Reply All - #115 The Bitcoin Hunter

Episode Date: January 25, 2018

Writer Jia Tolentino has a new case for Super Tech Support: where are all those bitcoin she bought six years ago? Further Reading Planet Money's bitcoin story Stories by Jia Tolentino Learn more about your ad choices. Visit podcastchoices.com/adchoices

From Gimlet, this is Reply All. I'm Alex Goldman. And I'm PJ Vote. And this week, PJ, we have a super tech support. Super tech support is a segment on our show where listeners write in with extraordinary unsolvable tech problems. And we decide... I'll do a great job solving them. We decide that you're the person who will solve all of them.

Yeah. And I actually have kind of a doozy this week. What have you got? So this super tech support comes to us from one of my favorite writers. First things first, can you just tell me who you are? I'm Gia Tolentino. I'm staff writer at The New Yorker. And you emailed us. Yes, I did.

Can you tell me why you emailed us? I emailed you guys because I bought Bitcoin in what I thought was 2011, but I think was January 2012. I bought some Bitcoin because I had read Adrian Chen's piece on Gawker about Silk Road. And I was like, I want to see if I could learn how to buy Bitcoin, figure out what the dark web is. Gia told me that at the time she'd just gotten back from a year in the Peace Corps. She was in Kyrgyzstan. And she just had very little access to the internet. And so I got reacquainted with the internet by buying some Bitcoin and then buying some drugs off Silk Road.

And then being like, wow, the internet's tight. And I like sampled a couple of things. What did you settle on for what you wanted to buy? I think I bought weed and Molly. Okay. Yeah. And how were the drugs? I think they were fine.

actually think the weed was not that good. And I think the molly was Molly. So it was great. G.S. says she bought about 80 bucks worth of Bitcoin for this drug purchase. And she knows that there was Bitcoin left over. But in the six years since the original purchase, she has totally forgotten what happened to the Bitcoin. It's like when you go on a trip and then you have like some currency left over and you throw it in a sock drawer. Right. Although the thing, I kind of feel like I know the next thing, which is that it's like if you go on a trip, have some currency left over and I talk to our, and in the intervening years, this currency becomes like immensely, immensely valuable. Right. We sat down, this was a couple months ago, and tried to figure out exactly how much

$80 with a Bitcoin would be today. What was the date you gave? January 24th, 2012. On the 23rd, Bitcoin was $6.29. Fuck. And now it is $16,800. $148.49. So 80, like, let's say 80 divided by 6 times 16K. Um. Where's right now?

I get up so much money. Oh, my God. What's wrong with me? That must be really agonizing. I'm so mad at myself. I'm sorry to sound so smug about it. No, it's crazy. But it's also like, that was never real money.

Oh, it was, though. God. 200. This is, this really hurts to look at. This really hurts to look at. I really. Wow. Gia probably doesn't have the full $213,000 because we've established she's already spent some of that money.

She just has the remainder. But it could easily be six figures of money. Yeah. Oh, man. That's the worst feeling. Okay. So I was like, I want to help. And I was like, okay, first things first.

Let's just retrace Gia's steps, which is actually really hard. Because not only did you buy this Bitcoin six years ago, buying Bitcoin is stupidly complicated. So can you explain to me to the best of your memory, like exactly the process of buying the Bitcoin and then buying the drugs? Yes. Okay. They're going to be big holes here. Okay. So I downloaded tour and then I looked at Silk Road. And I said, okay, I'm going to try to get some Bitcoin and make an account and do this. And then I remember taking my boyfriend's car to the Bank of America Drive-Thru, putting like, you know, what I think might have been $80. in a little pneumatic tube, it getting sucked up the pneumatic tube. Wait a minute.

You deposited money cash American U.S. dollars. Absolutely. Via pneumatic tube. Yeah, I did. At a normal bank. Yeah, I think that's what I was supposed to do. I think there was actually just her putting money in her bank account. Either way, she goes home, gets on the Internet, just like the regular Internet, not the dark web.

And she goes to this thing called a Bitcoin exchange, which just think of it as a bank. But it's just like a website. Mm-hmm. Yeah. She purchases Bitcoin using that money. Okay. So now her money is at this online Bitcoin exchange, aka Bank, and she has one of two options. She can let the Bitcoin exchange keep track of the Bitcoin for her, or she can keep track of it using a program on her laptop called a Bitcoin wallet, which is what she think she did. And then I remember using some sort of Internet tutorial to learn PGP or to get a PCP.

I had to like encrypt something about my wallet. Yeah, I hate these words, right? It's like, I wish I had a little wallet that would, is that, like, where do Bitcoin live? Where do they live? What's money? Hard to say. So the thing that I didn't fully understand about Bitcoin until I started reporting this story is that it's pretty much impossible to lose.

Because all it means to own Bitcoin is there's this gigantic public list of, every account and every transaction that's ever been made using Bitcoin. It is totally anonymous. And when you buy Bitcoin, all they do is put you on the list. And the thing that Gia lost is her proof that she's on the list. It's called a key. And all that does is allow her to point to a spot on the list and say, those $80 with a Bitcoin, those are mine. It's like what she actually lost is more like a claim ticket.

Right. So what we're looking for is the key to Gia's Bitcoin. And it's totally possible that it's. it lives on her old laptop in her Bitcoin wallet. Okay. Gia did tell me, though, that the laptop is broken and it doesn't turn on. I am going to need that computer. Okay.

Should I, like, send it off somewhere and get that hard drive done? Before you do that, I'd like to take a look at it. Okay. I have a history of tech support, so I might be able to boot the thing up and see what's going on there. I will bring you my laptop. This is exciting. I like this.

So a couple days later, Gia comes by the office. Hey, how's it going? I meet her outside. And she had told me that this laptop didn't turn on. But she didn't tell me the extent to which it didn't turn on. All right, here it is. It's, um...

Oh, my God, it feels so big. Well, I think it's bloated with whatever I broke it with. Like, I think there's some, like, water damage or something. Oh. Or, I mean... It was not water damage. I opened up the computer, and it turns out that the battery had exploded inside the computer.

But I managed to get the hard drive out. I connected it to my computer, and I went down into the studio with producer Damiano Marquetti. Okay, it is Tuesday, January 2nd, 2018. Welcome to the new year, Domiano. Don't act like you're not in the room. Okay, I am going to look in Gia's hard drive today

in the hopes that I can find a Bitcoin wallet and maybe her lost riches. Got it. Are you ready for this Odyssey of Discovery? It's very exciting. Oh, you're slotting it in. Maybe don't force it. I had it in backwards.

Is it mounting? It's not. The hard drive is spinning. I can feel the hard drive spinning. There's a chance that like this, the hard drive's dead. The hard drive is spinning, which means that, oh, I know what the problem is. It's not connected to my computer. Oh, that's embarrassing.

So anyway, I get the hard drive working and then... Wait a second. Wait a second. This looks like a wallet address. I find this program on our computer that's called Bitcoin Core and I open it up. It has no transactions. It has not received any Bitcoin. It has not sent any Bitcoin.

Basically, it's saying she doesn't have anything. That's what it's saying, yes. So it's a dead end. It's a total dead end. But it's a slightly interesting dead end because it's like, I mean, clearly she's right that, like, it's not like she invented the memory of buying Bitcoin, but it's not there. It's not in the laptop, which means it could probably only be in one other place. So do you remember when I said that Gia bought her Bitcoin from a Bitcoin exchange, which is like a bank?

Yes. I do remember. When she bought them, she might have just decided to leave that money on the website. Since there's nothing for them to actually, like, hold on to, what does that mean? Basically, instead of her managing her own Bitcoin. keys and worrying about potentially losing them and never getting her Bitcoin back, she could leave it on this site. And instead of having to worry about the key, all she'd have to worry about is the username and

password to the site. It's as simple as that. Okay. And the good news is that Gia remembers where she bought her Bitcoin, which is great. Which is where? Well, that's the bad news. She bought it at a website called Mount Gox. So in the early days of Bitcoin, Mount Gox was like the Bank of America of Bitcoin.

If you wanted to buy Bitcoin, you'd go to them. Okay. There were estimates that something like 80% of all Bitcoin transactions went through the site. And what happened was one day in early 2014, Mount Cox just stopped honoring people's requests to move money. Okay. It's like if all of a sudden Bank of America was like, eh. And then a document leaked from Mount Cox that said over the course of several years, hackers had stolen about 850,000 Bitcoin from Mount Cox. Whoa.

Yes. One of the biggest Bitcoin exchange houses, called Mount Gox, has gone offline and seems to have vanished. Something is suspicious and doesn't smell right here. Transactions have been halted and the CEO was unaccounted for after resigning from the Bitcoin Foundation. People were freaking out about this. There was talk that this was the end of Bitcoin entirely because there was half a billion

dollars worth of Bitcoin that was just gone, which today would be worth $10 billion. They managed to recover some of the Bitcoin that they've lost, but a huge chunk of it is just gone. Mount Cox declares bankruptcy. People start filing lawsuits left and right. It's a total mess. The only bright point in this dark tale, I mean, at least for us, is that Mount Cox puts a portal on their website that lets you check to see if you had Bitcoin there when the site shut down. Like if your name was Gia Tlantino. Right.

So I call Gia. I walk her through the site. It'll take you to the Mount Gok's bankruptcy filing system. Hey, all right. Okay. She tries to log in. Hmm. Okay, that didn't work.

Like, what password was I using in 2011? She can't remember her password. She has like my level of memory. We tried using the forgot my password option. The temporary authentication code will be sent to the contact email address that you entered on the bankruptcy claim form. I think I might have missed the boat on this. Oh, no. It turns out the whole system only works if you filed your lost Bitcoin claim before July of 2015.

So we're a couple years too late. I'm sorry, I'm so useless. This is, look. I could have made us rich. All we're doing is exhausting all possible options. Yeah. And there's still a chance you can make us rich. Never give up.

I will never give up. As long as you have potentially hundreds of thousands of dollars locked on the internet somewhere. Yeah. You have to have hope. I mean, it's still possible that her Bitcoin was in Mount Gox when it was hacked, which is the only thing at this point that we're trying to figure out. But we won't be able to get that information from this website. Okay, that sucks. But at this point, I'm feeling pretty jazzed because I feel like all I need to do is find the right person at Mount Gox to speak to, like the right bank teller.

And it turns out there's actually this hotline. Somewhere in Japan, there's a room where people sit by telephones and take. take calls all day from angry people who have lost their Bitcoin fortunes. Hello, thank you for calling. This is Indigox Call Center speaking. How can I help you today? Yeah. I would like to check on the account balance of an account on Mount Gox.

I'm sorry, but it's not possible. I try asking if I can talk to her boss. I ask if there's anybody else there I can speak to. And basically, I learned that this operator has a ton of polite ways of saying, No, but I could give you the information and maybe they would get back to me. Unfortunately, I'm not going to promise for that. Okay. Is there a way to contact the trustee directly?

But unfortunately, we cannot promise anything for that. I understand. I understand. This went on for a while and I didn't really get anywhere. Thank you so much, sir. Have nice day then. Bye-bye. Bye-bye.

So at this point, I decided that my last option was to escalate this whole thing. to go to the one person who I was positive would know whether Gia had any Bitcoin on Mount Gawks. The owner of Mount Gawks. His name is Mark Carpellus. Okay. There's this video of him at a press conference after Mount Gox went down,

but before people knew that it was a hack. So we had a problem is, since I've got a lot to our customers. He's this nerdy, scared-looking French guy who bought the site in very early days and got super rich. And people who worked with Mark when he ran Mount Gox told me that he ran the site in a pretty strange way,

and he was really easily distracted. Like a good example of that is he was in the process of renovating a floor in the Mount Gawks building because he was really into caramel lattes to make a cafe where he wanted to serve apple pie and kish that he baked. That was like his priority. That's like Roman Emperor type stuff. Wow.

So. Okay. So meanwhile, like a thief is stealing tiny amounts of Bitcoin and he's like, I think I got a really good keith recipe. So after the hack, Mark actually gets arrested because people think that he embezzled the money. He's on trial right now. And when I started talking to people in the Bitcoin realm, they all said basically, Mark's not talking to anybody. Good luck getting in touch with him. I reached out to a bunch of former amount.

Doc's employees, all the people I could think of who might connect us. And I finally got in touch with a person who told me that they could be an intermediary between me and Mark. And for weeks, I would send that person a message and they would forward it to Mark, or at least that's what they told me. And then a couple days ago, I was like, I'm just going to reach out to Mark on Reddit. On Reddit? He's a Redditor?

Yes. Okay. And I did. And he was like, yeah, I know who you are. Sure. I'll help you with this. I'll do it for the Reddit karma. So I gave him all of Gia's information and proof that I, that...

You were her emissary? Yeah. And I told him all I want from you is to just tell me if Gia has any Bitcoin on Mount Gawks. He disappears for about six hours, comes back and says, Gia has no balance. What? On Mount Gawks. Oh, my God. I have to say, like, I'm impressed that you got that now, honestly.

But what does that mean? Like, what are the remaining possibilities then? Basically, I asked Gia, are you sure that you got your Bitcoin from Mount Gox? And she said, yes, she sent me a confirmation email. And unless she got it on Mount Gox and then moved it to another Bitcoin exchange, it must be on her laptop. I must have missed something. So I asked everyone that I had been speaking to about this,

is there like a Bitcoin hunter out there? Like is there a Bitcoin hunter that I can talk to? What's a Bitcoin hunter? Just some person who has the skill to locate missing Bitcoin? That was supposed to be you. Just so you know. There's some kind of super tech expert who gets all this problem for me. Listen, I know the limits of my technical expertise.

Me too. You know the limits of my technical expertise? And I go to people who can possibly help me. So is there a Bitcoin Hunter out there? There is. I found him. And he agreed to help. So the Bitcoin Hunter I found.

His name is Jeremy Rubin. He is really involved in the Bitcoin community and has helped other people like Gia find their lost Bitcoin. It probably happens like not infrequently. Oh, yeah. It happens all the time. I read something that said that it was like 20% of all Bitcoin are lost. Anyway, Jeremy lives in San Francisco, but I had him remote into my computer so we could take a look at GS hard drive together and try and find the lost Bitcoin. It's cool that you finally found someone, a new person to remote into your computer.

I feel like you're like a remote into my computer fetishes. And every story you do is just an excuse to give like, ooh, remote access. Hello. Hi, is this Jeremy? Yep, how's it going? Good. Basically, what we're looking for is any trace of the existence. of these Bitcoins. And at first, we're just looking at the same stuff that I already looked at,

but since he's a Bitcoin hunter, he knows to look in folders that I didn't even know existed. So if you go to the directory called Application Support. Okay. So now what we're looking for in here is anything related to Bitcoin. I see a folder right here called Bitcoin. That's exciting. That's very exciting. Oh, wow. Oh, boy. So Jeremy finds this file called wallet. dat, and he says, just move that to your computer and open it there. Okay, moment of truth. Let's see what happens here. Oh, boy. Looks like at some point there was 17 Bitcoin on this wallet.

17 Bitcoin. Yeah. That's a lot. 17 Bitcoin is $255,000. In today dollars. Yes. Jesus. And at this point,

I'm pretty sure that this is the money that we're looking for, that this is the change from Gia's drug purchase. But the problem is, it doesn't stay in her wallet. If you look, it looks like they came to the wallet and then she sent them out immediately. So Gia's Bitcoin fortune lands in her Bitcoin wallet. And almost immediately, she moves it somewhere else. But here's the cool thing. Because we know Gia's Bitcoin wallet address, we can go online to this website called

blockchain. info. It shows me Bitcoin Block 6.5.5. 164027 from blockchain.m. And literally watch her Bitcoin travel from account to account to account. We don't know the actual names of the people who own these accounts, but we can see how much money they have. So we're tracing the funds now. We're seeing where they ended up.

And now it's gone from being an address with 131 to 200 Bitcoin. So let's just keep on clicking on the biggest one we can. And Gia's Bitcoin ended up in an account owned by someone who has way more than your average Bitcoin. user. They have 69,000 Bitcoin. Wow. And Jeremy looks at that account and he's like, no one really has that kind of Bitcoin. That is much more likely, probably a Bitcoin exchange. So at this point of them falling along, Gia took the change from a drug purchase and she put it in like another bank or exchange whatever, like not Mount Cox some other place for some reason. And then she just forgot about it. Possibly? I mean, we are basically making educated guesses based on a

bunch of account balances. So I asked Jeremy, like, hey, I know the whole point of Bitcoin is it's supposed to be totally anonymous. No one can figure out who's interacting with who. But like, is there any way that we can identify anybody? Like, can we identify the people that Gio was interacting with? And Jeremy was like, maybe. Really? He said that that was like outside of his area of expertise. He could not do it. But there are people who claim that they can. And so he put me in touch with this company called Chainalysis. And what do they do? Chainalysis is a company that basically does like Bitcoin forensics. So like they're the people you go to if someone is trying to blackmail you from a Bitcoin account or if the IRS is trying to catch someone who is hiding tax money in a cryptocurrency account.

Got it. So the co-founder of this company is named Jonathan Levine. I send him an email and he writes back right away. Hey, I'm on a transatlantic flight coming to New York from Cape Town. I don't have anything to do right now. I can figure this out while I'm on the plane. Using like GoGo Wireless? Yeah.

That's crazy. I send him, Gia's Bitcoin wallet address and the transaction information. And he gets back to me like a half an hour later. And he's like, I figured this out. I will be landing in New York in a couple hours. I'm going to take a shower and then I'm coming over. Okay. So he comes to the studio.

He's wearing a blazer and scarf. Like for a guy who's just traveled many, many hours, he is an extremely dapper, dapper fellow. All right. Let me give you a little background on this story. So, should I try and give you the story without you even telling me and see whether that matches the story that you are going to tell me? Absolutely. Go for it. Okay. So you provided me with a Bitcoin address and I would have really liked it if you didn't even provide me the name of the person that you were interested in because I would have been able to go back and basically tell you who that was and where she got her Bitcoin from and where she sent her Bitcoin to.

How could you have figured that out? I mean, I figured it out in less than 30 seconds. I'm just trying to, I'm going to do it in real time just while we sit here. Okay. Okay, so wait, the thing he's doing, unmasking anonymous people, the whole point is that he's not supposed to be able to do this. Like what, has he just like broken, has he, like, hacked Bitcoin? No, he hasn't hacked Bitcoin.

The deal is that like since every transaction using Bitcoin is public, he's watching money go from place to place. And he's sort of using deductive reasoning and educated guesses to figure out who's behind Bitcoin accounts. And he's really good at it. So I can see that this Bitcoin address that you supplied me received 17.5 Bitcoin. It received all of the Bitcoin from Mount Gocks. and it sent all of the Bitcoin to Silk Road. So that 69,000 Bitcoin account that we were hoping was a Bitcoin exchange, it was Silk Road. So she doesn't, the reason there's no leftover money to find is because what she's misremembering is she spent all her money on drugs.

Almost all of her money. What happened? So I talked to Gia today. Okay. So this has been a real odyssey for me. Really? Wait, do you know the answer? I do.

Oh my God. I'm so stressed. All right. So you got 17.59-259-0-0-0-0-0-1-Bitcoin. You spent 17.5-0-0-0-0-0-0-1-2-0 Bitcoin, meaning you have a balance in your account of 0-0-0-0-0-0-0-2-9 Bitcoin. Really? Wait, I spent almost all of it? I was that precise with my... Yes. Oh, my God. This is... Oh, my God.

That to me feels like a win. You've got some money in there. Yeah, we found it. 0.00-209 Bitcoin is, in today's Bitcoin market, $24.40. 40. It's so embarrassing. No, this is like my mom was always like, gee, you shouldn't do any drugs. And I'm like, Mom, my life is very on track. This is the first time I've been like, you should stop doing drugs. God damn. Reply All is hosted by PJ Vote and me, Alex Goldman.

The show is produced by Shwuthy Pidimanani, Fia Benin, Damiano Marquetti, and Caitlin Roberts. More production help this week from Krista Ripple. Our editor is Tim Howard. Fact-checking by Michelle Harris. Our intern is Devin Gwyn. Special thanks this week to Jed McCaleb and Kenny Malone, who did his own great Bitcoin hunting story on the Planet Money podcast, we will put a link to that in the show notes. We were mixed by Rick Kwan.

Our theme song is by the mysterious breakmaster cylinder, and the super tech support end theme song, aka the best hold music in the world, is simplicity by macroform. Matt Lieber is a vending machine that gives you two of the thing that you wanted by mistake. You can visit our website at replyall.limo, and you can find more episodes of the show on Spotify, Apple Podcasts, wherever you listen. Thanks for listening. We'll see in a couple weeks.