This currently isn't "news," as the paper hasn't been published yet, and none of the disclosed findings are too damning or conclusive.
That being said, it's important for two reasons:
1.) the paper gets published tomorrow, which will lead to a round of negative press, regardless of the claims' merit.
2.) More significant: it highlights what I see as an existential threat to the Bitcoin experiment: a.) the poor distribution of early wealth and b.) the possibility that a great percentage of all Bitcoins are currently held by bad actors (criminals, anarchists, use your imagination).
A few things to consider:
1. A list of richest Bitcoin addresses is not a good representation of the concentration of wealth. A single person can have x wallets, just like this Ulbricht character.
2. Bitcoin wealth is often used to reinvest in mining equipment, which furthers one's wealth to a greater extent. Rinse/repeat.
Several of the oldest wallets have been dormant for years, which means that this is not hypothetical -- that wealth has not circulated.
edit made to be clear about "bad actors":
"Bad actors" meaning: unpredictable and possibly having malicious intent.
If Bitcoin becomes a more important part of our daily lives, handling commerce ubiquitously, etc.--a single individual with ~10+% of said Bitcoin has enormous disruptive potential. I'm not referring to what said person could purchase with that wealth, but one's ability to manipulate markets.
This has never been a big issue, as far as the growth in value of the currency. However, I think this kind of uncertainty could freak out potential institutional investors.
Altcoins like Litecoin, PPC, Namecoin, etc - do not suffer as much from this issue because their exposure was far greater than Bitcoin ca. 2009, and the mining competition was greater on the respective debut-dates by several orders of magnitude.
There's no way in hell Satoshi is anywhere connected to "DPR". Look at the OPSEC between the two. Satoshi carefully concealed his identity even in the early crypto mailing list days of Bitcoin. Ross Ulbricht failed at this completely throughout his underground career. Satoshi was a pretty good developer, Ulbricht posted to Stackexchange the most basic of php questions.
Satoshi seemed to be very aware of the power of gov agencies both in UK and US and the risks he was taking creating Bitcoin, a good example was his response to people back in 2010 who were calling for Wikileaks to accept Bitcoin donations. Ulbricht on the other hand foolishly underestimated them and would've cheered Wikileaks adoption. I don't recall Satoshi ever granting interviews and was hesitant to even reply to PMs on bitcointalk. He also didn't discuss politics, though you could infer from his hatred of central banking what his politics were he never spelled them out like Ulbricht did on a regular basis.
> a.) the lack of even distribution of early wealth
Like an IPO? [1]
> b.) the possibility that a great percentage of Bitcoin are currently held by bad actors (criminals, anarchists, use your imagination).
I know you are probably using the term anarchist in the colloquial sense (meaning those black bloc anarchists who smash things and want revolution) conjuring images of a Mad Max like dystopia, but would you consider Noam Chomsky a bad actor? People of that ilk just consider a different structure to organizing society, or as he puts it "a kind of voluntary socialism, that is, as libertarian socialist or anarcho-syndicalist or communist anarchist, in the tradition of, say, Bakunin and Kropotkin and others."[1]
Sometimes its tempting to paint pictures with broad strokes but as someone who can appreciate many different political viewpoints (as long as they are peaceful and productive), it doesn't seem to make your image any more accurate.
bitcoin.it has a page on some myths you should read.[3]
held by bad actors (criminals, anarchists, use your imagination).
Where do you get off calling anarchists "bad actors"??? Personally I find this highly offensive and insulting. Just because I believe people should be free, and not subjects of some "state", I am the "bad actor"? F@%@ that...
It highlights what I see as an existential threat to the Bitcoin experiment: a.) the poor distribution of early wealth and b.) the possibility that a great percentage of all Bitcoins are currently held by bad actors
I share your concerns, and thank you as I've never been able to sum it up as well as you.
An uneven distribution of early wealth describes almost every organisation in society (including society itself): as long as later participants perceive they are gaining value for themselves, they will allow this to continue.
Part (b) is more interesting - the danger as I see it is that Bitcoin is entering legal-issues territory. For example, a legal crackdown on ownership of Bitcoin identified with illegal activity would likely provide an economic shock to the whole network.
Now that I think about it, it seems like Bitcoin was designed to create this problem. The protocol produces blocks at an (on average) constant rate, but the value of finding a block decreases exponentially. This gives a significant advantage to the initial investor.
I understand that the point of this exponential decay was to that, after the currency was bootstrapped, there would be a constant supply. However, couldn't this be accomplished with a constant, or increasing, rate of production in the beginning, then let the rate decline at the end?
The Coase theorem says that the initial allocation doesn't matter if transaction costs are low enough. Transaction costs are exceptionally low in the case of bitcoin.
Spend a $1 billion of your early bitcoins disrupting Bitcoin or spend $1 billion to buy bitcoins today and disrupt it. Either way costs the same doesn't it?
I agree with you completely. But in the meantime, mainstream media have started picking the story (omg shocking), which will surely have an effect on the price of Bitcoins. I wonder if the authors are planning to take advantage of this.
I doubt that the link here amounts to DPR knowing SN personally, or even worse, DPR being SN.
Obviously I don't know DPR or SN, but I really doubt that DPR is SN or even communicated with him. The reasons are entirely circumstantial but from what I've read of both of them:
- DPR is arrogant.
- DPR makes stupid mistakes.
- SN is fairly humble.
- SN is smarter than DPR.
- SN doesn't make mistakes.
Is it possible that DPR himself was an early adopter of BitCoins, and mined those early coins himself - giving him the occasion to later transfer them to himself? He might have had to become acquainted with the BitCoin crypto-currrency scheme for some time before he was confident enough in it to use it to protect his own identity, which means he may have been in the first couple of groups of people to download and use the software.
You are talking about some one or group who took great care (including in all their dealings with other early bitcoin users) to maintain their anonymity - which is really hard to do, in the face of the sort of scrutiny that SN has had.
Its at least plausible that, along with the name, other aspects of the SN persona were explicitly constructed.
There's all this myth around who SN is. A lot of people seem to believe SN is a benevolent crypto researcher working in their bedroom, for the benefit of humanity, with no profit motive in sight. I mean, sure, I hope that's the case too, but we should remember that we don't actually know very much at all.
I agree with you that there's no way DPR is Satoshi. DPR seemed to be learning to code when launching Silk Road. While Bitcoin had bugs (lots of them) to start with, it is not amateur level computer science. It's not even reasonable to assume that a dude who needed help getting curl to talk to a proxy would be competent enough to work with very advanced crypto concepts, and even invent a few things of their own (using standard crypto algorithms, but still, Bitcoin was not tested waters...).
So, yes, SN is smarter than DPR, and vastly more capable as a software engineer.
And, Satoshi wouldn't need Silk Road to be fantastically rich in Bitcoins. As far as we know, he's got a vast swath of the first mined Bitcoins, even if he gave away most of it. (Which is possibly how Satoshi's identity will be revealed...if suddenly there's a new trillionaire in the world in five years...well, might be Satoshi.)
Not just possible but likely. Then DPR created Silk Road to earn more BTC in a more traditional way than mining, and then DPR passed the business to one Ross Ulbricht. Or there may even have been more than one DPR before Ulbricht.
2 possible situations I can think of, based strictly on 'Among their discoveries was a particular transfer to an account controlled by Mr. Ulbricht from another that had been created in January 2009, during the very earliest days of the bitcoin network, which was set up the previous year.':
- the bitcoin wallet, although said to be associated with SN, has changed ownership since its creation in 2009
- SN purchased something from DPR, perhaps something DPR himself was selling on SR, either a legitimate buy or for some other purposes; SN was just a regular customer in this case
In the meantime, I'm eagerly awaiting their paper. Ron and Shamir have previously co-authored another bitcoin related paper titled 'Quantitative Analysis of the Full Bitcoin Transaction Graph'. There's a very interested overview of it in this Gist: https://gist.github.com/jgarzik/3901921 It appears to have some flaws.
I don't know how accurate this statistic is, but the last Gist comment mentions that 22% of bitcoins are held in reused addresses.
I don't believe that at all. DPR got busted for posting total newbie questions on Stack Overflow, after all - and SN displayed a deep knowledge of secure coding and cryptography!
Here's a quick litmus test when someone proposes a Satoshi candidate X: "how did $X pay for DigiRock hosting of bitcoin.org in August 2008 when DigiRock accepts only yen and has no English language support?"
As hard as it is to remain anonymous, how did Satoshi Nakamoto do it? No misstatements that betrayed his identity? No IP addresses that point to him or his location?
[+] [-] spenvo|12 years ago|reply
That being said, it's important for two reasons:
1.) the paper gets published tomorrow, which will lead to a round of negative press, regardless of the claims' merit.
2.) More significant: it highlights what I see as an existential threat to the Bitcoin experiment: a.) the poor distribution of early wealth and b.) the possibility that a great percentage of all Bitcoins are currently held by bad actors (criminals, anarchists, use your imagination).
A few things to consider: 1. A list of richest Bitcoin addresses is not a good representation of the concentration of wealth. A single person can have x wallets, just like this Ulbricht character. 2. Bitcoin wealth is often used to reinvest in mining equipment, which furthers one's wealth to a greater extent. Rinse/repeat.
Several of the oldest wallets have been dormant for years, which means that this is not hypothetical -- that wealth has not circulated.
edit made to be clear about "bad actors":
"Bad actors" meaning: unpredictable and possibly having malicious intent.
If Bitcoin becomes a more important part of our daily lives, handling commerce ubiquitously, etc.--a single individual with ~10+% of said Bitcoin has enormous disruptive potential. I'm not referring to what said person could purchase with that wealth, but one's ability to manipulate markets.
This has never been a big issue, as far as the growth in value of the currency. However, I think this kind of uncertainty could freak out potential institutional investors.
Altcoins like Litecoin, PPC, Namecoin, etc - do not suffer as much from this issue because their exposure was far greater than Bitcoin ca. 2009, and the mining competition was greater on the respective debut-dates by several orders of magnitude.
[+] [-] dobbsbob|12 years ago|reply
Satoshi seemed to be very aware of the power of gov agencies both in UK and US and the risks he was taking creating Bitcoin, a good example was his response to people back in 2010 who were calling for Wikileaks to accept Bitcoin donations. Ulbricht on the other hand foolishly underestimated them and would've cheered Wikileaks adoption. I don't recall Satoshi ever granting interviews and was hesitant to even reply to PMs on bitcointalk. He also didn't discuss politics, though you could infer from his hatred of central banking what his politics were he never spelled them out like Ulbricht did on a regular basis.
Not the same people
[+] [-] gnerd|12 years ago|reply
Like an IPO? [1]
> b.) the possibility that a great percentage of Bitcoin are currently held by bad actors (criminals, anarchists, use your imagination).
I know you are probably using the term anarchist in the colloquial sense (meaning those black bloc anarchists who smash things and want revolution) conjuring images of a Mad Max like dystopia, but would you consider Noam Chomsky a bad actor? People of that ilk just consider a different structure to organizing society, or as he puts it "a kind of voluntary socialism, that is, as libertarian socialist or anarcho-syndicalist or communist anarchist, in the tradition of, say, Bakunin and Kropotkin and others."[1]
Sometimes its tempting to paint pictures with broad strokes but as someone who can appreciate many different political viewpoints (as long as they are peaceful and productive), it doesn't seem to make your image any more accurate.
bitcoin.it has a page on some myths you should read.[3]
[1] https://en.bitcoin.it/wiki/Myths#Early_adopters_are_unfairly...
[2] https://en.wikipedia.org/wiki/Noam_Chomsky%27s_political_vie...
[3] https://en.bitcoin.it/wiki/Myths#The_Bitcoin_community_consi...
[+] [-] mindcrime|12 years ago|reply
Where do you get off calling anarchists "bad actors"??? Personally I find this highly offensive and insulting. Just because I believe people should be free, and not subjects of some "state", I am the "bad actor"? F@%@ that...
[+] [-] sliverstorm|12 years ago|reply
I share your concerns, and thank you as I've never been able to sum it up as well as you.
[+] [-] etherael|12 years ago|reply
[+] [-] ronaldx|12 years ago|reply
Part (b) is more interesting - the danger as I see it is that Bitcoin is entering legal-issues territory. For example, a legal crackdown on ownership of Bitcoin identified with illegal activity would likely provide an economic shock to the whole network.
[+] [-] stfu|12 years ago|reply
Totally! All we need is an "affordable bitcoin act" and the problem is solved.
Without being snarky: I just dislike when people tie political ideology into their evaluation of new technology.
[+] [-] gizmo686|12 years ago|reply
I understand that the point of this exponential decay was to that, after the currency was bootstrapped, there would be a constant supply. However, couldn't this be accomplished with a constant, or increasing, rate of production in the beginning, then let the rate decline at the end?
[+] [-] topynate|12 years ago|reply
[+] [-] itchitawa|12 years ago|reply
[+] [-] rheide|12 years ago|reply
[+] [-] unknown|12 years ago|reply
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[+] [-] Aqueous|12 years ago|reply
Obviously I don't know DPR or SN, but I really doubt that DPR is SN or even communicated with him. The reasons are entirely circumstantial but from what I've read of both of them:
- DPR is arrogant.
- DPR makes stupid mistakes.
- SN is fairly humble.
- SN is smarter than DPR.
- SN doesn't make mistakes.
Is it possible that DPR himself was an early adopter of BitCoins, and mined those early coins himself - giving him the occasion to later transfer them to himself? He might have had to become acquainted with the BitCoin crypto-currrency scheme for some time before he was confident enough in it to use it to protect his own identity, which means he may have been in the first couple of groups of people to download and use the software.
[+] [-] feral|12 years ago|reply
You are talking about some one or group who took great care (including in all their dealings with other early bitcoin users) to maintain their anonymity - which is really hard to do, in the face of the sort of scrutiny that SN has had.
Its at least plausible that, along with the name, other aspects of the SN persona were explicitly constructed.
There's all this myth around who SN is. A lot of people seem to believe SN is a benevolent crypto researcher working in their bedroom, for the benefit of humanity, with no profit motive in sight. I mean, sure, I hope that's the case too, but we should remember that we don't actually know very much at all.
[+] [-] SwellJoe|12 years ago|reply
So, yes, SN is smarter than DPR, and vastly more capable as a software engineer.
And, Satoshi wouldn't need Silk Road to be fantastically rich in Bitcoins. As far as we know, he's got a vast swath of the first mined Bitcoins, even if he gave away most of it. (Which is possibly how Satoshi's identity will be revealed...if suddenly there's a new trillionaire in the world in five years...well, might be Satoshi.)
[+] [-] Zigurd|12 years ago|reply
It is also possible that DPR is more than one person.
[+] [-] sillysaurus2|12 years ago|reply
[+] [-] unknown|12 years ago|reply
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[+] [-] unknown|12 years ago|reply
[deleted]
[+] [-] memracom|12 years ago|reply
[+] [-] maayank|12 years ago|reply
[+] [-] atmosx|12 years ago|reply
[+] [-] pallandt|12 years ago|reply
- the bitcoin wallet, although said to be associated with SN, has changed ownership since its creation in 2009
- SN purchased something from DPR, perhaps something DPR himself was selling on SR, either a legitimate buy or for some other purposes; SN was just a regular customer in this case
In the meantime, I'm eagerly awaiting their paper. Ron and Shamir have previously co-authored another bitcoin related paper titled 'Quantitative Analysis of the Full Bitcoin Transaction Graph'. There's a very interested overview of it in this Gist: https://gist.github.com/jgarzik/3901921 It appears to have some flaws.
I don't know how accurate this statistic is, but the last Gist comment mentions that 22% of bitcoins are held in reused addresses.
[+] [-] gwern|12 years ago|reply
[+] [-] dx4100|12 years ago|reply
[+] [-] mrb|12 years ago|reply
[+] [-] mschuster91|12 years ago|reply
[+] [-] GeneralMayhem|12 years ago|reply
[+] [-] dsrguru|12 years ago|reply
http://www.fastcompany.com/1785445/bitcoin-crypto-currency-m...
[+] [-] gwern|12 years ago|reply
[+] [-] unknown|12 years ago|reply
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[+] [-] fsiefken|12 years ago|reply
[+] [-] FreedomDealer|12 years ago|reply
[+] [-] RexRollman|12 years ago|reply
[+] [-] atularora|12 years ago|reply
via http://www.pcworld.com/article/2066780/did-satoshi-nakamoto-...
[+] [-] dil8|12 years ago|reply
EDIT I am referring to the article not the yet to be published material
[+] [-] rajacombinator|12 years ago|reply
[+] [-] kolev|12 years ago|reply
[+] [-] gojomo|12 years ago|reply
[+] [-] shmerl|12 years ago|reply
[+] [-] stmartin|12 years ago|reply
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[+] [-] unknown|12 years ago|reply
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