For at least two years, Arthur van Pelt has been paying close attention to the activity of Craig Wright. Ever since the self-proclaimed “Bit Coin” creator has started suing community members who contested his status, van Pelt has taken upon himself to shine a light on the numerous cases of shady evidence that Wright provided.
Some would go as far as saying that Arthur van Pelt is obsessed with Craig Wright and has a personal agenda. After all, his daily tweets about Wright’s life and activity in court do require hours of research and intensive reading. But if you ask van Pelt, he will say that he only does a community service by trying to salvage the reputations of those whom Wright has harmed: from Hal Finney to Adam Back and Hodlonaut, there are dozens of lives that have been irreversibly affected by lawsuits, threats, and perpetual slandering.
To support his cause, Arthur van Pelt has created the “#Faketoshi Fraud Timeline“: a website where he regularly publishes information that he collects from court data, testimonies, and individual investigations. His aim appears to be that of fact-checking statements that Craig Wright has made in court, private e-mails, blog posts, and social media interactions.
In the Bitcoin Takeover Season 5 finale, we talk about Craig Wright’s early days (convincing Gavin Andresen that he is Satoshi, debating Nick Szabo during Bitcoin Belle’s panel, and feeling reluctant to play the role of Satoshi), his evolution throughout the years, and the considerations that may exist behind his lawsuits.
Inevitably, some conspiracy theories get discussed: Is Craig Wright a government contractor who is trying to discredit Bitcoin and destroy it from within? Or is Craig Wright actually paid by the real Satoshi Nakamoto to put an end to the relevance of who the creator of Bitcoin may be?
At the end of our 155-minute discussion, Arthur van Pelt and I agree that the Bitcoin community should always be honest and phase out bad actors with facts and thorough research. While it’s better for bad actors to receive less media coverage, it’s also useful to balance their claims with facts. This anti-sensationalist middle ground may look less glamorous than scoring clickbaity website hits, but it’s also better in the long run.
Storing a podcast episode on a web server may be inexpensive… but when more than 50 of them add up, you end up having to upgrade your storage and also build an offline archive just in case cancel culture starts finding Bitcoin content offensive.
If you like what I’m doing and want to keep me going, please consider making a donation to the Bitcoin Takeover project. 90% of amounts sent to the address below will be redirected to support Arthur van Pelt’s research.
Conversely, if you don’t want to send anything but need a new Trezor hardware wallet or Billfodl metal plate/Faraday bag, feel free to use the linked referral links. I will get commissioned a small percentage of your payment, and any amount can help me keep going.
Near the end of his “Bitcoin – Unmasking Satoshi Nakamoto” video, Barely Sociable has concluded that Adam Back must be Satoshi Nakamoto. The conspiracy theorist pointed out to circumstancial, professional, and behavioural hints that suggest that the British cypherpunk is most likely to have created Bitcoin.
Though in a previous article I’ve tried to dismiss the structure and form of Barely Sociable’s video, I felt like it wasn’t enough. In order to refute such strong claims, one must take each argument and deconstruct it. Because sometimes a flood of half-truths and extrapolated theories can sound credible if it’s packaged nicely, I felt like I needed to make an effort and produce a similar presentation which fills in some gaps in Bitcoin history that the conspiracy theorist has more or less intentionally ignored.
So if during the previous article I’ve taken a shot at demonstrating Barely Sociable’s biases, then in this video I’m tackling his theories in a more structured manner.
To complete this project, I spent about an hour taking notes on exact timestamps and statements, another hour and a half gathering information sources and recording the video (which is one-take), and about 12-14 hours editing the video.
Initially, I hoped that a video presentation would save me time and provide a friendlier way of understanding why Adam Back is most likely not Satoshi Nakamoto, and why Barely Sociable’s depiction of the Bitcoin scaling debate is incomplete and flawed.
After spending almost 20 hours working on this (I could have just written an article in about 6 hours), I just hope that you will find my presentation informative and entertaining. I can’t match Barely Sociable’s level because I don’t do videos professionally and I’m not a native English speaker to deliver the message flawlessly. Yet the content is most of the times more important than the form in which it is presented – and I’ve actually made an extra effort with the editing.
The final result is a one-take recording that I hope will complete Barely Sociable’s presentation of the events. It’s also longer than his presentation, but unscripted (I only took some basic notes, so everything else is improvised) and more detailed from a technical point of view.
Just keep in mind that everything makes much more sense if you watch Barely Sociable’s video first. I hate the fact that I must promote his otherwise shallow analysis, but my work is pretty referential and cites moments from his video before presenting counter-arguments.
My notes on Barely Sociable’s video
12:20 – “Gaslighting Gavin to waste his time while working on a sidechain solution”.
This is wrong, scaling Bitcoin wasn’t just a dichotomy between big blocks (XT) and Blockstream’s Liquid sidechain. At the time, SegWit and the Lightning Network were both being developed and turned out to be preferred by developers and the community.
12:48 – “A vast majority was in favor of increasing the block size”.
This is wrong, the devs favored SegWit over a hard fork and they cast their votes. There were some companies that wanted a hard fork, but it was because it suited their short-term needs and would also give them more control over the network on the long term (they can afford to run a full node in a big block version of Bitcoin).
13:02 – “I lean more towards Gavin having better intentions”.
You say this, butat 24:09 in your video you acknowledged that Gavin purposely pushes a conman as Satoshi because he happened to have the same views on the block size. How does lying to the community imply best intentions? You’re contradicting yourself within 11 minutes.
24:14 – they revoked Gavin’s access for promoting a fraud who couldn’t sign the genesis block. It’s that simple, the developers didn’t want to deal with all the politics, cypherpunks write code.
24:49 – NDAs are anti-Bitcoin. Developers are always transparent about their work and intentions.
13:15 – Why is the Reddit censorship relevant in any way?
It’s foolish to assume that censorship didn’t cause a Streisand effect for XT, which made more people check it out. It failed because the users rejected it, as anyone could run the client at the time.
Also, Reddit wasn’t the only platform – there was Bitcoin-talk, there was Twitter, there were lots of IRC channels and groups. Tweets from around the time are cited throughout the video, yet you claim that Reddit was the main hub.
26:46 – Why the hell would Satoshi cite his own work if he wants to stay anonymous?
28:10 – False, we only have Hal Finney’s e-mails and a few other odd ones. No e-mails from Szabo or Wei Dai, afaik.
29:57 – Bitcoin was written in C++, Adam Back codes proficiently in C++. So do lots of cypherpunks.
30:08 – Adam Back is the kind of guy who files patents and seems to be proud about his own work. Why would he suddenly give up on his habit?
31:10 – Why would Satoshi edit his own Wikipedia page to dox himself?
31:28 – British grammar and double spacing may just be part of Satoshi’s op-sec.
31:52 – Political message and the London newspaper. One is too common, the other one is part of the op-sec.
32:06 – The Hashcash and Bitcoin pages are basic HTML websites with nothing but basic text to explain how stuff works. The lack of graphics in the early phase proves nothing but more concern with the code than aesthetics.
32:25 – All cypherpunks looked up to Hal Finney, he coded Phil Zimmermann’s PGP.
32:55 – Well, Satoshi never cashed in his Bitcoin so the idea of moving to Malta because he expected to receive money and wanted to avoid taxes is silly. Also, Wikileaks was a very hot topic in 2010 – it was all over the media and journalists were volunteering to investigate the leaked documents. Everyone was talking about it at the time, unlike today’s situation.
33:08 – Maybe that Adam Back did mine bitcoins, in spite of his claims. Or maybe he just regarded it as an experiment that should prove itself until 2013, cypherpunks were exchanging ideas quite often. None of this proves that he could have been Satoshi. Other cypherpunks like Zooko have been into Bitcoin since the first month, yet they’re not Satoshi Nakamoto.
33:33 – He raised funds for Blockstream with a team of very competent developers. Also, Adam Back wrote a lot of code and is responsible for Confidential Transactions and other interesting cryptographic inventions. Just because he never wrote a line of code for Bitcoin Core doesn’t mean that he revealed his Satoshi Nakamoto pseudonym to his investors.
34:00 – Joining Bitcoin a day after people figure out how many bitcoins Satoshi Nakamoto owns? How does that make any sense?
34:46 – On April 18th 2019, Adam Back suggested that Satoshi needs Confidential Transactions. He basically suggested that his own invention (which was never implemented in the base layer, but was added to Liquid) can help with transaction privacy so Satoshi can sell part of his stash. Promoting your own work as a solution doesn’t mean that you are the creator of something. Actually, if Adam Back was Satoshi then he would have probably done a better job with privacy.
35:10 – How can you know about a bug from 2010 if you joined the forum 2 days ago? Well, anyone can read Bitcoin Talk threads without signing up. And 2 days are enough to research previous issues of Bitcoin, especially if the event took place only 3 years ago. At the time it was easier to learn the whole history than it is now, almost 12 years since the whitepaper was published.
36:30 – “Other currencies have faces to them”
Well, they’re not Bitcoin and aren’t as ambitious in being so decentralized and censorship-resistance. Known creators are single points of failure.
38:23 – When you say that “the entire community was in favor of increasing the block size”, you merely appeal to businesses like Coinbase, BitPay, and blockchain.info that would directly benefit from a more centralized Bitcoin that they can control.
38:22 – Increasing the block size destroys censorship resistance, because a dangerous precedent is set and only a few businesses would become able to run a full node.
Timestamps for my own video
00:00 – Introduction, context, disclaimers
2:50 – Who is Satoshi Nakamoto? Not Adam Back!
3:11 – Adam Back gaslighting Gavin about agreeing to increase the block size while actually plotting to deploy the SiDeChAiN
3:30 – The Bitcoin scaling debate was bigger than block size increase vs sidechain
4:00 – SegWit has been conceptualized in 2012-2013
4:43 – Hard fork vs soft fork
5:33 – The base layer is like a rock
6:25 – Lightning Network
7:05 – Why on-chain scaling is terrible for privacy
8:46 – Barely Sociable only mentioned Bitcoin XT, but selectively forgot about Classic, Unlimited, and SegWit2X
9:16 – Why small blocks are better for scalability, privacy, and cost
10:11 – Bitcoin didn’t even adopt the Liquid sidechain to such a great extent
10:34 – The average user won’t use Liquid anyway
11:48 – A vast majority was in favor of increasing the block size? Who is that majority?
11:58 – The only businesses that wanted to hard fork Bitcoin were the ones that benefited from it by gaining more control over the network
14:36 – Companies that support a more centralized Bitcoin most likely want to be your custodians, since you can no longer run a full node
15:00 – Big blocks destroy the value proposition of Bitcoin
16:00 – In 2017 devs wanted SegWit, not a big block hard fork
20:21 – Gavin was actually the dishonest one and Barely Sociable contradicts himself
23:07 – Gavin making statements under NDAs is against the Bitcoin spirit
23:38 – Charlie Lee signing the Litecoin Genesis block to show how it’s done
24:10 – Why does a video about exposing the identity of Satoshi Nakamoto include a long discussion about r/bitcoin censorship?
25:36 – Censorship of ideas would normally lead to the Streisand effect, especially when dealing with Gavin and Hearn
26:06 – Bitcoin XT did not fail because of Reddit censorship
28:30 – Why would Satoshi Nakamoto cite himself in the whitepaper?!
29:39 – Satoshi e-mails
31:11 – British English and double spaces
32:55 – Adam Back’s early patent filling is not Satoshi-like
34:27 – Adam Back is a great coder who wouldn’t have made mistakes that Satoshi Nakamoto did
34:50 – Why would Adam Back add his interest in digital cryptographic money on his Wikipedia page if he is Satoshi and wants to hide his involvement in the creation of Bitcoin?
35:25 – Adam Back talking about WikiLeaks doesn’t prove that he’s Satoshi
36:47 – If the basic HTML web pages of Hashcash and Bitcoin looked identical, it still means nothing
38:39 – Satoshi looked up to Hal Finney, and so did Adam Back
39:53 – Satoshi Nakamoto wasn’t a genius coder, he’s made lots of mistakes in the first version of Bitcoin
41:08 – 2010 inflation hard fork which resulted in a hard fork
42:00 – Adam back moving to Malta is irrelevant, the weather is actually nice there
43:20 – There are people who got into bitcoin and mined without being Satoshi… as well as people who observed Bitcoin since the early days and have had no direct involvement with mining.
44:40 – You can raise funds as the CEO of Blockstream
48:40 – If Adam Back joins Bitcoin-Talk a day after an article gets published about Satoshi’s BTC wealth, then he’s actually less likely to be Satoshi Nakamoto
49:48 – If Adam Back promotes Confidential Transactions with the argument that Satoshi Nakamoto might need them, it still doesn’t mean that he is Satoshi
50:36 – If Adam Back is Satoshi and he invented
51:30 – If Adam Back knew a lot about Bitcoin on his second day on Bitcoin-Talk, it still doesn’t mean that he is Satoshi
53:51 – Coins with known leaders can’t ever be compared with Bitcoin
57:45 – Satoshi is best described by his code
58:30 – Why Bitcoin is the best chance that we have, but is not perfect
59:20 – Who is Satoshi Nakamoto today?
1:01:05 – David Chaum, Nick Szabo, and Wei Dai are most likely not Satoshi either
1:02:40 – If Satoshi sold his coins, there is enough market demand to buy them instantly
1:03:40 – Visa 2.0 is pointless, we need decentralization more than scalability
1:06:00 – Closing notes
1:07:04 – Donate to Bitcoin Takeover
1:07:38 – Bonus: Eric Voskuil explains why Satoshi Nakamoto was not a professional programmer
1:10:29 – Samson Mow explains why Adam Back is not Satoshi on MCF 38
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Maybe one of these days I’ll buy myself a Raspberry Pi and run BTCPay Server on it so I get rid of this custodian. But first I want to invest more in the Bitcoin Takeover website: get reviewed transcripts for all podcast guests, get a better WP theme, and optimize all content. If a conspiracy theorist can get millions of views, then more informative content should get at least a small fraction of that.
Sometimes the most efficient way to successfully attack your rival is to subject him to the public scrutiny of the masses. Especially if he is a shy and rather reserved middle-aged man who happens to lead the company that’s responsible for making your “big blocks hard fork” wet dream obsolete.
Barely Sociable’s video “Bitcoin – Unmasking Satoshi Nakamoto” is nothing but a clever way of introducing a distorted narrative to clueless conspiracy theorists who most likely know nothing about cypherpunk culture or Bitcoin history.
It’s a justification for the technical and market failure of big block hard forks of Bitcoin, which basically implies that all of it happened because Blockstream CEO Adam Back is Satoshi Nakamoto – and therefore he could convince everyone else to support and invest in his sidechain project.
If you haven't watched the video, this is your chance. Everything that you are about to read is a spoiler which deconstructs the "Adam Back is Satoshi Nakamoto" conclusion.
The documentary’s conclusions are silly at best and disregard multiple events and breakthroughs that happened at the time. There is no mention of SegWit, a network upgrade (soft fork) which managed to safely increase the block size of Bitcoin without breaking consensus rules to split the network (hard fork). Likewise, there is no mention of the Lightning Network – a second layer scaling solution which has been conceptualized in 2015 and played a major role in the scaling debate’s outcome.
As a matter of fact, the entire 40-minute video is mostly a collection of arguments which frame Bitcoin’s scaling wars as a dichotomous battle between on-chain scaling through hard forks (XT, Classic, Unlimited) and Blockstream’s sidechain proposal.
The fact that Mr. Barely Sociable spends more time talking about censorship on the r/Bitcoin subreddit and making an apology for Gavin Andresen’s and Mike Hearn’s intentions than actually researching into Adam Back’s work reveals a lot about the video’s true intentions.
After a while, it becomes evident that “Bitcoin – Unmasking Satoshi Nakamoto” is a political statement against the Bitcoin project’s development direction – and it just so happens that it echoes the arguments that Roger Ver has presented for years.
By the time documentary viewers have found out the conclusion about Adam Back being the designated Satoshi Nakamoto candidate, they will have already digested 25 minutes of big blocker propaganda. “Gavin Andresen was good, Adam Back and his Blockstream company are the bad guys who hijacked development and changed the narrative”.
And if Barely Sociable has picked the rather unlikely candidate Adam Back to become his Satoshi Nakamoto candidate of choice, this doesn’t make his story fair, accurate, or factual.
It doesn’t even matter if Mr. Back truly is the creator of Bitcoin. One could argue that this is a masterful attack that’s orchestrated to put extra stress and pressure on a cypherpunk who is otherwise known for being reserved, while also diluting Bitcoin’s value proposition by implying a central point of failure.
Who is Barely Sociable?
Barely Sociable has joined YouTube on March 27th 2019, but he hasn’t posted videos until 6 months later. He also runs a second account named Slightly Sociable which hosts a podcast, speaks with an American accent, and has been recognized by the Coin Spice journalist C. Edward Kelso as being a “former SoundCloud rapper”.
This connection is very relevant in the context, as Coin Spice is a pro-bcash website which is known for featuring pro-big block opinions. And if none of Barely Sociable’s 380.000 YouTube subscribers have figured out the identity of the pseudonymous speaker, the SoundCloud account has been deleted before the Satoshi Nakamoto reveal was even published, and a Coin Spice journalist has made a confirmed connection to a music account… then the BCH connection might run deeper.
During the first 2 months, Barely Sociable has posted videos about popular internet mysteries and conspiracy theories – 3 of his 10 early mini-documentaries being about Reddit stories.
But on November 19th 2019, Barely Sociable has posted his most popular video: “Dark Side of The Silk Road“. In it, he makes the first mention of Bitcoin and introduces an essential individual and angle that may link Barely Sociable to Roger Ver: Ross Ulbricht, aka the guy who received a double life sentence for running starting the Silk Road and operating the Dread Pirate Roberts account.
This is important because Roger Ver is known to exchange letters with Ross and is an outspoken supporter of the “Free Ross” cause. Bitcoin.com is even listed as a top donor to the campaign.
While this connection doesn’t imply any kind of early collaboration between Roger Ver and Barely Sociable, it does reveal a common interest. Combine this with the unlikely identification from the Coin Spice article, and we can assume that Barely Sociable is a member of the Bitcoin Cash community.
The Satoshi investigation series started on January 18th 2020 with the video “The Most Elusive Identity on the Internet, Pt. 1“. This debut was pretty reasonable, presented already-known arguments and introduced some facts about cypherpunks and their origins (with an evident focus on Chaum, Finney, and Szabo). Upon watching it, nobody would suspect that Satoshi would later be revealed as Adam Back.
It’s the second part, published on February 7th 2020, which begins to introduce wrongful facts. First of all, Barely Sociable says that Satoshi Nakamoto “premined” his coins – which is technically and semantically untrue because his presumed bitcoins were fairly mined after the launch of the network (and not before it, as the “premine” implies).
Secondly, the narrator argues that altcoins like Ethereum and Litecoin thrived in spite of having well-known creators, so Bitcoin wouldn’t be hurt if Satoshi revealed himself. Which is false, as neither of the projects chosen as examples are as successful and ambitious in their scope as Bitcoin. It’s a fake equivalence that was most likely inserted to normalize the subsequent “reveal”.
In the coming 3 months, Barely Sociable has kept on teasing the reveal on his YouTube page. And on May 11th 2020, he finally published the controversial “Bitcoin – Unmasking Satoshi Nakamoto” – the 40-minute glorification of Gavin Andresen, Bitcoin XT and big blocks, which presents the kind of conclusion that is means to further damage the Bitcoin project and its development.
In hopes that I’d find more information about Barely Sociable, I’ve looked at the Reddit accounts that posted his video. Unfortunately, the accounts don’t reveal much. Albin Nyden posted it in r/btc and r/videos, while r/JelloBrickRoad is responsible for promoting the content in the r/cryptocurrency subreddit. On r/bitcoin, it was a low-karma account named Number1ess that posted the video. I could probably undergo the process for each of his videos and look for patterns and links to the bcash community, but I’ll give Barely Sociable a free pass for now. There is plenty to analyze from his video anyway.
Why reveal Satoshi’s identity now?
It’s really no coincidence that the video got posted the day after the Bitcoin halving and scrutinizes Adam Back’s involvement in the Bitcoin project. After the BTC mining rewards were cut in half, the hashrate has also taken a ~30% plunge. It’s very likely that some miners no longer found their activity profitable due to electricity cost and low ASIC efficiency.
In the Bitcoin network, it takes 2016 blocks (~2 weeks) until the mining difficulty readjusts. So until this event happens, unprofitable miners can choose between running at a loss, shutting down operations, or temporarily migrating to another chain. Therefore, this can be regarded as an opportunity for minority chain BCH.
According to Bitinfocharts, the BTC halving has helped BCH regain the hash security that it has prior to its earlier April 8th halving. The difference is not great (only ~3% of the hash that BTC lost went to BCH), but it truly matters to a minority chain.
The only way to make miners stay on a particular chain is to give them proper incentives. So if more users do transactions and buy amounts of the network’s native cryptocurrency, then more fees are collected by the miners, the coin’s price goes up thanks to the demand, and consequently the miners sell their freshly-mined coins faster and more profitably.
It makes a whole lot of sense to push a campaign against BTC at this time when the difficulty readjustment is a week away, the halving press coverage has reignited interest in Bitcoin, and there are millions of people who have no idea about how the scaling debate of 2014-2017 took place.
Essentially, Barely Sociable’s documentary is conveniently-useful and well-timed. Through a 40-minute video he tells his viewers “Adam Back is Satoshi Nakamoto, but he’s the bad guy of the story because Bitcoin was supposed to scale with big blocks and that’s also Satoshi’s original vision”. And if Gavin Andresen and Mike Hearn are the good guys for pushing the XT project, then the “red-pilled” viewers will discover that XT has been merged into Bitcoin Cash.
Ignoring these facts and assuming that Barely Sociable has no idea about the halving and the momentum to onboard clueless newbies is simply foolish. Furthermore, not suspecting him of being a member of the BCH community is likewise naive. He basically echoes the same arguments that Roger Ver has been spouting for years.
Why Adam Back?
For years, Adam Back has been perceived as the enemy of the big block hard fork camp. As the CEO of Blockstream, he raised capital to hire some of the most talented Bitcoin developers to work on projects that preserve the network’s decentralization. Therefore, it can be argued that he helped make big blocks unnecessary and rudimentary in comparison with Blockstream’s more sophisticated scaling solutions.
But as an individual, Adam Back is more inclined to follow the “cypherpunks write code” mantra. Though he attends conferences and joins panel discussions, he doesn’t get into heated debates. He doesn’t talk much about his private life, mostly shows interest for the technical discussions, and is the exact opposite of altcoin CEOs.
This makes him the perfect target for harassment and public scrutiny. The fact that he also has the proper credentials and interest to be a worthy Satoshi Nakamoto candidate is a great bait for politicians and law-makers who may investigate him on the basis of these claims.
Yet a cypherpunk like Satoshi Nakamoto would definitely know better than to put the headline of the local newspaper in the Genesis Block, use British grammar and double spaces to delineate sentences, and mention himself in e-mails and the whitepaper. And these arguments aren’t even compelling enough.
This is what propaganda looks like: a sketchy reveal after more than 25 minutes of spoon-feeding viewers with half-truths and distorted facts.
Yet it all makes more sense when you realize that Roger Ver & co have experimented with the “We’ve got Satoshi Nakamoto on our side” narrative for a while. They legitimized Craig Wright’s status on the basis of Gavin Andresen’s testimony, and agreed to look the other way when counter-evidence started to emerge.
The angle didn’t work out for them. Bcash only looked more centralized in decision-making, scammy, and distant from Bitcoin’s philosophy. Newbies might have been fooled by the scheme, but the miners and major businesses stuck with the real Bitcoin.
And for years, Roger & co have pointed out to the fact that Adam Back has only joined the Bitcoin project after BTC hit the $1000 mark in 2013. The “Roger Ver has been around for a longer time and is the first investor in Bitcoin projects” argument has been an instrumental part of the anti-Blockstream and pro-hard fork propaganda.
But what if the narrative gets reversed to put more burden on Adam Back? Why keep on discrediting him when you can put him in the spotlight so the unwanted attention wears him out? And in the whole process, why not make it look like Bitcoin development does have a single point of failure and is still coordinated by the creator?
These arguments dilute the digital commodity value proposition of Bitcoin and make bcash seem a lot more decentralized in comparison. If enough people buy into this narrative, then Mr. Barely Sociable will definitely make a new video to introduce his viewers to the “real vision” that wasn’t perverted by VC money. And the video might benefit bcash in a more noticeable way.
Bcash’s last resort propaganda
We shouldn’t forget that bcash is a minority chain that failed to secure support from miners, traders, and users. Most people who do use BCH do it for purely ideological reasons – because otherwise they could get the same results with altcoins like Litecoin and Dogecoin, which precede the invention of Bitcoin’s contentious forks. Bcash can’t survive in the absence of proper incentives, so it needs to gain traction by any means necessary.
Trying to expose Blockstream’s CEO to public scrutiny (a phenomenon that happened to Dorian Nakamoto in 2014) may be one final attempt to push the big block narrative.
Barely Sociable is trying to make up a narrative about a perverted Bitcoin creator who surrendered his early principles to VC money and decided to centralize the project by moving transactions to a sidechain that makes him and his investors money. He abandoned his original vision that Bitcoin can scale on-chain, expelled the well-meaning developers, and flooded the space with opinion censorship and corporate greed.
In reality, Liquid mostly serves exchanges and big traders that need more privacy, quicker settlements, and lower fees. Regular users will keep on using the base layer and eventually move microtransactions to the Lightning Network when the fees increase. In the future, many more sidechains will exist to serve different purposes, and Bitcoin remains a decentralized base layer for which anyone can run a node and which serves as the foundation for lots of interesting inventions.
Also, building a fee market is essential for the Bitcoin network’s long-term sustainability and censorship resistance. If miners don’t earn attractive rewards from discovering new blocks, they will have to collect transaction fees to keep the operations profitable. Anyone who thinks that “instant” 0-conf transactions made through SPV wallets that trust the few existing nodes and for which negligible fees are paid is what Bitcoin should look like is delusional or doesn’t get it.
As for Adam Back, he’s done a great job as the CEO of Blockstream. He hired some of the most prolific developers, supported the release of remarkable research and open-source project, and facilitated the creation of tools and workarounds that big blockers would have never conceived. He’s definitely too smart to write the headline of a London newspaper in the genesis block, which confirms his own claims that he is not Satoshi Nakamoto.
I’ve done this research and made these connections so you don’t have to. If you have anything else to add, feel free to contact me on Twitter or via e-mail. And next time someone cites Barely Sociable’s video as evidence for knowing the identity of Satoshi Nakamoto, send them this article to put an end to this nonsense.
I’ve recently asked my Twitter followers to mention their favorite Bitcoin conspiracy theory. Surprisingly, most respondents have mentioned the CIA, the NSA, or another “three-letter agency” as the potential creators of the cryptocurrency.
Deater Bob suggested that Satoshi Nakamoto might have leaked the Bitcoin project from sources within the US government. Gilroy pointed out to a master plan that would eventually use Satoshi’s coins as the foundation for a new US treasury. The likes of Juan Galt and Jack have also suggested that the NSA might have been involved.
And in spite of some creative replies (such as Wladimir Van Der Laan’s theory about Bitcoin being a fungus and Bmo Masari’s suggestion that the internet itself might have attained consciousness in order to create Bitcoin), I couldn’t stop thinking about the popular associations between the creation of Bitcoin and governmental agencies.
Therefore, I will explain why the association is wrongful – and even if Satoshi Nakamoto was the CIA or the NSA, Bitcoin no longer belongs to him, and it isn’t even as innovative as most people think.
Bitcoin didn’t come out of nowhere and borrows multiple breakthroughs that cypherpunks have previously made. To Satoshi Nakamoto’s credit, he/she/they/it have created the best solutions for the Byzantine Generals Problem, and is/are responsible for releasing a form of decentralized electronic money that actually succeeded. The difficulty adjustment every 2016 blocks is also a fine touch, and one which has been crucial for the survival of the network.
However, there is a cypherpunk tradition that precedes Satoshi’s emergence by 20+ years. And this article will present only a few of the inventions that have taught Satoshi how to design Bitcoin and which proven flaws to avoid.
Satoshi Nakamoto might be the CIA/NSA, but Bitcoin is rooted in the cypherpunk tradition.
Lots of nocoiners, precoiners, and poorly informed bitcoiners think that Satoshi Nakamoto invented the blockchain and deserves all the credits for the accounting system which spawned an entire industry.
Like many other cryptographic inventions, the blockchain was first conceptualized by David Chaum during his PhD at Berkeley University. His 1979 Vault system even includes checks and balances that very much resemble Bitcoin’s: watchers (block explorers), doers (nodes), executives (miners), czars (developers).
Chaum also created the first form of digital money (ecash) with the DigiCash corporation. It was designed to fix the trust issues of online credit card payments with a form of money that is private enough to conceal personal data that is irrelevant to the transaction. However, its centralization ultimately led to a disappointing demise in the late 1990s. Interestingly, Satoshi doesn’t mention Chaum in the Bitcoin whitepaper.
Let’s get back to the blockchain: the idea of an hash chain that is used for linked timestamping is also presented in a 1991 research paper by Stuart Haber & W. Scott Stornetta. Unlike David Chaum’s work, Satoshi does reference this breakthrough in the Bitcoin whitepaper. Also, cypherpunk Jameson Lopp has cited the research as a precursor to Bitcoin’s blockchain.
Then there’s the choice of Elliptic Curve Digital Signature Algorithm (ECDSA), published in 1998 by Canadian computer science researchers Don Johnson, Alfred Menezes, and Scott Vanstone. With ECDSA, public keys, private keys, and signatures get generated in order to guarantee that the bitcoins can only be spent by the rightful owners.
A popular theory says that Satoshi Nakamoto picked ECDSA over Schnorr signatures out of convenience, as more libraries were available to suit his/their specific needs when designing Bitcoin. Yet there are lots of privacy concerns (that do involve the NSA’s tendency to implant backdoors) that will eventually replace ECDSA with Schnorr signatures (thanks, Pieter Wuille!).
The idea of cryptography that uses public keys is also not proprietary to Satoshi Nakamoto: Ralph Merkle was researching the topic in 1980 (as acknowledged by the Bitcoin creator in the whitepaper), and Phil Zimmermann’s private e-mailing tool PGP (on which Hal Finney has worked for many years) has been available on the internet for free since 1991.
Speaking of Hal Finney, Bitcoin makes use of his Reusable Proof of Work (RPOW) breakthrough. However, it’s Adam Back who gets cited in the whitepaper for inventing the hashcash system in 1997 and perfecting it to prevent e-mail spam. Without these cryptographic breakthroughs, Bitcoin could have never reached the same degree of security and the brilliant mining incentives most likely wouldn’t have existed.
Yet another great cypherpunk who doesn’t get cited in the whitepaper but has basically solved 90% of Satoshi’s problems is Nick Szabo. His Bit gold system successfully connects many puzzle pieces from amongst the most brilliant cryptographic discoveries, and also creates the “digital gold” principles that are rooted in Austrian economics (scarcity, fixed issuance rate which avoids the pitfalls of hyperinflation, easy verification).
Unfortunately, the Bit gold design relied on a majority of network participants and could be easily become subjected to 51% attacks. What Satoshi Nakamoto did was to replace the rule of CPUs with the rule of hash power.
These cypherpunks were all about privacy and resisting the NSA
The “punk” in “cypherpunk” should successfully delineate the movement from government servitude. According to Tim May’s 1994 opus “The Cyphernomicon“, the cypherpunks were very much against surveillance and sought to keep their privacy on the internet while inventing tools to also help others.
In an October 1995 report by the NSA (which was declassified in 2008), some concerns were expressed in regards to the ways in which DigiCash can be used for criminal activities. The existence of this particular document proves that Chaum’s intentions were real and he truly was concerned with privacy.
It’s very unlikely that cypherpunks like Finney, Szabo, Back, Haber, and Stornetta worked for the NSA, CIA, or any other governmental agency. Otherwise their work would have been classified and restricted to only be used by authorized personnel.
And even if we assume that the open source work was released as such to get further improved by other voluntary cryptographers on the internet, the fact that these tools work against the monopolistic interests of the NSA/CIA also makes the cypherpunks look pure at heart.
If the NSA decides to use RPOW or the ideas behind Bit gold to build a system of their own (which most likely happened already to some extent), it doesn’t mean that the inventors of these systems were their employees.
Bitcoin was invented by Satoshi, but it never belonged to him
At most, a returning Satoshi Nakamoto can move his coins and spend them. There is no backdoor key, there is no reserved lead developer position, and there is no active developer who awaits the return of the creator.
Like it or not, Bitcoin is not the same network it was in 2009. It has undergone numerous improvements and will continue to leave Satoshi Nakamoto’s legacy behind as more parts get replaced.
After all, the point of Bitcoin is not to remain unchanged over time, but to keep its monetary policy, guarantee that Satoshi can return at any time and move the coins, and preserve decentralization.
There is a lot that Satoshi Nakamoto got right, but also plenty of code that was removed or replaced by developers. Hal Finney has spent a lot of time fixing design flaws in Bitcoin (and even added extra zeroes to define the system’s smallest monetary unit as 1/100.000.000 BTC) and he set a precedent for future devs to seek more elegant and efficient fixes for an otherwise rigid project.
Bitcoin as a monetary system is set in stone with a fixed supply, a predictable inflation until 2140, clear mining rewards, and convenient difficulty adjustments every 2016 blocks. But Bitcoin as a network is bound to receive lots of upgrades that make it faster, more private, and more efficient.
Improvement proposals like Schnorr signatures, Taproot, MAST, and Grafroot are designed to bring greater privacy and block efficiency (transactions will get smaller and more affordable).
Then there are lots of privacy improvements that are being explored on altcoin networks and sidechains (it’s only a matter of time until Confidential Transactions or MimbleWimble get added to the base layer to some degree). In the future, it’s likely for transaction privacy to become more popular, and smart tricks that still guarantee supply auditability and inflation resistance will be implemented.
If Satoshi returned, he probably wouldn’t recognize his own invention. But that’s for the better, as the network is growing and becoming much more efficient for its purpose. Bitcoin is like a muscle car which receives upgrades without ever changing the body frame – it will always retain the main design qualities, but with a better engine and bulletproof windows.
If Satoshi Nakamoto is the NSA/CIA, then Bitcoin does not belong to them anyway
Is Bitcoin designed by a three-letter agency? It’s definitely possible. Could the CIA and NSA use Bitcoin for transactions? That’s even more likely. But neither of these two probabilities lead to a conclusion that puts a governmental agency in control.
Right now, Bitcoin may possibly be the most decentralized computer network on the planet. It has functioned for almost 11 years with only two instances of downtime (due to an inflation bug in 2010 and due to poor network synchronization in 2013) and has ~10000 nodes operating worldwide (not counting the ones running on Tor and the ones that didn’t open the 8333 port).
Some argue that backdoors may exist: and the most damage they can do is break the signatures (which can lead to funds being stolen) or break the cryptography behind SHA256. In either case, it’s possible for the community to hard fork to a new chain, replace both ECDSA and SHA256 with existing alternatives that have already been already been developed, and restore previous coin ownership on the basis of cryptographic proof. The solution seems unpopular now, but may prove to be the last resort in the event of a serious attack of the kind which Bitcoin never really faced.
The battle against Big Brother is relentless, and it’s clear that government officials understand the trade-offs involved in launching attacks or momentarily lack the means to engage. It’s also probable that the CIA and the NSA find the existence of Bitcoin convenient, as they use it themselves and have their own ways to track transactions on the blockchain by looking at communications between participants and other network-level clues.
But even if we assume that Satoshi Nakamoto was the father of all CIA agents, the experiment has escaped his hands and he is no longer in control – and nor will he ever be again, unless the network becomes more centralized (as it happened with BCH and BSV).
And even if half of the Bitcoin community is under CIA’s paycheck, then the other half can still resist attacks by moving to another chain which retains the rules but changes the security. It’s all open-source software and the means to protect one’s property should be enforced.
Yet thanks to the brilliant network incentives, it’s better for everyone (CIA agents or not) to stick together and protect the same network. For as long as greed works, Bitcoin will remain secure and adversarial in terms of who it onboards and for what reasons.
The “don’t trust, verify” motto mostly refers to other people’s nodes and implies having your own node as a way of proving that the funds exist and are rightfully yours. Therefore, it’s an assumption that everyone else is out there to rob you – because you know, everyone’s a scammer.
Muh Satoshi
The Satoshi Nakamoto we know from forum posts and the cypherpunk mailing list was pretty humble and down-to-earth. He was willing to help anyone understand how Bitcoin works – with the exception of Daniel Larimer, who got dismissed in a pretty badass way.
However, turning him into some sort of Messianic figure who gave us the power of the Holy Spirit and departed to return “someday” is definitely wrong. We can’t deny Satoshi’s contributions to the world of cryptography, but we can’t exaggerate his work either.
Sure, the story of the unknown computer programmer who released an innovative digital money system out of nowhere seems romantic. It attracts newcomers and it keeps the media busy with phony investigations. Yet the genius of Satoshi Nakamoto is overstated and there is very little that he added to the otherwise impressive but lesser popular inventions of his peers.
It’s the classic example of Isaac Newton and Gottfriend Wilhelm Leibniz: everyone knows about the former and his story with the apple, but tends to forget about the latter. They both discovered integral mathematical calculus around the same time, but the glory appears to be on the side of the English polymath to an unfair extent.
The bottom line is that it doesn’t matter who Satoshi Nakamoto really was and it’s extremely irrelevant at this point in Bitcoin’s development. Also, the NSA/CIA stories are pretty unfortunate given the cypherpunk origins of Bitcoin. While Satoshi might have been the NSA, then Bitcoin clearly isn’t.
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