User:Dusan Barok/Bitcoin bits, trivia and anecdotes: Difference between revisions

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This document includes notes from my research on Bitcoin, the peer-to-peer currency (May-July 2011). The structure resembles Wikipedia article, but the content does not at all serve purpose of presenting the coherent image of Bitcoin technology, nor community. I included things and anecdotes which are not widely known, or which i simply found interesting for my writing ([[User:Dusan_Barok/Bitcoin:_censorship-resistant_currency_and_domain_name_system_to_the_people|you can read it here]]). For futher reference see [[#Resources|Resources]] section.
This document includes notes from my research on the peer-to-peer currency Bitcoin (May-July 2011). The structure resembles Wikipedia article, but the content does not at all serve purpose of presenting a coherent image of Bitcoin technology, nor its community. I included things and anecdotes which are not widely known, or which I simply found interesting for my writing ([[User:Dusan_Barok/Bitcoin:_censorship-resistant_currency_and_domain_name_system_to_the_people|you can read it here]]). For further reference see [[#Resources|Resources]] section.


Latest revision as of 00:32, 2 December 2013

This document includes notes from my research on the peer-to-peer currency Bitcoin (May-July 2011). The structure resembles Wikipedia article, but the content does not at all serve purpose of presenting a coherent image of Bitcoin technology, nor its community. I included things and anecdotes which are not widely known, or which I simply found interesting for my writing (you can read it here). For further reference see Resources section.


50 mil USD & 6 mil BTC & 20k users (5/2011). [3]

100 top Btc addresses own 30% of economy (2 mil BTC, 36 mil USD); 5 addresses are USD millionaires (6/2011). [4]

210.000 = 50 coins * 10 minutes (6 per hour) * 4 years. The number comes from the combinations of the initial block reward (50 coins), the target blocks per hour (6) and the halving period (4 years). There will be 10.5 million created in the first four year period, and then the reward will be halved while all other metrics remain the same. As the reward continues to half again with each four year period, the total number of coins issued will trend toward the mathmatical limit (as in a logrithmic) of 21 million. The numbers that define the outcomes are the initial reward, the target block interval, and the halving term. All of these were design decisions that resulted in the outcome of 21 million, not the other way around. [5]


  • Fiat money: money legalised by state by linguistic act; since 1971 when Nixon ended the backing of USD by precious metal.
  • Ponzi scheme: pyramidal financial games, since early 1900s.


The main properties [6]:

  • Double-spending is prevented with a peer-to-peer network.
  • No mint or other trusted parties.
  • Participants can be anonymous.
  • New coins are made from Hashcash style proof-of-work.
  • The proof-of-work for new coin generation also powers the network to prevent double-spending.

Nakamoto "Bitcoin's solution is to use a peer-to-peer network to check for double-spending. In a nutshell, the network works like a distributed timestamp server, stamping the first transaction to spend a coin. It takes advantage of the nature of information being easy to spread but hard to stifle. The result is a distributed system with no single point of failure. Users hold the crypto keys to their own money and transact directly with each other, with the help of the P2P network to check for double-spending." [7] (from 41:00 till end)

Byzantine Generals Problem

Two Generals Problem

Important in epistemic logic; and to understand the importance of common knowledge. Tought in introductions of computer networking (mainly TCP), but can be applied to other type of communication too. Generals are camping on the hills facing over the city they plan to attack. They have to communicate through messengers passing through the city where they can be caught. They must communicate with each other to decide on a time to attack and to agree to attack at that time, and each general must know that the other general knows that they have agreed to the attack plan. Because acknowledgement of message receipt can be lost as easily as the original message, a potentially infinite series of messages is required to come to consensus. Solutions via number of accepted messages don't work. Engineering solution: we must not eliminate uncertainty, but lower the risk of failure, so let's send 100 messengers, at least one has to come back. With this approach the first general will attack no matter what and the second general will attack, if any message is received. [8]

Byzantine Generals Problem (Byzantine Fault Tolerance)

Szabo: "Exercise about liars in government [..] The basic idea of a Byzantine fault tolerant protocol is that it is a highly distributed peer-to-peer protocol robust from a certain fraction or less of its participants lying about information originally observed or created by one or a small subset of them. The fraction varies based on various assumptions of the model, but common figures are 1/3 and 1/2 for information originating from one node assuming that node is truthful. If the fraction required for successful collusive lying is not achieved (and such an attack requires either informed negotiations occurring before this protocol step or negotiating the collusion in a single step, the latter possible to avoid by assuming fraud if messaging is abnormally delayed), the liars are detected and can be excluded from future participation in the network." [9]

BGP is an agreement problem (first proposed by Marshall Pease, Robert Shostak, and Leslie Lamport in 1980) in which generals of the Byzantine Empire's army must decide unanimously whether to attack some enemy army. The problem is complicated by the geographic separation of the generals, who must communicate by sending messengers to each other, and by the presence of traitors amongst the generals. These traitors can act arbitrarily in order to achieve the following aims: trick some generals into attacking; force a decision that is not consistent with the generals' desires, e.g. forcing an attack when no general wished to attack; or confusing some generals to the point that they are unable to make up their minds. If the traitors succeed in any of these goals, any resulting attack is doomed, as only a concerted effort can result in victory. [..] In 1999, Miguel Castro and Barbara Liskov introduced the "Practical Byzantine Fault Tolerance" (PBFT) algorithm, which provides high-performance Byzantine state machine replication, processing thousands of requests per second with sub-millisecond increases in latency. PBFT triggered a renaissance in BFT replication research, with protocols working to lower costs, improve performance, and improve robustness. [10]

Nakamoto's BGP rephrased: [11]

System enables majority consensus without requiring anyone to trust anyone else.


Nakamoto: In Bitcoin, "everything is based on crypto proof instead of trust." [12]

Bitcoin network works in parallel to generate a chain of Hashcash style proof-of-work. The proof-of-work chain is the key to solving the Byzantine Generals' Problem of synchronising the global view and generating computational proof of the majority consensus without having to trust anyone.

"We have earlier seen two proposed cryptocurrencies, and proof-of-work was one of the most common proposals to deal with the rising tsunami of spam. (Although ironically, proof-of-work never seemed to go into widespread use because of general inertia and because to deter large amounts of spam, proof-of-work would deter legitimate users under some models; spam seems to have been kept in check by better filtering techniques (eg. Paul Graham's "A Plan for Spam" using Bayesian spam filtering) and legal action against botnets & spammers.)" [13]

Free software

Very first bitcoin client v0.1 was for Windows only (open source C++). Linux version launched only on 17.12.09 [14]

Non-trust-based system (No third-party; No central authority)

Nakamoto: "You know, I think there were a lot more people interested in the 90's, but after more than a decade of failed Trusted Third Party based systems (Digicash, etc), they see it as a lost cause. I hope they can make the distinction that this is the first time I know of that we're trying a non-trust-based system."

"These ideas were in contrast to credit cards, ACH, Chaum's e-cash, PayPal, etc. that try to copy the characteristics of various kinds of paper money or credit and in particular rely on monolithic trusted parties." [15]


"While bitcoin addresses are randomly generated cryptographic signatures, not obviously associated with any one person, the entire block chain is publicly readable, and you can readily see transactions between any bitcoin address: [16]. Thus, 'anonymity' must be in quotes. Even if one follows the recommended practice of using a new bitcoin address for each transaction, statistical analysis can be performed on the public transaction data." [17]. Andresen: [18]

Jeff Garzik wrote that all Bitcoin transactions are recorded in a public log, though the identities of all the parties are anonymous, concluding that "Attempting major illicit transactions with bitcoin, given existing statistical analysis techniques deployed in the field by law enforcement, is pretty damned dumb". [19]

Matonis critises JGarzik: We should "resist digital money unless anonymous" and don't give up paper cash if the future is even more traceable and intrusive. Jgarzik wrongly stresses that Bitcoin is traceable and not anonymous, and that money can and should be used for identity tracking. [20]


Matonis: "The way things are being positioned by the [Bitcoin] establishment --- 'give up the privacy and untracability elements of the $100 bill and we will give you the nirvana of a digital, cashless society.' This is such bullshit! Bitcoin needs to be positioned as a way to restore financial privacy to the individual: 1. Secrecy does not equal concealment, but rather secrecy equals privacy; 2. Large-scale private value transfer should not be impeded across national boundaries (money laundering is a pejorative term); 3. Individuals should have freedom from confiscation and immoral tax levies; 4. Individuals should have freedom from money being used to track identity; 5. Individuals should have protection from the depreciating nation-State political currencies." [21]


Overpowering the network

Unk: "The attack is not expensive, nor does the fact that mining is profitable mean that a strategic attack on a valuable block chain won't be far more profitable. this neglect of the strategic value of an attack is the only well-known significant mistake in Satoshi's original paper, one that the analyst going by the name 'computerscientist' in various online forums has pointed out in detail." [22]

Nakamoto: "Even if a bad guy does overpower the network, it's not like he's instantly rich. All he can accomplish is to take back money he himself spent, like bouncing a check. To exploit it, he would have to buy something from a merchant, wait till it ships, then overpower the network and try to take his money back. I don't think he could make as much money trying to pull a carding scheme like that as he could by generating bitcoins. With a zombie farm that big, he could generate more bitcoins than everyone else combined. The Bitcoin network might actually reduce spam by diverting zombie farms to generating bitcoins instead." [23]

Nefario: "We suspect that within the next 6 months many if not most bitcoin exchangers will be shutdown by various authorities around the world." (6/2011) [24]


Bitcoin's feature: mining is not in feedback with supply. "Unlike gold, where the cost of mining effort is relatively stable and the market price fluctuates around it, in case of BitCoin, mining effort follows market price without any feedback. If gold becomes too expensive, more effort will be put into mining thereby increasing supply, while if gold price falls, people stop mining. With BitCoin, there is no such feedback: no matter how much effort is put into BitCoin mining, the rate at which BitCoins emerge is near constant." [25]

jgarzik's CPU miner: [26]. Making use of the new 'getwork' RPC command. Intended largely to demonstrate a 'getwork' miner. It is written in straight C, with minimal dependencies (libcurl, jansson). Getwork or Share Efficiency is defined as: (The # of getwork requested) / (The number of submitted shares) * 100.


Btc client is released under MIT license. The FSF acknowledges that the MIT license is compatible with the GPL. You can fork an MIT project into a GPL project if you like, after which your GPL fork is copyleft.

Ideas and properties

Financial crisis

Nakamoto included information in the Genesis Block that pointed to The Times article “Chancellor Alistair Darling on brink of second bailout for banks” as a clue to his motivations for creating Bitcoin. [27]

All Bitcoin technology ingredients were in place 8-12 years before Nakamoto's publication. Financial crisis in 2008 occurred to be ideal opportunity to launch the system.


Nakamoto: “[we will not find a solution to political problems in cryptography,] but we can win a major battle in the arms race and gain a new territory of freedom for several years.”


Nakamoto: "Governments are good at cutting off the heads of a centrally controlled networks like Napster, but pure P2P networks like Gnutella and Tor seem to be holding their own." [28]


Szabo: "There's nothing like Nakamoto's incentive-to-market scheme to change minds about these issues. :-) Thanks to RAMs full of coin with 'scheduled deflation', there are now no shortage of people willing to argue in its favor." [29]

Falkvinge: "The total money supply in the world is about 75 trillion US dollars. Estimates say that between 5% and 30% of this supply is in the black market with illicit work and services. Let’s be conservative and pick 5%; let’s assume cautiously that four trillion US dollars worldwide is in the black market. [..] That brings us to 15% out of 10% out of four trillion USD, coming to 60 billion USD that will enter the bitcoin system in cautious estimates. I expect those savings to get three more zeroes after them in three to four years." [30]

Gwern: "It may be that Bitcoin’s greatest virtue is not its deflation, nor its microtransactions, but its viral distributed nature; it can wait for its opportunity. 'If you sit by the bank of the river long enough, you can watch the bodies of your enemies float by.'" [31]

Long tail

Finney: "Bitcoin seems to be a very promising idea. I like the idea of basing security on the assumption that the CPU power of honest participants outweighs that of the attacker. It is a very modern notion that exploits the power of the long tail." [32]

Pure money

Andresen: "Bitcoin is really a pure money. It's a store of value and a means of exchange and that's all it is. It's almost a plutonic ideal of what money is, in that there is nothing backing it beyond the fact that it's useful as a money." [33]


Bitcoin-specific stock exchange

Bitcoin-speficic stock exchange: Conventional stock exchanges are available only to corporations big enough to go public, while small businesses must usually be bought out, either entirely by big businesses or partially by big angel investors and venture capitalists. This encourages aggregation of business ownership into centralized elites. On the GLBSE, in contrast, there is no regulation and thus no minimum size. Thus, the stock exchange replaces not only the function of exchanges like the NYSE and NASDAQ, but also venture capitalism; small businesses, just like large ones, would be able to take advantage of public investment, allowing innovative new businesses to far more easily attack entrenched monopolies with huge economies of scale keeping them in power. This creates quasi-mutualism rather than big-business-capitalism. Mutualism is a 150-year old economic philosophy which describes a type of society in which economic activity is done entirely bottom-up, with no big business or government interference, and where the means of production are controlled by individuals and, where necessary, cooperatively run factories. There are few regulatory differences between mutualism and big-business capitalism; they can both occur in a society without regulation. The difference between the two is divisibility. Proudhon (first person to call himself an "anarchist") @ Theory of Property, 1862: 'Imagine now that property and all the domains of the nobles could be divided and sold like chunks of beef, that they enter into an exchange and are paid for with products, since they are nothing but products: soon you would see inequality decrease, and property, by the same quality it had to monopolize, become an institution of equalization.' It is divisibility that is the difference between property ownership leading to accumulation in the hands of the few, and therefore oligarchy and despotism, and property ownership leading to equality, and a stock exchange embodies the very definition of divisibility." [34]


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Poll: Which of these most closely resembles your political position? [35]

  • Anarcho-Capitalist - 31 (40.8%)
  • Left-Wing Anarchist - 9 (11.8%)
  • Classical Liberal - 6 (7.9%)
  • Socialist - 11 (14.5%)
  • American Liberal - 4 (5.3%)
  • American Conservative - 1 (1.3%)
  • Other (please specify) - 10 (13.2%)
  • Apolitical/Non-Ideological - 4 (5.3%)

Total Voters: 76


  • 1979: Hash tree
  • 1980: public key cryptography. (This is Satoshi's citation date; Diffie-Hellman, the first published system, was in 1976, not 1980.) [36]
  • 1991: cryptographic timestamps
  • 1992-1993: Proof-of-work for spam ("Pricing via Processing, Or, Combating Junk Mail, Advances in Cryptology", Dwork 1993, published in CRYPTO'92)
  • 1999: Byzantine-resilient peer-to-peer replication
  • 2001: SHA-256 finalized. [37]
  • 2002: HashCash. proof-of-work system designed to limit email spam and denial of service attacks. 3/97 (pdf says 2002?!) by Adam Back. [38]
  • August 18, 2008
    • registered, via (helsinki),
  • August 19, 2008
    • registered, via Administrative Contact:, 1-3-3 Sakura House, Tokyo, TOKYO 169-0072, JP [39] [40]
  • October 31, 2008
    • Bitcoin design paper published. From: Satoshi Nakamoto <satoshi <at>>; Subject: Bitcoin P2P e-cash paper; Newsgroups: gmane.comp.encryption.general; "The paper is available at:". Nakamoto: "I had to write all the code before I could convince myself that I could solve every problem, then I wrote the paper. I think I will be able to release the code sooner than I could write a detailed spec." [41]
  • Nov 1, 2008
  • November 09, 2008
    • Bitcoin project registered at
  • January 3, 2009
    • Genesis block established at 18:15:05 GMT; includes link to article "The Times 03/Jan/2009 Chancellor on brink of second bailout for banks."
  • January 9, 2009
    • bitcoin v0.1, Windows only [44] + discussion
  • January 10, 2009
    • Hal Finney, author of RPOW, tests Btc v0.1.0 [45]
  • January 11, 2009
  • February 11, 2009 and on
    • Satoshi on p2p-research list, hosted by Bauwens [46]
  • December 2009
  • community moves from Btc Sourgeforge mailing list to Btc forum,
  • December 16, 2009
    • Bitcoin v0.2 released
  • December 30, 2009
    • First difficulty increase at 06:11:04 GMT
  • February 6, 2010
    • Bitcoin Market established
  • February 24, 2010
    • Nakamoto makes new bitcoin logo [47]
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  • May 22, 2010
    • Laszlo first to buy pizza with Bitcoins agreeing upon paying 10,000 BTC for ~$25 worth of pizza courtesy of jercos
  • July 7, 2010
    • Bitcoin v0.3 released
  • July 11, 2010
  • July 17, 2010
    • MtGox exchange established
  • July 18, 2010
    • ArtForz generated his first block after establishing his personal OpenCL GPU hash farm
  • August 15, 2010
    • Value_overflow incident
  • September 14, 2010
    • jgarzik offered 10,000 BTC (valued at ~$600-650) to puddinpop to open source their windows-based CUDA client
  • September 18, 2010
    • puddinpop released source to their windows-based CUDA client under MIT license
  • September 29, 2010
    • kermit discovered a microtransactions exploit which precipitated the Bitcoin v0.3.13 release
  • October 01, 2010
    • First public OpenCL miner released
  • October 04, 2010
    • Original Bitcoin History wiki page (this page) established (ooh so meta) on's wiki.
  • October 28, 2010
    • First bitcoin short sale transaction initiated, with a loan of 100 BTC by nanotube to kiba, facilitated by the #bitcoin-otc market.
  • November 6, 2010
  • November 9, 2010
    • EFF adds btc on their "ways to help" page
  • November 14, 2010
    • Bitcoin And The Electronic Frontier Foundation [48]
    • Hacker News: EFF Begins Accepting Anonymous Donations via Bitcoin [49]
  • December 5, 2010
    • Satoshi makes a plea to Wikileaks not to try to use Bitcoin [50]
  • December 7, 2010
    • Bitcoind was compiled for the Nokia N900 mobile computer by doublec. The following day, ribuck sent him 0.42 BTC in the first portable-to-portable Bitcoin transaction.
  • December 9, 2010
    • The generation difficulty passed 10,000.
    • First bitcoin call option contract sold, from nanotube to sgornick, via the #bitcoin-otc market.
  • December 11, 2010
  • December 12, 2010
    • Nakamoto's last post at Bitcoin Forum. [51]
    • Slashdot: WikiLeaks, Money, and Ron Paul [52]
  • December 14, 2010
    • EFF's call to action [53]
  • December 16, 2010
    • Rainey Reitman/EFF (activism director) talks in SF Wikileaks rally about Dot-P2P, Tor, Bitcoin, [54]
    • Bitcoin Pooled Mining, operated by slush, found its first block
  • January 2, 2011
    • Tonal BitCoin units standardized.
  • January 8, 2011
    • Bitcoin Pooled Mining reached a total of 10,000 Mhash/s
  • January 20, 2011
  • January 27, 2011
    • Largest numeric value ever traded for bitcoins thus far occurred on this date. Three currency bills from Zimbabwe, known as Zimdollars, were traded on #bitcoin-otc at the rate of 4 BTC for each of the one-hundred trillion dollar ($100,000,000,000,000) Zimbabwe notes (Serial numbers for Zimdollars sold: AA1669317, AA1669318 and AA1669319)
  • January 28, 2011
    • Block 105000 was generated. This means that 5.25 million bitcoins have been generated, which is just over one-quarter of the eventual total of nearly 21 million.
  • February 9, 2011
    • Decimal Bitcoin reached parity with the US dollar, touching $1 per BTC at MtGox.
  • February 10, 2011
  • February 14, 2011
  • Feb?, 2011
    • David Forster, 29, convinced his parents Jim and Nancy, owners of Green Hill Alpacas in Haydenville, Mass., to accept Bitcoins for alpaca socks. Technically, the younger Forster buys the socks for dollars and resells them for Bitcoins. "They said it sounded like a Ponzi scheme but that as long as I wasn't risking their money for Internet coins it was fine," he says. Sock sales have risen to between 75 and 100 since the experiment began from four dozen during all of last year and orders have come from as far as Finland and Russia. More remarkable is what has happened to pricing. Forster began charging 75 Bitcoins for each pair in February and has since had to lower the price to 5 due to extreme appreciation in the currency's value. "I wish I had kept all of them," says Forster, who traded his Bitcoins on the way up for cash and web services.
  • March 6, 2011
  • March 18, 2011
    • BTC/USD exchange rate reaches a 6-week low point at almost $0.70/BTC, after what appeared to be a short burst of, possibly automated, BTC sales at progressively lower prices. BTC price had been declining since the February 9 high.
    • article in Slate
  • March 25, 2011
    • Difficulty decreased nearly 10%. A decrease has only occurred once before, and this decrease of nearly 10% was the largest.
    • article in Gizmodo
  • March 26, 2011
    • Britcoin launched
  • March 27, 2011
    • The first market for exchanging bitcoins to and from the British Pound Sterling BTC/GBP, Britcoin, opens.
  • March 31, 2011
    • The first market for exchanging bitcoins to and from Brazilian Reals, Bitcoin Brazil, opens.
  • April 5, 2011
    • The first market for exchanging bitcoins to and from the Polish złoty,, opens.
  • April 12, 2011
    • First bitcoin put option contract sold via the #bitcoin-otc market.
  • April 16, 2011
  • April 18, 2011
    • First version of namecoin, [56]. Nakamoto's mentions it 12/10: [57]. How it works: [58], [59]. .bit won the poll: [60]
  • April 20, 2011
  • April 23, 2011
    • BTC/USD exchange rate reaches and passes parity with the Euro (EUR) on MtGox exchange.
    • BTC/USD exchange rate reaches and passes parity with the British Sterling Pound (GBP) on MtGox exchange.
    • Value of the Bitcoin money stock at current exchange rate passes $10 million USD threshold.
    • First tweet @namecoin (by community member Sgornick)
  • April 27, 2011
    • VirWoX opens first market to trade bitcoins against a virtual currency on BTC/SL (Second Life Lindens) exchange.
  • April 28, 2011
    • Block 120,630 is first to be mined using split allocation of the generation reward.
  • April 29, 2011
    • First .bit DNS server
  • April 30, 2011
    • The generation difficulty passed 100,000.
  • May ??, 2011
    • GLBSE - bitcoin stock market launched; first 2 legitimate assets being traded: UBX (Ubitex), an in-person Bitcoin exchange, and DISHWARA, a mining company. UBX: The idea is for users to enter their locations, as well as a buy or sell order for bitcoins and a maximum distance. If two users have compatible orders and are close enough to each other, Ubitex connects the two together, taking in a 0.5 BTC fee from the seller. [61]
  • May 10, 2011
    • The exchange rate at MtGox touched 6 USD per BTC.
  • May 17, 2011
    • Ben Laurie: Bitcoin is nothing new. There are cheaper ways than #proof-of-work to limit supply. [62] [63]
    • Adam Cohen's answer to [64] which was elegantly refuted by Sean Lynch and Brandon Smietana
    • Victor Grishchenko's critical piece on bitcoin, which was slowly negated on the Bitcoin Forum. [65]
  • May 18, 2011
    • 500 .bit domains reserved
  • May 25, 2011
    • Technology Review: What Bitcoin Is, and Why It Matters, [66]
  • May 27, 2011
    • Gwern, "Bitcoin is Worse is Better". [67]
  • May 28, 2011
    • Nick Szabo, "Bitcoin, what took ye so long?". [68]
  • May 29, 2011
    • Falkvinge: Why I’m Putting All My Savings Into Bitcoin [69] Probably 80,000$ around 20.5.; even took a loan to buy more bitcoins. interview. "Investing was as much a financial decision as it was a political statement and provocation." "Legal weaknesses are largely irrelevant for P2P networks."
  • May 31, 2011
  • June 2, 2011
    • BTC hits $10.
  • June 3, 2011
    • Gawker, Wired, Forbes, ..: Silkroad: Amazon for drugs [73] [74] [75]
  • June 3, 2011
    • Yahoo! Finance: The Currency That's Up 200,000 Percent [76]
  • June 5, 2011
    • 100 top btc addresses own 30% of economy (2 mil BTC, 36 mil USD); 5 addresses are USD millionaires [77]
    • slush on Czech news TV, od 14:00
  • June 6, 2011
    • FT Alphaville: Virtual money, from real central bank mistrust [78]
    • LulzSec, "Someone just sent over $7200 worth of BitCoins. Whoever you are... thank you... Balance: 7853.35 USD." [79]
  • June 7, 2011
    • jgarzik about Btc and Silkroad on CBS [80]
    • moved to hosting, which unfortunately doesn't support https. [81]
  • June 8, 2011
    • Btc hits $20 at MtGox (someone bought 5000 btc in 4 transactions in several minutes)
    • Senators seek crackdown on "Bitcoin" currency, [82]
    • TradeHill currency exchange launched (company based in Chile). by Jered Kenna.; [83]; [84]
    • Ars Technica: Bitcoin: inside the encrypted, peer-to-peer digital currency [85]
    • "Senators draw a bead on BitCoin. Shock: people buy drugs with currency" [86]
  • June 9, 2011
    • Wikileaks approves of Bitcoin and Namecoin. "Namecoin and Bitcoin will be revolutionary see "Orwell's Dictum"" [87]
    • Wall Street Journal: Bitcoin: On Line Currency Taking Off [88]
    • Spiegel Online reports on Schumer, Silk Road and Bitcoin (the 3rd time in 10 days). [89]
  • June 10, 2011
    • LulzSec Hackers Using Digital Currency: DEA Crackdown Soon? [90]
    • Falkvinge about Bitcoin on Keiser Report [91]
    • DailyTech: Digital Black Friday: First Bitcoin "Depression" Hits [92]
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  • June 11, 2011
    • mtgox usd rate storm. from 21 down to 14, then back to 20, now at 17.. mtgox was saying hello to tradehill, which appeared only a couple of days ago and which had a 'stable' USD rate bwn 19 and 17... now they have pretty much synced...
    • Blackmarket started. "TOS": You can sell or buy whatever you want. You're sole responsible for what you sell or buy. Feedback is EVERYTHING there. [93]
    • LulzSec claims responsibility for Bitcoin Flash Crash - dumps 17,000BTC. "@LulzSec: BitCoins dropped from 32 to 11 in the last 24 hours, I wonder why? Bwahahaha." [94] "@LulzSec: Spot the lulz: [95]." [96]. Is Lulzsec partly to blame for the bitcoin crash? [97]. 17000 BTC from 240 accounts [98]. "Look at MtGox trade data a bit after 12PM UTC today and prepare to be amazed... Someone cashed out nearly a quarter million USD" [99]. jgarzik: "Those coins in the LulzSec tweet have not been spent (ie. not sent to mtgox etc.). The coins have not been sold, therefore those sales did not crash the market. Either they are taking credit for someone else's coin transfer, or they hacked into a miner and stole their wallet" [100].
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  • June 12, 2011
    • Falkvinge: "Wow, #bitcoin is really a daytrader's wet dream. Doubles from 16 to 32, thirds from 32 to 10, and doubles again to 20 - in less than a week" [101]
    • Guardian: Bitcoin: the hacker currency that's taking over the web. [102]
    • MtGox freezes bwn 4.30-8.30pm UTC
  • June 13, 2011
    • slush's ddos'd
    • The Economist: Virtual currency: Bits and bob [103]
  • June 14, 2011
    • Amir Taaki answers readers' questions on Slashdot, [104]
    • Gavin Andresen talk at emerging tech conf at CIA (paid $3000 fee), [105], [106]
  • June 15, 2011
  • June 17, 2011
    • Technology review: "Crypto-currency Security under Scrutiny", [109]
  • June 19, 2011
    • MtGox - Leaked information includes username, email and hashed password.One account with a lot of coins was compromised and whoever stole it (using a HK based IP to login) first sold all the coins in there, to buy those again just after, and then tried to withdraw the coins. The $1000/day withdraw limit was active for this account and the hacker could only get out with $1000 worth of coins. Due to the large impact this had on the Bitcoin market, we will rollback every trade which happened since the big sale, and ensure this account is secure before opening access again. We will address this issue too and prevent logins from each users. Leaked information includes username, email and hashed password, which does not allow anyone to get to the actual password, should it be complex enough. If you used a simple password you will not be able to login on Mt.Gox until you change your password to something more secure. If you used the same password on different places, it is recommended to change it as soon as possible. [110]
  • June 20, 2011
    • MtGox is still down, Bitcoincharts blank
    • EFF: EFF and Bitcoin [111]
    • Technology Review: "An Insecure Economy Built on a Super Secure Currency", [112]
  • June 22, 2011
    • Guardian: Bitcoins: What are they, and how do they work? [113]
  • June 23, 2011
    •, Bitcoin Bank announced. "This is the first bitcoin wallet that actually pays interest, hence looking more and more like a bitcoin bank. The site mines for bitcoins, anything found is then distributed to the account holders that have a positive balance of bitcoins in their account." [114]
  • June 24, 2011
    • Sydney Morning Herald: Mine your machines: ABC probes security breach [115]
  • July 3, 2011
  • August 18-21, 2011
    • NYC org by Bruce Wagner


Satoshi Nakamoto

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Stayed anonymous, never posted anything in Japanese. His PGP key was created just months prior to the date of the genesis block. Seems to be very familiar with the cryptography mailing list, but there are no non-Bitcoin posts from him on it. He has used an email address from an anonymous mail hosting service (vistomail) as well as one from a free webmail account ( and sends mail when connected via Tor. In 12/2010 disappeared from Btc forum. [116] [117]

"If you read his posts and code carefully and have some sense of these things, the impression you get is that Satoshi is likely an Oxbridge-educated computer scientist, maybe a graduate student or lecturer at a British university (or, marginally less likely, someone in industry with a bit of time on his hands. possibly Google, since some Googlers, depending on their circumstances, don't work very hard). It's very unlikely that he's American or Australian. It's inconceivable he's natively Japanese, at least without having emigrated very early. Also, i doubt he's quite a libertarian, and he wasn't generally distracted by Austrian-school ideology. I recall many times where he cut through various common misinterpretations of menger, for example, but not from the perspective of someone grounded deeply in economic terminology or fallacies. Rather, he just called it out or ignored it as inapplicable to the questions he was answering. (The particular monetary policy behind Bitcoin doesn't seem ideological but, rather, based in marketing and a sense of what would promote adoption. Indeed, early messages from Satoshi suggest that Bitcoin's appeal to libertarians was largely a marketing manoeuver.)" [118]

Speculation: is this him? [119] (date corresponds with the work on Btc), [120]

Project developers

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Project lead, Gavin Andresen [1]
  • Satoshi Nakamoto (id 3 at Bitcoin Forum)
  • Gavin Andresen (224), Amherst/MA; Clearwing company;,, Clearcoin; [121] interview
  • Martti Malmi (4), aka sirius-m, Bitcoin Web Developer, installed Btc forums and wiki at (13.6.09), made Btc Linux client (12/2009)
  • Amir Taaki (1931), aka genjix, UK
  • Pieter Wuille
  • Nils Schneider
  • Jeff Garzik (8866)


Early adopters

Beta testers from Bitcoin mailing list

  • Hal Finney (2436), 10.1.09, [123]
  • Dustin D. Trammell, +-16.1.09
  • Nicholas Bohm, +-25.1.09, Salkyns, Great Canfield, Takeley, Bishop's Stortford, UK
  • Jeff Kane, +-30.1.09
  • Martti Malmi (4)
  • Tyler Gillies, *15.8.09,
  • Liberty Standard, +-23.10.09 (flagged on forum)
  • Mike Hearn, +-24.10.09
  • Eugen Leitl, +-26.10.09,,,
  • Dan Mahoney, *21.5.10, system admin,, "i plan on accepting bitcoin currency for web-hosting that I run, because it sounds cool."

Old times (late 2009), [124]

Forum users

  • 3 satoshi, admin, *19.11.09, last 13 dec 10
  • 4 sirius, admin, Btc client developer (see above), Martti Malmi, *20.11.09, FI, active, owner of Bitcoin Exchange, owns the server that is hosted on
  • 6 nandnor, newbie, *4.12.09, last 5 june 10, 3 posts
  • 10 Xunie, global moderator, *9.12.09, active
  • 11 madhatter, newbie, *9.12.09, last dec 09, 1 post
  • 12 nanaimogold, full member, Shane Smith, *9.12.09, active;, Nanaimo/CA - Nanaimo Gold Digital Currency Exchange, trades with 7 digital currencies, exists since 2005 already??, "not affiliated with any of these payment systems mentioned."
  • 13 SmokeTooMuch, hero member, *10.12.09, active, DE, @2009: "back then it felt like listening to some technology-socialist-anarchist-liberalist gurus."
  • 14 The Madhatter, hero member, *10.12.09, active,
  • 16 xuO4k04c6Ng, newbie, *12.12.09, last july 10, 1 post
  • 17 The Doctor, newbie, *18.12.09, active, sysadmin @ DC/US, part of HacDC hackerspace DC/US, 1 post, blog:,
  • 21 AgoraMutual, newbie, *1.1.2010, last jan 11, 9 posts, US
  • 22 RogerRabbit, newbie, *12.1.2010, last jan 11, 10 posts
  • 24 dwdollar, global moderator, *15.1.2010, active,
  • 26 NewLibertyStandard, sr. member, *19.1.2010, last mar 11, Valentina Izmailova (possibly fraudulent) and IP (possibly proxy) steals money from friendly Bitcoin users by stealing your email password by sending a message with the subject "Your account will be suspended".
  • 27 riX, jr. member, *20.1.2010, active, SW
  • 30 BitcoinFX, full member, *1.2.2010, last oct 10, - Independent Bitcoin Exchange Service.
  • 33 m0mchil, full member, *5.2.2010, active, POCLBM - python OpenCL bitcoin miner
  • 143 laszlo, global moderator & full member, 22.5.10 bought pizza from Jercos for 10k Btc [125]
  • 224 Gavin Andresen, admin, Btc client developer (see above)
  • 338 mizerydearia (aka necrodearia), Milwaukee/WI, author/coder of, IRC Bitbot, Stats Control Panel, MtGox Market Bot,, and the Bitcoin Gentoo Ebuild; interview
  • 489 mtgox, full member, *7.2010, inactive (as of 3/11), Jed, 6.3.11 sold to MagicalTux [126]
  • 490 ByteCoin; pro Btc alternative
  • 491 kiba, (1 of 3); organised pledge and letter to EFF; [127], (TODO manager with RPG elements)
  • 904 zooko, Zooko O'Whielacronx, twice failed in deploying DigiCash, in 11/2008 tried third time. p2p-hackers list (since 6/2006, did not exist as of 4/2009); develops Tahoe-LAFS secure decentralised filesystem (praised by EFF)
  • 1598 bitcoinex, hero member, *7/2010, RU, owns bitcoinex and its btcex exchange, ~11.5.11 DDos'd MtGox exchange, "By the way, I am announcing collecting donations for the ddos of mtgox for decreasing exchange rates!" [128]
  • 1931 genjix, Amir Taaki, hero member, Btc client developer; (1 of 3); Britcoin (*26.3.11); [129]; writings;; talks esperanto (; game developer; studied computer animation, [130]
  • 1954 Wei Dai, author of B-money, [131]
  • 1986 matonis,, "I am an Austrian School economist from George Washington University focused on expanding the circulation of nonpolitical digital currencies. My career has included senior influential posts at Sumitomo Bank, VISA, VeriSign, and Hushmail."
  • 2033 Bruce Wagner, Sr. member, *10/2010, NYC;;; [132]; 11/2010 organised Btc NYC meetup
  • 2134 MagicalTux, full member, Mark Karpeles, born ~1986, *11.2010, Tokyo/JP, 6.3.11 bought from id MtGox ("Jed is still looking over us for now"); involved in, KalyHost webhosting and vps; K.K. Tibanne (Japanese company, since 2009); /; owns domain;; "Here in Japan I pay taxes on bitcoin income based on the equivalent JPY value at date of sale." interview; as of 3/2011 works on QBitcoin (Qt-based C++ bitcoin client written to provide a better API and internals) which is planned to be launched in 1-2/2012(?!)
  • 2167 slush, Marek Palatinus, - first mining pool of its kind
  • 2436 Hal, Hal Finney, author of RPOW; "I started using Bitcoin the first day. Satoshi sent me 10 btc within a day or two" [133]
  • 2538 mndrix, Michael Hendrix, (suspended after Paypal’s action against his account), (converts Bitcoins into PayPal payments and pizza),,; interview
  • 3046 Nefario, global moderator & hero member, (Doctor) Nefario, founder of BitcoinGlobal & CEO (first btc company), GLBSE founder & coder, Bitdrop; owns, [134]; interview; "i'm sth of a cypherpunk"; discovered Btc in 10/10; teaches English @ uni in China; 6/2011: "there are about 5 people other than myself working for BitcoinGlobal, with roughly 10 persons as shareholders including myself"; 6/2011: "working beginning on and CryptoCloud over the next few weeks"; CryptoCloud "is to be a cloud based computing platform (ala. Amazon AWS) that is hidden in cypherspace (inside the darknets I2P or Tor) so that their location cannot become known."; "is to be the implementation of the anonymous exchange, requires CryptoCloud"; BitDrop: decentralised, package delivery service that's paid for with bitcoin; [135]
  • 3771 molecular, sr. member, DE, *1.2011,, [136]
  • 5856 Jered Kenna (Tradehill), *Tradehill (8.6.11) with two partners ("El Nino" from San Francisco's spanish BTC show; the other is professional developer); [137]
  • 7314 Vitalik Buterin, *3.2011, newbie, Toronto/CA, Abelard School student, staff writer, wrote about GLBSE and new capitalism
  • 8866 xf2_org, jgarzik, Btc client developer (see above),, Btc is not anonymous and we need to collaborate with state;;;; [138]
  • 8872 cuddlefish, creator of Ubitex (one of two first companies at GLBSE)
  • 9498 s; Btc is vulnerable to attacks
  • 9552 vinced, *Namecoin 18.4.11
  • 11756 backopy, *Blackmarket 11.6.11, [139]
  • 12472 unk; early miner; Btc is vulnerable to attacks
  • 14218 ComputerScientist; pro Btc alternative
  • 16131 jutajata, works on Brazilian exchange [140]
  • 18274 andes; pro btc alternative


Bitcoin users include Hal Finney (fan since 11/2008, user since 1/2009), Wei Dai (since 2/2011), Julian Assange (WikiLeaks accepts donations since 6/2011). Nick Szabo commented on Bitcoin extensively (first mention 5/2009).

Ben Laurie (; *Lucre; *Apache-SSL; founding director of Apache; in 1999 code his own ecash system): "If you are going to deploy electronic coins, why on earth make them expensive to create? That’s just burning money – the idea is to make something unforgeable as cheaply as possible. This is why all modern currencies are fiat currencies instead of being made out of gold." [141]. "Bitcoins are designed to be expensive to make: they rely on proof-of-work. It is far more sensible to use signatures over random numbers as a basis, as asymmetric encryption gives us the required unforgeability without any need to involve work. This is how Chaum’s original system worked. And the only real improvement since then has been Brands' selective disclosure work." Did not take into account the Btc's novelty of P2P architecture, and absence of central authority.

Accidental millionaires

Survey: Your total Bitcoin assets. [142]

Early miner video, [143], [144]

As of june 5 2011, 100 top btc addresses own 30% of economy (2 mil BTC, 36 mil USD); 5 addresses are USD millionaires [145]

"I make $30k/month thanks to Bitcoin. What should I do?" (owns 73k btc) [146]

Free software and free speech organisations accepting donations

Organisation Bitcoin community pledge Accepts bitcoin from Donated amount (as of 18.7.2011) Donation page Account
EFF [147] 8/2010 3500 removed [148]
Tahoe-LAFS 8/2010 240 [149] [150]
I2P [151] 12/2010 4300 [152] [153]
Riseup 1/2011 25 [154] [155]
Freenet 2/2011 540 [156] [157]
Torservers 4/2011 50 [158] [159]
FSF [160] 5/2011 320 [161] [162]
WikiLeaks 6/2011 400 + donations to one-time addresses [163] [164]
CCC not responding


EFF chairman found out about Btc from sirius (Martti Malmi, btc developer) in early august 2010. He liked the idea and forwarded it to colleagues.

Pledges for eff donations since 8/10 (to be donated as soon as someone act as escrow): [165] (in 9/10 there were 630 btc at escrow account).
Letter: [166].
Final letter sent 28.8.10: [167].
13.9.10 EFF writes back, they are interested.
7.10.10 EFF announced they will include Btc at their "ways to help" page ("it isn't possible to integrate it with our membership donation forms") [168].
4.11.10 Rainey Reitman joins EFF as Activist director. Free Bradley Manning & privacy activist.
9.11.10 Btc appeared at helpout page [169].
Summary: [170].
12/2010 EFF publicly mentions Bitcoin in connection to Wikileaks (call for action at their homepage and street rally). "It's shockingly simple to get bitcoin up and running on your computer." [171]
20.1.11 Reitman: Bitcoin - a Step Toward Censorship-Resistant Digital Currency: "Our cold hard cash is now shepherded through a series of regulated financial institutions like banks, credit unions and lenders. User can exchange Bitcoins directly with other users or merchants — without the currency being verified by a third party such as a bank or government. Current money systems now increasingly come with monitoring of financial transactions and blocking of financial anonymity. A peer-to-peer currency could theoretically offer an alternative to the bank practices that increasingly include sharing information on their customers who don't actively opt-out, and who may even then be able to share data with affiliates and joint marketers. [..] Bitcoin is particularly interesting in the wake of recent events that demonstrated how financial institutions can make political decisions in whom they service, showcased by the decisions of PayPal, Visa, Mastercard and Bank of America to cut off services to Wikileaks. Bitcoin, if it were to live up to the dreams of its creators, might offer the kind of anonymity and freedom in the digital environment we associate with cash used in the offline world." [172]. 25.5.11 Btc removed from EFF site: "we have determined that legal tender is the best way to help EFF support online civil liberties." [173], [174].
20.6.11 EFF announcement: "We don't fully understand the complex legal issues involved with creating a new currency system. Bitcoin raises untested legal concerns related to securities law, the Stamp Payments Act, tax evasion, consumer protection and money laundering, among others. And that’s just in the U.S." [175].

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LulzSec: "Someone just sent over $7200 worth of BitCoins. Whoever you are... thank you... Balance: 7853.35 USD #Speechless" [176] [177]


Nakamoto calls for not to donate BTC to WikiLeaks: "It would have been nice to get this attention in any other context. WikiLeaks has kicked the hornet's nest, and the swarm is headed towards us." (12/2010) [178] [179]

WikiLeaks 'approved' Btc and Namecoin on Twitter (9/6/2011)

Adoption and economy

Nakamoto: "It could get started in a narrow niche like reward points, donation tokens, currency for a game or micropayments for adult sites. Initially it can be used in proof-of-work applications for services that could almost be free but not quite." [180]


Bitcoin service Description Launch Operators exchange rates tracker transactions tracker articles Nefario sirius realtime view of mtgox trades/asks/bids btc wiki MagicalTux + Kiba + Genjix jgarzik free btc Andresen Andresen local btc exchange (enter GPS & negotiate via ubitex web interface) cuddlefish local btc exchange (enter ZIP code & negotiate via email) local btc exchange (enter city & negotiate via skype/phone/..) btc stock market Nefario MagicalTux mizerydearia btc exchange MagicalTux btc exchange decentralized, anonymous and open DNS system based on bitcoin or; first registrar, 1btc/domain) free public domain name system (DNS) service and transparent gateway to the world of Namecoins (forwards to wikileaks.bit) for tipping online content, accepts btc for tipping online content, accepts btc and usd auction auction crytographically anonymous bitcoin randomizer "pretty" URL for your Bitcoin address [181] upload any file, set a price for it and your customers can purchase access to the file immediately through bitcoin; 10% fee file sharing site. After uploading of the file you will be given bitcoin address where to send your invested bitcoins. Price to download will be set to amount you invested. You will get 70% share for each download. jobs *25.4.11 jobs A question and answer site powered by bitcoins *2/11 Send a message to a bitcoin user A buying service in which purchases through can be made and paid for using bitcoins & BTC-Economy database has indexed ~6000 items for sale from approximately 100 websites illegal items over tor btc shopping via "Instant Bitcoin Exchange" 8.6.11 Jered Kenna auctions shortcut for btc address
bitcoinex btc exchange bitcoinex
Britcoin btc exchange 26.3.11 genjix
Blackmarket 11.6.11 Backopy


Cypherpunk, Californian Ideology, and digital currencies


(via Steven Levy's book Crypto)

  • mid-1970s: public-key cryptography by Whitfield Diffie and Martin Hellman makes them heroes in crypto circles. Seminal historian of codes, David Kahn, argued that the Diffie–Hellman invention represented the most important development in cryptography since the Renaissance.
  • 1986 Shamir + 2 colleagues (all three Israelis): "zero-knowledge proofs of identity" [p210] -> applied for patent -> reply from US Army: threat to national security & abandon the research, but after involvement of NSA okayed (they were afraid scientists will stop submitting their ideas).
  • 1989 another ban on Merkle's scheme - paper submitted for NSA review by Xerox to NSA. Dealing with optimalisation of crypto computation (NSA censored due to S-box design mention). Xerox accepted, but 1 of NSA outside reviewers leaked the paper to hacker-millionaire Gilmore, who leaked it to sci.crypt Usenet group (8000 subscribers).
  • 1991 Zimmermann: *PGP => hero on the crypto scene: he created a tool for people, strong impulse to crypto community not only to talk, but to create software (eg. May & Hughes start Cypherpunks). First widely available program implementing public-key cryptography. Investigated by the Gov for 3 years. US Government had long regarded cryptographic software as a munition, and thus subject to arms trafficking export controls. At that time, the boundary between permitted ("low-strength") cryptography and impermissible ("high-strength") cryptography placed PGP well on the too-strong-to-export side (this boundary has since been relaxed).
  • 6/1997 US Supreme Court (ACLU vs Reno decision): CDA to be an unconstitutional violation of the First Amendment. The Court agreed with the ACLU and EFF that the law was too vague and therefore unnecessarily “chilled” protected speech. Of more lasting import, however, was the Court’s embrace of the concept of cyberspace and its apparent conferral of a special legal status for cyberspace communications.
  • 1998 US Gov claims authority over net (Green Paper after Postel's week-long 'test' and unsuccessful attempt of Internet Society to take over the domain authority away from Network Solution monopoly).
  • 2000 crypto community celebrates at the annual Crypto conference: Government stepped back and they can freely distribute crypto software outside US.

David Chaum (and DigiCash)

(via Steven Levy's book Crypto [p267])

  • Bearded, ponytailed, Birkenstocked cryptographer and businessman, was the former Berkeley graduate student raised in suburban Los Angeles in a middle-class Jewish family.
  • Since childhood fascinated with privacy hardware (locks and burglar alarms and safes), first computer security, then encryption.
  • The privacy revolution's Don Quixote, idealistically pursuing crypto liberation from Big Brother.
  • While at Berkeley in the late 1970s, he began building on the foundation of public key to create protocols for a world where people could perform any number of electronic functions while preserving their anonymity.
  • “I got interested in those particular techniques because I wanted to make [anonymous] voting protocols,” he says. “Then I realized that you could use them more generally as sort of untraceable communication protocols.”
  • The trail led to anonymous, untraceable digital cash.
  • paper “Numbers Can Be a Better Form of Cash Than Paper”: Verify authenticity of the bills - by unique numbers and merchant/bank can check if the bill was already spent. Anonymity via "blind signature" - bank releases numbered banknotes and user can change them, but it still includes stamp saying who issued the bill.
  • Another tale making the rounds was that Chaum made a last-minute veto of a deal with Visa that would have made Digicash the standard for electronic money.

The Cypherpunks

John Gilmore

(via Steven Levy's book Crypto [p261])

  • outspoken civil libertarian, created alt.* hierarchy @Usenet, contributor to GNU, 5th employee of Sun (till 1986; made a fortune), free software contributor, co-author of Bootstrap Protocol (later DHCP). [182]
  • gentle computer hacker with long thinning hair and a wispy beard.
  • co-founded EFF in 1990
  • 1991 conference “Computers, Freedom, and Privacy”: speech that anticipated the thoughts of May's and Hughes — a people's crypto movement to stave off the government: "What if we could build a society where the information was never collected? Where you could pay to rent a video without leaving a credit card or bank account number? Where you could prove you're certified to drive without giving your name? Where you could send and receive messages without revealing your physical location, like an electronic post office box? That's the kind of society I want to build. I want to guarantee — with physics and mathematics, not with laws — things like real privacy of personal communications ... real privacy of personal records ... real freedom of trade ... real financial privacy ... [and] real control of identification."
  • Particularly interested in making sure that information about crypto found its way into the public domain.

Tim May

(via Steven Levy's book Crypto [p258])

  • most authoritative political voice @ Cypherpunks.
  • Slim, bearded man who often wore an outback hat, he owned a small house cluttered with books, gadgets, and well-fed cats.
  • Physicist who had retired from Intel seven years earlier with a bundle of stocks. His major contribution at Intel had been his proof that quantum events — the meanderings of subatomic particles — could affect the calculations performed by semiconductor chips. May's discovery allowed Intel's designers to devise strategies to deal with this problem, enabling the steady progress of Moore's Law.
  • politicial libertarian: “I got converted by reading Ayn Rand as a kid”
  • He usually signed his e-mail with a hair-raising list of passions — “crypto anarchy, digital money, anonymous networks, digital pseudonyms, black markets, and collapse of governments”.
  • In the computer age, we create 'virtual regions', he would say. And the conduits and pipes of the future, the very mortar and walls of those virtual spaces, could be held up by nothing but crypto. Oh, God, May would burst out when speaking of this vision, it's so profound. There's nothing else! One-way functions like the ones exploited by Diffie, Merkle, and Rivest were the building blocks of cyberspace, he insisted, and if we don't use them we would be reduced to pathetic shivering creatures standing in the ashes of a virtual burned-out house. But with it, everything is imaginable. Secure conduits — untappable by the NSA! — from hackers in Los Gatos, California, to activists in St. Petersburg, Russia. Transactions beyond taxation. And an end to the nation-states. That was the coming revolution, according to Tim May.
  • wrote Cyphernomicon: He envisaged the future as an Ayn Rand utopia of autonomous individuals dealing with each other as they pleased. Before this future arrived, he advocated tax avoidance, insider trading, money laundering, markets for information of all kinds, including military secrets, and what he called assassination markets not only for those who broke contracts or committed serious crime but also for state officials and the politicians he called “Congressrodents”. In his future world only elites with control over technology would prosper. “The clueless 95%” – whom he described as “inner city breeders” and as “the unproductive, the halt and the lame” – “would suffer, but that is only just”.
  • While the overwhelming majority of cypherpunks were, like him, anarcho-capitalist libertarians, some were strait-laced Republicans, left-leaning liberals, Wobblies or even Maoists.

Eric Hughes

(via Steven Levy's book Crypto [p259])

  • Semilapsed Mormon from Virginia, Hughes had a long, wispy light-brown beard, aviator wire-rimmed glasses, and a cold, sarcastic wit.
  • Studied math at Berkeley, and worked for a company overseas for a while
  • His ultimate goal was combining pure-market capitalism and freedom fighting.
  • In his world view, governments — even allegedly benign ones like the United States — were a constant threat to the well-being of citizens.
  • Individual privacy was a citadel constantly under attack by the state
  • Hughes and May were an interesting combination, bound by scientific passion, political libertarianism, and a slightly unnerving paranoia. Hughes came down from north Bay Area search for flat in Santa Cruz, hung out at May's, they talked all three days, and started the Cypherpunks list when he got back. Iinspired by Zimmermann's PGP to develop a software, the tools that would arm the general public against cyberthieves, credit bureaus, and especially the government.

Mailing list

Wired magazine 2, 1993 [2]
  • List founders: Eric Hughes, Tim May, John Gilmore [183]
  • The origin
    • 19.9.92 first CASI meeting (cryptology amateurs for social irresponsibility). About 20 people attended, non-academic environment, many of them made a fortune in software development and were not dependent on their work in cryptography. Their politics were heavily libertarian; more than a few were also self-proclaimed Extropians. "Code rebels" for crypto anarchy. May prepared 57-page handout on “societal implications of cryptography,” “voting networks,” and “anonymous information markets,” => "A Crypto Anarchist Manifesto".
    • PGP 2.0 had been released only days before — and most in attendance were huge fans of the first version — much of the meeting was spent discussing Phil Zimmermann's latest effort, and copies were distributed to all in the room. (Zimmermann himself was still in Boulder.) The event turned into a key-swapping party, as everyone exchanged PGP public keys and signed one another's key ring.
    • Hughes started list-serv on Gilmore's server. In a couple of weeks it reached 100 subscribers and 150 mails a day.
    • After the meeting, Hughes wrote “a small statement of purpose” to explain what the group was about => "A Cypherpunk's Manifesto" which envisioned a home-brewed privacy structure that the government couldn't crack: "Cypherpunks write code. They know that someone has to write to defend privacy, and since it's their privacy, they're going to write it. Cypherpunks publish their code so that their fellow cypherpunks may practice and play with it. Cypherpunks realize that security is not built in a day and are patient with incremental progress. Cypherpunks don't care if you don't like the software they write. Cypherpunks know that software can't be destroyed. Cypherpunks know that a widely dispersed system can't be shut down.Cypherpunks will make the networks safe for privacy."
  • List about encryption (also known as cryptography, the science and art of secret writing).
  • (later shutdown 2001 by Gilmore) -> "distributed mailing list" -> (2003; 1 of forks, but primary successor, moderated + less zany + more technical)
  • 1992, peaked around 1997 (200 mails/day; 1000 subscribers)
  • 1993: three founders on the cover of 2nd issue of Wired masked by PGP keys. Features "Code Rebels" article by Steven Levy [184].
  • The general attitude, though, definitely put personal privacy and personal liberty above all other considerations.
  • Lot discussed also: anonymity, pseudonyms, censorship, monitoring, anti ban on export of crypto software, hiding the act of hiding (crypted msgs which act as noncrypted), code/software.
  • Gilmore: "I want a guarantee -- with physics and mathematics, not with laws -- that we can give ourselves real privacy of personal communications."
  • fork: Coderpunks, took up more technical matters and had less discussion of public policy implications
  • inspired: the "Cryptography" list (; the "Financial Cryptography" list (; small group of closed (invitation-only) lists as well. Also: PGP, /dev/random, Linux kernel, anonymous remailers
  • late 1997: decline of the list, following a meltdown over the question of the possible moderation of the list – censorship! – and the departure of John Gilmore.
  • 1999-2001 archive: ..
  • Neal Stephenson's Cryptonomicon (1999) novel is directly inspired by the list, and it is featured in the book.
  • cyberpunks who used cryptography (Ian Goldberg, Bram Cohen and Nikita Borisov)
  • subscribers: Adam Back (*Hashcash); Assange; Bram Cohen (*BitTorrent); Hal Finney (PGP2, RPOW); Rop Gonggrijp (Xs4all); Horowitz (PGP); Ben Laurie (Apache-SSL); John Young (Cryptome); Zimmermann (PGP); Zooko [185]
  • When some cypherpunks helped organize the first conference on financial cryptography, its location was a foregone conclusion: Anguilla, a small Caribbean island whose transactions laws were, to say the least, liberal.
  • May: BlackNet: “We consider nation-states, export laws, patent laws, national security considerations, and the like to be relics of the pre-cyberspace era.”
  • on Assange and cypherpunks: [186]

Jim Bell

(via Steven Levy's book Crypto)

  • Even more extreme cypherpunk of the libertarian Right than May, like an inverse Leninist, thought that history might need a push.
  • In mid-1995, drawing upon May’s recommendation of assassination markets, he began a series explaining his “revolutionary idea”, which he called “Assassination Politics”.
  • Bell devised a system in which citizens could contribute towards a lottery fund for the assassination of particular government officials. The prize would go to the person who correctly predicted the date of the death. The winner would obviously be the official’s murderer. However, through the use of public-key cryptography, remailers and digital cash, from the time they entered the competition to the collection of the prize no one except the murderer would be aware of their identity. Under the rubric “tax is theft” all government officials and politicians were legitimate targets of assassination. Journalists would begin to ask of politicians, “Why should you not be killed?” As prudence would eventually dictate that no one take the job, the state would simply wither away.
  • ended his 20,000 word series of postings with these words. “Is all this wishful thinking? I really don’t know!” A year or so later he was arrested on tax avoidance charges.

Libtech-l list

Started by Nick Szabo.

Szabo: "While the security technology is very far from trivial, the 'why' [to design decentralised currency] was by far the biggest stumbling block -- nearly everybody who heard the general idea thought it was a very bad idea. Myself [Nick Szabo, inventor of bit gold, 2001-5], Wei Dai, and Hal Finney were the only people I know of who liked the idea (or in Dai's case his related idea) enough to pursue it to any significant extent until Nakamoto (assuming Nakamoto is not really Finney or Dai). Only Finney (RPOW) and Nakamoto were motivated enough to actually implement such a scheme." [187] [188]

Nick Szabo

[189] [190].

Hal Finney


  • 1956, BS engineering, CA/US, 09 diagnosed with ALS (rare and serious neurological disease)
  • worked on PGP 2.0; till 2010 @ PGP Corp; digital cash, anonymous remailers.
  • praised Btc on btc list on 8.11.08; tested already v0.1.0, 10.1.2009, [192], [193]
  • "Unlike many early Cypherpunks, I never viewed cryptography as a gateway to a libertarian society. My goals are more modest but still worthwhile, I hope."

Wei Dai

[194] [195]

  • Singularity institute; wrote crypto++ library for C++
  • praised Btc (making money with computing & no third party) on his blog 16.2.11 [196]

Californian Ideology

  • Hippie New Left American counter-culture ideology: (1) anti-state (warlords & traditionalists); (2) McLuhanist techno-utopia = liberation.
  • Californian Ideology (anarcho-cybercapitalist ideology) = hippie New Left + neoliberal capitalism (which cannot be abolished):
    • (1) criticism of state (state = censorship, NSA, DNS control, access control)
    • (2) new technologies = tool of emancipation
    • (3) libertarian (personal liberties & private property), Jeffersonian (as in US independence from Europe), free market (while protects itself by state laws), neoliberal
    • (4) FLOSS = ?! (information wants to be free)
    • (5) cyberspace/virtual reality/Edge - independent from reality (what ignores the physicality of internet -- hardware, cables, human labour)

Arthur Kroker, Michael A. Weinstein: The Theory of the Virtual Class, 1994

Barbrook+Cameron: Californian Ideology, 1994/1995/1996

[197] [198]

  • ~ "West Coast cyber-libertarianism", "hippie capitalists", "West Coast anarcho-capitalists"
  • CI: mix of cybernetics, free market economics, and counter-culture libertarianism
  • CI mags&people: Wired and Mondo 2000 as well as the books of Stewart Brand, Douglas Rushkoff, Kevin Kelly and many others. But also: Negroponte, Gates, Dyson. Supported by ideologists: Toffler, Gilder, Peters.
  • CI followers (Wired readers): new faith has been embraced by computer nerds, slacker students, thirty-something capitalists, hip academics, futurist bureaucrats and even the President of the USA himself.
    • in EU: recent EU report recommended adopting the Californian free enterprise model to build the 'infobahn', cutting-edge artists and academics have been championing the 'post-human' philosophy developed by the West Coast's Extropian cult.
  • CI writings: amusing cocktail of Bay Area cultural wackiness and in-depth analysis of the latest developments in the hi-tech arts, entertainment and media industries.
  • CI politics: impeccably libertarian - they want information technologies to be used to create a new 'Jeffersonian democracy' in cyberspace where every individual would be able to express themselves freely.
  • CI vision: fatalistic vision of the natural and inevitable triumph of the hi-tech free market - a vision which is blind to racism, poverty and environmental degradation and which has no time to debate alternatives
  • CI gets it wrong (1): dreams about fictive world, ideological.
  • CI gets it wrong (2): ingores racism, poverty and environmental polution, because it's too busy with other things.
  • CI two visions of future:
    • Rheingold: anti-biz & anti-state: anti-corporate purity of the New Left has been preserved by the advocates of the 'virtual community'. According to their guru, Howard Rheingold, the values of the counter-culture baby boomers will continue to shape the development of new information technologies. Community activists will increasingly use hypermedia to replace corporate capitalism and big government with a hi-tech 'gift economy' in which information is freely exchanged between participants.
    • West Coast ideologues: fuck welfare..: embraced the laissez-faire ideology of their erstwhile conservative enemy. For example, Wired - the monthly bible of the 'virtual class' - has uncritically reproduced the views of Newt Gingrich, the extreme-right Republican leader of the House of Representatives and the Tofflers, wreho are his close advisors. Ignoring their policies for welfare cutbacks, the magazine is instead mesmerised by their enthusiasm for the libertarian possibilities offered by the new information technologies. Gingrich and the Tofflers claim that the convergence of media, computing and telecommunications will not create an electronic agora, but will instead lead to the apotheosis of the market - an electronic exchange within which everybody can become a free trader.
  • CI origins: McLuhan's new tech empowered individuals believing they are turning their nonconformist libertarian principles into political act. Media+computing+telecommunications => *electronic direct democracy, *electronic agora (total free speech, no censorship)
  • CI influenced by: technological optimism of the new left and the counter-culture. 'Virtual class': 'labour aristocracy', engineering specialists. '...the techno-intelligentsia of cognitive scientists, engineers, computer scientists, video-game developers, and all the other communications specialists...' (Kroker and Weinstein)
  • CI emerged from: an unexpected collision of right-wing neo-liberalism, counter-culture radicalism and technological determinism
  • CI gets it wrong (3): free market is a myth and anti-state attitude is fake. Barbrook: we need state.
    • 3a, even Silicon Valley computing initiated by massive support of state and public money
    • 3b, libertarian computer capitalists in CA joined state-sponsored cartel to fight Japanese taking over the American microchip market
  • CI hero: Jefferson - libertarian, while being one of the biggest slave-traders.
  • CI effect: another apartheid between the 'information-rich' and the 'information-poor' is being created. Rich white Californians need their darker-skinned fellow humans to work in their factories, pick their crops, look after their children and tend their gardens.
  • CI dream: "digital nirvana inhabited solely by liberal psychopaths". As neo-liberals, they assert that the will of the people, mediated by democratic government through the political process, is a dangerous heresy which interferes with the natural and efficient freedom to accumulate property. As technological determinists, they believe that human social and emotional ties obstruct the efficient evolution of the machine. Abandoning democracy and social solidarity, the Californian Ideology dreams of a digital nirvana inhabited solely by liberal psychopaths.
  • CI gets it wrong (4): claims universalism, but is created by is location-specific - West Coast's eclectic blend of conservative economics and hippie libertarianism.
  • 1792: FR revolucia: went beyond liberalism to democracy (republic as 'general will'). The state had to represent the interests of all citizens, rather than just protect the rights of individual property-owners.
  • EU hypermedia (good model): state intervention + capitalist entrepreneurship + d.i.y. culture

Louis Rossetto - reply to Cal Ideology (Wired editor-in-chief), 1995

[199] [200]

  • re:
    • criticism (1): (doesn't address)
    • criticism (2): the others are simply late-adopters: "Not haves and have-nots - have-laters".
    • criticism (3): High European taxes which have restricted spending on technology and hence retarded its development; state telco monopolies which have kept prices high and service bad, again impeding networking in business and the home; state-directed technology investment, which has resulted in the monopolization of risk capital, uniformly bad technology policy, and the squandering of resources and opportunities; social welfare policies which reward parasitical living rather than risk-taking; a truly attavistic, sick attachment to the compulsion and non-meritocratic elitism of statism as a way of life; and a kneejerk disdain for truly radical social and political thought which falls outside Euro PC dogma (read failed Marxist/Fabian) - have all retarded and will continue to retard Europeans.
    • criticism (4): (not directly, but positions it as US vs EU)

Barlow: "fuck them" => Declaration of Independence of Cyberspace, 2/1996


Barbrook - Hypermedia Freedom = re: Barlow's Declaration, 3/1996

[202] [203]

  • he casts himself as the new Thomas Jefferson calling the people to arms against the tyranny of Bill Clinton: "the great invertebrate in Washington". Claiming to speak "on behalf of the future", he declares that the elected government of the USA has no right to legislate over "Cyberspace, the new home of the Mind". Because "we are creating a world that is both everywhere and nowhere, but it is not where bodies live", Barlow asserts that cyberspace exists outside the jurisdication of the American or any other existing state. In cyberspace, only Net users have the right to decide the rules. According to Barlow, the inhabitants of this virtual space already police themselves without any interference from Federal legislators
  • Barlow gets it wrong: cyberspace cannot be separated from reality, there is still hardware and cables and human labour. Construction of the infobahn is an intensely physical act. It is flesh and blood workers who spend many hours of their lives developing hardware, assembling PCs, laying cables, installing router systems, writing software programs, designing Web pages and so on. It is obviously a fantasy to believe that cyberspace can be ever be separated from the societies - and states - within which these people spend their lives.
  • EFF was never just a campaign for cyber-rights. It was also a leading cheerleader for the individualist fantasies of the Californian Ideology
  • The spread of the new industrial technologies freed no slaves. On the contrary, the invention of the cotton gin and mechanical spinning machines actually reinforced the archaic and brutal institutions of slavery in the Old South.
  • CI's Jeffersonian Democracy is simply neo-liberal propaganda designed to win support for the privatisation of cyberspace from the members of the "virtual class".
  • any meaningful campaign for cyber-rights has to fight for freedom of expression against both state and market forms of censorship.
  • inherent contradiction of free speech: The political rights of each individual are circumscribed by the rights of other citizens. For instance, in order to protect children, the state has a duty to restrict the freedom of speech of paedophiles on the Net. Because ethnic minorities have the right to live in peace, the democratic republic should try to prevent fascists from organising online.
  • challenge: we need to protect kids (pedophilia) and minorities (fascists), while not limiting access to internet to the others

Barbrook - The::Cyber.Com/Munist::Manifesto, 12/1999

[204] [205] [206]

  • is short version of Cyber-Communism article from 9/19999
  • Whatever their professed political beliefs, every user dreams of the digital transcendence of capitalism.
  • CI: 'prophets of American neo-liberalism', 'right-wing futurism', 'right-wing gurus'
  • CI ~'Soviet communism' (SC) via ideology of emancipation through technology. (Any suffering caused by the introduction of new technologies was justified by the promise of future liberation).
  • In the late-1990s, the prophets of American neo-liberalism measure our progress towards utopia through increases in the ownership of digital artefacts: home computers, Net connections, mobile phones and laptops. SC: in 30s Stalin similarly measured progress towards utopia through the rising output of modern products: steel, cars, tractors and machine-tools.
  • CI=SC via vanguard party=digerati
  • cyber-communists (CC) - noncommodified intellectual labour within cyberspace, via gift economy
  • CI wants intellectual property vs CC wants piracy

The Cryptography Mailing List

  • ?-1996-3/2001? "This is an unofficial, unedited (by us) public service from Online Privacy (, a non-profit group located in Canada. "Cryptography" is a low-noise mailing list devoted to cryptographic technology and its political impact." [207]
  • 29.3.01-5.4.03 (last: msg04029.html)
  • since 3.6.03, [208]

Digital currencies

  • 1980s: Hal Finney and Nick Szabo in cryptography circles
  • 1990s: The first ones—Beenz, Flooz and others, arrived with the first wave of the Internet in the 1990s and failed.
  • 1993: ecash by Chaum's DigiCash. It got so popular that some brick and mortar banks started accepting it! But unfortunately it died out almost as rapidly since it was closed source, patented, and the company went bankrupt.
  • 1996-2009: E-Gold, by by Dr. Douglas Jackson and Barry K. Downey.
  • late 90s: libtech list (Szabo, Dai, Finney)
  • 1997: Webmoney,, "Russian version of Bitcoin called Webmoney has been around since 1997 and it's far more advanced than Bitcoin in terms of market penetration as well as security, exchange mechanisms and software" z 1 fora..
  • 1998: B-money (idea, on libtech list), by Wei Dai. b-money used proof of work in a different way for money creation, but transfers are just like Bitcoin. [209] [210]
  • 1998: Bit Gold (idea, on libtech list, *1998, made public *2005), by Nick Szabo: "Nakamoto improved a significant security shortcoming that my design had, namely by requiring a proof-of-work to be a node in the Byzantine-resilient peer-to-peer system to lessen the threat of an untrustworthy party controlling the majority of nodes and thus corrupting a number of important security features. Yet another feature obvious in hindsight, quite non-obvious in foresight." [http//]
  • mid-2000s: virtual currency economy boomed on the strength of gaming systems: Linden Dollar in Second Life, World of Warcraft Gold, Entropia and Tencent’s QQ in China encountered success with volatility.
  • 2004 RPOW, by Hal Finney. [211]
  • 7/2007: Ven (closed loop currency), 0.5 mil USD @ 2011, [212]
  • 2008: Pekunio (?!), [213]. Nakamoto: "Indeed, it [btc] is much like Pekunio in the concept of spraying redundant copies of every transaction to a number of peers on the network". [214]
  • Ripple. Nakamoto: "As trust systems go, Ripple is unique in spreading trust around rather than concentrating it." [215]
  • 2009: *Bitcoin


bash one-liner for mtgox

curl -s | sed -e 's/[{}]//g' | awk -v RS=',"' -F: '/sell/ {print $2}'

'sell' can be changed for high, low, vol, buy


Mining is centralised to 2 pools takze zavisle na third parties (network is not decentralised).

Long transaction delay & poor scalability: slow if many transactions; [216]

Employers of large companies exploiting their computational power cannot be stopped.

Hugely wasteful in terms of computation.


Alpha P2P currency

Nakamoto: "I see Bitcoin as a foundation and first step if you want to implement programmable P2P social currencies [..]. First you need normal, basic P2P currency working. Once that is established and proven out, dynamic smart money is an easy next step. I love the idea of virtual, non-geographic communities experimenting with new economic paradigms." [217]

Bitcoin is the "first attempt which will be superseded with better designs." [218]

Several Btc forum members discussed creating alternative which would sustain 51% attack: ComputerScientist, ByteCoin, s, unk ("many 3d-intensive games are much larger 'supercomputers' [than Btc]"), Andes. (early 2011)

"Bitcoin is ugly, but 'worse is better'. It seems to work. Just like Unix, there were countless ways to destroy your data or crash the system, which didn't exist on more 'proper' OSs like OpenVMS, and there were countless lacking features compared to systems like ITS or the Lisp machine OSs. But like the proverbial cockroaches, Unix spread, networked, survived - and the rest did not." [219]

  • worse is better (by Richard Gabriel on software acceptance): quality does not necessarily increase with functionality. There is a point where less functionality ("worse") is a preferable option ("better") in terms of practicality and usability.

Proposals and speculations

Andresen: "I still think selling boot-able USB sticks that contain a Linux distro, bitcoin, a bitcoin miner, and "starter" bitcoins would be a great eBay business/product. You're not selling currency, you're selling software and a USB stick. You'll have to have a good eBay rep, though, because the person who gets it would have to trust that you didn't keep a copy of the wallet." [220]

Szabo: "Byzantine-agreed P2P, atomic clock time-stamping service which could be based mostly on code from Bitcoin. 'Bittime', natch. :-) This would provide a more secure Internet time service for everybody." [221]

Btc meetup raid.

Btc exchange with long tail currencies.

Legalisation of Btc in political programmes of pirate parties.

Open source bots.

Decentralised currency competitors.


Nakamoto thought Bitcoin also as an anti-spam for celebrities receiving email: "It can already be used for pay-to-send e-mail. The send dialog is resizeable and you can enter as long of a message as you like. It's sent directly when it connects. The recipient doubleclicks on the transaction to see the full message. If someone famous is getting more e-mail than they can read, but would still like to have a way for fans to contact them, they could set up Bitcoin and give out the IP address on their website. "Send X bitcoins to my priority hotline at this IP and I'll read the message personally." [222]


Facebook uses BitTorrent to distribute updates to Facebook servers. Twitter uses BitTorrent to distribute updates to Twitter servers. [223]


  • Bitcoin at Wikipedia, [224]
  • Bitcoin Wiki, [225]
  • Bitcoin Forum, [226]
  • Bitcoin at EncyclopaediaDrammatica, [227]
  • Cypherpunks mailing list archive. 1992-1998, [228]
  • Eric Hughes, 1993. A Cypherpunk's Manifesto, [229]
  • Steven Levy, 2001. Crypto: How the Code Rebels Beat the Government, Saving Privacy in the Digital Age. New York: Viking.
  • Steven Levy, 1993. Crypto Rebels, Wired Issue 1.02, [230]
  • Robert Manne, 2011. Julian Assange: The Cypherpunk Revolutionary. The Monthly, March 2011, [231]
  • Tim May, 1992. The Crypto Anarchist Manifesto, [232]
  • Satoshi Nakamoto, 2008. Bitcoin: A Peer-to-Peer Electronic Cash System. [233]
  • Chris Palmer, 2010. Constructive Direct Action Against Censorship. San Francisco: Electronic Frontier Foundation (Published 14 December) [234]
  • Rainey Reitman, 2011. Bitcoin – A Step Toward Censorship-Resistant Digital Currency. San Francisco: Electronic Frontier Foundation (Published 20 January) [235]
  • Nick Szabo, 2011. Bitcoin, what took ye so long? Enumerated blog, [236]