There’s a good chance you’ll learn something you didn’t know about Bitcoin in this week’s “Theory of Bitcoin” episode. The series of video discussions between Bitcoin creator Dr. Craig S. Wright and Money Button founder Ryan X. Charles always manages to uncover something new—and this time around, the focus is on Bitcoin’s History.
Bitcoin History is important to know. Hearing it from the source helps to understand not only what Bitcoin really is, but where it came from and how it came to be. It also helps to understand what Bitcoin can do and what it can’t, and why people who understood it have a better chance at success than people who spent years of time (and millions of dollars) getting it all wrong.
David Chaum, Digicash, Mark Twain Bank, why Craig Wright used the pseudonym "Satoshi Nakamoto" when he launched Bitcoin, and why there is so much misinformation about Bitcoin.https://t.co/NRe55JxACq
— Theory of Bitcoin (@theoryofbitcoin) August 11, 2020
Given the mystery surrounding “Satoshi Nakamoto” and his hidden identity in the early years gave the impression it emerged from the cypherpunk and crypto-anarchist movements. This in turn led many to believe it was intended to pursue those movements’ goals. However there’s a lot more to it than that, and to focus on those aims only is to only see part of the picture.
DigiCash, cypherpunks, and much misdirection
Dr. Wright talks about the past work of David Chaum, privacy advocate and creator of “DigiCash”. DigiCash was the first working cryptocurrency concept, which launched in 1989 but failed to gain traction. This was partly because its anonymous transaction structure aroused the authorities’ suspicions, partly because it was a private company, and partly because it was ahead of its time—online commerce was still a cutting-edge concept and few actually needed it.
Chaum and DigiCash influenced Bitcoin’s creation but only in some ways, Dr. Wright says. However, unbeknownst to most, organizations like the NSA were also working on similar cryptocurrency-like concepts. Bitcoin’s popularity today is the result of much work and research, an understanding of what it should be, and perhaps good timing.
“If you make an anonymous money system you’re going to attract criminals,” Wright says, explaining that the difference between anonymity and privacy are very different. Bitcoin and its predecessors did indeed attract criminals, and an “underground” image, something Dr. Wright is determined to fix.
Perhaps his interest in money and cryptography, but coming from outside the cypherpunk movement, may have helped. Those pursuing crypto-anarchy and anonymity will always find themselves isolated, whereas Bitcoin can only succeed by being inclusive.
However, in a few comments that will surprise viewers, Dr. Wright acknowledged that people who “got the wrong idea” may have helped Bitcoin become more popular. He doesn’t think Hal Finney would’ve joined the project if he’d understood its true goals, and said “in 2011, if I’d explained Bitcoin properly to Roger Ver, he wouldn’t have become Bitcoin Jesus and evangelized.”
He almost got sidetracked a few times himself along the way, by listening to people he thought understood electronic money better than him. However, he disagrees with Charles that Bitcoin is now “in a hole” we’re trying to dig it out of. While many misguided people—and companies—continue to waste time and money pursuing ideas that can’t work, there are still enough people in Bitcoin/blockchain who do “get it” to keep things progressing.
Dr. Wright says the response to Bitcoin has been, in many ways, like a laptop presented to a tribe of cavemen. Lots of them are still hitting that laptop with a rock, trying to figure out what it is and what it’s supposed to do, he adds.
Regrets and stumbles
The path to creating Bitcoin, getting it from its origins to the point where enough people began to take interest, and now trying to help people understand the truth, has not been easy.
Charles and Wright talk about regrets, and Wright has a few. There were times he lost hope, thought he might not have been smart enough, and plenty of times he thought he was wasting his life and all his money, or was too afraid of being a leader to act when he should have. His early behavior, statements and actions were often attempts to self-sabotage his leadership role, Wright says. But “it’s my mess and I need to clean it up in the best way.”
He also talks about the times he pitched Bitcoin-like concepts within the tech/finance industry, only to see it rejected or laughed at—which, to be honest, many in the Bitcoin industry describe reactions like these even today.
Better leadership, and certainly more marketing and communications skills, could have helped Bitcoin better in those early days. Wright also regrets “dumping” a leadership role on Gavin Andresen, who he describes as a great guy but not the right person for that role.
Next week’s episode looks at Bitcoin’s future, though the two touch on the topic this week too. Dr. Wright is an eternal optimist (which is probably a good thing) and sees technology growing exponentially. But even that is conditional. When Charles asks him how the world can avoid a future like that in the movie “Idiocracy,” Wright says having more people and giving them all every opportunity is key to ensuring humanity has a bright future.
He draws parallels between the world and his own beginnings in poverty—it was his mother who “never gave up on me” and having opportunities to learn and grow that helped Bitcoin exist today. “More people, more solutions” he says, reiterating his strong belief that education and access to education are essential.
The next episode is due to be the final part of this series, which has been fascinating. However there’s every chance the two will continue their discussions by branching out into other topics (which is also a hallmark of this current series). Watching these episodes is the best chance to get an all-round view of Bitcoin… and discover ways to improve understanding even further.
Subscribe to the Theory of Bitcoin channel here.
New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin—as originally envisioned by Satoshi Nakamoto—and blockchain.