Transcription
I had an idea, an idea that just wouldn't let me go until I programmed it. My name is Satoshi Nakamoto. You don't know me, not yet, but my invention will change your life.
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By linking all computers, our lives were digitalized, reduced to a set of data that need only be collected and analyzed. Every word, every gesture, every transaction. The internet was transformed from a window onto the world into a means of control. A new economy was emerging. We would be its raw material. This new world would upend everything: our communications, our rights, our privacy.
In the era of self-style promotion, privacy is a revolutionary act, regardless of whether there is something to hide or not. Privacy is not secrecy. A private matter is something you don't want the world to know. A secret is something you don't want anybody to know. Privacy is the power to selectively reveal oneself to the world, freedom.
With the growth of the internet, it became necessary for everyone to have access to strong encryption. Cryptography is the art of scrambling information to make it unintelligible, except to those that have the right key to unscramble it. So governments form their opinion about cryptography as a consequence of how pivotal it was to the outcome of World War II. The government regarded it as a munition and restricted its export.
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The cypherpunks, a group of activists in the San Francisco Bay Area, were quite interested in promoting strong encryption. For us cypherpunks, freedom is non-negotiable. It tops everything. Freedom is our struggle. Eric Hughes said it in his Manifesto back in 1993: "Privacy is necessary for an open society in the electronic age." We cannot expect governments, corporations, or other large, faceless organizations to grant us privacy out of their beneficence. Cypherpunks write code. We know that someone has to write software to defend privacy, and since we can't get privacy unless we all do, we're going to write it. They believe that true human expression is really only possible when you can protect your anonymity.
And out of this movement came many attempts to recreate various fundamental institutions of society using the complex mathematics of cryptographic systems. So things like voting systems, digital communication systems that enabled very strong privacy. The cypherpunks were a group of individuals who felt that cryptography could enable new human freedom, that freedom to communicate and the freedom to send money. And there were many different versions or ideas behind like digital cash.
"I've got to send something for my mom's birthday." "Well, book plane tickets for our trip next week." "And my kids got to go to the library to look up dinosaurs." "Hey, we can take care of all that before we go." "Yeah, right. Oh, with America Online. America Online can do all that."
If you can control people's money, you can control every aspect of their life. If you can surveil people's money, then you know everything you need to know about them. "How about some of your mom some nice flowers? All you do is click on Marketplace, we place an order, and it's so easy. All you do is point, click." America Online: a new way to use your computer to communicate, have fun, and get instant news and information. A giant virtual supermarket. That's what the internet promised us, but we saw something quite different.
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Additional financial system. For some time, they've been working on peer-to-peer currencies for decades. Because the internet made information accessible to everyone, but no suitable currency, no global universal currency exists without a central bank. That was a drawback. Control trade, and you control freedom. As the internet became a huge platform for trade, it needed a currency: anonymous, counterfeit-proof, with no middleman.
But there was an issue: double spending. The double spending problem is this idea that digital information is easy to copy. And if you have a form of digital money, how can you keep track of that money and make sure it's only spent once? Now, with physical paper money, when you give it to someone, you no longer have it. But in the digital realm, you can give someone a copy of something digital, a perfect copy that is indistinguishable from the original, and still keep the original. Now there are two copies. What if you then give it to someone else again? On the internet, everything can be duplicated infinitely.
Solving the double spending problem would help prevent fraud on the net. Copy and paste could no longer be an option. Without it, online commerce would be impossible. Technology. It was a complex technical problem. That's why it took decades to solve. Bitcoin is the result of decades of intensive research and ideology of freedom and a desire for secure payments. It's the individuals who had built precursors to Bitcoin, but these precursors hadn't been successful. If you think of it of Bitcoin as a new species of money, these species died on the operating table. They never really made it out of the lab. And so, with the cypherpunks, they wanted to create a digital cache, but they had no idea how money worked. They knew how cryptography worked, but they very had very poor understanding of economics, monetary policy, and money.
Satoshi did. Sometimes the solution appeared to be within my grasp. Other times, it appeared entirely out of reach.
"The stock market is now down 21%. It was the worst day on Wall Street since the crash of 1987. This could be the most serious recession in decades." Well, it started in America last year, has now spread to every part of the world. The financial world collapsed. Its instruments, its rules, the creation of wealth, all one big fiction, a web of lies and opaque algorithms. The opposite of what I had been working on for years: an open, universal, well-ordered mathematical world. The Bitcoin code haunted me day and night. Lehman Brothers had just collapsed. There had been massive bailouts. It was a huge, huge, super stressful time period in the world. And finally, the time had come. It worked. Cryptography had cracked double spending. Absolute transparency, guaranteed anonymity. Bitcoin was ready.
Satoshi first assured the Bitcoin white paper with the cryptographer mailing list, which was comprised of the cypherpunks. October 31st, 2008, is when he releases the white paper. And Satoshi waited for that exact moment because it sounded like he had completed Bitcoin a little bit before that and was waiting for the peak moment of despair in the financial markets.
"Suppress the send button." A technical scientific paper that described in just over eight pages, in beautiful detail, very concisely, very clearly, the primary technical ideas of Bitcoin.
The first people that heard about Bitcoin typically scoffed at it. They thought it was a joke, or they didn't think it was going to work. A few months later, he released the code in the Genesis block. He has a headline from The Times: "UK Chancellor on the verge of second bailout for banks." So he's very much, this is a very aggressive stance, anti-banking, anti-central banking, anti-government. In his writings, he goes, "The core root of the problem with money is it requires trust to make it all work. We must trust the banks. We must trust the merchant processors. We must trust the central banks." And he goes, "With Bitcoin, we remove that needed element of trust."
Bitcoin's network wasn't in a state of too much testing for that long of a time. It was in a state of like, very active development and in production. Cypherpunks write code. That that isn't just enough to talk about it, you have to go implement it. And Satoshi very much fit that, where he goes, "Okay, I'm gonna go make this happen. I'm gonna go release this to the world." "I like the idea of writing software and releasing it, and the software changes the facts on the ground. It's politically easier to bring about these changes if the software is already deployed. It makes it harder to make the software illegal if it's available everywhere."
The program was launched. I had won a victory against the banks, against state power. I had to be careful. In the early days, I had a few allies, but it was a minefield. A handful of disciples does not make an army. Bitcoin was easy prey. Bitcoin certainly wasn't 100% perfect right off the bat. There were a few bugs, a few flaws. From a network perspective, it very easily could have been crushed by, you know, a really motivated attacker, but luckily, that didn't happen. I think most people dismissed Bitcoin, and governments included, dismissed Bitcoin as silly money for a long time. And most governments still do.
What is the value of a new currency? It was valued at what it cost to produce it. One dollar or 1500 Bitcoins. Trust would then follow. Late 2010 and 2011, there were a few OTC markets where people would essentially on the forums be like, "Hey, I'm selling 10,000 Bitcoin." And someone would go, "Cool, I'll buy it for ten dollars." It didn't immediately become a currency, and it's still not clearly a currency to me. It's just becoming a currency, not because the government says at some point it's a currency, but because more and more people are using it as a currency.
Laszlo put out a message on the forums, the Bitcoin Talk forum, and said, "Hey, I'd like to buy a pizza for 10,000 Bitcoin." And someone said, "Sure, he'll send me your address and I'll send you a pizza, then you can send me the Bitcoin." The very first purchase was pizza, not drugs or weapons. Bitcoin could be used as a very ordinary currency in everyday life, autonomously and without a regulatory authority. That was the first ever paid Bitcoin transaction, supposedly the first ever transaction for value. A very, a very expensive pizza.
Currency is based on the trust of its users.
But what is the trust based on? We trust current government currencies because they're issued by the state, because we pay our taxes with them. The state guarantees a monopoly for the currency within its borders. Digital currencies are something completely new. They force us to question the very nature of money.
Julian Assange, the founder of WikiLeaks, has been put on Interpol's most wanted list tonight. In Britain, Julian Assange is awaiting arrest by British police, but the WikiLeaks founder remains defiant, suggesting the U.S. is out to kill him tonight. Assange isn't relenting, suggesting that if anything happens to him, all the remaining secret cables will be released to the world at once.
Governments quickly conquered the digital world, invading by force and with war-like interests. WikiLeaks soon learned that revealing the secrets of the powerful can lead to punishment. I learned from the fate of Assange that there are red lines that are better not crossed. Drastic security measures became necessary. Different governments around the world pressured PayPal and Visa and other payment providers to censor their transactions because WikiLeaks was deemed dangerous for leaking information. So WikiLeaks turned to Bitcoin, which is permissionless, as a way to accept donations. And I think that was another really cool testament to Bitcoin's resiliency and use case of permissionless money. No one can take that money away from you, and no one can stop it from being sent to you.
"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. We were right in the spotlight's glare much too early." You know, Satoshi had created this new money, and he was very much worried that they were kicking the hornet's nest at too early of a stage in the project, and that they may not survive a government attack. He also, I think, close to that time, started to question if he should be part of the project. And so Satoshi eventually disappeared.
Bitcoin had become the currency for those who wanted to remain unknown at all costs. "You can get anything on the internet nowadays: cars, homes, and now black tar heroin. This is Silk Road, the anonymous marketplace." On the main page, they proudly and openly sell LSD, marijuana, and ecstasy. Bitcoin is this thing that has no political bias. So it's this truly free, permissionless network for storing and moving value. Business. It is not anonymous, but rather pseudonymous. The Bitcoin register, the blockchain, is transparent and open for all to see. If there is a court order because of possible criminal activity, the state can search the platform, just like a bank. They're allowed to uncover your identity and your finances. The virtual world is not an encapsulated parallel world. It is actually closely connected to our world. Every digital action can touch real life.
To me, that it could survive something even for an illegal use case, which meant that its protocol must be really, really robust and sound. This is before I completely understood how it all worked.
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Bitcoin to protect criminals. I wanted free and autonomous transactions. And then Silk Road drove up the value of one Bitcoin to $30. That's when I decided to back away from the project. No more public posts, only a few private emails to Bitcoin developers. "I will only guide and advise. That's all."
Why did Satoshi disappear? I remember he disappeared after Gavin Anderson came back and said, "He, I just had a meeting with the CIA. They wanted to talk to me about what Bitcoin is." I got an email in April 2011 from Gavin Andreessen, one of my programmers. He had accepted an invitation from the CIA to talk about Bitcoin. Satoshi never wrote an email ever again. That was it.
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Gavin knew nothing about me, not a thing. But I made a radical cut anyway. I didn't want to take any chances. I knew they would do anything to find me, but I knew they wouldn't succeed. The program didn't need me anymore. It was stable enough to grow and fulfill its function for whatever purpose. I was a little bit surprised that it happened so soon. I would have thought that he takes a bit more leadership in the project. I think Satoshi understood, and this is why he stayed pseudonymous. He knew that if there was a human behind the project, that that would always be a weakness. No one is responsible. That makes Bitcoin less vulnerable to attack. There is no one to prosecute, attack, arrest, or convict for founding Bitcoin or for having power over Bitcoin. No one has power over a Bitcoin, not even the founder.
They're not just new. Satoshi's writings, we know that he is an English speaker. He uses some UK spellings for words, but he only does it twice. We know at times he posted on the Bitcoin Talk Forum what time zone he may live in. Whenever someone is thought to be Satoshi, they say, "No, Satoshi can't be like that." But we don't actually know if Satoshi is a genius. He's bound to be a little strange and not average. It can change. That's the extent of our knowledge.
"I'm not in Bitcoin, but you're, you're addressing Bitcoin. I don't know anything about it." 64-year-old Dorian Satoshi Nakamoto emerged from his Southern California home Thursday and walked right into a media frenzy hours after Newsweek magazine claimed he was the mystery man behind Bitcoin.
"Oh, yes, I was around in those times, but I was very annoyed with the Newsweek." Um, the Newsweek research. What Newsweek did is they found a guy named Satoshi Nakamoto, and they're like, "We found him. It's Satoshi wouldn't have chosen his real name." And so they were literally looking for a John Doe, found John Doe, and said that that was that was Satoshi. It's very poor journalism because they went to his home, they kind of harassed this guy, and so he was put under the spotlight, and he was just a very quiet dude. He did, he didn't really want to be found. So it was a very uncomfortable position for him, and very unethical on Newsweek's part. The main reason I'm here is to clear my name, that I have nothing to do with Bitcoin, nothing to do with developing. Um, I was just an engineer doing something else.
When the first transaction occurred, which was nine days into the Bitcoin blockchain, Satoshi Nakamoto signed some amounts of Bitcoin that they had mined and sent it to an address that we know belonged to Hal Finney, a computer scientist who was one of the first people interested in Bitcoin and communicating with Satoshi Nakamoto. Hal had built reusable proof of work. He had kind of built some of the key components that enabled Bitcoin to be successful. Satoshi was asking for help in terms of people needed to help him get it all built and help mine it and kind of incept it. And so Hal and Satoshi worked together, and Satoshi sent him the first ever Bitcoin transaction.
"Only an autonomous system can be free." And Hal understood this. Bitcoin isn't just a digital currency. It's a means to absolute independence. One thing was revolutionary: it was determined in the spirit of absolute sovereignty. The cost of maintaining the system would be paid with the currency of the system. Bitcoin is the new gold, digital gold. Like with gold, the quantity of Bitcoin is limited. Like with gold, the more prospectors there are, the more difficult it is to find them.
What's mining? It's a big question. You know, it's an industry, and it's a bit of a philosophy also, but most of all, it's like the, like the cornerstone of Bitcoin technology. It's a currency system, right? In the currency system, you either own currency or you're sending it. That's pretty much all you do with currency, right? And how you would usually build that into a computer system is that you have a database, and this database lists like who earns how much money, and when someone wants to send money, you just change the database. But if you want to do it in a decentralized way, like Bitcoin does, all the participants in the Bitcoin ecosystem store a copy of the same database. And when someone wants to make a transaction, which is to change the database, then he has to coordinate with everyone else to make sure that everyone agrees that this is a kind of okay thing to do. It's more difficult to hack 20,000 or 100,000 computers to modify the database than to hack the computer of a single bank.
Don't care to send you a Bitcoin. I need to make a transaction. This takes place in a transaction group and is done by Bitcoin miners. They combine their computing power in a mining pool and generate a block. The miners compete to validate the transaction blocks. The network kind of creates a very complex mathematical riddle that someone has to solve in order to progress the blockchain to create a new block in the blockchain. In all the combinations, you'd have to throw a tails 90 times in a row. That would be impossible in a lifetime. That's why you have to repeat it billions and billions of times. It's not a complicated problem, it just has high material and energy costs. Whoever solves the problem first wins, and they get Bitcoins. That's the motivation. He then says, "Hey, I won." The others say, "Okay, then validate the block." The block is added to the chain. Yes, that is how the transaction is validated, and you get Bitcoins from me.
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The Bitcoin blockchain is the registry that records all Bitcoin transactions, and it's been that way since the very first transaction. The more time passes, the more a transaction is secured by previous transactions. To modify one, you'd have to modify them all on thousands of computers. The system is not flawless, but almost. Mining is very important to ensure the security of the system. No one would invest this much energy unless they were confident that all transactions in the block are legitimate. A block can't be validated unless all transactions are legitimate, and the cost and effort would be in vain. The miner would have invested money and energy for nothing.
I trust the Bitcoin system, but I don't trust my neighbors, and I don't trust the miners, and I don't trust the transactions that I see, and I don't trust the blocks that I see. I verify everything, or rather, my computer does. And because everybody's verifying everybody, and because nobody trusts anybody, we can all trust the ultimate result because it's being checked by so many thousands of computers, because it's so difficult to tell a lie on the Bitcoin network. When it comes to guaranteeing the value of Bitcoin, it is more sound than the gold standard. Bitcoin does not depend on anyone. It's supported by an entire network. There's no central bank. It's a transparent, dispersed registry that can't be attacked. A system so widely distributed can't be stopped, can't be captured. It's a fortress. It does require a lot of computing power. That's why miners invest in special hardware, graphics card servers, etc.
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People are worried that Bitcoin mining is using too many natural resources and is polluting the environment disproportionately. Of course, they're right. Sure, it's using power. Of course, it's not a free resource, but we have to see not only as a cost, but we have to see it as an investment. We're, let's say, spending all this power and energy on Bitcoin. What are we getting? Protecting privacy has a price, a high price. Cryptocurrency opponents pretend not to know that the entire digital world lives at the expense of our planet. Every virtual act leaves traces in the form of digital pollution. I'm not just talking about my program. Much of our life takes place online. Bitcoin is as useful as social networks and streaming services, and it will stay that way.
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That was a pretty wild year because from the start of the year to the end of the year, Bitcoin went from $10 to $1,000, which is a hundred-fold return. In January 2013, there was only a dozen of us who would show up to the Bitcoin Meetup in San Francisco. And then in March, when the price hit $260, there were a hundred people.
Handing out business cards, and we were like, "Oh, but this Bitcoin thing is becoming real." My disappearance had unleashed my creation. The value of Bitcoin spiraled out of control. Bitcoin became an extremely volatile speculative asset because of fluctuations in supply and demand. One day you could buy a pizza for one Bitcoin, the next you could buy a sports car. A bit too volatile for a currency. People talked about Bitcoin. The U.S. Congress. There are a lot of companies that raise money to go build products and services. Bitcoin hitting a thousand dollars really blew people's minds that this was like a new technology, a new valuable money. Of course, it's growing, right? More people are hearing about it. The philosophy behind it, owning your own data and being against the banks.
I had conceived Bitcoin as a limited resource from the beginning. The amount that can be mined is fixed and decreases little by little. One day, the source will run dry. Satoshi's brilliance was in the monetary policy he invented, you know, pure digital scarcity. With Bitcoin's 21 million hard cap, there will only be 21 million. There will never be more.
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He's one of the richest people in the world, and he's anonymous. I was rich in Bitcoin, my own currency, but I couldn't touch it because then the trust I had so painstakingly built up would be destroyed. Is a big mystery. The first million Bitcoin ever created have never been moved, which is which is insane for, you know, for someone to build this massively about valuable thing and not touch the money. It's a modern-day Prometheus, a modern-day saint, if you will. It's unbelievable, like something out of a novel or a movie. This million weighed heavily on me. I could have used it to control the value of Bitcoin and helped stabilize it by carefully buying and selling. I could have reclaimed my influence.
I don't think Satoshi is just going to move his Bitcoin and say, "Yo, though, I'm just going to move it and see what happens." What he can do is he can sign with his private key. He can sign a message letting everyone know that he is and what he will be doing with it. It is the only way that if you are Satoshi, to verify that you are Satoshi. This Bitcoin million was the only way to prove I was Satoshi. If I use the money, I would reveal myself. Was now the time? So I'm going to do this once and once only. I'm going to come in front of the camera once.
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Craig writes confession about a person who until now has gone by the name of Satoshi Nakamoto, and I will never, ever be on a camera ever again for any TV station or any media. Ever. To support his claim, the Australian entrepreneur demonstrated he had access to blocks of Bitcoins known to have been created in the early days of the digital cash system. "I'm about to demonstrate a signing of a message with the public key that is associated with the first transaction ever done on Bitcoin." He was a cryptologist, but the demonstration was made to convince journalists, not cryptologists. That's where it went wrong. Opportunism knows no bounds. The pursuit of fame, vanity.
Anonymity is the price of my freedom. Anyone who claims to be the inventor of Bitcoin is lying. Some people will believe, some people won't, and to tell you the truth, I don't really care. Maybe I should rephrase that. There have been some that claim to be the inventor of Bitcoin, but they're not. I don't want money. I don't want fame. I don't want adoration. They're absolutely positively not, not the inventor of Bitcoin.
My absence created a powerful center around which big egos and wild imaginations gathered, which was the opposite of what I wanted. Bitcoin should maintain its autonomy and people's trust at any cost. I had to force myself not to intervene. Despite the volatile price, my million had to stay just where it was. Countless scammers were trying to take my place. They copied the Bitcoin code. More and more cryptocurrencies appeared, each made their own claim: micropayments, confidentiality, automated transactions. The demand for new currencies exploded, and it was just the start.
People are looking at Bitcoin, seeing how it's exploding in price, and they think, "Ah, you know, I really missed out on this one, but I should have, I should have bought in." And then they're looking for the next best opportunity to invest in something else to hopefully have the same price increase as with Bitcoin. And for those guys are the altcoins: faster, more anonymous, more energy-efficient. Everyone wanted to create a new, better Bitcoin and to replicate its meteoric price in the process. The total market value of all cryptocurrencies at the beginning of 2018 was $800 billion. $800 billion. With my Bitcoin million, I joined the top 50 richest people in the world. My net worth was 44th. My virtual fortune in 2017. And previously to that, in 2014, we also saw the emergence of many other competing systems that are trying to capture the magic of this idea, and either are genuinely trying to make new things with it, or in many cases are fraudulently trying to capture the enthusiasm without any substance.
With Bitcoin, you can't make thousands of transactions per second, and you can only plan transactions approximately. This is where other cryptocurrencies have tried to improve. To do so, they had to make concessions in the areas of security and complexity, because you can never have everything. I gave the world the weapons it needed to protect privacy, but in doing so, I also provided a tool to those who wanted to tap into our data, hungry for power. They use money as a means for absolute domination.
Privacy has two great enemies: the internet giants and governments. Governments now are also proposing money from a digital central bank. These currencies would be issued centrally and based on debt, as they have forever. But there would be one difference: digitalization would rob cash of a key property, anonymity.
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State entities, especially totalitarian states, would love to have cryptocurrencies for more control over citizens, privacy, and the economy. And attempts by democratic states in Europe to create digital currencies also have similar goals. Not totalitarian control like in China, but they follow a similar logic. Similar one payment method becoming increasingly important in Europe has long been used in Asia, especially in China. Paying by smartphone. In the West, we use Facebook, WhatsApp, separate online banking, online newspaper subscriptions, etc. The Chinese model combines all of these. It's all unified in a country notorious for showing little respect for individual freedom. This means that the state knows everything about people's lives. This is possible because everything is dematerialized and has digital traces.
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These digital traces are processed among other things in the social credit, a point system based on information from the various apps, based partially on purchasing behavior. The social rating has concrete effects on consumers. Some things will be more expensive. When you get to the airport, it might say you can't fly because you didn't pay a fine.
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Using these technical capabilities for surveillance is a major threat to privacy and individual freedom. They are expanding their power at the expense of your privacy, your freedom. An ultra-centralized, opaque, traceable digital state currency that uses your data against you. That's precisely what cypherpunks had always feared. A nightmare. Understanding that the end of privacy is coming is one thing. Witnessing it is something else entirely. What's surprising isn't that China is building a totalitarian financial surveillance system. They are a totalitarian society. What is surprising is that European authorities and American authorities and Japanese authorities are also considering, and in some cases gleefully anticipating, the eradication of cash and the ability to do surveillance and control of all financial payments from every point to every point. How totalitarian a state has become could now be determined by the maturity of its digital currency.
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I am not who you think I am, not even close. I have carefully sketched a distorted, vague image, the opposite of my real self. I am 40, 50, 60 years old. I am a woman, a man, an artificial intelligence. I act alone or in a group. Does it matter? Bitcoin is collective by definition. It is the result of decades of research by a wide variety of people. Its code has been run on tens, hundreds, thousands of computers, and even today, this is how the project continues to grow.
Oh, it's going to 12 years ago, Bitcoin was just a few people developing a program from a white paper. Now Bitcoin is thousands of nodes, miners, hundreds of thousands, even millions of Bitcoin owners and companies are investing in Bitcoin. A lot has happened, and the pace of development is still accelerating. Let me assure you, this thing has not yet happened. Right now, it's difficult to use, it's complicated, it's understood by a tiny fraction of the human population, and it will change the world. Bitcoin is stateless, but behind it stands an army of computers, programmers, miners, users. It's useless to cut the heads off the Hydra. There are too many, and they would always grow back. I am never far away. In some form, under a different name, I continue to program. Data protection is the cyberpunk's mission.
Bitcoin continues to grow. It's a currency, but it's also a capital investment, repository of value, and object of speculation. As soon as you understand it, it slips away again. I, Satoshi, wanted to create an alternative to the banks, to the states, and the faceless mega-companies. Freedom has to be fought for over and over again. That's what we're fighting for.
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