This is a segment of the Supply Shock Newsletter. Subscribe to read the full edition.
Why was no one making Bitcoin before Satoshi?
Cryptomers have been messing around with the idea of decentralized digital currency since the late 90s. It took someone over 20 years to actually figure out how to do it on a large scale.
Perhaps technical limitations at the node level have reduced it like low memory and disk bandwidth. Or perhaps the slow pace of dial-up did not exactly encourage internet-based distributed computing before the Dot-COM boom.
Gwern, a pseudonymous Internet Brainiac, had just as much doubt on her 2011 blog.
Today, Szabo will protect Bitcoin
In the May 27, 2011 essay, “Bitcoin is bad, good,” Guwan suggests that Bitcoin “does not include any major intellectual breakthroughs.”
Bitcoin is a collection of prerequisite technologies, ranging from Hash Trees from 1979 to Adambak’s Hashquash and Waydai’s B Money, to Suzabo’s Bit Gold from the early 2000s.
The next day – 14 years ago today – Sabo replied. “Bitcoin, what took so long? So Gwen asks in the grand exhibition of hindsight.”
Szabo really commented on Bitcoin only twice, at least in my count.
Both instances included comparisons to BitGold, and he said in January 2011 that Bitcoin was an “implementation of the BitGold idea.” Of course, this is true in many ways.
In 1998, Szabo proposed the concept of Bit Gold, a decentralized digital currency that is widely considered to be Bitcoin’s closest ancestor. Bit Gold has many of the features of Bitcoin, such as mining work and blocking time stamps.
Bit Gold has never been implemented in a public prototype officially published, and many in the early days wondered whether Szabo was actually Nakamotoshi himself. (Nick refused to create Bitcoin on multiple occasions.)
“The short answer as to why it took so long is that the idea of Bitgold/Bitcoin is not far away, as obvious Guwan suggests,” writes Szabo. “They needed a very significant amount of unconventional thinking, not just Gwern’s security technology (and I’m not overlooking one of the peer-to-peer replicas that the list wants to be byzantine, but how and why these protocols can be chosen and assembled.
“Bitcoin is not a list of cryptographic features. It is a very complex system of mathematics and protocols that interact with it to pursue what is a very unpopular goal.”
The entire post is worth reading, especially after moving forward with Gwern’s entire original post in advance (Gwern will be featured in the comments and reply to Szabo’s criticism. Szabo’s blog is also worth revisiting, but hasn’t posted since March 2018.
Most interestingly, Szabo refers to the private mailing list “Libtech,” which was founded in the late 90s. Szabo later said that Hal Finney, Free Banking Authority Larry White and economist George Selgin were also on the list.
Anyone who knew if those email archives still existed hit me.
Did you know?
Wei Dai’s B Money Proposal is the first quote in the Bitcoin White Paper. And although he may not be Satoshi, Way did Mining Bitcoin was traded for less than a dollar in early 2011.
“…My understanding is that the creator of Bitcoin, named Nakamoto at, had not even read my article (suggested B-Money) before reinventing the idea himself.”
