27 December 2008

Nick Szabo discussed the implementation of his Bit Gold proposal

A photo representation of the Bitcoin event, Nick Szabo discussed the implementation of his Bit Gold proposal

The Bit Gold proposal, conceived by Nick Szabo, was a prescient blueprint for a decentralized digital currency that shared many fundamental concepts with what would later become Bitcoin. Although Szabo first proposed Bit Gold in 1998, it was on December 27, 2008, that he revisited the idea on his blog, discussing the potential implementation of his proposal.
 

Bit Gold was envisioned as a system for the decentralized creation of unforgeable chains of proofs-of-work, with each link in the chain being attributed to its discoverer’s public key, using timestamps and digital signatures. The idea was that these proofs-of-work would have value because they would be scarce, difficult to produce, and could be securely stored and transferred. Szabo’s theory on the economics of such money is described in his writings on the origins of money and property.
 

While Bit Gold was never implemented, its principles are remarkably similar to those of Bitcoin, which was released by an anonymous entity known as Satoshi Nakamoto just a month after Szabo’s blog post, in January 2009. Bitcoin also creates a chain of proofs-of-work that are computationally expensive to produce and are linked to the discoverer’s public key. Moreover, Bitcoin’s design addresses one of the vulnerabilities in the Bit Gold proposal: the susceptibility to Sybil attacks, by relying on a quorum of computing power rather than network addresses.

The timing of Szabo’s blog post and the release of Bitcoin has led to speculation about his involvement with Bitcoin, although Szabo has denied being Satoshi Nakamoto.


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