SOURCES
The bulk of this book is based on over three hundred interviews I conducted with the people involved, in places as far flung as Buenos Aires; Beijing; Shanghai; Tokyo; Austin; San Francisco; Palo Alto; Reykjavik; Toronto; Washington, DC; Amsterdam; and New York. I was often able to confirm the recollections with private e-mails and other contemporaneous documents that were shared with me. In the end only a handful of the people mentioned in this book declined to talk to me.
Unless I have specified otherwise in the notes below, readers can assume that every moment described in this book came to me directly from at least one or, when possible, more than one person present at the event described. Most of the direct quotes come from contemporaneous documents or recordings but some of the quotes are the best recollection of the participants, generally backed up by at least one other person in attendance. I was lucky enough to be present for some of the events, such as the March 2014 gathering at Dan Morehead’s house on Lake Tahoe.
Most of the material that did not come from interviews and personal e-mails sat in the digital treasure trove of public messages and chats that the Bitcoin community has created over time, and that various participants had the wisdom to maintain for posterity. They will be referenced in the notes by following abbreviations:
CYPH: Cypherpunk mailing list, http://cypherpunks.venona.com/.
CRYP: The Cryptography and Cryptography Policy Mailing List, http://www.mail-archive.com/[email protected]/.
DEV-LIST: Core Bitcoin development discussion, http://sourceforge.net/p/bitcoin/mailman/bitcoin-development/.
BTCF: Bitcoin Forum, https://bitcointalk.org.
IRC: #bitcoin-dev Internet Relay Chat channel, http://bitcoinstats.com/irc/bitcoin-dev/logs/2014/01.
On Silk Road, there are two remarkable online efforts to gather and catalog all available information, including legal documents and postings from the now defunct marketplace. One is available at http://antilop.cc/sr/. The other is at http://www.gwern.net/Silk%20Road. Many of the details in the book came from the Silk Road’s forums and Ross Ulbricht’s trial, which will be referred to in the notes by the following abbreviations:
SRF: Silk Road forum archives, http://antilop.cc/sr/download/stexo_sr_forum.zip.
RUTT: Ross Ulbricht trial transcripts, United States of America v. Ross William Ulbricht. United States District Court Southern District of New York. 14 CR 68 (KBF).
RUTE: Ross Ulbricht trial exhibits, United States of America v. Ross William Ulbricht. United States District Court Southern District of New York. 14 CR 68 (KBF).
The notes below will not contain citations for material from the sources above when it is obvious in the text where the material came from.
All Bitcoin prices are taken from CoinDesk’s Bitcoin Price Index, which is available at http://www.coindesk.com/price/, unless I have stated otherwise. The numbers on Bitcoin trading volumes come from www.bitcoinmarkets. com and www.bitcoinity.com/data.
For those looking to learn more about the topics covered in this book there are several wonderful books. On the history of the Cypherpunks, there is Andy Greenberg’s This Machine Kills Secrets: How WikiLeakers, Cypherpunks, and Hacktivists Aim to Free the World’s Information. For the history of cryptography I learned a great deal from Simon Singh’s The Code Book. For those eager to learn more about the evolution of money, Felix Martin’s Money: An Authorized Biography and Jack Weatherford’s The History of Money are wonderful reads, and Nigel Dodd’s The Social Life is thought-provoking. Those looking to go into greater depth can try A History of Money by Glyn Davies. I also benefited from Eileen Ormsby’s book Silk Road, the first of what I’m sure will be many fascinating volumes about the online bazaar.
The pagination of this electronic edition does not match the edition from which it was created. To locate a specific passage, please use your e-book reader’s search tool.
INTRODUCTION
xivonly 15 percent of the basic Bitcoin computer code: Based on calculations done for the author by Gavin Andresen.
CHAPTER 1
4this particular e-mail came from: Satoshi Nakamoto to CRYP, October 31, 2008.
4the nine-page description: A later version of the paper would be nine pages, but the initial version Hal reviewed was actually eight pages.
5tied to an Internet provider in California: Hal’s debug log showed that the IP addresse of the other user was reached through a Tor service that would have obscured the real IP address. But Tor generally routes users to nodes in the same geographic area, suggesting that the other user on Bitcoin’s first day was probably in California.
5He said he’d been testing it heavily: I have elected to use the pronoun “he” to refer to Satoshi, but Satoshi could also be she or they.
6now recorded next to one of his Bitcoin addresses: The address in question was 1AiBYt8XbsdyPAELFpcSwRpu45eb2bArMf.
12Chaum’s effort would rub Hal and others the wrong way: Hal Finney to CYPH, August 22, 1993.
12DigiCash went down with it: Tim Clark, “DigiCash Files Chapter 11,” CNET, November 4, 1998, http://news.cnet.com/2100-1001-217527 .html.
13Hal would calculate the maximum bill: This anecdote was recounted by Hal’s college roommate and later colleague, Yin Shih.
13“The work we are doing here, broadly speaking”: Hal Finney to CYPH, November 15, 1992.
CHAPTER 2
16As sociologist Nigel Dodd put it: Nigel Dodd, The Social Life of Money (Princeton, NJ: Princeton University Press, 2014).
17“We could envisage proposals in the near future”: Alan Greenspan, Conference on Electric Money and Banking, United States Treasury, September 19, 1996, http://www.federalreserve.gov/boarddocs/speeches/19960919.htm.
17a British researcher named Adam Back released his plan: Adam Back to CYPH, March 28, 1997.
18a concept called bit gold, was invented by Nick Szabo: Nick Szabo, “Bit Gold,” Unenumerated, December 2005, http://unenumerated.blogspot .co.uk/2005/12/bit-gold.html.
19Another, known as b-money, came from an American named Wei Dai: Wei Dai to CYPH, 1998.
19Hal created his own variant, with a decidedly less sexy name: Hal Finney to CYPH, August 15, 2004.
20The nine-page PDF attached to the e-mail: the current version is available at https://bitcoin.org/bitcoin.pdf.
22modeled after the contest that Adam Back: While this process was modeled on Back’s program, it also relied on the innovations of several other cryptographers and mathematicians, including Ralph Merkle, Stuart Haber, and W. Scott Stornetta.
25usually belonging to Satoshi: Satoshi’s mining activities were traced by the Argentinian researcher Sergio Demian Lerner. Sergio Demian Lerner, “The Well Deserved Fortune of Satoshi Nakamoto, Bitcoin Creator, Visionary and Genius,” Bitslog, April 17, 2013, https://bitslog.wordpress .com/2013/04/17/the-well-deserved-fortune-of-satoshi-nakamoto/.
25the first transaction took place when Satoshi sent Hal ten coins: Satoshi’s address for this transaction was 12cbQLTFMXRnSzktF kuoG3eHoMeFtpTu3S; Hal’s was 1Q2TWHE3GMdB6BZKafqwxX tWAWgFt5Jvm3.
26Satoshi was using his own computers to help power the network: Lerner.
26When a programmer in Texas wrote to Satoshi late one night: The programmer, Dustin Trammel, posted the e-mails on his blog at http://blog.dustintrammell.com/2013/11/26/i-am-not-satoshi/.
CHAPTER 3
29Before reaching out to Satoshi, Martti had written about Bitcoin on anti-state.org: Martti’s post, written under the screen name Trickster, is available at https://board.freedomainradio.com/topic/17233-p2p-currency-could-make-the-government-extinct/.
30“The root problem with conventional currency”: Satoshi Nakamoto, “Bitcoin Open Source Implementation of P2P Currency,” P2P Foundation forum, February 11, 2009, http://p2pfoundation.ning.com/forum/topics/bitcoin-open-source.
33It also meant that Satoshi’s computers were still: Sergio Demian Lerner, “The Well Deserved Fortune of Satoshi Nakamoto, Bitcoin Creator, Visionary and Geniu
s,” Bitslog, April 17, 2013, https://bitslog.wordpress .com/2013/04/17/the-well-deserved-fortune-of-satoshi-nakamoto/.
35“Be safe from the unstability caused by fractional reserve”: An archived version of the page designed by Martti is available at http://web.archive .org/web/20090511173000/http://bitcoin.sourceforge.net/.
35A few dozen people downloaded the Bitcoin program: Data on software downloads available at http://sourceforge.net/projects/bitcoin/files/stats/timeline.
37Starting in August, the log of changes to the software: The history of changes to the software is available at https://gitorious.org/bitcoin/bitcoind/activities.
37When the next version of Bitcoin, 0.2: Satoshi Nakamoto to DEV-LIST, December 17, 2009.
37the majority of coins were still: Lerner.
37throughout 2009 no one else was sending or receiving: Data on the number of transactions per block available at https://blockchain.info/charts/n-transactions-per-block.
38In the very first recorded transaction of Bitcoin for United States dollars: Information on the transaction is available at https://blockchain .info/tx/7dff938918f07619abd38e4510890396b1cef4fbeca154fb7aaf ba8843295ea2.
38NewLibertyStandard came up with his own method: The shuttered exchange is still online at http://newlibertystandard.wikifoundry.com/page/Exchange+Rate.
39Swap Variety Shop on his exchange website: The shuttered shop is still online at http://newlibertystandard.wikifoundry.com/page/Specialty+Shop.
CHAPTER 4
44But on May 22, 2010, a guy in California offered to call Lazlo’s local Papa John’s: Information about the Bitcoin transaction is available at https://blockchain.info/tx/a1075db55d416d3ca199f55b6084e2115b9345e16c5cf302fc80e9d5fbf5d48d.
44small item on the website of InfoWorld: Neil McAllister, “Open Source Innovation on the Cutting Edge,” Info World, May 24, 2010, http://www.infoworld.com/article/2627013/open-source-software/open-source-innovation-on-the-cutting-edge.html.
47“Slashdot with its millions of tech-savvy readers”: Martti Malmi to BTCF, June 22, 2010.
48“How’s this for a disruptive technology?”: “Bitcoin Releases Version 0.3,” Slashdot, July 11, 2010, http://news-beta.slashdot.org/story/10/07/11/1747245/bitcoin-releases-version-03.
CHAPTER 5
49The number of downloads would jump from around three thousand: Data on software downloads available at http://sourceforge.net/projects/bitcoin/files/stats/timeline.
49“Over the last two days of Bitcoin being”: Gavin Andresen to BTCF, July 14, 2010.
53the difficulty of mining new Bitcoins jumped 300 percent: Data on mining difficulty available at https://blockchain.info/charts/difficulty? timespan=all&showDataPoints=false&daysAverageString=1&show_ header=true&scale=0&address=.
54In one month, the forum had gained more new members: Data on forum usage available at https://bitcointalk.org/index.php?action=stats.
57“Nobody can stop the Bitcoin system”: Keir Thomas, “Could the Wikileaks Scandal Lead to New Virtual Currency?” PC World, December 10, 2010, http://www.pcworld.com/article/213230/could_ wikileaks_scandal_lead_to_new_virtual_currency.html.
CHAPTER 6
65“To tell the truth, I always felt”: Mark’s blog has been taken down, but an archived version of this post is available at http://web.archive .org/web/20140302234940/http://blog.magicaltux.net/2006/02/12/pensees-nocturnes/.
69begun in earnest in July 2010 when he had sold a cheap house in Pennsylvania: RUTE GX 250 and GX 251.
69Ross rented a cabin about an hour from his home in Austin, Texas: RUTE GX 240A.
70he knew he wanted to set up a new kind of online market: RUTE GX 240A.
70His curiosity about and penchant for the outdoors: Ross spoke about his youth in a recording done for the StoryCorps project with his friend Rene Pinnel in 2012.
70At Penn State, he had the unique distinction: Erin Rowley, “Caribbean Students Host Cultural Event,” Daily Collegian, March 24, 2008, http://www.collegian.psu.edu/archives/article_ef9c02f3-a9c2-5b8f-b1d3-f0ef82e3dce0.html. Katharine Lackey, “Paul to Visit PSU,” Daily Collegian, March 26, 2008, http://www.collegian.psu.edu/archives/article_239513a3-a577-5732-bab0-9cc27c5d4610.html.
70“Everywhere I looked I saw the State”: Dread Pirate Roberts to SRF, March 20, 2012.
70Initially, he called the project Underground Brokers: RUTE GX 240A.
71he soon had big black trash bags full of them: Richard Bates, RUTT, January 22, 2015.
72“either don’t want the spouse to see it on the bill”: Satoshi Nakamoto to BTCF, September 23, 2010.
73“I felt ashamed of where my life was”: RUTE GX 240A.
73he had, by his own accounting, gone through $20,000: RUTE GX 250.
73By the end of February, twenty-eight transactions: silkroad to BTCF, March 1, 2011.
CHAPTER 7
75“i’m so stressed! i gotta”: Richard Bates, RUTT, January 22, 2015.
75“Free Talk Live, who was broadcasting live at the time”: FreeTalk Live, March 16, 2011, https://www.freetalklive.com/content/podcast_ 2011_03_16.
76“my site had a 40 minute spot on a national”: RUTE GX 1002.
77he was sentenced to ten months in prison: Information on the case is available at http://www.justice.gov/criminal/cybercrime/press-releases/2002/verPlea.htm.
80“Law-abiding citizens can carry on their affairs”: Jerry Brito, “Online Cash Bitcoin Could Challenge Governments, Banks,” Techland blog, Time, April 16, 2011.
80“cuts across international boundaries, can be stored”: Andy Greenberg, “Crypto Currency,” Forbes, April 20, 2011, http://www.forbes .com/forbes/2011/0509/technology-psilocybin-bitcoins-gavin-andresen-crypto-currency.html.
82“This was—of course—denied”: Mark Karpeles to BTCF, May 1, 2011.
83Silk Road now had over a thousand people registered: Eileen Ormsby, Silk Road (Sydney: Pan Macmillan Australia, 2014).
83“Updating a live site to a whole new version is no easy task”: RUTE GX 240B.
83Gawker published an in-depth story about Silk Road: Adrian Chen, “The Underground Website Where You Can Buy Any Drug Imaginable,” Gawker, June 1, 2011, http://gawker.com/the-underground-website-where-you-can-buy-any-drug-imag-30818160.
83over a thousand new people were registering for Silk Road: Ormsby.
84“online form of money laundering used to disguise”: “Schumer Pushes to Shut Down Online Drug Marketplace,” June 5, 2011, http://www .nbcnewyork.com/news/local/Schumer-Calls-on-Feds-to-Shut-Down-Online-Drug-Marketplace-123187958.html.
85earning $17,000 from the sale of his mushrooms, and $14,000 from commissions: RUTE GX 250.
85“I was mentally taxed, and now I felt extremely vulnerable”: RUTE GX 240B.
8615,000 new people joined the forums: Data on forum usage available at https://bitcointalk.org/index.php?action=stats.
86He said he had long avoided determining: Martti Malmi to BTCF, June 11, 2011.
CHAPTER 8
90The selling continued until 260,000 Bitcoins were purchased: IRC, June 19, 2011.
95appeared briefly, via Skype, on The Bitcoin Show: Episode 25, June 19, 2011, https://www.youtube.com/watch?v=Ye_81RH6wiI.
95“Ready guys?”: An archived version of this chat is available at http://pastebin.com/d7vp06hL.
96“it’s likely to go the way of other”: Peter Cohan, “Can Bitcoin Survive, Is It Legal?” Forbes, June 28, 2011, http://www.forbes.com/sites/petercohan/2011/06/28/can-bitcoin-survive-is-it-legal/.
CHAPTER 9
97the founder of a small Polish Bitcoin exchange, Bitomat, announced: Kyt Dotson, “Third Largest Bitcoin Exchange Bitomat Lost Their Wallet, Over 17,000 Bitcoins Missing,” Silicon Angle, August 1, 2011, http://siliconangle.com/blog/2011/08/01/third-largest-bitcoin-exchange-bitomat-lost-their-wallet-over-17000-bitcoins-missing/.
98The founder of the site, a man who called himself Tom Williams, was unresponsive: Adrianne Jeffries, “Search for Owners of MyBitcoin Loses Steam,” BetaBeat, New Yor
k Observer, August 19, 2011, http://observer.com/2011/08/search-for-owners-of-mybitcoin-loses-steam/.
102“I know for sure attendees are flying in”: Bruce Wagner to BTCF, July 27, 2011.
104“You can call me an idiot and yeah”: Gavin’s presentation is viewable at https://www.youtube.com/watch?v=0ljx4bbJrYE.
104“be making a HUGE HUGE HUGE announcement at the Conference”: Bruce Wagner to BTCF, August 14, 2011.
104“If that’s not enough”: Wagner’s presentation is viewable at https://www.youtube.com/watch?v=pv0SdUNcBKc.
CHAPTER 10
110The announcement from the Free State Project: Erik Voorhees to BTCF, October 8, 2011.
111The people who had been attending the New York Bitcoin Meetup: Disposition to BTCF, October 4, 2011.
112“the sanctity of the individual, the priority”: Mark Lilla, “The Truth About Our Libertarian Age: Why the Dogma of Democracy Doesn’t Always Make the World Better,” New Republic, June 17, 2014, http://www.newrepublic .com/article/118043/our-libertarian-age-dogma-democracy-dogma-decline.
112“libertarian, going to replace all other currencies”: Jed McCaleb to BTCF, May 16, 2011.
114MyBitcoin users went to the FBI’s cybercrime unit: Adrianne Jeffries, “MyBitcoin.com Is Back: A Week After Vanishing with at Least $250 K. Worth of BTC, Site Claims It Was Hacked,” BetaBeat, New York Observer, August 5, 2011, http://observer.com/2011/08/mybitcoin-disappeared-with-bitcoins/.
CHAPTER 11
Digital Gold Page 33
