Satoshi's old emails have only now come to light

In this series of articles entitled The Beginnings, I bring reflections on the early days of Bitcoin, when Satoshi still corresponded in posts on different forums and via emails exchanged with the first collaborators before disappearing completely.

Just as theoretical physics seeks to explain natural laws and today's world by investigating what occurred at the beginning of the universe, an archeology of the early days and months of Bitcoin are precious in explaining what are the rules and choices that determined its success, what are the issues we encountered from the beginning and that still persist and how Bitcoin differs from other projects. I don't think that Satoshi's word should be revered as if it were the voice of a prophet or a demi-god, nor do I seek to know who Satoshi Nakamoto really was. The type of investigation I bring here serves to assess something that I believe to be one of Bitcoin's main values: the integrity of its protocol and its history; how the monetary order inaugurated by Bitcoin can be understood as a set of stable and isonomic rules that had an organic adoption, without retroactive and arbitrary changes to benefit any specific person or group, as occurred in other projects that followed it.

The more I investigate the history - or even prehistory of Bitcoin - I see how important the open source nature of Bitcoin was for errors to be corrected quickly and transparently, even though the first criticisms that Satoshi received reveal widespread skepticism about the possibility of there being a completely decentralized currency that works without the need for a third intermediary, as had been dreamed of for many years. The first versions of Bitcoin, however, contained bugs and attributes that could have led to Bitcoin's failure. For example, the size of the blocks was not specified, nor was the maximum limit of 21 million units. In the white paper and in v0.1.0 the consensus algorithm is wrong. Satoshi originally thought that the selection of the chain of valid blocks should be the one with the most blocks. But the chain with more blocks does not necessarily have more computational work. So Satoshi had to make a major change to the current rule of more work as a valid chain, even after the release of v0.1.0. To this day, this error still confuses many who read the white paper and don't realize it is incorrect. Examples like these show us that if it weren't for the collaboration and critical evaluation of many who helped Satoshi at the beginning, Bitcoin would probably have failed.

In the first article in the series, I sought to explain the reasons that led Satoshi to be ostracized at the beginning of 2011 and why this gesture was fundamental for us to have a leaderless and truly decentralized currency, unlike fiats and arbitrarily pre-distributed tokens like Ethereum, who to this day need to trust charismatic leaders with enormous power over the rules of protocol. In the second article, I comment on a video that aired in February of the same year, where the host of the SecurityNow podcast called Steve Gibson explains very enthusiastically and also with a lot of knowledge how this new currency that lives on the internet works and what problems it seeks to solve. In this third article, I will comment on Satoshi Nakamoto's emails that were revealed to the public only last week by Adam Back and Martti Malmi.

For those who don't know, an important legal battle is currently taking place in the English courts between the non-profit organization called COPA (Cryptocurrency Open Patent Alliance), which fights to keep Bitcoin an open source project, and Craig Wright, or Faketoshi, the only person in the world we are sure is not Satoshi Nakamoto.

It would only be comical to watch this mythomaniac contradict himself countless times while trying to prove himself as Satoshi if it weren't for the concrete damage he has caused to many people. In addition to being an impostor, Faketoshi usually intimidates core Bitcoin developers with million-dollar lawsuits, tries to remove the white paper from public domains saying he has copyright on it and even promotes failed copies of Bitcoin such as the infamous BitcoinSV, deceiving his public and investors .

Obviously, to this day he has not presented any concrete proof of his allegations and in this process two witnesses were called in who recently presented evidence that seeks to refute them: the well-known cypherpunk cryptographer Adam Back, mentioned in the white paper itself, and Martti Malmi, one of the first programmers helping Satoshi with Bitcoin and now developer of the Nostr protocol. Both presented to the judge e-mails exchanged with Satoshi that had never been presented before, e-mails that were not even in the book The Book of Satoshi, which compiled all of Satoshi's known writing until then. Here a caveat is necessary. Although they were presented in court, they are just prints of emails that do not offer any real cryptographic proof that they communicated with the real Satoshi, even though there is strong evidence to believe that the documents are legitimate.

Adam Back, founder of the company Blockstream and the inventor of the anti-spam called Hashcash in 1997 that inspired Bitcoin's proof-of-work, released five emails he exchanged with Satoshi. Back had already commented that he had exchanged these emails, but it was the first time they had appeared to the public. They show us that even before publishing the white paper, Satoshi already indicated that he would use proof-of-work to develop what he calls e-cash or electronic cash - the name Bitcoin had not yet appeared. Back then shows Satoshi the correct references to cite Wei Dai's b-money, a proof of concept for electronic money that didn't succeed but inspired Satoshi, and helps him find more information. These emails corroborate what Back had said before: he himself was not very interested in collaborating with Bitcoin at the beginning and only got involved years later.

The hundreds of emails that Martti Malmi (known as Trickster or Sirius on anarchist and libertarian forums) exchanged with Satoshi between 2009 and 2011 contain many interesting details. Malmi was still a university student at the time, studying his second year of computing at the Helsinki University of Technology. Even so, he was one of the first Bitcoin developers, helping both in the “public relations” part, so to speak, developing the FAQ, in discussions on SourceForge and on the website bitcoin.org, and collaborating in C++ programming in the first versions of the code - Initially Bitcoin was developed by Satoshi for Windows and Martti works to implement it on Linux.

In these many correspondences, several questions arise that are still discussed today. For example, already predicting the allegations of Bitcoin's energy “waste”, Satoshi says in a passage, which I made a point of translating here:

This comment is impressive for several reasons. A few months after mining the Genesis Block, Satoshi already foresees that Bitcoin mining will consume a lot of energy to generate hashes per second, he imagines that many people will consider this activity as a type of waste and already offers the answer saying that the amount of energy required to keep the fiat system upright is much greater. In other words, his objective with Bitcoin was not to create a new PayPal or a mere p2p payment system - a confusion that many people still make today - but rather to replace the entire traditional banking system, being more efficient even from the point of view of spending. energy.

Only recently did Galaxy Research publish a report that concluded that the global banking system consumes 263 terawatt hours per year, twice what the Bitcoin network uses. But this only considers the stricto sensu fiat system. If we take into account the military-industrial complex necessary to make it accepted through coercion, how much energy is wasted in the form of inflation, conspicuous consumption generated by cheap credit and in the cycles of expansion and recession resulting in malinvestment, the The amount of energy and vital time wasted by the fiat system is much greater.

We also see in these emails the origin of the term “cryptocurrency”, which Satoshi realizes is being proposed on Bitcoin discussion forums. Satoshi asks Martti:

To which Martti responds:

At that time, Satoshi had in mind failed experiments with other “cryptocurrencies” such as David Chaum's Digicash, whose main flaw, he is keen to highlight, was its centralization and the need for trust in third-party intermediaries.

Still speculating on how to give “traction” to the project and try to spread the use of Bitcoin, Martti proposes to Satoshi the creation of the first brokerage, where people could exchange Bitcoin for fiat through an offer auction without a fixed price, as occurs today . Already feeling the financial interest that many people have started to have with Bitcoin, Satoshi says he is “uncomfortable” with the proposal to promote Bitcoin as an investment. He said it was okay if people came to that conclusion on their own, but that it shouldn't be a “pitch” from those involved in the project or in the site's FAQ.

Your answer to why 21 million units couldn't be more trivial. It was an “educated guess”, that is, an informed guess. He wanted a unit of 100,000,000 to have more or less the value of fiat currencies, for example, 1 BTC for USD 100 million or even USD 10 million, in this case only having to cut a zero (1 USD for 10 sats), but as it is very difficult to predict the future, it does not seem to worry about the exact number as long as it follows the issuance calendar and a maximum limit.

The emails also reinforce the impression that Satoshi was a solitary programmer - including working on Christmas Day - and not a team. He always seems overwhelmed by the questions that arise, asking Martti to help him with various tasks that a team could solve and encouraging him to act more publicly, including as treasurer of donations to the project. Satoshi says he started working on Bitcoin around January 2008 and shows signs of fatigue 18 months later:

It's a fascinating correspondence. We realized that they were facing something great, new, but still very uncertain. Perhaps the only good thing that was caused by Craig Wright, even against his will, was the release of these emails. Faketoshi will go down in history not as the creator of Bitcoin, but as someone who indirectly helped shed light on its history. I hope the courts do justice and impose heavy sentences on this swindler.