I asked him to explain the distributed ledger in layman’s terms and he went into an algorithmic paroxysm of verbal ingenuity. Ignoring all that, a distributed ledger is a database that is shared between multiple users, with every contributor to the network having their own identical copy of the database. Any and all additions or alterations to the ledger are mirrored in every copy as soon as they’re made. No central authority is in charge of it, but no entry on it can be disputed. Adam Smith’s point about ‘incentive’ is embedded in the way bitcoin works: people do not just buy coins or use them; they ‘mine’ them. Miners use their computers to solve increasingly difficult mathematical problems, the reward for the solving of which can be paid in bitcoin. This keeps the currency honest and, ideally, stops it from being dominated by any single entity.
I had brought rolls of disposable whiteboard and stuck it up around the flat, and, while we were speaking, he would jump up and cover the walls in formulae, along with arrows, arcs and curves. His wife told me she sometimes goes into the shower room and finds him standing there, stark naked, writing on the steamed glass. ‘Was there a primary person doing the maths?’ I asked.
‘Me,’ he said. ‘Dave wasn’t really a mathematician. What he did was make me simplify it.’
‘How did he know how to make you simplify it?’
‘We got to a point in the writing of the Satoshi white paper where it was … People say that it was hard.’
‘He wanted you to bring the language down a little bit?’
‘A lot. It’s very simple. The elliptical curve stuff is not described in the paper at all, it’s just there. The crypto stuff isn’t described either.’ I asked him to show me the trail of ideas that led to their collaboration. ‘So all these things are there,’ he said, pointing to a 337-page thesis on his computer called ‘The Quantification of Information Systems Risk’, which he had recently submitted in partial fulfilment of a philosophy doctorate at Charles Sturt University. ‘Application to audits, how you analyse failures, deriving the mathematics behind it, simplifying the mathematics and there you go … The core of the bitcoin paper is a Poisson model based on binomial distribution. That’s how it got solved.’
In 2008 it was a ‘hodgepodge’, he said. I asked him if he felt the development of bitcoin was, at some level, a response to the financial crisis. ‘It was already in process. I saw [the crisis] coming though. It was a kind of perfect storm. During that year, I spoke to Wei Dai. So between him and Hal Finney there were a lot of really good ideas about making money work … [Finney] was the one who actually took what I said seriously. He received the first bitcoin.’"
The Satoshi Affair.
Andrew O’Hagan in the #LRB:
30 June 2016
https://www.lrb.co.uk/v38/n13/andrew-ohagan/the-satoshi-affair
I had brought rolls of disposable whiteboard and stuck it up around the flat, and, while we were speaking, he would jump up and cover the walls in formulae, along with arrows, arcs and curves. His wife told me she sometimes goes into the shower room and finds him standing there, stark naked, writing on the steamed glass. ‘Was there a primary person doing the maths?’ I asked.
‘Me,’ he said. ‘Dave wasn’t really a mathematician. What he did was make me simplify it.’
‘How did he know how to make you simplify it?’
‘We got to a point in the writing of the Satoshi white paper where it was … People say that it was hard.’
‘He wanted you to bring the language down a little bit?’
‘A lot. It’s very simple. The elliptical curve stuff is not described in the paper at all, it’s just there. The crypto stuff isn’t described either.’ I asked him to show me the trail of ideas that led to their collaboration. ‘So all these things are there,’ he said, pointing to a 337-page thesis on his computer called ‘The Quantification of Information Systems Risk’, which he had recently submitted in partial fulfilment of a philosophy doctorate at Charles Sturt University. ‘Application to audits, how you analyse failures, deriving the mathematics behind it, simplifying the mathematics and there you go … The core of the bitcoin paper is a Poisson model based on binomial distribution. That’s how it got solved.’
In 2008 it was a ‘hodgepodge’, he said. I asked him if he felt the development of bitcoin was, at some level, a response to the financial crisis. ‘It was already in process. I saw [the crisis] coming though. It was a kind of perfect storm. During that year, I spoke to Wei Dai. So between him and Hal Finney there were a lot of really good ideas about making money work … [Finney] was the one who actually took what I said seriously. He received the first bitcoin.’"
The Satoshi Affair.
Andrew O’Hagan in the #LRB:
30 June 2016
https://www.lrb.co.uk/v38/n13/andrew-ohagan/the-satoshi-affair
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