The Legendary Nick Szabo: Bitgold, Smart Contracts, Cryptocurrency And Blockchain Story

In both the cryptocurrency and cryptography worlds, Nick Szabo is legendary. While he may not be a household name, Nick Szabo is highly revered among the crypto enthusiasts. He is both a computer scientist, as well as a legal scholar. It was in 1996 that he brought forth the concept of “smart contracts.” Those smart contracts became the focus of Ethereum blockchain and introduced the Internet to a whole new way of commerce.

Within an enlightening blog, Unenumerated, where he pins his various ideas and thoughts there still is a particular mystery that shrouds him. If one would do a simple Google search, you will see that he is done public lectures, has worked on several projects as a consultant, and regularly uses Twitter. All of his personal information has been kept out of the public eye.

Beyond the regular tweets on Twitter, and various blog entries revolving around technology and finance there is really not much to go on when looking into who Nick Szabo's really is. All we really have is Bit gold and smart contracts.

Nick Szabo: His Work

Bit Gold

Now if you're new to the world of crypto technology, you may not know that Nick's work is extensive. However, he is best known for his proposal of Bit Gold. What makes this paper so impressive is the parallels that it draws to the cryptocurrency giant BitCoin. Within the paper outlining Bit Gold, Szabo identifies the issues of the dependence of the modern financial systems and explains his visions for an alternative.

According to Mr. Szabo, TTP or third trusted parties are viewed as security holes. If and when a protocol relies too heavily on TTP, there is a necessity to patch the holes in security. By doing so, it creates centralization which can be very costly. The cost of security must be integrated with the costs of operating which of course leads to added expenses that the end-users pick up.

Another problem that was addressed was the Third Trusted Parties. According to Mr.Szabo's paper, the TTP is a problem in itself that should be eliminated wherever possible.

If this all sounds familiar, it should. The outline that Mr. Szabo's stated in his paper introducing Bit Gold is eerily similar to that of Bitcoin. The paper goes on to explain the overview of how to implement Bit Gold and how transactions would be processed. The underlining difference between Bit Gold and Bitcoin lie in the fact that Bitcoin's algorithm counts the hashing power while Bit Gold counts the network addresses.

Nevertheless, the theory behind Bitcoin and Bit Gold hold true to the fact that TTP's need to be removed, there must be a currency in place that can be trusted, and where information can be stored and transferred securely.

Smart Contracts

Everyone at some point has heard about ICO's. In the news there are various bits about ICO scams, ICO tokens exploding on the market and reaching astronomical amounts. You may also have read articles about the latest ICO's and their impact on society with new breakthrough technology. The point is, ICO's wouldn't have been made possible without Nick Szabo's Smart Contracts.

You may be wondering what “Smart Contracts” have to do with cryptocurrency. To better understand the reasoning behind smart contracts, you have to distinguish the four primary objectives of a smart contract.

#1- Observability which is the ability of the principals to observe each other's performance of the contract.

#2- Verifiability which proves to the arbitrator that a particular contract has been performed or breached. Of course, the arbitrator also can find whether the contract has been fulfilled by other means.

#3 – Privity which is the principle that control over the data and the performance of the contract should be distributed among the parties only as much as needed for the fulfillment of the contract.

#4 – Enforceability which is the possibility of a particular contract's ability to be regulated and enforced.

With Smart Contracts, all parties involved in the transaction would be able to observe the other's performance. The parties would be able to quickly verify the agreed terms, divulge only the necessary details to complete the contract. Lastly, smart contracts would reduce the cost of enforcing the contract because smart contracts will be self-executing when all the criteria are met.

The whole purpose of smart contracts is to make transactions more accessible and more efficient as long as they are designed correctly.

Nick Szabo And Satoshi Nakamoto

October 2008 was a pivotal moment in time. A white paper was submitted by Satoshi Nakamoto entitled, “Bitcoin: a peer-to-peer electronic Cash system.” It wasn't until January 2009 that the genesis block was brought into existence. Embedded in the code was a message for the ages. Nine years later, Bitcoin has a market value of $300 billion. With cash on the table like that it's no wonder why people want to know who Satoshi Nakamoto is.

Many people speculate the identity of Satoshi Nakamoto. Some even claim to have found him. Yet, still, the mystery remains. So why does Nick have anything to do with Nakamoto? It all revolves around Bit Gold's white paper and the similarities to Bitcoin.

Bitcoin Or Bit Gold?

Here's where things get a little complicated. Bit Gold whitepaper proves that the technological concept and philosophy of Bitcoin was already conceived four years before the release of Bitcoin. It wasn't April 2008 when Szabo wrote on his blog about Bit Gold and how he was looking for somebody to help him code it.

Seven months after Bitcoin was launched, the blog post that Szabo's wrote was suspiciously backdated to December 2008. Another interesting fact is how Satoshi never once referenced Szabo's work in the white paper for Bitcoin despite the parallels between the two.

An odd thing to note is the lack of interest from Szabo when in 2010 Bitcoin broke the one cent barrier and continued to rise well over $.20 per coin. Also during the time while Satoshi was working tentatively on the Bitcoin protocol, Szabo never once mentioned Bitcoin on his blog. It wasn't until Satoshi at the end of 2010 stepped down did Szabo begin talking about cryptocurrency.

Of course, you can't forget that Nick never released Bit Gold even though he was actively seeking help from readers on his blog. All these facts put together propose the question “Is Nick Szabo Satoshi Nakamoto?”

Hal Finney

Everyone knows that Nick Szabo and Hal Finney have known each other since 1993. It is also known that they communicated and exchanged ideas several times. Hal received the first Bitcoin transaction from none other than Satoshi Nakamoto.

Why should Hal Finney be connected to Satoshi Nakamoto? After all the only acquaintance Finney new and exchanged ideas with was Nick. Of course, it didn't help that Hal lived in the same town and possibly even the same neighborhood as Dorian Satoshi Nakamoto for 10 years. Dorian Satoshi Nakamoto was accused by several reporters to be the creator of Bitcoin.

Yet, one reporter writing an article for the New York Times stated how he had received an email from an acquaintance of Finney's who asked to remain anonymous. Within this email, the writer points out that while he was doing research on the identity of Satoshi Nakamoto, he'd come to the conclusion that Nick Szabo is the name behind the pseudonym, Satoshi Nakamoto.

The email that was sent to the reporter goes into great detail about why the writer got the impression that Satoshi Nakamoto may very well be Nick Szabo.

Let's Recap

In April 2008 Nick Szabo's wrote a blog post highlighting the blueprint for his conception of Bit Gold. On that post, he asks for help to code the cryptocurrency. In October 2008 a white paper was released for Bitcoin with strikingly similar attributes to that of Bit Gold. Then Mr. Szabo's backlists his blog post to December 2008 to appear to have come up with the idea for Bit Gold only after Bitcoin's white paper was released.

Then in 2010 when Bitcoin made headway by breaking the one cent mark and skyrocketing to $0.20, Nick Szabo's remained silent. Even though the technology and idealism was spot on to what he had talked about previously on his blog. You would think that a guy so in tune with digital currency would take note of a monumental achievement, even if it weren't supposedly his?

Then once Satoshi steps down from Bitcoin and Nick begins writing once more on his blog about cryptocurrencies, yet never actually brought his idea of Bit Gold to life.

Next, there is the Hal Finney connection that has Nick's acquaintance, whom he speaks to frequently and exchanges ideas receive the first Bitcoin transaction from none other than Satoshi Nakamoto. The coincidence continues to add up that Nick Szabo is Satoshi Nakamoto. But the last bit of information linking the two is astonishing.

Aston University Forensic Linguistics

Okay, so Forensic Linguistics is a mouthful and rightfully so. However, it is a branch of applied linguistics. It is the application of linguistic knowledge, insights, and methods to written material. The aim of this branch is simple, gain as much information possible by the way a person writes.

A group of forensic linguistics from Aston University did a study which nicknamed “Project Bitcoin.” The purpose of this study was to look at the similarities between Nakamoto's Bitcoin white paper and the eleven people that conspiracy theorists claimed as possible creators of Bitcoin. “Project Bitcoin” was conducted by 40 students alongside Dr. Jack Grieve.

The group's conclusion on the study stated that the number of similarities between Nakamoto and Szabo's writing was ‘uncanny.' They went on to explain how none of the other matches they looked at came close to matching Nakamoto the way Szabo's had done.

Although there might have been other contributors to the creation of Bitcoin, Nick Szabo was the primary author who wrote the white paper for Bitcoin.

Even though the evidence continues to point to Nick Szabo's as the man behind Satoshi Nakamoto, the truth is, no one knows for sure. The identity of Satoshi remains a mystery.

The Reigning Titan

The personal life of Nick Szabo may be an enigma. However, his work places him on the top of the blockchain technology. His blog continues to be one of the most influential sites on cryptocurrencies, ledger technology, history of law as well as commerce and cryptography.

He will remain the go-to guy and continue to make people stop and listen when it comes to anything related to cryptocurrencies. As a reputable expert in computer science, Nick Szabo's legacy will live on forever.

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