diff --git a/README.md b/README.md
index cd7a71a..0251429 100644
--- a/README.md
+++ b/README.md
@@ -24,4 +24,102 @@ suite. For authentication, a 256 bit long random PSK is used. The passphrase
 for unlocking should be in a own keyslot (i.e., do not use a passphrase which
 you remember).
 
+Configuration
+=============
+Clients and servers use a configuration file. This is originally a text file
+that is then converted to encrypted binary format using the luksrku-config
+tool. This binary configuration file is encrypted using AES256-GCM, uses a 128
+bit randomized initialization vector and authenticated with a 128 bit
+authentication tag. The key derivation function which is used to derive the 256
+bit AES key from the passphrase is scrypt with N = 131072, r = 8, p = 1.
+
+Storing in a binary format serves two purposes: 
+  1. Error-prone parsing of human-modifiable text is done in a separate
+     application. These chunks of code are not linked into the luksrku binary.
+  2. It allows for easy encryption.
+
+The server key database contains no secrets, yet it is encrypted nevertheless.
+The sole purpose is to keep the number of alternative code paths minimal. There
+is no technical reason to encrypt the server configuration file, but again: it
+contains *no* secrets. Using the same storage for server and client was maybe
+an awkward design choice, but this is something that is ugly, but not
+security-critical.
+
+The client key database contains the LUKS keys, therefore it is advisable to
+keep it encrypted with a passphrase. Only if this passphrase is correctly
+entered on the client, the password can be decrypted on the client and
+transmitted to the server. Note that care is taken to ensure no
+length-of-message side channels reveal information about the underlying LUKS
+passphrase. Therefore the transmitted messages are always of the same length.
+
+The PSK that is used to communicate between client and server ensures mutual
+authentication. If the PSK is stolen by an adversary, that adversary can simply
+pose as a server and ask the client for the LUKS key. Therefore it is integral
+that this PSK is kept safe. Passive attacks (i.e., where the adversary is only
+eavesdropping on communication), however, are not compromised because the TLS
+channel provides PFS.
+
+Prerequisites
+=============
+Since the used cryptography (such as ECDH on Curve25519 and the
+ECDHE-PSK-CHACHA20-POLY1305 cipher suite) are fairly new, support for at least
+OpenSSL-1.1.0 is essential.
+
+
+Example
+=======
+This is a very crude example. Feel free to improve it and send a PR. Let's say
+we want to unlock the crypt-root of a headless system. I.e., only one LUKS
+partition that should be unlocked. That LUKS partition has the UUID of
+952ebed9-5256-4b4c-9de5-7f8829b4a74a (use blkid to find out). This is what we
+can do:
+
+  1. Build >=OpenSSL-1.1.0 (e.g., using the provided ./build_openssl command)
+  2. Build and install luksrku: make && sudo make install
+  3. Generate the keyfiles. For this we use the provided gen_config script:
+	```
+	Disk UUID : 952ebed9-5256-4b4c-9de5-7f8829b4a74a
+	Disk name : crypt-root
+	Suggestion: TDFV6Z6XyDQ52ASswVFSEl8mrVfnH9F5b
+	Passphrase: 
+
+	Disk UUID : 
+	# server.txt
+	# Host UUID								Host PSK															Disk UUIDs
+	d66f96fc-7056-46e1-aea6-0f3d705cd3bc	d94f3fc6c3507123bda4034dd8c865a1b4cf9870bda50e9ed9f861621d581017	952ebed9-5256-4b4c-9de5-7f8829b4a74a=crypt-root
+
+	# client.txt
+	# Host UUID								Host PSK															Disk UUIDs
+	d66f96fc-7056-46e1-aea6-0f3d705cd3bc	d94f3fc6c3507123bda4034dd8c865a1b4cf9870bda50e9ed9f861621d581017	952ebed9-5256-4b4c-9de5-7f8829b4a74a=54444656365a3658794451353241537377564653456c386d7256666e4839463562
+	```
+  4. The config script has given suggestions for server.txt and client.txt. We
+	 copy the respective contents into the files.
+  5. Then we create the server binary config:
+	```
+	$ luksrku-config server server.txt server.bin
+	Successfully read key file with 1 entries.
+	$ luksrku-config client client.txt client.bin
+	Successfully read key file with 1 entries.
+	Passphrase to encrypt keyfile: 	
+	```
+	Now we'll have a server.bin and password-protected client.bin.
+  6. On the server machine (i.e., the one with the LUKS disk) we copy
+	 server.bin to /etc/luksrku-server.bin.
+  7. On the server, we modify the luksrku-script in the initramfs/ subdirectory
+	 to fit the NIC of the server and the IP address we want (this is really
+     ugly at the moment and needs to be fixed ASAP, but it is what it is now).
+  8. On the server, then run the "./install" script as root which will install
+	 initramfs hooks.
+  9. On the server, update the initramfs (update-initramfs -u). Previously make
+	 a copy of your initramfs so that you can boot your system in case things
+     go wrong (which they will, trust me).
+  10. Boot the server. If everything went fine (it won't at the first run), it
+	  will now broadcast UDP packets onto the network indicating its presence.
+      These packets will be sent to UDP port 23170.
+  11. On the client, start the client to unlock the server's key:
+	```
+	$ luksrku --client-mode -k client.bin 
+	Keyfile password: 	
+	```
+