Ask HN: Why would a government have created bitcoin?
The part that puzzles me is why a government would do this. I can imagine several possibilities:
1. To finance their own black operations.
2. Because they thought digital currencies were inevitable, and they preferred bitcoin to some potentially more malevolent form. (Could bitcoin have been worse from a government's point of view?)
3. A friend suggested this: because they felt their currency would never become the standard reserve currency, and they felt it was better that no one's be if theirs couldn't be.
4. A variant of the above: the US did it because it seemed inevitable that the dollar would eventually lose its place as the standard reserve currency, and better to have it replaced by bitcoin that the yuan.
I realize some of these explanations are pretty far fetched, but so is an individual cooking up bitcoin as an intellectual exercise. Whatever the explanation of bitcoin's origin turns out to be, it will probably be pretty weird.
Anyone have opinions about these possible explanations, or other ones?
309 comments
[ 122 ms ] story [ 865 ms ] threadAside from leaking their identities (for reputational reasons) I am having a hard time thinking of anything these hypothetical reviewers would be motivated to leak. The best I can come up with is, "The main architect of Bitcoin hates the U.S. government, and his main motivation was to weaken it by depriving it of tax revenue."
As to why they are not leaking their identities: they run the risk of being kidnapped and tortured for their BTC if everyone knew who they were -- since (from the point of view of the average Bitcoin-literate thug) it is highly likely that those who got in on the ground floor of Bitcoin hold a lot of BTC.
Doesn't any rich person have the same risk?
Also, the rich do tend to make a point not to let it be publicly known that they are rich if they can. (ADDED. Officers of public corporations for example cannot hide their incomes from the public because of the financial-reporting requirements imposed on the corporations.)
This would the the perfect scheme to ensure orwellian control of the economy, with a complete history of the transactions. It is a possibility - that bitcoin is touted as a "libertarian dream" while it can be in fact used for complete control by the governement.
Today's currencies are too many and transferts not properly traceable. Make that one currency and add in the design that all transferts are to be logged, and it does not matter whether one uses a bitcoin address or its full identity.
With enough social network analysing and recouping information, especially with the governement weigth and files, it should not be hard to "uncover" the true id.
I find this possiblity interesting, even if far fetched.
EDIT: see the actual thread on https://news.ycombinator.com/item?id=5501803
Another possibility would be to reduce the "weight" of the financial sector. Having IIRC 10% of the GDP used for allocating resources is wasteful when there is technology available to do this very thing. I commented on Krugman article on https://news.ycombinator.com/item?id=5541189 along with additional details on https://news.ycombinator.com/item?id=5543308
Basically, using bitcoin instead of the current financial sector would remove frictions and transaction costs, improving efficiency. It is compatible with the standard economic approach, especially on grow theory, where growth is explained by technical change and human capital in many models - from the augmented Solow growth model to Romer and Lucas.
Bitcoin could then be seen as a way to "reallocate" the human capital "spent" in the financial sector to new productive endeavours - the lack of inflation being added to make sure that there would not remain any incentive to waste human capital on looking for ways to speculate.
That is the explanation I prefer at the moment - Bitcoin as an experiment created to improve efficiency of our economical system as a planetary level, by someone well versed in economy and computer science.
Yet out of your list of possible explanation, I would say (2) is the most likely. But if indeed it was government made, I would not say the US is the most likely author.
Look at how the european currencies tried and failed to replace the dollar as the world currency - sum up the Euro currencies place in world commerce before and after the Euro, and you'll see they failed. A bit like HP-Compaq merger, with total share of the market less than their initial shares.
This could support (3) and (4). It is also quite interesting to see how EU-wide directives about virtual currencies were implented and voted were created before BTC became very popular- see http://ec.europa.eu/internal_market/payments/emoney/
The second EU electronic money directive, 2009/110 dates from 2009. Considering how long the political process usually takes, I find having a directive voted and ready in its SECOND version in 2009, then implemented with only a year and a half delay in say France, "unusual". http://www.bryancave.com/files/Publication/515cae04-f1c0-46c...
The only thing that would not match this is how the ECB follows a Friedman like monetarist appr...
With regard to that 10%, don't forget that much of it is spent on the salaries of the individuals actually allocating capital (i.e taking money from some source, such as depositors or investors, and acting on their behalf to invest or loan it elsewhere), such as bank managers, fund managers and investment bankers. Bitcoin cannot decide whether a firm or individual has a good chance of paying capital back, and so its role in allocating capital in nil I would say. An algorithmically-determined money supply would however render infeasible the idea of discretionary or near-discretionary monetary policy, which would free up many economists from the ECB, Fed and Bank of England, and so would free up resources in that regard (whether that is optimal would depend on the algorithm of course).
For any computer system to do allocate capital optimally, it would need to have to sort of assessment ability a human has - or else have a very, very good dataset.
This, in itself, is worth considering. This 10% doesn't disappear from the economy- a good part is distributed to salaries, which are in turn spent on the economy. Not as efficiently as it could be of course, but still.
It's also why, for example, bank robberies aren't worth it.
There's already zerocoin, a proposed extension of bitcoin, which guarantees completely anonymous bitcoins.
http://blog.cryptographyengineering.com/2013/04/zerocoin-mak...
They breakup transactions between hundreds of wallets before sending back to one address, similar to money laundering.
And this valuable process will be generously provided for free, by another gentleman, thus making the whole money laundering a costless operation.
Basically, this whole complex service will fully guaranteed by the trust each money launderer have on their good fellows also engaged in this benevolent operation.
Even without any government action or the tracking of tainted/untainted accounts, I just don't believe it may ever work that way - not with human beings at least :-)
If I have two accounts, one with 0.5 btc (newly created, never tracked by authorities, purchased with a relatively disposable account from somewhere like virwox) and one with 1.5 btc (potentially tracked, need to launder it), I'd pay both into a tumbler and then extract into 3-5 different accounts (like 0.2, 0.45, 0.9, 0.18, and 0.27).
How do you prove, as a tracker, that those 5 accounts paid out to, involve btc from the original 1.5 tracked account? Especially when you consider the hundreds of other accounts being paid out to at the same time.
Still paranoid? Rinse and repeat.
IMHO, you can't.
That's the flow in anonymity, because, how do you ensure the tumbler properly operates? There is an incentive to try and "steal" from the tumbler pool.
Even if it works, the tumbler could be marked as "tainted" - or any undeclared BTC account by default could be declared tainted, and taxation imposed on any incoming bitcoin, unless then come from an untainted account to another untainted account.
The same logic currently applies in the real world - ie if you receive say 500k wired to your account from an account in the cayman islands, the taxman will want to have a word with you.
Do you see the logic there? It was previously discussed in the thread reference in the original message.
it s not the case that if you have not done anything wrong, then you have nothing to hide.
Look at how hard it is to get many people to set up a password manager, or encrypted email. You can't hide in the crowd if the crowd isn't there.
Surprisingly, yes: that's exactly the accomplishment of Zerocoin, though it's currently too inefficient to be practical. (It still requires many participants, but the "tumbling" is global and does not require any trusted pool.)
1mdc was a similar service to this that I used as did many others about 10 years ago for the purpose of obfuscating and anonymizing e-gold transactions between various accounts. http://en.wikipedia.org/wiki/1mdc
One interesting comment from the wiki page: "1mdc's e-gold was held in unallocated (pooled) storage (in several e-gold user accounts) which allowed for extra privacy from e-gold's administrators. However, this increased storage risk, as the client had no precedence on the e-gold they entrusted 1mdc to hold, and there was virtually no way for a user to ensure that 1mdc is maintaining full reserves of their e-gold."
Regarding the Fed, QE and USG. The Fed is a private bank (it pays its shareholders 6%, which no government department does!).
USG is different, and currently in thrall to the Fed. Now _I'm_ going to sound like the conspiracy nutcase when I add "in much the same way European sovereigns were to the Rothschilds".
I just know the textbook stuff- that it takes order from the politicians (ex: obama and the congress could ask for a trillion coin, pretty please), can be forced to buy government debt, and as a goal of helping employment.
I'm most familiar with the european ECB : by construction it follows a monetarist policy (M3 grows at a fixed 4.5%), is independent of political power (you can't ask it to mint a trillion coin for you), and doesn't care about employment.
Before 2012, it also could not be forced by politicians to buy "toxic assets" like sovereign debt (greek debt anyone?), so they created the european stability mechanism, guaranteed by the "federal" EC budget to do this very same thing!
It is even better : now they are not forcing the ECB to buy sovereign debt on political orders, they buy sovereign debt by themselves!
http://en.wikipedia.org/wiki/European_Stability_Mechanism
Could you please elaborate on the US situation? (I'm checking wikipedia at the moment)
If the Fed is a private bank, and I understand correctly your Rothschilds example, that makes the situation in the US similar to the one of the Bank of France prior to 1945 when it was nationalized - it was a private bank, with a monopoly on sovereign currency emission.
Only it's even better and more lucrative, because the Bank of France had to deal with the gold standard (even in the 1929 great depression) while the present day FED is doing fiat money.
Who are the FED shareholders who get to benefit 6% returns, backed by the US government? How do you compare that to the french situation before WW2?
Politicians are mostly mouthpieces for constituent groups and don't understand any of the laws they pass at the granular, much less atomistic level. Their briefs, talking points and speeches are all prepared by others.
The individual can only be as smart as his information input and analytical framework.
i suspect that the only people who read the bills are those trying to sneak something in, or watchdog groups like the eff.
everybody else in washington is there for the hookers n'blow.
[1] Plenty of references: http://en.wikipedia.org/wiki/Rider_%28legislation%29 http://www.politifact.com/truth-o-meter/promises/gop-pledge-...
[2] These last two are Monsanto and firearms related bills being snuck through via the "avoid government shutdown" scare: http://www.npr.org/blogs/thesalt/2013/03/21/174973235/did-co... http://www.npr.org/blogs/itsallpolitics/2013/03/21/174969923...
What we need is full decentralization in govs too
In the case of the trillion dollar coin they had passed legislation that the Treasury was to be given the leeway to print a new platinum coin - if they wished, and at their discretion as to its denomination.
All of which is to say that this whole trillion dollar coin thing only emphasizes the extent to which the president does not control the Fed.
FWIW this is very common in western democracies. Even when the central bank is not a privately owned institution it is almost always managed in a very hands-off way, ostensibly (though perhaps not practically) to stop short term administrations from playing with things in a way that might affect long term currency stability.
I have to evaluate my knowledge of economics before I can commit to creating value up to the amount it would cost to the crowdfunders, but then crowdfunding could be an option.
Meanwhile, I can certainly accept BTC donations to jauge public interest on this project. Click on my name to get the BTC address, since I don't want to "spam" the thread.
[In fact, I'm very selfishly more interested in discussing the proposed explanations than taking commitments at such an early stage.]
It seemed to me that "gauge" was generally accepted use in that meaning. The American Heritage College Dictionary, Fourth Edition says: gauge also gage (gāj) n. (...) 3. To evaluate or judge: gauge a person's ability.
Anyway, if the original phrasing bothers you, please excuse my french :-) and read that as an evaluation of interest before engaging in formal work.
I am concerned that the idea of bitcoin as a government black flag operation, while not fully impossible (I'm glad pg posted this), may sounds like a nutcase conspiracy theory.
Even if the topic is interesting, since from this discussion it seems to be quite unlikely, it does not seem very logical to investigate the issues as more than a side project unless there is a minimal number of people sharing the opinion that it is indeed worthy of further analysis.
See that as a threshold: time is finite while possible projects are infinite. Proper research, as suggested by another poster, will require organisation - even the basic task of setting up a microryza page.
One must use a ranking function. I am uncomfortable with committing to work of doubtful quality and interest. I frequently use HN as a source of "external reasoning", ie a place to submit ideas and see if they are plausible, if the reasoning is sound, ie whether they pass the scrutiny of a technical audience.
I spent many minutes writing down my opinions on this idea, I read with great interest the replies and the other comments, now I'll rest and estimate whether I should spent more time on that.
As jacquesm said in this very thread, even if I don't fully share his conclusions "I've spent more time (...) than is good for me".
There are questions about possible vulnerabilities in the secp256k1 (the Koblitz curve) I did not know about and whose investigation will consume time. Also, the relation between the US and the Federal Reserve shareholders, with the 6% interest rate are interesting. Being french, I know a little about the ECB. Increasing my knowledge about the inner working of the US system will take time.
Even if I'm glad I'm not the only one with such questions, I am wondering if I am spending more time on the topic than it is worth, and how productive any work on such issues could be
I'll sleep on that.
Sur ce, bonne nuit (and that's french)
As for your meaning, I really like your analysis, and I think that you've made some of the best theories in this thread, and I hope that you keep spending time on it, because your discoveries might be good for all of us.
Some people think the US government invented crack cocaine to fund CIA operations. Who knows...
There would be one really good reason to invent a crack epidemic. Before that, there was a pretty strong anti-capitalist black nationalist movement. The men behind the curtain would not want that growing.
If the CIA was behind Bitcoin, they would have done a better job with the unlinkability.
Contemporary dogma surrounding deflation is broken in multiple ways. The idea that deflation is bad is only considered credible (imho) is because it is touted so loudly. There are very few examples of deflation in history to draw from (as opposed to inflation, which there are many more), and further, many of the existing examples of deflation, while "on paper" are bad are not particularly harmful to the median-income'd person.
One rhetoric for deflation-is-evil is predicated on this idea that if consumers know their capital is going to be able to aquire more tomorrow than today, they will wait till tomorrow "too much" for the economy to function. (The analysis tends to get very hand-wavy after this part..). Interestingly, for the past 50~ years we have experienced rapid deflation in computer prices. Consumers have not shied away from purchasing an iphone 5 the second it comes out because it will be cheaper next year and their iphone 4 is basically the same thing. The idea that inflation is 'necessary' to keep an economy going is essentially conjecture; and I disagree; I think a deflationary currency (especially when there are other local currencies competing) will be very good for the economy and encourage more businesses that create things as sexy as the iphone5 (or services equally as appealing to consumers) as it will be the only way to get that currency out of people's hands. When people are hungry or trying to imprss someone, or really desiring of something.. they will spend today even if next year they might be able to get a couple percent more.
Anyway, perhaps deflation is the nail-in-the-coffin, but I don't really see evidence of it, just a lot of people really insisting that it's true.
As for volatility; I think volatility both a) has a potential to lessen over time, and b) is not an insurmountable barrier depending on how much people want to use bitcoin specifically (if you need to send money somewhere privately) ; they can be exposed to exchange rate for only a few minutes, or, use an escrow service that is also willing to hedge (the silk road does this).
bitpay exposes merchants to zero% exchange risk; they get lower rates than cc's and zero charge backs.. no merchant account necessary.
However, beyond even all of that, these arguments are dismissed because by every measurement available: bitcoin is acting as a currency, despite deflation* and volatility. People have so deeply ingrained that 'deflation==dead' that when they see a functioning currency that doesn't have the characteristics it is "supposed to" they define it as a " a lesson in basic economics for crypto-anarcho-libertarian-nerds" as if they can predict the future. Quite pompous.
Bitcoin has had several major crashes which easily could have dropped bitcoin to zero if it were indeed worthless. Yet it continues on, acting as a medium of exchange between --hundreds-- -thousands- -hundreds of thousands- millions of people; some as a toy, some are betting their lives on it.
volatility - infancy
http://www.reddit.com/r/Bitcoin/comments/1cahbk/today_i_lear...
or this:
https://news.ycombinator.com/item?id=5548095
One of the first pieces of evidence is typically that those countries that left the gold standard earlier also recovered from the Great Depression earlier.
By ramping up production for WWII.
Now I'm going to go orthogonal and mention something I've never seen addressed. Germany was economically a shambles. How did Hitler manage its economic comeback? Have any books been written on that subject?
EDIT for a typo. As usual.
In the Great Depression the German chancellor Bruenning did try to keep a balanced budget, kept essentially a gold standard [1] and cut unemployment insurance. This resulted in 30% unemployment and a very high multiplier. Additionally Weimar Germany was on brink of civil war in the end.
Hitler then did introduce the Reichsarbeitsdienst, essentially forced but payed labor for the unemployed. And he did ramp up spending, first mostly for infrastructure later shifting to the military. [2] And he was rather reckless in consolidating his power, which probably lead to increased 'investor confidence.' With these policies he managed to get more than 5% real GDP growth each year, [3] together with steeply falling unemployment. [4] ( Wikipedia has an article with more details. [5])
And this is probably the reason why this is rarely addressed, economic policy was an area where Hitler did have some success, at least by modern metrics which are not easily applicable. ( And therefore it is actually quite hard to discuss without getting awkwardly close to not damning Hitler. In fact I am wondering at the moment, if this posting needs a stronger disclaimer.)
[1] The Rentenmark introduced after the hyperinflation of '23 was backed by land.
[2] The details are actually quite interesting, the regime was trying to hide a substantial part of the dept as 'Mefo bills.'
[3] https://en.wikipedia.org/wiki/File:BSPDRWeltkriseEngl.PNG
the datasource is
https://www.destatis.de/DE/Publikationen/WirtschaftStatistik... [German]
[4] http://archive.is/JXNR
[5] https://en.wikipedia.org/wiki/Economy_of_Nazi_Germany
Don't worry about that. We are discussing strictly economic policies and ideas, not politicians/dictators. Thanks for the reading.
EDIT to add: Having now read, I see there is nothing there for sane people to duplicate. Thanks.
I personally have spent hundreds of dollars in BTC on various products.
2. What is the ultimate driver of demand for Bitcoin? Fiat currencies have laws to create demand for them -- taxes, debt laws, etc. What legal business has any particular reason to accept Bitcoin payments, when they must then turn around and convert those payments to their nation's currency (at cost)?
Free instant global money-transfers that can not be charged back and are optionally anonymous? And you ask for demand?!
What legal business has any particular reason to accept Bitcoin payments
Any business that currently pays the >2% Visa/Mc/Amex/Paypal tax on every transaction?
You should ask the hundreds of businesses that do so.
The most obvious reason is the fact that it actually costs less. There are substantial fees associated with using credit/debit cards or paypal. The fees for converting BTC to fiat are much smaller.
If it's a government, it is not a constitutional one with democratic elections. Checks and balances make it much more difficult to carry out a conspiracy with elegance and grace. I'm not saying it's impossible, but if the US did it, it will come out very soon. There are too many conflicting interests in government to keep this under wraps for long.
Essentially, crypto-guys who don't leak stuff would have to have been acting at the bottom of a chain of command that does leak stuff clumsily, and is opposed by political forces with the incentive to find stuff out. Plus, no major agency of the government has yet commented, which suggests that they are trying to get their heads around the phenomenon before choosing how to act.
All the same, I doubt it's an individual, as you suggested. It's certainly a group or entity with it's own agenda, external to, but perhaps sponsored in some way by a government (perhaps even the US, for the reasons you mentioned).
I'm puzzled by this statement. You need n people to keep the secret...
The reason why "conspiracy theories" sound silly is that the term itself is reserved for possibilities the speaker doesn't believe in [edit: changed that wording to make it more neutral]. Well-documented conspiracies are called "history".
http://20committee.com/2013/02/24/what-if-everything-you-kno...
The creators of bitcoin could have one or more purposes, picked from a fairly large set of possibilities.
I don't wish to express contempt for the possibility, just that it is unlikely.
Stuxnet. How long before anyone outside of the group that created/deployed it knew it existed?
EDIT to add: I typed too soon. You did specify "conspiracy." Stuxnet was an approved project. Those are easier to keep secret.
An the target of Stuxnet was an single program of a fairly obnoxious state (Iran).
The "target" of btc is an entrenched system of currency used by nearly everyone on earth. Much harder to contain.
I wonder if I'm the only person who sees Bitcoin as just as alpha test?
In general, however, I would argue that it is incredibly naive to think that we know even remotely all there is to know about what our government does.
Bitcoin has well-known built-in weaknesses, e.g. the limited supply; it was designed to be exploitable, and we see this being done in the real work as we speak. You find the knowledge how to work markets at investment banks.
That's a pretty bold statement for which I'm not aware of any proof whatsoever. Bitcoin is pretty rough and ready when you first look at it but on closer inspection it is actually remarkably solid.
Why do people not realize this?
Rant time: Bitcoin's large amount of deflation was a fucking stupid decision and is playing a very large part in its own price volatility. Whoever made it was so blinded by their own economic ideologies that they figured since inflation's a problem, massive deflation must be the answer! Never mind the currency's very design will prevent it from ever really being effectively used for credit or payment installments, like rent or financing for something.
I'm so sick of people talking about "investing in Bitcoins." If it rises greatly in price (more than a few percent a year!) it's really bad, not good! If it rises that quickly then it's not a currency because nobody will be incentivized to spend it! And the worst part is, that's the very way it was designed.
Can Bitcoin ever be used as a real currency? Someday, once the market cap gets big enough to limit the deflation to a reasonable amount. That won't happen for years. Years and years and years. Until then it will be a volatile, bubble-prone commodity with almost zero intrinsic value, because the creators made the fucking ridiculous decision to cap the supply in a global economy that we expect to (presumably) grow in real terms for at least hundreds of years.
Wei Dai published his work originally on crypto-currency in 1998 (in fact some suspected that Wei Dai is Satoshi). Moreover Szabo was mirroring lots of the same thoughts with his bitgold proposals.
From an economic perspective, the Austrian school has been gaining more and more creditability as it becomes increasingly clear that monopolistic control of currency is unworkable in the long-term.
Therefore, there was nothing specifically revolutionary about it. It was really just one of those things that it was just waiting for someone to come tie these things together into a coherent project (I'm not at all minimizing the work satoshi did).
This all does beg the larger question; Who is Satoshi and why would he disappear. Personally, I think it was a nom-de-plume of several people who intelligently made the decision to 'disappear' (even though they may still be active on the project using different names). Leaderless projects are very difficult for the various state monopolies to fight.
See also: Nicolas Bourbaki for a historical example of such an occurrence (minus the disappearing / remaining anonymous part).
I've been saying this for a long time (http://www.gwern.net/Bitcoin%20is%20Worse%20is%20Better), but people don't seem to usually agree with me.
1. You haven't worked in government. Their code is worse than Yahoo! or virtually any startup. Bitcoin isn't.
2. Bitcoin is far from the most malevolent possible form for governments. Chaumian blinded money, what I want to build next, with open, non monopolistic exchanges, and protocols designed to be hidden, instant, etc., is the most powerful possible form of anonymous cash.
3. No clue, but probably not, since the concept of a reserve currency is irrelevant. With electronic exchanges, you can separate out the different roles of money.
4. A subset of 3.
I bet the NSA and NASA both write code that's orders of magnitude better than anything Yahoo does, just to pick two counterexamples.
And this wouldn't have been their A team.
The motivations are very similar to startups working outside of larger companies. You get more freedom in work choices and pay scale.
Government also discourages small side projects, especially in the classified world, and particularly discourages them from becoming production. They would far prefer to run a program of record, or pay for (well defined) innovation by third parties.
2: It might just be because I don't understand it completely, but as I understand it, every single transaction in Bitcoin is public and traceable - so if you compromise the identity of a wallet (from computer seizures, wiretap etc) you can monitor a target's transactions. A more perfect (or malevolent, depending on your POV) system would not have this traceability.
Obviously I don't speak for rdl, but what impresses me is the level of anticipation of future developments.
All these goodies just waiting in there to come out and play.
There is a lot I hate about BTC but mainly due to it having wrong design goals, vs a wrong implementation.
The essential thing they got wrong was lack of using the market to price risk, and trying to be all or nothing.
So bitcoin was probably not released by a tiny .gov. Most likely by a big player like .us, .ru, .cn, .uk, .jp, .de. Probably not the .us because its hard to encourage a replacement if you're the reserve currency see above. So it could be from the .gov of one of the five countries above, maybe a couple others.
99% of code written by Government is subpar, the other 1% is like Stuxnet
So yeah, I am going to call that "great code."
To me, the only question left is about leaking. What's a greater incentive against leaking: coercion by a bureaucratic, nontechnical employer (ie; a government), or the bonds of secrecy between close friends in a common cause? Call me an idealist, but I think the latter has a pretty good shot. The number of leaks coming from Apple vs the number of leaks from Google (higher from Apple, IIRC) seems to support this viewpoint.
[1] http://sub.garrytan.com/hackers-can-be-business-guys-and-oth..., around 12:30 iirc.
EDIT: sentence structure.
If bitcoin was a top secret government development then it's quite likely they would assign different people to different parts of the project with a minimal number of people overseeing the entire thing.
I question whether the best of the best in cryptography couldn't just work for the government TO earn enough money to spend time building something awesome. I mean, at least in the field of cryptography, it has always seemed like the government would be high on the list of places to work anyway. Crypto is a big deal to government, so they are going to be on the cutting edge, and plenty of other top crypto guys work there.
Maybe he replicated The Currency that is known to work using local technology.
This will explain how Satoshi looks like one person and still does too much stuff for one person and gets it all right in a first try.
Even funnier if he's a space traveller, altough I suspect laws of physics disallow "naive" time travel.
If you read their papers in the run-up to bitcoin then there is no doubt that either group had the technical ability and the means to execute on the idea.
To posit that a government did this would need to come with some proof that is stronger than the proof pointing at these two non governmental groups.
But I can tell you my starting points: there are few threads on bitcointalk that try to ID satoshi, start with those, then read a bunch of papers, figure out who the co-authors are and sooner or later you'll end up with the same set of names. The interesting bit to me is that those two groups are both roughly equally likely but I can't find any clear signs of collaboration between the two.
If PG emailed you, would you tell him in private?
This is a pretty good starting point:
https://bitcointalk.org/index.php?topic=5951.0
Was this done out of some ideological commitment, or just to get rich as the first movers?
Same with the reason behind creating this particular crypto-currency. Since the creator is not known to public we can only assume.
1. http://www.fincen.gov/statutes_regs/guidance/html/FIN-2013-G...
http://en.wikipedia.org/wiki/Scrip
Consider me amazed at how far it's already gone, if it goes much further it may very well be extremely wise to not be known as one of its creators.
A culture of anonymity and unaccountability may be a good thing with respect to the users of a currency, but not for its creators and backers, IMHO.
http://en.wikipedia.org/wiki/Phil_Zimmermann
This is probably going to end a lot worse:
(1) bitcoin survives, lots of parties angry
(2) bitcoin is broken, a fatal flaw is detected, lots of people lose money, lots of parties angry
In either scenario there will be a lot of parties pissed off at bitcoins creators. Anonimity seems to be a smart move, just like many other pre-emptive strikes that are embedded in bitcoin.
Trust me, no governmental entity gives a hoot about who created the bitcoin standard. They probably will give a hoot about how it's used.
Better safe than sorry seems to be a good strategy in cases like this, if there is no upside to claiming credit, why would you claim credit?
Not really. All of the ones I'm aware of involve DMCA pissing matches, which aren't relevant here.
Citation needed.
>Trust me, no governmental entity gives a hoot about who created the bitcoin standard.
Are you talking of the same government agencies that had 10,000 page files on people such as John Lennon and such?
Also, I don't think John Lennon would have turned down his opportunity for celebrity if he'd known that J. Edgar Hoover was going to open a file with his name on it. He might have thought twice if someone had told him about that Chapman fellow, though.
The people die, the practices do not.
Government agencies have Harry Potter long files on all kinds of peaceful activists, from tree-huggers to EFF members, to authors and free press writers, and such. Even more so than back in the day, because they can get tons more info through electronic means.
>Also, I don't think John Lennon would have turned down his opportunity for celebrity if he'd known that J. Edgar Hoover was going to open a file with his name on it.
Lennon might not, other people that would only get the negatives without any benefits of that celebrity, would not.
Far worse to be an operator than a software developer.
Also some people are at more risk, even if they wouldn't be killed or even arrested for creating ecash. If you were at all legally questionable for drugs, taxes, politics, or had a day job with a clearance, a company with pr exposure, etc....
Not very far, in the grand scheme of things.
The whole amount of money involved is less than what some LOCAL restaurant chains make in a year.
There have been more widespread regional alternative currencies in the past. Given that this one also has all those internet-technology advantages to spread, it's surprisingly minuscule and insignificant.
Maybe gold a long time ago but still doesn't fully compare
Well, how about gold?
>Maybe gold a long time ago but still doesn't fully compare
Why not? In addition you have:
a) no logs b) no reason to trust some advanced crypto stuff (that might collapse 10 years from now due to some hole/collision/whatever discovered in the algorithms). c) acceptable everywhere already
Oh, and it doesn't lose 70% of it's value in 2 days, like BitCoin has done in the past (from what I read).
Bitcoin won't be so volatile after it has been more widely adopted.
And the "advanced crypto stuff" of Bitcoin can never collapse. It is already partially post-quantum and was designed to be easily upgradeable to fully post-quantum algorithm set.
You would do yourself some good if you took a minute to learn some things about crypto.
Like a lot of libertarian activists, or indeed activists in general, they may have overestimated how much governments would feel threatened by their actions. Or, maybe they were prescient. Hard to say right now.
Taking a similar example, in 2010 it was unlikely Stuxnet was government made - people talked about the black market and high school students from Panama http://en.wikipedia.org/wiki/Stuxnet#History
Yet now, it seems to be.
I share part of your opinion, as in "unlikely to be from a government" but I would NOT jump to conclusions and exclude this possibility.
Investigations into the real identity of Satoshi Nakamoto have been attempted by The New Yorker and Fast Company. Fast Company's investigation brought up circumstantial evidence that indicated a link between an encryption patent application filed by Neal King, Vladimir Oksman and Charles Bry on 15 August 2008, and the bitcoin.org domain name which was registered 72 hours later. The patent application (#20100042841) contained networking and encryption technologies similar to bitcoin's. After textual analysis, the phrase "...computationally impractical to reverse" was found in both the patent application and bitcoin's whitepaper. All three inventors explicitly denied being Satoshi Nakamoto.
[1] http://en.wikipedia.org/wiki/Bitcoin#Identity
Or person presumably?
It's entirely possible that early on they used throw away wallets while testing and the alleged $100m in "early coins" are all inaccessible.
For historic precedents, see for example Wikipedia on "Project MKUltra", or the book "Subversives: The FBI's War on Student Radicals and Reagan's Rise to Power" by Seth Rosenfeld.
PG remarks that there were probably peer reviewers but none has stepped forward. Either of the two examples I gave illustrates how long and how tightly private-sector collaborators with secret government projects can keep their mouths shut.
Is that really far fetched? Seems it's no more far-fetched than an individual coming up with the initial version of Linux. As I understand it, Bitcoin is just one implementation of the "crypto-currency" line of thought. E.g. http://www.weidai.com/bmoney.txt
Makes more sense I think for whatever multi-billion dollar cartel to be planning 20 years into the future with bitcoin as a 'version 1' mvp.
along the "far fetched" lines, it is definitely a possibility that this was a govt initiative, and possibilities 1 and 2 (not 1 or 2) seem to fit my reasoning.
countries that fit my argument are those with large trade deficits; have little or no natural resources; are known to run smuggling networks of drugs, counterfeit money, etc.
countries with little or no economic resources are constantly under economic pressure to trade in "trusted" currencies. they need to purchase commodities and resources where counter-parties only accept strong currencies (usd, eur, gbp, chf, nok, etc.). it's impossible doing business with a large/influential commodities trader unless you trade in any of the currencies above.
given that these countries are unable to generate enough foreign reserves via exports, large undercover networks that smuggle all kinds of illegal goods/services are unofficially permitted. e.g. class a drugs, counterfeit money (sold at a discount. think for a second why some top notch usd counterfeiters are located in africa and asia), free/subsidised drugs sold back to developing countries by 3rd world countries, etc.
consequently the creation of a virtual currency, that does not require an export, and that it can be easily printed with ubiquitous technology/computing power is a great way to make up for the real economic shortfalls.
final remark: still, i think the chance of this being the case is very slim. right now the trade deficits/currency needs by many countries that fit this profile are orders of magnitude larger than the overall value of the bitcoin market. unless the size of the btc market grows at a very high rate i seriously doubt this can be an effective tool to run the above operations.
If a government were to create it with the intention of it lasting, then I would imagine they would have designed it such that the supply of the currency increased with the number of transactions; I'd like to hazard the guess that this is both possible, and would prevent both inflation and deflation. Why is preventing both of these necessary? Had they included inflation, it is unlikely bitcoin would have attracted its initial users - that is, the libertarians et al. Similarly, had it been deflationary, then this would possibly constrain government; no seignorage, and the real value of debt rising over time.
The protocol specification is fairly impressive, and runs almost smoothly for 4 yrs.
Just one thing that I can remark, the elliptic curve used in the bitcoin protocol (secp256k1, the Koblitz curve y^2 = x^3 - 7 with a 256 bits prime) is not the one recommended by standards, and may contain leak. (It could happen that NSA already know some weakness of Koblitz curve over prime fields.)
So 2 possibility here:
1. That's a backdoor set by the designer. 2. Designer just doesn't care about gov recommended specification.