Bitcoin

by Dominic Frisby

  Nakamoto, Satoshi. ‘Bitcoin: a peer-to-peer electronic cash system.’ August 31, 2008. Accessed June 16, 2014. http://bit.ly/1tHFaWK.

  Nakamoto, Satoshi. ‘Bitcoin open source implementation of P2P currency.’ P2P Foundation. February 11, 2009. Accessed June 16, 2014. http://bit.ly/1tHFaWL.

  National Taxpayers’Union Talks with Milton Friedman. Professor Milton Friedman and John Berthoud. YouTube. Spring 1999. Posted August 9, 2012. http://bit.ly/1tHF8OK.

  ‘Number of credit card holders fell in India: HSBC survey.’ Hindu Business Line. May 13, 2013. Accessed March 20, 2014. http://bit.ly/1tHFaWP.

  O’Neill, Patrick H. ‘How big is the internet’s most notorious black market?’ The Daily Dot. July 30, 2013. Accessed June 16, 2014. http://bit.ly/1tHF8ON.

  Paulson, Henry M. On the Brink: Inside the Race to Stop the Collapse of the Global Financial System. New York: Business Plus, 2010.

  Peck, Morgan E. ‘Bitcoin: the cryptoanarchists’ answer to cash.’ IEEE Spectrum. May 10, 2014. Accessed June 16, 2014. http://bit.ly/1tHFaWR.

  Penenberg, Adam L. ‘The Bitcoin crypto-currency mystery reopened.’ Fast Company. October 11, 2011. Accessed June 16, 2014. http://bit.ly/1tHF8OR.

  Peston, Robert. ‘Bitcoin’s life-or-death moment’. BBC News. February 25, 2014. Accessed June 16, 2014. http://bbc.in/1tHF8OS.

  ‘Reddit’. Reddit: The Front Page of the Internet. Accessed June 15, 2014. http://bit.ly/1tHFaWT.

  ‘Researchers uncover likely author of original Bitcoin paper.’ Aston University. April 16, 2014. Accessed June 16, 2014. http://bit.ly/1tHFaWU.

  Riegel, Edwin C. The New Approach to Freedom: Together with Essays on the Separation of Money and State. San Pedro, CA: Heather Foundation, 2003. http://bit.ly/1tHF956.

  ‘Russian authorities say Bitcoin illegal.’ Thomson Reuters. February 9, 2014. Accessed June 16, 2014. http://reut.rs/1tHFaWV.

  Smith, Andrew. ‘Desperately seeking Satoshi.’ The Sunday Times. March 2, 2014.

  Southurst, Jon. ‘Why China is leading the global rise of Bitcoin.’ CoinDesk RSS. November 18, 2013. Accessed June 16, 2014. http://bit.ly/1tHF957.

  Standard, Liberty. ‘Exchange rates 2009.’ New Liberty Standard – An Economic Revolution. Accessed June 16, 2014. http://bit.ly/1tHFaWW.

  Stephenson, Neal. Cryptonomicon. New York: Avon, 1999.

  Szabo, Nicholas. ‘Ben Bernanke plays John Law.’ Unenumerated. May 13, 2008. Accessed June 16, 2014. http://bit.ly/1tHFaX0.

  Szabo, Nicholas. ‘Bit gold markets.’ Unenumerated. April 8, 2008. Accessed June 16, 2014. http://bit.ly/1tHF95b.

  Szabo, Nicholas. ‘Bitcoin – what took ye so long?’. Unenumerated. May 28, 2011. Accessed June 16, 2014. http://bit.ly/1tHFbde.

  Szabo, Nicholas. ‘Bit gold.’ Unenumerated. December 29, 2005 Accessed March 30, 2014. http://bit.ly/1tHF95d.

  Szabo, Nicholas. ‘Consulting services.’ Unenumerated. April 2, 2008. Accessed June 16, 2014. http://bit.ly/1tHF95e.

  Szabo, Nicholas. ‘Contracts with Bearer.’ Nick Szabo’s Essays, Papers, and Concise Tutorials. March 12, 2008. Accessed June 16, 2014. http://bit.ly/1tHFbdj.

  Szabo, Nicholas. ‘Flying money.’ Unenumerated. August 27, 2008. Accessed June 16, 2014. http://bit.ly/1tHF95h.

  Szabo, Nicholas. ‘How to protect your electronic privacy.’ April 27, 1993. Accessed June 16, 2014. http://bit.ly/1tHFbdn.

  Szabo, Nicholas. ‘New Zealander challenges Amazon one-click patent.’ Unenumerated. December 20, 2005. Accessed June 16, 2014. http://bit.ly/1tHF95j.

  Szabo, Nicholas. ‘Shelling out – the origins of money.’ Shelling Out – The Origins of Money. 2002. Accessed June 16, 2014. http://bit.ly/1tHFbdp.

  Szabo, Nicholas. ‘Ten ways to make a political difference’. Unenumerated. August 12, 2007. Accessed June 16, 2014. http://bit.ly/1tHF95l.

  Szabo, Nick. ‘Antiques, time, gold and bit gold.’ Unenumerated. August 28, 2008. Accessed June 16, 2014. http://bit.ly/1tHFbdq.

  Taylor, Adam. ‘Alleged founder of Silk Road posted LinkedIn manifesto about using economic theory to change the world.’ Business Insider. October 2, 2013. Accessed June 16, 2014. http://j.mp/1tHFbds.

  Thomas, Keir. ‘Could the Wikileaks scandal lead to new virtual currency?’ PCWorld. December 10, 2012. Accessed June 16, 2014. http://bit.ly/1tHF95n.

  Titcomb, James. ‘Bitcoin under threat as MtGox goes offline.’ The Telegraph. Telegraph Media Group, February 25, 2014. Accessed June 16, 2014. http://bit.ly/1tHF9lC.

  Treanor, Jill, Wintour, Patrick and Ashley Seager. ‘Staring into the abyss.’ Guardian. October 9, 2008. Accessed June 16, 2014. http://bit.ly/1tHF9lF.

  Worstall, Tim. ‘Finally, a proper use for Bitcoin, avoiding capital controls.’ Forbes. November 21, 2013. Accessed June 16, 2014. http://onforb.es/1tHFbtQ.

  Yeoman, Kyla. ‘M-Pesa helps world’s poorest go to the bank using mobile phones.’ The Christian Science Monitor. January 6, 2014. Accessed June 16, 2014. http://bit.ly/1tHF9lH.

  Notes

  Prologue

  1 Juan Manuel Chaves Echeverri, ‘The Global Financial Tsunami: 2008,’ Lingnan Journal of Banking, Finance and Economics (2012) Volume 3, http://bit.ly/1tHFaGe.

  Hank Paulson, ‘On the Brink: Inside the Race to Stop the Collapse of the Global Financial System,’ Business Plus, February 2010.

  Ashley Seager, Jill Treanor and Patrick Wintour, ‘Staring into the abyss,’ Guardian, October 8, 2008, accessed January 22, 2014. http://bit.ly/1tHF9lF.

  2 Satoshi Nakamoto, ‘Bitcoin: A Peer-to-Peer Electronic Cash System,’ August 31, 2008, http://bit.ly/1tHFaWK.

  3 Satoshi Nakamoto, ‘Bitcoin P2P e-cash paper,’ Cryptography Mailing List, November 1, 2008, accessed March 2, 2014. http://bit.ly/1tHF9lM.

  4 Ibid.

  5 SourceForge.net, accessed January 22, 2014, http://bit.ly/1tHFbtP.

  What is Bitcoin? How is it Made?

  6 New Liberty Standard, ‘2009 Exchange Rate,’ accessed January 28, 2014, http://bit.ly/1tHFbtR.

  7 American Time Use Survey, BLS, October 23, 2013, accessed May 8, 2014, http://1.usa.gov/1tHFbtU.

  8 Asli Demirguc-Kunt and Leora Klapper, ‘Measuring Financial Inclusion: The Global Findex Database,’ World Bank, April 1, 2012, http://bit.ly/1tHF9lS.

  9 ‘How Currency Gets into Circulation,’ Federal Reserve Bank of New York, February 7, 2014, http://nyfed.org/1tHF8OC.

  10 Based on US M3 (one measure of money supply) of $16 trillion, Nick Laird, ‘Sharelynx,’ February 10, 2014, http://bit.ly/1tHF9lT. Based on M2 (another money supply measure) of $11 trillion, about 11% of US dollars exist in physical form, Federal Reserve Bank of St Louis, February 10, 2014, http://bit.ly/1tHF8OH.

  11 ‘How Currency Gets into Circulation,’ Federal Reserve Bank of New York, February 7, 2014, http://nyfed.org/1tHF8OC.

  12 Bank of England Statistical Release, January 30, 2014, accessed February 10, 2014, http://bit.ly/1tHF7KB.

  13 Satoshi Nakamoto, ‘Bitcoin open source implementation of P2P currency,’ P2P Foundation, accessed January 28, 2014, http://bit.ly/1tHFaWL.

  14 Ibid.

  15 David Chaum. ‘Blind signatures for untraceable payments,’ 1982, accessed February 13, 2014, http://bit.ly/1tHFaGd.

  16 ‘How DigiCash Blew Everything,’ Next, January 1999, accessed February 11, 2014, http://bit.ly/1tHF9C8.

  17 Stephen Foley, ‘Bitcoin needs to learn from past e-currency failures,’ Financial Times, November 28, 2013, accessed February 11, 2014, http://on.ft.com/1tHFaGn.

  18 ‘Bitcoin open source implementation of P2P currency.’

  19 Gwern Branwen, ‘Silk Road: Theory & Practice’ June 2011, accessed May 14, 2014. bit.ly/1tHF8y9.

  20 ‘Bitcoin open source implementation of P2P currency.’

  21 Leslie Lamport, Robert Shostak and Marshall Pease, ‘The Byzantine Generals Problem,’ SRI International, April 1980. Reliable computer systems must handle malfunctioning components that give conflicting information to different parts of the system. This situa
tion can be expressed abstractly in terms of a group of generals of the Byzantine army camped with their troops around an enemy city. Communicating only by messenger, the generals must agree upon a common battle plan. However, one or more of them may be traitors who will try to confuse the others. The problem is to find an algorithm to ensure that the loyal generals will reach agreement. It is shown that, using only oral messages, this problem is solvable if and only if more than two-thirds of the generals are loyal; so a single traitor can confound two loyal generals.

  22 ‘Bitcoin open source implementation of P2P currency.’

  23 Gwern Branwen, ‘Silk Road: Theory & Practice,’ June 2011, accessed May 14, 2014, http://bit.ly/1tHF8y9.

  24 Joshua Davis, ‘The crypto-currency,’ New Yorker, October 10, 2011, 62.

  25 Ibid.

  26 Dan Kaminsky, ‘I Tried Hacking Bitcoin and I Failed,’ Business Insider, April 12, 2013, accessed March 10, 2014, http://read.bi/1tHF8OE.

  The Anarchic Computing Subculture where Bitcoin has its Roots

  27 Tim May, ‘The Crypto Anarchist Manifesto,’ 1998, accessed March 3, 2014. http://bit.ly/1tHF8OI.

  28 Eric Hughes, ‘A cypherpunk’s manifesto,’ March 1993, accessed January 27, 2014, http://bit.ly/1tru7gG.

  29 Ibid.

  30 Before Bitcoin was announced, Satoshi contacted Adam Back, wanting to make sure he was referencing Back correctly. In their exchange, Back said Satoshi’s idea reminded him of Dai’s. Satoshi then emailed Dai, saying, ‘I was very interested to read your b-money page. I’m getting ready to release a paper that expands on your ideas into a complete working system. Adam Back (Hashcash.org) noticed the similarities and pointed me to your site.’ It’s possible Satoshi had had the same idea independently but was only referencing that Dai had had the idea first.

  Wei Dai, comments on ‘Bitcoins are not digital greenbacks’, Less Wrong, April 19, 2013, accessed March 13, 2013, http://bit.ly/1tru4RU.

  31 Nick Szabo, ‘Bit gold,’ Unenumerated, December 29, 2005, accessed March 30, 2014, http://bit.ly/1tHF95d. N.B. The earliest example I can find of Szabo’s proposal dates to 2005, long before Bitcoin, and he begins his blogpost with the line, ‘A long time ago I hit upon the idea of bit gold,’ and there are references to it from many contemporaries, so I can see no reason to doubt the assertion that the idea was hatched in the late 1990s.

  32 Morgan E. Peck, ‘The Cryptoanarchists Answer to Cash,’ IEEE Spectrum, May 30, 2012, accessed May,10, 2014, http://bit.ly/1tHFaWR.

  33 ‘Bit gold.’

  34 Ian Grigg, Ian Goldberg, David Chaum, Stefan Brands, Steve Schear, John Gilmore, Ryan Lackey, Ben Laurie, Jim McCoy, Bram Cohen, Paul Kocher, Zooko, Adam Shostack, Len Sassaman, Ulf Moeller and the army of cryptographers, from Gavin Andresen to Jeff Garzik and beyond, who helped develop Bitcoin in the open-source community.

  35 Satoshi Nakamoto, ‘Bitcoin v0.1 released’, Cryptography Mailing List, January 9, 2009, accessed March 2, 2014, http://bit.ly/1tru7wY.

  36 Hal Finney, ‘Bitcoin v0.1 released’, Cryptography Mailing List. January 11, 2009, accessed March 2, 2014. http://bit.ly/1tru7wZ.

  37 ‘Bitcoin open source implementation of P2P currency,’

  The Rise of Bitcoin and the Disappearance of its Maker

  38 ‘Wikileaks contact info?,’ BitcoinTalk, November–December, 2010, accessed March 23, 2014, http://bit.ly/1rVaJg3.

  39 Keir Thomas, ‘Could the Wikileaks Scandal Lead to New Virtual Currency?,’ PC World, December 10, 2010, accessed February 26, 2014. http://bit.ly/1tHF95n.

  40 ‘Money Laundering Using New Payment Methods,’ Financial Action Taskforce, October 2010, accessed May 10, 2014, http://bit.ly/1tHFaGm.

  41 Satoshi Nakamoto, ‘Added some DoS limits, removed safe mode (0.3.19),’ BitcoinTalk, December 12, 2010, accessed March 24, 2014, http://bit.ly/1trBfth.

  42 The Bitcoin Show with Bruce Wagner, September 15, 2011, accessed February 26, 2014, http://bit.ly/1trBch2.

  43 Jerry Brito, ‘Online Cash Bitcoin Could Challenge Governments, Banks,’ Time, April 16, 2011, accessed February 24, 2014, http://ti.me/1tru7x1.

  44 ‘Bitcoin Virtual Currency: Unique Features Present Distinct Challenges for Deterring Illicit Activity,’ United States Federal Bureau of Investigation, April 24, 2014, accessed May 15, 2014, http://wrd.cm/1tru4RX.

  45 JJ Colao, ‘With 60 Million Websites, WordPress Rules The Web. So Where’s The Money?,’ Forbes, September 5, 2012, accessed February 26, 2014, http://onforb.es/1tru7x6.

  46 ‘Proof of massive fraudulent trading activity at Mt. Gox, and how it has affected the price of Bitcoin,’ The Willy Report, May 25, 2014, accessed May 27, 2014, http://bit.ly/1tru4RY.

  47 ‘Russian authorities say Bitcoin illegal,’ Reuters, February 9, 2014, accessed February 27, 2014, http://reut.rs/1tHFaWV.

  48 Robert Peston, ‘Bitcoin’s life-or-death moment,’ BBC News, February 25, 2014, accessed February 26, 2014, http://bbc.in/1tHF8OS.

  49 James Titcomb, ‘Bitcoin under threat as MtGox goes offline,’ Daily Telegraph, February 25, 2014, accessed February 26, 2014, http://bit.ly/1tHF9lC.

  50 mtreme, ‘Gox horror story thread,’ Reddit, accessed May 10, 2014, http://bit.ly/1tru7x8.

  51 AdamSC1, ‘Vault of Satoshi Launches Full Public Proof of Solvency (Not Just an Audit),’ Reddit, April 21, 2014, accessed May 11, 2014, http://bit.ly/1tru7x9.

  Nerds, Squats and Millionaires

  52 I didn’t know it at the time, but Sean’s Outpost is a nine-acre sanctuary for the homeless in Florida funded by bitcoin donations. It is known as Satoshi Forest.

  53 Victoria McNally, ‘How the Heck Do You Pronounce “Doge,” Anyway?,’ GeekoSystem, accessed February 10, 2014, http://bit.ly/1tHF8OJ.

  How a Computer Nerd became the FBI’s Most Wanted Drug Dealer

  54 David Kushner, ‘Dead End on Silk Road: Internet Crime Kingpin Ross Ulbricht’s Big Fall,’ Rolling Stone, February 4, 2014, accessed March 1, 2014, http://rol.st/1tHFaGu.

  55 Patrick Howell O’Neill, ‘How big is the Internet’s most notorious black market?,’ The Daily Dot, July 30, 2013, accessed May 14, 2014, http://bit.ly/1tHF8ON.

  56 Fran Berkman, ‘Alleged Silk Road Mastermind Was a Dirty Hippie, Best Friend Says,’ Mashable, November 4, 2013, accessed March 1, 2014, http://on.mash.to/1tHF8y5.

  57 Ibid.

  58 Ross Ulbricht, ‘Thoughts on Freedom,’ July 6, 2010, accessed March 1, 2014, http://on.fb.me/1trBch6.

  59 Adam Taylor, ‘Alleged Founder Of Silk Road Posted LinkedIn Manifesto About Using Economic Theory To Change The World,’ Business Insider, October 2, 2013, accessed March 1, 2014, http://read.bi/1tHFbds.

  60 Fran Berkman, ‘Alleged Silk Road Mastermind Was a Dirty Hippie, Best Friend Says,’ Mashable, November 4, 2013, accessed March 1, 2014, http://on.mash.to/1tHF8y5.

  61 ‘Anonymous market online?,’ Shroomery, January 27, 2011, accessed March 1, 2014, http://bit.ly/1tru4S2.

  62 ‘Huge sell off + Ordering not possible on MtGox’, BitcoinTalk, June 19, 2011, accessed March 1, 2014, http://bit.ly/1tru4S5.

  63 ‘IT pro needed for venture backed bitcoin startup,’ BitcoinTalk, October 11, 2011, accessed March 1, 2014, http://bit.ly/1tru7xg.

  64 Ulbricht Criminal Complaint. FBI Agent Christopher Tarbell before Honorable Frank Maas, United States Magistrate Judge, Southern District of New York, October 2013, accessed March 1, 2014, http://bit.ly/1tru7xf.

  65 Ibid.

  66 Ibid.

  67 Ibid.

  68 Ibid.

  69 Ibid.

  70 David Gilbert, ‘FBI’s Christopher Tarbell – The Elliot Ness of Cyberspace who Busted Silk Road,’ International Business Times, October 3, 2013, accessed March 2, 2014, http://bit.ly/1tHF8yl.

  71 ‘DarkList Aims To Be The ‘Yelp’ Of Silk-Road-Style Drug Dealers,’ Mainstreamlos, January 24, 2014, accessed February 28, 2014, http://bit.ly/1tru4S7.

  72 Ibid.

  Who is Satoshi Nakamoto?

  73 Leah McGrath Goodman, �
��The Face Behind Bitcoin,’ Newsweek, March 6, 2014, http://bit.ly/1tHFaGp.

  74 Dorian Nakamoto, ‘Reviews,’ Amazon, accessed March 11, 2014 http://amzn.to/1tru7Nv.

  75 Ibid.

  76 Dorian Nakamoto, email message to Ann Kerman, December 1, 2009, accessed April 10, 2014. http://bit.ly/1tru7Nw.

  77 O Scale Trains Magazine, July/August 2009, 19, accessed April 10, 2014, http://bit.ly/1truasE.

  78 Satoshi Nakamoto, comment on ‘Bitcoin open source implementation of P2P currency,’ P2P Foundation, March 7, 2014, accessed March 11, 2014. http://bit.ly/1tru7Nx.

  79 Andrew Smith, Twitter, accessed April 10, 2014, http://bit.ly/1truasF.

  80 Hal Finney, ‘Detecting Double Spending,’ October 15, 1993, accessed February 15, 2014, http://bit.ly/1truasH.

  81 ‘Bitcoin v0.1 released,’ The Cryptography Archive, accessed January 24, 2014, http://bit.ly/1tru7Ny.

  82 Satoshi Nakamoto, ‘Re: Bitcoin does NOT violate Mises’ Regression Theorem,’ BitcoinTalk, 27 August, 2010, accessed March 3, 2014, http://bit.ly/1trBch7.

  83 Hal Finney, ‘Bitcoin and me,’ Bitcointalk, March 19, 2013, accessed January 24, 2014, http://bit.ly/1trBftp.

  84 Ibid.

  85 Ibid.

  86 Andy Greenberg, ‘Nakamoto’s Neighbor: My Hunt For Bitcoin’s Creator Led To A Paralyzed Crypto Genius,’ Forbes, March 25, 2013, accessed March 26, 2014, http://onforb.es/1tHF8ym.

  87 ‘Weaknesses,’ Bitcoin Wiki, accessed March 5, 2014, http://bit.ly/1trBch8.

  88 Greenberg, ‘Nakamoto’s Neighbor: My Hunt For Bitcoin’s Creator Led To A Paralyzed Crypto Genius.’

  89 Ibid.

  90 ‘Bitcoin and me.’

  91 Satoshi Nakamoto, ‘Re: Bitcoin P2P e-cash paper,’ Cryptography Mailing List, November 14, 2008, accessed February 19, 2013, http://bit.ly/1tru7NC.

  92 Wei Dai, comments on ‘Bitcoins are not digital greenbacks,’ Less Wrong, April 19, 2013, accessed March 13, 2013, http://bit.ly/1tru4RU. See also: Note 30.