Nick Szabo – The Man Behind The Cryptocurrency Curtain Revealed
- Nick Szabo is a lesser known, yet hugely influential coder and cryptocurrency pioneer
- Nick Szabo pioneered the idea of smart contracts, and hence was instrumental in laying the groundwork for the current Ethereum Protocol
- Due to an early paper titled ‘Bit Gold,’ some have gone so far as to suggest that Nick Szabo is the real Satoshi Nakamoto
10-years prior to the creation of Bitcoin, a lesser-known computer science and law graduate named Nick Szabo, theorized that one day, ‘Bits’ (meaning bytes of computer code) could form the basis of a new kind of world currency.
In his 1998 paper ‘Bit Gold,’ Nick Szabo analyzed the origins of money as we know it. He then came to the conclusion that some form of digital world currency, would be the inevitable final evolution of physical cash. More strikingly, in an earlier paper from 1996, Nick first coined the term ‘smart contract.’ Specifically, while detailing how smart contracts as we know them today, would eventually prove superior to traditional paper-based consensus mechanisms.
Is Nick Szabo Satoshi Nakamoto?
To say that Nick Szabo’s 1998 ‘Bit Gold’ paper bares similarities to 2008’s Bitcoin whitepaper by Satoshi Nakamoto is an understatement.
- Szabo’s Bit Gold paper postulated that a time-stamped proof of work consensus mechanism would be required to give a future digital currency real value
- Bit Gold theorized that after one cryptographic problem being solved by the owner of a ‘Bit String,’ that string would form the basis of the puzzle designed to be solved by the owner of the next Bit String
- Overall, the Szabo paper outlined the idea of a distributed ledger which could be used to track, monitor, and verify transactions
Of course, Bit Gold never became a reality in of itself. However, just one week after writing:
“Bit Gold would greatly benefit from a demonstration, an experimental market (with e.g. a trusted third party substituted for the complex security that would be needed for a real system). Anybody want to help me code one up?”
The enigmatic Satoshi Nakamoto released the original Bitcoin whitepaper.
Needless to say, Szabo has since been speculated to be the very man behind the Satoshi Nakamoto namesake. Szabo, however, vehemently denies that this is true.
Szabo’s Influence on Ethereum Explained
In his 1996 paper “Smart Contracts: Building Blocks for Digital Free Markets,” Nick Szabo outlined the very ideas which underpin the Ethereum protocol as we currently know it.
Thankfully, Ethereum’s creator Vitalik Buterin hasn’t been as secretive as Satoshi Nakamoto, with regard to taking credit for Ethereum’s creation. Szabo’s influence on Ethereum, however, is profound. This is due to the fact that “Smart Contracts: Building Blocks for Digital Free Markets,” outlined the exact privacy, enforcement, observability, and verification processes, which the Ethereum protocol (and other cryptocurrency protocols) use to this day to execute smart contract transactions.
Szabo’s Modern Influence on the Cryptocurrency Market
Regularly posting to his blog ‘Unenumerated,’ Nick Szabo continues to inspire conversation regarding modern monetary concepts. At the same time, Szabo is a well-known advocate of second layer sidechain solutions to modern cryptocurrency scaling problems. In fact, Szabo is known to be in particular favor of the forthcoming Litecoin lightning Network.
Of course, rumors still about that Szabo is the chief architect of Bitcoin itself. As it stands, however, this matter will likely only ever be reconciled, if and when Szabo officially reveals himself as such.