Mon, 19 Oct 2020

The Appearance of Satoshi Nakamoto

Satoshi got the idea for a decentralized form of electronic money sometime around mid-2007. He spent the next year and a half coding it before he ever mentioned it to anybody.

By the end of 2008, he was confident enough in his work to talk about it publicly. He posted his first public message on October 31st of 2008 to a mailing list for cryptographers. In it, he wrote:

I've been working on a new electronic cash system that's fully peer-to-peer, with no trusted third party.

The paper is available at: http://www.bitcoin.org/bitcoin.pdf

Along with the link to the bitcoin whitepaper, he also gave some more details of his invention. This was two months before Satoshi released the Bitcoin software.

His message and his whitepaper lacked any hints of political motivation, but the response he generated was largely political with a libertarian bent.

This soon induced Satoshi to reveal some of his own political motives. When someone wrote "You will not find a solution to political problems in cryptography," Satoshi responded:

Yes, but we can win a major battle in the arms race and gain a new territory of freedom for several years.

Governments are good at cutting off the heads of a centrally controlled networks, but pure P2P networks seem to be holding their own.

The critique kept coming but it was mostly shallow and discouraging. The list of objections included, among other things, statements like this will not scale, it would be susceptible to a government attack, will Jews be blamed if bitcoin fails? and zombie farms would take over the network!

Satoshi took it in stride. He defended his proposal cordially and patiently.

After a few days of this, however, the list moderator intervened. "I'm a rabid libertarian myself", he wrote, "but this isn't the rabid libertarian mailing list. Please stick to discussing either the protocols themselves or their direct practicality."

Luckily, there was one member, Hal Finney, who was deeply curious about the protocol itself. Hal's interest in decentralized money predated even bitcoin. So he studied Satoshi's proposal closely before responding. His excitement showed. He praised the proposal as "a very promising idea." In that first message, Hal unexpectedly predicted several major turning points in the future of bitcoin. He described Bitcoin as "more analogous to gold than to fiat currencies," and predicted the Lightning Network, writing "there have also been proposals for building light-weight anonymous payment schemes on top of heavy-weight non-anonymous systems, so Bitcoin could be leveraged to allow for anonymity even beyond the mechanisms discussed in the paper."

Hal's message helped steer the discussion towards the practicality of bitcoin. But skepticism remained high, and for good reason. Nobody has ever been able to design a global datastore without relying on a central authority. Yet here's this unfamiliar name with a 9-page document claiming to have done just that.

So the questioning continued. How will the database be updated across participants? Will identities be tracked? How do users prove ownership of coins? Etc.

It became clear that this could go on and on, and Satoshi knew it when he wrote "I'll try and hurry up and release the sourcecode as soon as possible to serve as a reference to help clear up all these implementation questions."

Shortly after that, the moderator requested that bitcoin discussion be stopped until there is a more formal description of the protocol or an implementation of it.

It would be another two months before Satoshi would post again on the list, this time with the title "Bitcoin v0.1 released" and another chapter of the Bitcoin story would begin.