There is no doubt that Nick Szabo Regarded as a visionary in the digital currency realm, Szabo's journey began post his computer science studies at the University of Washington in 1989. He embarked on an innovative path, blending legal contract frameworks with the dawn of new technology systems.
In a groundbreaking move in 1996, Szabo introduced the world to 'smart contracts.' He envisioned a way for independent digital participants to operate outside the bounds of traditional third-party contract systems, relying instead on self-executing code that independently verified and enforced agreements.
Fast forward two years, and Szabo was at the forefront again by proposing a revolutionary digital currency system that mimicked the gold market's dynamics—'bit gold' was born. This provocative idea stoked the fires of conjecture, with whispers persisting even today about Szabo possibly being the enigmatic creator of Bitcoin.
Early Life
Details about Szabo’s early years remain scarce. He is more private than reclusive, embodying the very essence of the concept smart contracts he created. While he has ventured into the public sphere through lectures and maintains a humble blog though his interests span from money systems to mapping, Szabo’s origins, residence, and participation in Bitcoin's development are matters of speculation. His blog 'Unenumerated' features a faceless avatar, while excerpts celebrate his essays.
A 2015 New York Times article investigating Bitcoin's inception described him as an 'American man of Hungarian birth.' Nathaniel Popper, the reporter, pressed Szabo but elicited only one certainty—he wasn't the mythic Bitcoin founder. Satoshi Nakamoto .
'I’ve made clear on numerous occasions that this speculation, while flattering, errs—I am not Satoshi,' Szabo asserted in correspondence with Popper after their discussion.
Smart Contracts
Szabo’s prominence in crypto lore was cemented with his 1996 discourse 'Smart Contracts: Building Blocks for Digital Free Markets' ” in Extropy #16.
Contracts are fundamental to the Western world. They form the backbone of governance from the Magna Carta to capitalism, Rousseau’s writings to the U.S. Constitution, and are central to every business and personal agreement.
The core feature of a contract is enforceability. If breached, there are repercussions. Historically, a neutral third party serves to mediate and enforce. This entity, unbound by the agreement, could adjudicate, interpret, and execute if necessary.
Szabo’s ambition was to eliminate the mediating force and imbue enforcement within the contract itself. His famous analogy was the vending machine: an early physical form of a smart contract. It programmed rules: deposit coins and make selections to receive your item. Fulfill these conditions, and your Coke emerges.
Nick Szabo, Image from CoinDesk
Harnessing cryptography and hash chains, Szabo envisioned smart contracts evolving past gears and springs to digitalize dealmaking. These coded protocols allowed parties to transact in cyberspace devoid of an external enforcer, sidelining traditional roles of judge and jury.
'In the cryptic sphere, digital security measures, particularly those employing advanced cryptography, unlock security capabilities that were unfathomable under conventional laws,' wrote Szabo in 2007. 'Melding computational might and innovative digital interactions might dismantle the mental cost barriers to complex contractual terms, paving an unprecedented economic terrain that supersedes resource allocation frameworks.'
Bit Gold
Gold has historically been the medium of trade due to its consistent value and rarity. Across cultures, from the Americas to ancient Greece, its appeal lay in its non-reactive properties that assured value retention independent of external validation.
Gold Facade, Image by Takaharu Sawa
In 1998, Szabo sought to transpose gold’s market strengths into a digital realm, innovating a currency he termed 'bit gold.' This currency circumvented third-party intermediaries through complex cryptographic protocols, supporting ownership assignment and spending autonomy without banks or governmental oversight. This would later play a role in the 2013 seizure of 144,000 Bitcoins by U.S. authorities during the Silk Road takedown.
He elaborated on the proposal in a December 2008 blog entry , copied from a paper he wrote in 2005 . Soon after, Satoshi Nakamoto materialized, submitting Bitcoin’s initial code on SourceForge and heralding the crypto era with the genesis block.
'Precious metals matter due to their unforgeable scarcity, underpinning their worth irrespective of external endorsement,' noted Szabo. 'Historically, precious metals posed challenges, such as the high costs of frequent purity checks during transactions, leading to a reliance on standardized coinage vetted by third-party authorities.'
The link between bit gold and Bitcoin remains speculative, yet it hasn’t deterred a flood of crypto detectives from seeking a definitive correlation. Coincidentally, Szabo’s virtual presence diminished from January 2009 to April 2009, corresponding with Bitcoin’s maiden extraction.
His pre-hiatus musings touched upon the pivotal function of secure timestamps.
'One could timestamp a digital creation anonymously, proving its existence at a certain time,' Szabo penned. 'This could be pivotal within the framework of the American first-to-invent principle.'
Secret Billionaires
Szabo remains active online, regularly updating his blogs and tweets. He even maintains a Facebook page with only a duo of posts. In a 2015 photo, Szabo captured several minds gathered, captioned 'Dinner with the greatest minds in Bitcoin.'
Dinner With the Greatest in Bitcoin, Photo Credit Facebook
In 2017, he shared a profile image. The individual shown bears a distinguished salt-and-pepper beard, his half-smile seemingly incongruent with his intense gaze. Could this be the visage of Satoshi Nakamoto, the entity renowned for approaching a $20 billion valuation in 2017?
Szabo denies it, and there are other notable contenders as a contender for Bitcoin's genesis claims. Even if Szabo isn’t Bitcoin’s progenitor, his pioneering work with smart contracts and cryptographic currencies laid the groundwork for its evolution. It’s almost poetically apt; the trailblazer of anonymous digital money has mirrored this principle in his own life.
Useful links
- https://www.entrepreneur.com/article/233143
- https://en.bitcoinwiki.org/wiki/Nick_Szabo
- https://www.nytimes.com/2015/05/17/business/decoding-the-enigma-of-satoshi-nakamoto-and-the-birth-of-bitcoin.html
- http://unenumerated.blogspot.com/
- https://archive.is/H8UGk
- http://fortune.com/2017/10/02/bitcoin-sale-silk-road/
- https://www.facebook.com/Nick-Szabo-1377902829157901/
- https://sourceforge.net/projects/bitcoin/
- http://time.com/money/5070980/satoshi-nakamoto-net-worth-bitcoin/
