to have those; there's even a Bitcoin honeypot address where anyone with access to a quant can break open the wallet and take about six million dollars worth of Bitcoin. When that wallet address is cracked, we know quantum computing has arrived."

"But if they do have access..."

"If they do have one, or more, this is not a good thing, Jess. For decades they've always been twenty or more years away. They could do anything."

"So, the goal of this organization is to make money. And I heard her say they were short of their 'funding goal' this year. Why don't they just break open everyone's wallet and take the money?"

"That would be the easy way, but I suspect their quants can't yet do that at this point. That's why they're talking about killing the chain – they wouldn't need to do that if their quants were just capable of cracking wallets and stealing coin willy-nilly."

"So then how would they use their quants to profit from this?"

"Coupl'a ways. If they are looking to stop the blockchain cold, they'll probably wait until the difficulty is about ready to adjust, then throw their quantum computing power at it. This would skew the adjustment algorithm higher, so that afterwards, it might be so high that us regular non-quant miners couldn't even find a block. It would effectively kill Bitcoin."

"OK, well I don't quite understand all that, but she did say something about waiting for the right time, and to Google the details of the system. Apparently even they didn't grasp the concepts fully."

"Yup; it's certainly not intuitive. A lot of it is based on game theory, too, so it's an intricate psychological system as well. But one of the weaknesses is the two-week adjustment interval. If it was dynamic it would be a lot better, but it's hard to gather consensus across the network for a change of that nature."

"But, like you said, there's other cryptos besides Bitcoin nowadays, right? So it's not necessarily Bitcoin they're after?"

"Right, but the big boy is still Bitcoin, and currently it has the most value, so it's probably the target. Disrupting it could slosh a whole lot of value around."

"So, could they, like, short it? Like a stock?"

"They could, but to earn the kind of money they are talking about would bankrupt any counterparty that took their short. More likely, they've been accumulating a position in one of the more popular alts, so when Bitcoin is stranded, all of those users would abandon it for the alt, pushing prices way up."

"So they would be selling, just as everyone in the cryptosphere is buying."

"Yes."

"How much could they make that way?"

"Oh, probably ten or twenty billion, easily."

"That would go a long way to make up their funding shortfall. But what would it do to the markets?"

"Chaos, honey. But forget the first-world markets for a second, some of the most vulnerable countries, the ones with the shittiest banking systems, have been using crypto in a big way, just like they used the dollar years ago. Those people would be hurt, badly. It would affect real people, in real way."

"OK, that's all I need. We gotta stop these a-holes."

"Hold on, Jess, we don't even know their plan."

"We know enough. What do we do?"

Terry sighed. "What can we do. Not much."

"Look, there's gotta be something. Trace where the computing power is coming from, and shut down their network connection. Something."

"If they really have quants, it wouldn't take but thirty seconds to solve a ton of blocks; not even time enough for a trace. They would be in and gone."

Terry filled her ear with a loud sip of tea; Jess was annoyed at his Zen - she thought he wasn't taking this as seriously as he should be. "This is just ridiculous. Look, I'm running out of juice here, can you please ponder this some more?"

"I will Jess. Remember, I have a lot to lose also if they are successful. More than you do."

"Yeah, I know. Later." She ended the call and looked around for Noly and Gavin, whom she finally discovered reclining in the front seats of the car. It wasn't the most exciting topic to overhear, she guessed.

Back at the ranch, Star served them a second breakfast of scrambled eggs and coffee as Jess explained what she had learned from Terry. Nobody except Sag, however, seemed interested, or even able to follow her explanation. Granted she was no expert, and kept having to go back and repeat and re-define the terms used, making it a somewhat less compelling story.

Sag sat back on the couch when she had finished. "So it's the opposite of a Ponzi scheme, huh?"

"I don't follow you."

"You try to get other people involved, who all pay a percentage to you, before the whole thing collapses – that's a Ponzi scheme. But this, they are shooing people away, making the value go down."

"Yes. But remember, they have hold – we assume – of another crypto, which will rise in value as Bitcoin falls."

"What's the likely candidate? We could grab some and make a killing!"

Jess frowned at him. "Sag. You yourself said you guys have some Bitcoin, I'm sure you wouldn't want it to become completely worthless, would you?"

"No ma'am, would make things a bunch harder for us. And personally, I'm done with cash – especially the U.S. dollar."

"Then help me figure out a way to stop these guys."

He put his bare feet up on the coffee table and stretched his arms behind his head in resignation. "What can we do? I don't even know what a quant looks like. Maybe it's the size of a sugar cube. Maybe they put it in their pocket, walk up to the nearest Starbucks with WiFi, turn it on and destroy Bitcoin. How do you stop that?"

Jess wrinkled her brow.

"Jess – are you listening? Maybe –"

"No," she interrupted, staring into her coffee mug as traces of cream swirled around the surface, "there's no way this is ours. No way we have quantum computers, sugar cube sized or not. Look at the trouble even the NSA has had with encryption the last decade. They gotta exploit the same bugs everybody else finds years later, like Heartbleed. It's cause they can't crack the encryption at the core, that they have to attack from the edges like the rest of the hackers."

"So if nobody has quantum computers, except these guys – the Farmers – then where did they get them?"

Jess looked up at him and smiled; he caught her thought in mid-air.

"Holy crap, Jess! The ships!"

She nodded, sat back and put her own feet up on the table.

"The ships..." Sag whispered to himself.