In this final portion of the lecture,
we'll look about what if anything we can
determine about Satoshi Nakamoto himself.
And also the ideas that he
had in the design of BitCoin,
by looking at the history of the ideas
that lead up to invention of BitCoin.
So first off, just as a refresher,
who is Satoshi Nakamoto?
A lot of people know him as
the creator of Bitcoin, and
that's sort of an abstract notion.
Okay, we can be a little bit more specific
about what was done in the name of
Satoshi Nakamoto.
So, according to Satoshi Nakamoto,
and I'll note as an aside that
when Satoshi asserts that something is
true, I'm going to take him at his word.
Okay, I don't think just because he
is anonymous there's a reason that he
is going to lie about certain things.
So if he says that I started
BitCoin in May 2007,
let's believe him and
believe that that's true.
So at least according to him, around May
2007 is when he started coding BitCoin.
He registered the domain
bitcoin.org in August 2008 and
at that time he started sending private
emails to a few people who were
he thought might be
interested in the proposal.
Okay?
Then a little later in October 2008,
he released publicly a white paper
that described the protocol, and
then soon after he released the code for
it, as well.
Then he stuck around for about two years.
And over these ensuing two years, he
posted lots of messages on message forums.
He emailed with lots of people.
He responded to people's concerns.
On the code side,
he submitted patches to the code.
He fixed it up in conjunction
with other developers.
And basically maintained the source code.
In December 2010,
he then left the project.
Now I'm referring to
Satoshi Nakamoto as a he,
I have no reason believe he
is a he as opposed to a she,
it's just since he assumed a male name,
it's the easiest pronoun to use.
Another thing I'm doing is I'm referring
to him as a single individual.
There is a theory that maybe Satoshi
Nakamoto is a collection of individuals.
I don't buy this theory.
I think that he is probably an individual.
The reason why is if we think about what
was done in the name of Satoshi Nakamoto,
if we start at the end and we think about
the two years somebody spent replying to
emails and patching code, it would be
really hard to think that this would be
multiple people sharing user accounts and
passwords and responding in similar style,
a similar voice, and making sure
they didn't contradict each other.
It just seems a much simpler
explanation that at least this
portion of what Satoshi did was
done by a single individual.
Now, if you look at what he writes and
what he says and the patches that he makes
to the code, it's clear that he
understood, whoever this single
individual is, that individual did
understand the full code base of Bitcoin.
So it's very reasonable that they're also
the person that created the original piece
of Bitcoin software.
It is also clear from the writings that
they understood all the design aspects
of Bitcoin, and so they're probably the
person who wrote the whitepaper as well.
There's no reason to assume otherwise.
Now all of this isn't to say that Satoshi
didn't have help with the original design.
However, we know that Satoshi's very
quick to attribute any help he receives
after Bitcoin is released to the people
that contributed to the project.
And there's no reason to think that he
would lie about inventing something
by himself when he actually had
help from other individuals.
Now we might ask ourselves what did
Satoshi know about the history of e
e-cash?
And to understand this better, we can
look at what he cites in his white paper.
And also the references that existed on
early versions of the BitCoin website.
So, if we look at his white paper,
we see that he sites some papers on basic
cryptography and probability theory.
He also cites the time-stamping work
that we saw in the previous slides and
it's very natural to think that he
based the design of the blockchain on
these references,
since the similarities are so apparent.
He also cites the Hashcash proposal,
which has a proof of work that's very
similar to the one that's used in Bitcoin.
And he has a reference to b-money.
Later, on the website,
he added references to Bitgold, and
as well to Hal Finney's
reusable-proof-of-work schemes.
Now, if we look at the history of email
transactions that were made public by
people who corresponded with
Satoshi Nakamoto in the early days,
we see that the b-money proposal was
actually added after the fact at
the suggestion of Adam Back.
Satoshi then e-mailed Wei Dei
who created b-money and
apparently Wei Dei was the one that told
him about Nick's proposal about BitGold.
So these proposals weren't probably
inspirations for the original design.
He later corresponded a lot with
Hal Finney and that's quite a reasonable
explanation for why he cites reusable
proof of works at least on the website.
So based on just the citations
in the white paper,
it seems reasonable that maybe the only
things that he knew or thought were
relevant about the history of E-cash was
Hashcash and the time-stamping proposals.
In the early days of BitCoin,
BitCoin had a Wikipedia article, and
at some point it was flagged for deletion
by the moderators of Wikipedia because
they thought it wasn't relevant or
noteworthy.
And so
there some discussion between Satoshi and
others about how to get this article so
Wikipedia would accept it.
And what Satoshi did is he
actually suggested a stub article,
a single sentence that describes BitCoin.
And the way he phrased
it was the following.
Bitcoin is an implementation
of Wei Dai's b-money
proposal on Cypherpunks in 1998 and
Nick Szabo's Bitgold proposal.
So Satoshi at this point did see
positioning Bitcoin as an extension of
these two ideas, or an implementation
of these two prior systems,
as a good explanation of how it worked.
However, from the previous slide,
it seems that Satoshi actually didn't know
about these two systems when he came
up with the original design of Bitcoin.
Now, what about everything else,
the Chaumian e-cash,
all the credit card proposals that we
looked at, all the microtransctions.
What about all of that stuff?
Did he know any of that history?
Well the answer is we don't know what
he did know or what he didn't know.
But he didn't give any indication
really of knowing that history.
And it's just as likely that he didn't
reference this because it just
wasn't relevant to Bitcoin.
Bitcoin used a completely different model,
and so
there's no reason to talk about
these old systems that failed.
He does mention in passing Chaumian
e-cash in one of his blog posts
when he's talking about another
proposal called opencoin.org and
he notes that they seem to be talking
about the old Chaumian central mint stuff,
but maybe because that was
the only thing available.
Maybe they would be interested
in going in a new direction.
A lot of people automatically
dismiss e-currency as a lost cause
because of all the companies
that failed since the 1990's.
I hope it's obvious that it was only
the centrally controlled nature
of those systems that doomed them.
I think this is the first time
we're trying a decentralized,
non-trust-based system.
So this gives a really nice idea or
a nice view of what Satoshi thought of
the earlier proposals and specifically
how he felt Bitcoin was different.
Which is that Bitcoin moved
in a decentralized manner.
And from our study of all the previous
systems we can see that this is true.
That this is a defining feature of
Bitcoin that is not present in a lot of
the systems that we looked at.
Another interesting quote from Satoshi
suggests that maybe he's not an academic.
A lot of academics think about ideas and
write them down immediately.
Satoshi says that he took
an opposite approach.
He says I actually did
BitCoin kind of backwards.
I had to write all the code before I
could convince myself that I could solve
every problem, then I wrote the paper.
I think I will be able to release the code
sooner than I could write a detailed
specification.
A final question we may ask ourselves
colored by what we understand
from the history of e-cash is why
does Satoshi maintain his anonymity?
The first reason might be it's just for
fun.
There's lots of people that
write novels that are anonymous.
There's graffiti artists like Banksy
that maintain their anonymity.
And at that time in the community
that he was involved in,
the cyberpunk community and
the cryptography mailing list, there
were lots of people that were posting to
that mailing list in an anonymous fashion.
The second that ties a little
closer to what we've seen
maybe there were legal reasons that he was
concerned about revealing his identity.
There were a couple events in particular
that led up to the release of BitCoin
where two other proposals, one was called
Liberty Reserve and the other e-Gold
which we talked briefly about ran into
legal trouble for money laundering.
In particular, in 2006, the CEO or
the founders of Liberty Reserve actually
fled the United States because they
were afraid they were going to be
indicted on money laundering charges.
And for e-Gold, the founders
stayed in the United States and
they were actually indicted and
eventually pled guilty to the charges.
And this guilty plea was registered
just right before Satoshi
started the BitCoin website and started
emailing people about his proposal.
That said, there is lots of people
that invented eCash systems and
nobody else was scared of
the legal implication.
And no one else remained
anonymous as well.
So this may have been a reason and
may not have been the reason.
Another thing is that we mention that
certain aspects of eCash were patented.
And if you go back to the culture
of the cypherpunk movement,
they were concerned about
implementing e-cash systems
because they may violate the patents of
some of the technology that was patented.
And so here's a post proposing that,
for example, they launch a project
to implement David Chaum's e-cash system,
which was subject to a patent.
And they do it under
the guides of anonymity so
that no one knows who they are.
And then if they get sued for
violating the patent,
no one can find them to
actually issue the lawsuit.
A final reason that's often cited
is that because Bitcoin was so
successful and Satoshi has a lot of
Bitcoins that are worth a lot of money,
that maybe he's doing this for
personal security reasons.
And this could very well be the reason
why he maintains his anonymity.
Choosing to be anonymous isn't
a decision you make once,
it's something that you continually
make on a continuing basis.
That said,
it probably wasn't the original reason.
At the original reasons, the first time
Satoshi used the name Satoshi Nakamoto,
he hadn't even released the white paper or
the codebase for Bitcoin.
And it's hard to imagine that he had
any idea that it would be as successful
as it was.
It's clear that he understood
the potential of it, he understood that it
could be successful, but
he wasn't a perfect oracle of the future.
He made mistakes just like everyone else,
both in the code.
He had some features that he added
to BitCoin like sending money to
IP addresses that never caught on,
no one thought they were useful.
When he described what BitCoin
was useful for he gave a bunch of
use cases that were very centered on
the idea of using it across the Internet.
Which of course is a huge, huge case for
BitCoin but it's not the only one.
He didn't really envision it being used
by stores, going into a coffee and
using BitCoin to pay for
your coffee, for example.
But last, but not least,
he was generally adopted the tone of being
optimistic about the future of BitCoin,
but also being cautious.
He understood that previous companies had
failed, and that BitCoin may fail as well.
And so he supported a very conservative
approach, especially in the early days
when a lot of attention was perhaps
going to be applied to Bitcoin,
should Wikileaks choose to
start accepting Bitcoins after
credit card companies shut down people's
ability to donate to that project.
He warned the other developers that
this could have bad consequences for
the project and the Bitcoin project might
not succeed, if they went ahead and
got WikiLeaks to start accepting Bitcoin.
WikiLeaks by the way did do that and
the Bitcoin project survived that, but
that was right at the time
that Satoshi left the project.