Beginner’s Guide #3: Bitcoin's Pre-History and the Cypherpunks with Aaron van Wirdum - WBD184

Summary

Podcast Summary: The Peter McCormack Show – Beginner’s Guide #3: Bitcoin's Pre-History and the Cypherpunks with Aaron van Wirdum (WBD184)
Release Date: January 10, 2020

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Introduction

In the third installment of his Bitcoin Beginner's Guide series, Peter McCormack welcomes Aaron van Wirdum, Technical Editor at Bitcoin Magazine, to delve into the foundational projects and the cypherpunk movement that paved the way for Bitcoin. This episode explores the evolution of digital money, highlighting key innovations, successes, and shortcomings of early attempts to create a decentralized financial system.

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Early Attempts at Digital Money

David Chaum's eCash and DigiCash

Peter and Aaron begin by discussing David Chaum’s pioneering work in digital money. Chaum introduced eCash, a form of digital currency aimed at ensuring user privacy. Chaum envisioned a system where transactions could remain confidential, mirroring the anonymity of physical cash.

Aaron van Wirdum [08:48]: "Everything you do could be known to anyone else, could be recorded forever. This is antithetical to the basic principle underlying the mechanics of democracy."

Chaum founded DigiCash, a company in Amsterdam, which aimed to provide anonymous payment solutions to banks. Despite its innovative approach to privacy, DigiCash was centralized, relying on banks to issue and manage eCash, which ultimately limited its adoption and long-term viability.

Wei Dai's B Money

Next, Aaron introduces B Money, proposed by Wei Dai. Unlike eCash, B Money emphasized decentralization, aiming to create a system where all participants maintained their own ledgers without relying on a central authority.

Aaron van Wirdum [42:12]: "Nick Szabo basically introduced the concept. He invented it."

B Money faced challenges such as preventing double-spending and establishing a method for consensus across a decentralized network, issues that remained unresolved until the advent of Bitcoin.

Nick Szabo's BitGold

Aaron then shifts focus to BitGold, developed by Nick Szabo, which closely resembles Bitcoin in its design. BitGold proposed a decentralized digital currency where participants would use proof-of-work to generate new units, effectively creating digital scarcity.

Aaron van Wirdum [51:56]: "He wanted to make a digital money that had this unforgeable costliness that was, you know, that's what we talk about today when we talk about stock to flow."

Despite its promising framework, BitGold was never fully implemented, primarily due to the lack of a robust consensus mechanism and the integration of a scalable network protocol.

Adam Back's Hashcash

Hashcash, created by Adam Back, was another significant precursor. Initially designed to combat email spam by requiring computational work to send messages, Hashcash introduced the concept of proof-of-work, which would later become a cornerstone of Bitcoin’s mining process.

Aaron van Wirdum [37:52]: "Hashcash introduced this idea that you can tie real world resources to something digital."

Hashcash's implementation demonstrated the feasibility of associating real-world computational effort with digital transactions, laying the groundwork for Bitcoin’s security model.

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The Cypherpunk Movement

Origins and Principles

The episode delves into the Cypherpunk movement, a collective of cryptography enthusiasts advocating for privacy-enhancing technologies as a means to preserve individual freedoms in the digital age. The movement emerged from groups like the Extropians, futurists focused on technological advancements and societal progress.

Aaron van Wirdum [25:29]: "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. We must defend our own privacy if we expect to have any."

Key Figures and Contributions

Prominent figures such as Eric Hughes, Tim May, and Nick Szabo played pivotal roles in shaping the cypherpunk ideology. They emphasized the importance of decentralized systems to prevent government overreach and ensure financial autonomy.

Aaron van Wirdum [39:40]: "In a crypto anarchy, the government is not temporarily destroyed, but permanently forbidden and permanently unnecessary."

The cypherpunks fostered innovations like PGP (Pretty Good Privacy) for secure communications, Tor for anonymous browsing, and WikiLeaks for information transparency, all of which underscore their commitment to privacy and decentralized control.

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Innovations and Challenges in Early Digital Money Proposals

Decentralization and Consensus

One of the major breakthroughs in digital money proposals was the shift towards decentralization, where no single entity controls the ledger. Both B Money and BitGold introduced the concept of distributed ledgers, anticipating the blockchain technology that Bitcoin would later perfect.

Aaron van Wirdum [42:38]: "They began to propose that all participants are going to have the ledger, and they're all going to update their ledger every time a transaction is made."

However, these early systems struggled with achieving consensus and preventing double-spending without a central authority, highlighting the need for a more robust solution.

Proof-of-Work and Security

Proof-of-Work (PoW) emerged as a fundamental security mechanism, ensuring that creating new units of currency required significant computational effort. This concept not only deterred spam and abuse, as seen with Hashcash but also provided a foundation for securing the network against malicious activities.

Aaron van Wirdum [36:54]: "It introduced something new. It introduced this idea that you can tie real world resources to something digital."

Despite its potential, implementing PoW in a decentralized manner posed significant technical challenges that Bitcoin successfully addressed through its blockchain structure.

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Transition to Bitcoin

Satoshi Nakamoto’s Synthesis

The culmination of these early efforts and ideologies was Bitcoin, introduced by the enigmatic Satoshi Nakamoto. Bitcoin ingeniously combined proof-of-work with a decentralized consensus mechanism, resolving issues like double-spending and ensuring the integrity of the ledger without a central authority.

Aaron van Wirdum [57:04]: "Bitcoin brilliantly combined these things by having new coins come into circulation through proof of work, but not as the proof of works themselves, but through a distribution, distribution mechanism."

Innovative Features

Bitcoin's distinctive features, such as its fixed supply of 21 million coins, introduced economic incentives for miners and holders, fostering a speculative environment that encouraged widespread participation and investment.

Aaron van Wirdum [55:55]: "With 20 million coins that gives each coin a value of about 10 million."

Additionally, Bitcoin incorporated a longest-chain rule, where the longest valid blockchain is considered the true ledger, enhancing security and consensus accuracy.

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Cypherpunks' Legacy and Bitcoin's Success

Peter and Aaron reflect on the enduring influence of the cypherpunk movement on Bitcoin and modern digital privacy technologies. The movement's emphasis on privacy, decentralization, and resistance to censorship continues to resonate within the cryptocurrency community.

Peter McCormack: "Learning about the cypherpunks and what they stood for also helped me understand why such people as Matt O'Dell keep on about the importance of bitcoin privacy."

Bitcoin stands as the most successful realization of these early visions, effectively addressing past challenges and establishing itself as a resilient digital currency supported by a robust and engaged community.

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Conclusion

This episode of The Peter McCormack Show provides a comprehensive overview of the historical context and ideological underpinnings that led to the creation of Bitcoin. By examining the successes and limitations of early digital money projects and the influential cypherpunk movement, listeners gain a deeper appreciation for Bitcoin’s innovative design and its mission to create a decentralized, privacy-focused financial system.

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Notable Quotes:

• Aaron van Wirdum [08:48]: "Everything you do could be known to anyone else, could be recorded forever. This is antithetical to the basic principle underlying the mechanics of democracy."

• Aaron van Wirdum [25:29]: "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. We must defend our own privacy if we expect to have any."

• Aaron van Wirdum [36:54]: "It introduced something new. It introduced this idea that you can tie real world resources to something digital."

• Aaron van Wirdum [57:04]: "Bitcoin brilliantly combined these things by having new coins come into circulation through proof of work, but not as the proof of works themselves, but through a distribution, distribution mechanism."

• Peter McCormack: "Learning about the cypherpunks and what they stood for also helped me understand why such people as Matt O'Dell keep on about the importance of bitcoin privacy."

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Further Listening

Stay tuned for the next episode in the series, where Peter McCormack will continue exploring Bitcoin fundamentals with Dan Held, focusing on what Bitcoin is and how it operates.

Transcript

[Peter McCormack]

Welcome to the what Bitcoin did podcast. Hi there, how are you all? Welcome to the what Bitcoin did podcast which is brought to you by the mighty Kraken. The best place to buy, sell and trade bitcoin. I'm your host Peter McCormack and today I've got part three of my Bitcoin beginner's guide. I have an interview with Aaron Van Weardem, technical editor at Bitcoin Magazine and we're going to discuss the precursors to bitcoin and the cypherpunk movement. But before that I do have a message from my amazing show sponsors. So first up today it's BlockFi, the future of bitcoin and financial services. And what an amazing year they had last year. And I know that they are going to crush it this year and there's no better place to kick this off than what they announced with their plans for 2020. I really cannot wait for this. BlockFi are going to be launching a BTC rewards credit card. Yes. You're going to be able to earn Bitcoin cashback rewards from your credit card. Amazing. Can't wait to get this, can't wait to try it out. They've also got a mobile app coming and they've just announced support for USDC and Litecoin and this is on top of their market leading products. They have the best crypto backed loans product in the market and they also have the best interest accounts in the market for your bitcoin, ether and gUSD. I'm a customer and I love getting my interest every month.

[Aaron Van Weerdem]

I do love these interest accounts.

[Peter McCormack]

2020 is going to be massive for BlockFi. So if you're interested in checking them out, I recommend you do your own research then head over to blockfi.com which is B L-O-C-K-F I.com and next up we have the mighty Kraken. You know Kraken, you know they're the best place to buy, sell and trade bitcoin. But why I bang on about this the whole time, why do I use them? Well firstly, they've got the most secure exchange in the market. They put safeguarding of your funds and your privacy as their number one objective. If you never heard my show with Nick Pacoco, their chief Security officer, go back and check it out. It was a monster. Also, they have an additional layer of near real time hyper personalized support through Kraken Account management. And if you're a trader, come on, why would you trade anywhere else? They've got so many products. Their suite of products is second to none. They've got kraken.com, the best place to trade bitcoin. You can supercharge your trades with up to 5x leverage. You've got access to to the second pricing data with cryptocurrency indices powered by CF benchmarks. They've got next level trading with bitcoin futures. Their OTC desk offers deeper liquidity and they've got more private and personalized service. They've also got cryptowatch where you can access markets across multiple exchanges at a glance. And at the end of last year they launched Kraken Pro, a badass, beautiful mobile first app so you can try Kraken wherever you are. There is no better place to trade bitcoin. Find out [e-mail] or download the app which is available for the iPhone and Android. Just search for Kraken Pro which is K R A K E N P R O okay, onto part three of my Bitcoin Beginner's Guide and I couldn't wait to make this one. I really, really love this subject. So following the first two episodes where we looked at why we need bitcoin and then what money is, and before we dive into what bitcoin is itself and how it works, we're going to take a look at the digital money projects which led to bitcoin and the cypherpunk movement which them for this, I'm very, very lucky to have Aaron Van Wearden on the show who's the technical editor at Bitcoin Magazine, and he was also the author of the Genesis Files, a series of articles exploring these projects which also helped me prep for this interview. So bitcoin was not the first attempt at digital money. In fact, there have been a number of attempts and proposals, from the likes of David Chaum's eCash to Wei Dai's B Money, Nick Szabo's BitGold to Adam Back's Hash Cash. While there are many other important parts of history, these are some of the key projects which will help you understand how bitcoin came to be. They are the building blocks.

[Aaron Van Weerdem]

They are the pieces of the puzzle.

[Peter McCormack]

Which Satoshi Nakamoto used to create Bitcoin along with his own innovations. So in this show we're going to get into the merits of these projects and proposals, what worked, what didn't, what the innovations were and how they fit into bitcoin. And we talk about the cypherpunk movement and the people who are involved in that and what they stood for and what they wanted to achieve. It's a really awesome show. I hope you enjoy as much as, I hope making it. If you've got any questions, feel free to hit me up.

[Aaron Van Weerdem]

My email address is.

[Peter McCormack]

Hello, bitcoindeer.com.

[Aaron Van Weerdem]

Aaron, how are you?

I'm good. How are you?

I'm pretty good. Thank you for doing this at last minute. So I've been doing this beginner's guide to bitcoin. I've been wanting to put together this resource for people whereby if they're new to bitcoin and they want to get, like, learn as much as they can as quickly as possible, it's a series of interviews that takes them through all the things that they will kind of want to learn as quickly as possible. So I've done two shows already. The first one I did with was with Andreas where we covered why we need bitcoin so people understand why it's important. The second one I did was with Parker Lewis talking about money. So people understand money, how they think about money. Because I know myself before bitcoin, I hadn't thought about money. Hopefully after those two interviews, people will have an interest in bitcoin. What I think next is a good point is to talk to them about the precursors to bitcoin, why they did it, what went right, what went wrong, so they can understand it before we talk about bitcoin. And there's no better person to do that with than you because your Genesis Files were fantastic. So this is what we're going to do today.

Thanks. Yeah, I mean, I will add, I don't consider myself necessarily the top expert on any of these particular topics, because for any of these particular topics, the top expert would be, you know, Nick Szabo, for his work, you interviewed him. But I think I hope I can give you kind of a nice bird's eye view of like the whole process and the step by step iteration of how we got to bitcoin.

[Peter McCormack]

Yeah.

[Aaron Van Weerdem]

Well, I think Nick would be great, but I think yourself as a journalist comes at it a different way. So I would have preferred to do that. Well, I am doing it with you, which is great. So during your Genesis files, you kind of identified four key projects. But also I've dropped in there into the narrative, the. The part of the cypherpunks.

Sure.

So we'll work through it all. But essentially there is a history of people who have tried to create a new form of money.

Yeah. I would note actually the Genesis Files articles, in a way, I kind of see it as, like, series one. I've always wanted to do a series two because there are some projects that. That are worth covering that I haven't yet, like arpa, which was Helvini's thing, and Egold. But I do think that the four that I did cover maybe give the best sort of linear progression towards bitcoin in a way.

[Peter McCormack]

Yeah.

[Aaron Van Weerdem]

And it was funny because I've read your articles before. I've read all four of them, but I've never read them all together in one go like I did in prepping for this. And what becomes very clear is this journey to bitcoin. All the things that were tried, all the things that happened that led up to why bitcoin worked. Because without it, you can dive into the world of bitcoin and it's really complicated. But there were a number of things that had to have happened to make bitcoin itself happen.

Yeah, it definitely didn't come out of nothing, which some people may still think there was nothing. And then all of a sudden, this Satoshi demigod created bitcoin and there it was. No. Yeah. It was more of a step by step process. And if you see all the steps, then you also see that satoshi, he didn't invent anything particularly new. He just put it together in a very clever way. A very clever way. I mean, all credit to him. I don't want to take anything away from that. Like, it was genius. But all of the pieces of the puzzle were there.

Yeah, it was a jigsaw puzzle he pulled together. And he rightly. Thanks. And cites those people who influenced the work in the white paper for bits of it.

[Peter McCormack]

Well, yeah, well.

[Aaron Van Weerdem]

So, interestingly, I don't know if you noticed, with my interview with Szabo, I actually asked him if he was a bit pissed that he wasn't cited in the white paper. And that was a cool response he gave. But one of the interesting parts for me is that I thought the cypherpunks were around before. E. Cash and the Digicash Project by David Chaum. It was when I was going through this, I actually realized, no, David Chown predates all of this. You know, he really saw what was coming with the Internet and we saw what was, you know, the importance of privacy. And I'm gonna. This is a quote I'd actually read a few times before. But I'm gonna start with this quote because I think it's really important. But he said everything you do could be known to anyone else, could be recorded forever. Is antithetical to the basic principle underlying the mechanics of democracy. Great quote.

Yeah, yeah, yeah, for sure. I mean, I think privacy is such an important thing just for society in general without it, and that this is one of the things he foresaw, is that the Internet, if we're not careful, could become this huge panopticon, right, where everyone could be watched at any potential time. You're not sure if you're actually being watched, but just the potential alone is scary. And it would influence behavior, it would disincentivize dissidents or, you know, critical journalism even, and all of that. So if you have no privacy, you just behave differently. And with something digital, like in the Internet, it's not even your. It's not even the current powers that be that you might be scared of, but you don't know who's going to be in power in 10 years. And if all of this data, if all of your personal data, including, like, transaction data, if it's all stored, you know, you don't know who's going to be very unhappy with you ten years from now.

And you know what? We look at the Internet right now, we look at everything that happened over the last, say, decade, everything that's happened with Edward Snowden, for example, all the issues we have with censorship online. And he was talking about this at the CERN conference in Geneva in 94. He saw all of this coming.

Chum did. Yeah, yeah, yeah, for sure. It's like the whole world was kind of asleep for decades while people like David Chauman, Cypherpunks, they were ringing the alarm bell and no one was listening. And only recently has this become kind of part of the public consciousness, that the Internet is actually a big risk for privacy and therefore for freedom. I do like to think that even though we've kind of dwelled in the completely wrong direction, I do like to think that some of these guys at least kind of carved out safe space that's there today. Even though the Internet did become kind of a panopticon, at least we have something like Tor, you know, it's there if you really need it. And that's something Snowden used, for example, to contact Greenwald. And, you know, so even though the Internet is not private in general, there's still these safe spaces. And a lot of the guys we will talk about did help, you know, establish that, did help safeguard that.

Well, I would say right now there is definitely a movement of people who are understanding, you know, the importance of privacy, the importance of money, which isn't controlled by the state. You know, we have people working on this now. You know, we have an opportunity. So, you know, I don't would never say it's too late, but I would say that there's definitely a movement now. I feel, I mean, you and I will feel it as much as more than most people because we work in the bitcoin world. So this is all people are talking about. But I think there's a number of interesting projects and then there is a. There is a real movement to fight against this. So, you know, I'm positive. But. So let's start with David Chan, because, like, a lot of people listening to this might not have heard of him. Yeah, it might even be bitcoiners who haven't heard of him. I've met David.

Well, he's kind of back in the. He's kind of back in the cryptocurrency space now, isn't he?

Well, he is, yeah.

He came back since I wrote that article. I mean, I'm not suggesting any causation there, but I'm sure there's no causation there.

But yeah, I've met him a couple of times. I, you know, I think he's a really interesting, really interesting guy. But for, for people who don't know who David Chalmer is, like, you know, quick, quick background to him.

Now, maybe we should take one small step back. Even before David Chalmers, that public key cryptography was invented in 1976 by Diffien Hellman, before I interviewed you as well. Yeah, very cool. So, you know, just for context, before 1976, encryption wasn't a thing that the public could use at all. It was something for, you know, secret agencies. And that was the domain. They were encrypting their data, but no one else really was. And in general, they. Or without exception, I would say they use. What's it called. There's a term for it that's slipping my mind. The decryption key would always be the same key as the encryption key. So the only way to communicate securely would be to meet up physically first and exchange keys. And only then could you communicate securely. So that changed with public key cryptography, which for the first time allowed people to communicate securely, even though they'd never met, because there's this public key they could share with each other and use to encrypt their communication with one another. So that was invented in 1976. And then David Chaum, only a couple Years later, in 1980, he figured out how to use these kinds of tools for money. So it was invented for communication, basically and also for signatures to prove that, you know, you could sign data, for example, signifying that you agree with the content, much like an actual signature. And then a couple years later, David Chum came up with this concept called blind signatures. And that really enabled the first cryptographic money. So it was the first type of digital something that could act as money, really.

And why was encryption important for money?

I mean, so privacy would be. Was his motivation, right? He was all about privacy. He was not. He was not a big libertarian. He wasn't schooled in like Austrian economics. That wasn't his motivation. He just wanted to safeguard that what we already have, namely cash, something you can use to a bearer asset which you can use to pay without anyone in the world needing to know that you made that payment. It's just between the payer and the payee. He wanted to create something like that for the Internet. He envisioned that the Internet was going to be a big thing. This was also in a time where it wasn't clear the Internet kind of evolved into this. The revenue model that dominates the Internet today is advertising, right? Like everything on the Internet feels free, but that's because you're being served ads or something like that. And back in these days that wasn't obvious that that was going to happen. Some people thought it would be payments. So you'd pay to visit the website, you'd pay to watch a video. And he saw this potential. He knew that the Internet was going to be big and to avoid tyranny, we'd need a private form of money. Even called his paper. In his paper he even referred to Big Brother. How to prevent Big Brother or something was like the subtitle of that paper.

So with that, with his design for Ecash, he ended up building Digicash, which was his first project. Right. And so how was Digicash structured?

Yeah, Digicash was a company, was based in Amsterdam. He founded the company around this idea that the Dutch government wanted to implement some sort of toll booth system where, you know, if you drive a car over certain way roads, you'd have to pay. And he thought that should be anonymous, like the government doesn't need to know where you're driving your car all the time. So that was kind of his pitch to the government. He proposed like, you know, a government agency. I think it was a. Well, it doesn't matter the name of the specific agency. But he made his pitch that I think I can make this anonymous for you. At first they didn't Believe it. Then he riled up some friends from Eindhoven University, I believe, and they got together and they built this system in like a week as proof of concept. This convinced the government agency. And then he founded his company around that. And within this company he wanted to do more. He wanted to also create ecash.

Yeah, but as you said, the idea here wasn't like bitcoin to have censorship, resistance. The idea wasn't to be decentralized. This was more about privacy. So this was like the first steps for privacy. But his ultimate downfall, that it was centralized.

Well, I mean, I don't know if that was the ultimate downfall, but yeah, it's important to note that he wasn't necessarily trying to create a new currency. His system was built for banks. Like it was just regular, you know, dollars, euros, just existing banks could use this system. So he wasn't trying to reinvent money in the way that something like bitcoin does. He wanted to provide a layer for anonymous payments on the existing monetary infrastructure.

But it was ultimately inspiration for people within the cypherpunk movement to create. So did he inspire the creation of the cypherpunks?

I would say he was a big influence. Yes, for sure. Yeah, that's for sure. Even though he didn't really like the cypherpunks himself. And down the road, the cypherpunks weren't really in love with him either anymore. They didn't really get along too well. But yeah, he was definitely a big inspiration. Definitely. Also the cash aspect of it, of course.

And it's quite important to note that both Nick Szabo and Zuko worked with him. Zuko Wilcox.

Yeah, and a bunch of other cypherpunks as well, I think maybe Eric Hughes as well. I'm going from memory here, I could be wrong, but yeah, it was like, for the cypherpunks, it kind of became this almost internship thing where a lot of them kind of went there and worked at digicast for a little while and sort of learned to rope.

So the bit where it really gets interesting is after this with the creation of the cypherpunks. So I think it would be really good to just explain who the cypherpunks were, how they came to be, and what were their goals and principles.

Yeah. So maybe it's cool to take a small step back before we get to cypherpunks, because there was another group and they're not as often discussed within sort of the cryptocurrency ecosystem today, but they were like have you heard of dextropians?

No, I haven't. There's a lesson for me then.

Yeah, so the Extropians, they started in the 80s. They were a group of California based, super optimistic futurists basically. And they, they got interested in like nanotechnology, life extension technology, space exploration. Like also like they saw science progressing and then at an increasing exponential pace even. And they kind of started to philosophize and think about where that could lead society. And that led to very futuristic ideas, including eternal life is a big one. Like they believed that it was very possible that even within their own lifespans. And some of them are still alive today. So who knows? Science would progress to the point where we'd cure all diseases as well as old age, right? So we could live forever. That was like one of the, one of the key goals they had. But also like I mentioned, or artificial intelligence and mind uploading, that I mentioned that one. All sorts of these crazy or I don't know if they're crazy. They didn't think they were crazy for sure. They were taking it very seriously. And one of the interesting things about them, a lot of futuristic ideas around that era, they kind of foresaw the future as managed by some sort of super wise, you know, perfect governments kind of thing. Something like Star Trek comes to mind when I think of that. Like there's this perfect government that will, you know, make humanity happy. And they, these extropians had a very different idea of how humanity should progress. And it was a very libertarian and it was very influenced by Austrian economics. And they saw government as like a roadblock to that future. Right. So they got interested in digital cash as well, from an Austrian perspective as well. And also from the privacy perspective. You can't have a tyrannical government watching over all your transactions and also realize a utopian future. Right? So these guys were thinking about digital cash and a lot of them, okay, so next step is, I think Eric Hughes, he moves back to California or he was looking to relocate in California or something like that. I think he wanted to live closer to the beach if I think that was it. And then he met up with Tim May because he lived somewhere close to be. I was like an old friend of him. And Tim May, he was one of these extropians. So he was thinking about digital cash and he was thinking of digital cash in the context of information markets, which is an interesting topic if you want to get into that. But eric hughes at 10a, they started talking, they started talking about digital Cash the future of the Internet. And then they basically, you know, it was like a meeting of the mind kind of thing where they just kept talking about this stuff for days and days. And then at some point they got the idea that they should form a group to protect privacy, to actually make this work, to use the tools of cryptography that were available and to start building stuff that was useful. So they. John Gilmour was also one of the three, I guess, unofficial founders of the cypherpunks. So they met up, they invited a bunch of friends, and a lot of these friends were also jackstropians. So there's a lot of overlap. So Nick Szabo was in them, in the Xtropian group. Vidai was in the Xtropian group. Helvini was there. Like a lot of these extropians kind of came to this cypherpunk meeting, which wasn't called the Cypherpunks yet. Cypherpunks was kind of a joke. They came up with that. One of these meetings was like a play on cyberpunk, of course. And they started meeting and they started discussing how to realize this stuff. So how to realize anonymous remailers, which are sort of the precursors to Tor digital cash information markets, how to ensure that the humanity, that the future of humanity would enjoy some level of freedom through encryption.

It's really interesting through all of this though, there are consistent threads, and the consistent threads are privacy, money, anonymity and censorship. It's a consistent thread that I found through everything I've read and everything I researched from this.

Yeah, in a way, there were actually sort of two schools of thought within the cypherpunks, which is maybe interesting to note. So one school of thought, which was more the Eric Hughes kind of guy kind of school of thought, and that also is closer to David Chaum, for example. They wanted to safeguard privacy. Like privacy was the thing they cared about for the reasons we just discussed. Like they. To maintain a healthy level of society, to also be beneficial to democracy. And that was sort of their way of looking at this. And then you had the other school of thought, which was. Tim May was like the main proponent of this was the crypto anarchist. The crypto anarchist vision of the future, which wasn't just protecting privacy, but it was actually making government obsolete through privacy. Like if your money is private enough, the government can't tax your money. If you're, you know, if your property and more of it would become digital, then you can protect that through encryption through cryptography. And it would render governments obsolete. So that's, that's sort of the two visions that sort of cooperated within the cyberpunks, even though they weren't all necessarily on the Tim A. School of thought there.

Yeah. And I have the quote, 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. We must defend our own privacy if we expect to have any cypherpunks write code. We know that someone has to write software to defend privacy, and we're going to write it.

Yeah. That's our cubes. Right. That's the cypherpunk menace manifesto. Well, I should say. I should say. I think it was called a cypherpunks manifesto. And there's actually a reason for that. Because the cypherpunks didn't see themselves as like a organized. Like it wasn't an institution. Right. It was like a loose collective of individuals and they were all free to do whatever they want. They just found each other voluntarily in their goals. This is something also, Tim A. For example, he really rejected this idea that the cypherpunks should organize themselves or should lobby governments. He saw the cypherpunks as kind of like the Black Panthers equivalent of the civil rights movement. Like the civil rights movement had its more organized parts of it. And then there were sort of the more radical, unorganized, you know, activists. And that's really how you should see the cypherpunks. I think they were like the unorganized activists that were there to make sure it happened without having to, you know, let the lobbying to the Electronic Frontier Foundation. And like these guys, they weren't opposed to them. Just the cypherpunks were like radicals and.

Individuals and they would submit proposals into the mailing list of what they were working on, get feedback, get ideas and build and test these things.

Yeah, for sure. I mean, they met. They had physical meetings as well, where, where they discussed this kind of stuff and. Yeah, but at some point, I think the mating list became probably the most important center of discussion. And at some point, I think there were like a thousand people on there from all across the world discussing how to realize privacy, how to realize digital cash, how to make it happen and write code.

Do you know what the status is of the cypherpunk kind of movement at the moment? Because it's not as it was.

I mean, the mailing list definitely died down. Yeah, I think as a movement it died, but their ideas didn't die. Right. I think that's the right way to look at it at some point, the mailing list, I think by the late 90s maybe there were still some serious contributions in the year 2000 or something, but around that time it got spammed and it got noisy and it got hard to read, which was in part because they had a pretty strict non moderation policy, which was, you know, in the philosophy of the cyberpunks themselves. They didn't want to have anyone in charge, so there was no moderation. Well, that worked while they were small, but at some point it just kind of got overrun by noise and so the ideas live on, I would say. But as a movement, I guess some people still call themselves cypherpunks nowadays, but they do.

Yeah. I mean you see it in their Twitter handles.

Yeah, I guess there's nothing wrong with that if you, if you look at the original idea that, that it's individuals doing whatever they want as long as they sort of embrace that ethos. But yeah, the mailing list definitely died and I'm sure the meetings died long before that, so.

Yeah, and the number of very well known people in it, I mean a lot of them we will know as being people in bitcoin. But I mean, probably the most famous name in it that other people know would be Julian Assange.

Yeah, yeah. I think Elon Musk may have been on there as well. I think so. I saw an email from like x.com at some point and I think it was also on the topic of digital cash. So X.com was his first website. Right. Which kind of merged in PayPal.

PayPal, yeah, yeah.

So I think he was on there. Yeah. A lot of the current Bitcoin sort of OGs were on there and they.

Had some very significant achievements. You know, when you look back at all the work they did, it's like very significant things. PGP came out of it, you would, you could argue WikiLeaks came out of it. And bitcoin itself, I mean these are genuinely things that are known and used globally now.

Yeah, And I would add Tor to that list. Yeah, yeah.

So Tor wasn't a CIA invention.

Well, let's just say the technology that Tor ended up using that definitely was sort of brewing there on the cypherpunk mailing list with remailers and sort of similar type.

Next up, I talk to Aaron.

[Peter McCormack]

More about the cypherpunks and the prehistory of bitcoin. But before that I have a message from my amazing sponsors. So first up, I Need to welcome my new sponsor, Kalman Law or Kelman Law, one of the oldest names in bitcoin and fintech and one of the premier law firms in the space. Kelman Law is run by Bitcoin OGs based out in New York. And unlike any of the other crypto lawyers you find online, these guys really understand bitcoin and fintech. They were already operating the space back in 2013 because they are committed to the cause of bitcoin and what it.

[Aaron Van Weerdem]

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[Peter McCormack]

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[Aaron Van Weerdem]

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[Peter McCormack]

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[Aaron Van Weerdem]

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[Peter McCormack]

Why have you checked out drop it yet? It's available for the iPhone and Android. Just head over to drop bit app, which is D R O P B I T app.

[Aaron Van Weerdem]

So out of this, though, one of the very prominent cypherpunk members is somebody called Adam back, someone we both know. He's been on my show, I know you know him well, and a very prominent person in bitcoin, cited in the white paper for his work on hashcash. So let's talk about hashcash, what it is and then we can talk about why it's so important for bitcoin.

Yeah. So sort of Midway through the 90s, spam became a problem, right? Spam, email, you. You even see that on the cypherpunk mailing list. Actually, if you sort of dig through the archives, you see like just nonsense, your penis types of emails because they didn't have any moderation. Like, it became a real problem. It also became a problem for the remailers which I mentioned, like they were being spammed, so they were taking up resources for no good reason. So there needed to be a solution for that. And the cypherpunk started to discuss the problem and how to solve it. Now, one way to solve it, of course, is to get government involved, to just make spam illegal and try to, you know, track down the spammers and throw them in jail or find them or something like that. But cypherpunks and back in particular, he didn't like that idea at all. He saw that as the beginning of the end of the free Internet. If you get government involved in that way, you know, it could lead to the equivalent of like a Internet driving license where you're only allowed to use it if you have government approval. So just the idea of getting government involved to stop this kind of stuff was cyberpunks wanted a different solution. Adam back in particular, he wants us a different solution. Now, of course, one solution that people discussed in this context was to use something like ecash, right? That could have worked. Or, you know, you could have used E cash to buy some sort of digital Sam. That could have worked. But ecash wasn't really getting off the ground at this point. Like, banks weren't really pushing it. There was kind of the chicken and egg problem of, you know, it's only useful to have ecash if you can spend it somewhere. So if merchants will actually accept it and merchants will only accept it if people are willing to spend it. So if there's people that have ecash. So it was kind of a chicken and egg problem that ecash wasn't able to overcome. Maybe also because of some of Chelms decisions in how we manage the companies being getting some flack for that. I mean, he thinks that's, that's nonsense. But you know, who knows, different people, different opinions. But bottom line is ecash didn't really get off the ground. So then Adam back came up with a different solution called hashcash. So the idea behind Hash Cash is if you'd want to send someone an email, you'd have to actually take some parameters of that email, like the recipient address and I don't know, maybe the time you sent it. I'm not sure what was included, doesn't really matter. The point is that you had to hash these parameters and since the outcome of a hash is random, right? So you have to invest some computing cycles to get this random hash and then only some hashes would be considered valid. So for example, a hash would have to start with a specific number of zeros. So if you wanted to send someone an email and that person would only accept emails that included hashcash, then you'd have to invest some computing cycles, you'd have to invest some computing power in order to get a valid piece of hashcash, a valid stamp in a way. Now this would cost you a little bit of energy and therefore, you know, a miniscule amount of money, which is fine. If you're sending someone an email, you're not really going to care about a fraction of a cent. But if you're a spammer, and you're only profitable if you send the same spam email to 10 million people, they have to make these computations 10 million times and then it becomes unprofitable. So it was to disincentivize spam and in that sense it could have worked. But yeah, it never really caught on either.

Yeah, a very small amount of traction. But ultimately it proved to be a very important development for Bitcoin.

It introduced something new. It introduced this idea that you can tie real world resources to something digital. Basically a number. A number which you can then email or which you can just send over the Internet. Something digital. Well, if you want to get very technically specific, maybe the better way to think about it is even copying a file, just, you know, making A copy of a file costs a little bit of energy. So if you make a million copies of a file, that costs a bunch of energy to do it. But then if someone wants to verify that you actually made a million copies of the same file, that would cost as much energy as actually making the copies themselves. While hashcache had this very clever property that it would cost a bunch of energy to create, and then it cost almost no energy to validate that you actually did create it. So hard to produce. Easy to verify. That was really the innovation, in a way.

Yeah. And the best analogy for me, for somebody new coming in and wants to really understand it, is that is just to do the reference to gold mining. If you want to mine gold, you have to invest in a bunch of equipment and a bunch of people. And wherever that gold is, you have to mine it. Whether it's at the bottom of an ocean or in the ground. You have to go. You have to invest a whole bunch of energy and work and cost to mine that gold for you to then sell on. The analogy for bitcoin being is that if you want to mine bitcoins for the creation of new bitcoins, you then have to do something similar. You have to invest a bunch of resources and money to mine that bitcoin. And that's how bitcoin has value, because it costs money to create. Is that a fair analogy for someone new?

Yeah. Well, I would say bitcoin takes another step because the proof of work, these proofs are themselves kind of the money. Right. While with bitcoin, it's just a way of creating money, it's not the proofs themselves you use. So bitcoin kind of took another abstraction which was very clever. But this idea of using the proofs themselves was subsequently used as an idea for other cash systems. So these came before bitcoin?

Yeah. So after hashcash, at very similar time about a month apart, we had both B money, which came from Waydai, and we also had BitGold from Nick Szabo. But let's cover B money first, because you think Bitcold is more like bitcoin. So it's like a logical step.

Yeah, I would say. So bit gold is almost bitcoin, and B money is slightly different. Yeah.

Okay. So Wei Dai, a mysterious person. Never met him. Don't see much of him or hear much of him. What do we know about him?

Very little. Yeah, he's a very seclusive guy. He's still active on some online forums giving his ideas. He's a smart Guy for sure. I mean, he's a genius, I can tell you that much. But yeah, he's very much outside of the public eye and clearly, clearly he likes it that way. I happen to have a friend who, like his, his girlfriend went to Singularity University, I believe, or I think they renamed it, and he gives lectures there, or he gave lectures there. So he's still, you know, he's still around, but not really in the cryptocurrency space. And we know very, we know very little of him. They always knew very little of him. I think Tim May at one point commented that he, they didn't even know he was a guy or a girl or, or some people suspected that it was a pseudonym for someone, you know, maybe for one of the other cypherpunks or just people didn't know. And still today he's a secretive guy.

Well, he was very much inspired by Tim May's Crypto Anarchy.

Yeah. So one of the, one of the founding cypherpunks.

So let me put the quote in for that. In a crypto anarchy, the government is not temporarily destroyed, but permanently forbidden and permanently unnecessary. I think those last two words are very interesting. The permanently unnecessary.

Yeah, his idea was that governments, you know, states never shrink, they always tend to increase. And same for like rights, they always kind of tend to diminish. You never seem to really get them back or they never really seem to increase short of like a full blown revolution. So to safeguard this stuff through laws and regulations, kind of a slippery slope, safeguarding it through technology seems like a much stronger guarantee.

So I liked his quote as well. I'm bringing a lot of quotes into this, but they've written so many profound things. But with B money, he said efficient corporation requires a medium of exchange money and a way to enforce contracts. The protocol proposed in this article allows untraceable pseudonymous entities to cooperate with each other more efficiently by providing them with a medium exchange and a method of enforcing contracts. I hope this is a step towards making crypto anarchy a practical as well as theoretical possibility. So again, it follows those same themes, you know, money, anonymity. But it also, this is the point where smart contracts, they start to kind of raise their head. And it does that with Nick Szabo's BitGold as well.

Yeah, Nick Szabo basically introduced the concept. He invented it. Yeah.

So the structure of beam money was, I mean, it was, I can see a lot of similarities to bitcoin when I was reading about it. Ultimately a distributed ledger.

Yeah, that was one of the key insights in both bmoney and bigold.

And that was a real innovation in the development of digital money.

Yeah. So up until that point, for example, Chaum or other digital cash schemes that people were coming up with, there were some ideas on the cypherpunk mailing list that resembled xiaom's idea, but they all relied on the central server or a bank or someone, some entity that would keep track of the balances of all participants, of all users. So, you know, if alice pays bob one coin, then that central entity would update the ledger and, you know, subtract one coin from Alice's balance and add it to Bob's balance. And bmoney and bitgold, they really kind of turned this on its head and said, no, all participants are going to have the ledger, and they're all going to update their ledger every time a transaction is made. So that was definitely a big insight and also big step towards bitcoin.

And so decentralization is something you will hear a lot about with regards to bitcoin if you're coming in. And there's a lot of other projects that people might hear about and they might be interested in. But bitcoin has such a focus on decentralization. Why is this so important?

I would say it's important because if you have a central entity doing this kind of stuff, then that central entity can mess with it as well. That central entity can block transactions. It can maybe even, like freeze balances or, you know, even change balances. Maybe change its own balance. Like, it can mess with it in all sorts of ways. And even if the central entity is totally honest, unless central entity has a very good way of remaining private, then you can have governments interfering, so you can have government stepping in and telling the central entity, you know what, we don't really like that whole WikiLeaks organization. We want you to block all payments to it. So by decentralizing this, you sidestep this problem. There's no central entity that can cheat. There's no central entity that can be pressured into obedience.

So it's a step now beyond privacy, where David chan was working on privacy. This step beyond is actually to create an economic system that can't be censored and can't be switched off.

I think that's fair to say. Yes.

Yeah. So what went wrong with b money? Why, you know, why didn't it end up. Because it didn't actually end up being developed. It was a proposal.

Yeah, it was a proposal. And I would say it was kind of a Rough proposal as well. There were still, there was still kind of some hand waving going on on how it should exactly work. How should coins come into circulation? That was a big question. You know, if you start from scratch, then who's, who's going to get the coins or why? Another problem was how do you prevent double spending? So if Alice sends the same coin to both Bob and Carol and she does it at exact same time as he sends the same transaction, the same coin to different parts of the network, then you get a divide over the network on which is the true state of balances. And that was a hard problem to solve. It would have been solved in a sort of hypothetical situation where everyone sees every transaction instantly. But that's not the reality of networks. It takes a time for a transaction to sort of make it, make it, make its way through the network. So you get this problem. So that wasn't really solved. One way to kind of solve it is, you know, but this is. It was a bit hand wavy, but you could have sort of different tires of users where you had sort of a client server kind of system where there was a group of sort of upper tire servers that would maintain the balance. And then you check with a subset of the servers, but you know, there's no guarantee that the servers will agree. There's also no guarantee that the servers won't collude against you. There's sort of like these loose ends in the proposal that just weren't perfectly solved. Even though it was a very clever idea. There were unsolved problems and he knew that, like he admitted that. But you know, it was still worth publishing and getting people to think about the money system that would work like this. But it wasn't a finished system. It couldn't have worked as he proposed it.

So one of the really interesting things that I find with Bee Money is that his original vision was it was essentially a stablecoin.

Yeah, in a way, yes. But that's difficult as well.

Of course. Of course. But then I looked to his quote regarding Bitcoin that I found very interesting. He said, I would consider Bitcoin to have failed with regards to its monetary policy because the policy causes high price volatility, which imposes a heavy cost on its users who have to either take undesirable risks or, or engage in a costly hedging in order to use its currency. And you know, I've done nearly 200 interviews now, Aaron, and I've also met people who actually using Bitcoin and volatility is a constant problem that is raised, and there are people who either accepting the risk or they are looking at ways to hedge. So, you know, he did identify a.

[Peter McCormack]

What?

[Aaron Van Weerdem]

You know, and I know some will argue it's not a flaw, but he did identify a debatable flaw within Bitcoin.

Yeah, and it's interesting that he saw that as a big flaw too, like not just for Bitcoin, but even like for cryptocurrency in general. So in a way, he kind of took a very maximalist approach, interestingly, where he said something like, bitcoin only has one chance to succeed. Basically, like if Bitcoin. Bitcoin has taken up the niche of cryptocurrency and it's very hard to surpass it now. And since it's flawed, it will always be a marginal thing. So since bitcoin can't be overtaken and it will remain a marginal thing, now cryptocurrency is forever doomed to be a marginal thing.

Well, so this is where I think Bitcold and Nick Szabo is a little bit more interesting. This is where I think it takes it the step further, because Nick's view was actually it was more gold than it was money. And I know gold can be money, but if we think of money as the medium exchange and gold is more of a store of value, and I know they both can overlap and interchange, but he saw bit gold more to act like digital gold and accepted the volatility.

I think Szabo, he had a brilliant insight in many ways. There's of course, the whole Austrian economics tradition and the whole Goldbach kind of tradition. And I think Szabo kind of agreed with a lot of the arguments, but where typical, Goldbach just sort of assumed that gold was the real money and gold was the way to go. Szabo in a way took a step further and he started to think, okay, but why is gold the way to go? Why is gold such a good money? And then he starts to think about, okay, what are the properties that make gold such good money? And these are properties like, it's very secure, it's easy to validate, and incredibly important one is the unfortunable costliness. And this is something you touched on before. Like, you can't just create gold, you can't just create more gold. You actually have to dig it out of the ground. You have to actually get it from somewhere in fast energy to get the gold out of the ground. And this unfortunate costliness is what Saba wanted to translate into something digital. So he wanted to make a digital money that had this unforgeable costliness that was, you know, that's what we talk about today when we talk about stock to flow. This is like his insight in many ways. He explained it in. Oh, what's the name of the paper? Shelling Out.

Yes.

Shelling out is, I think, a seminal paper that people should read and it will really make them think about money in a way that Bitcoin starts making sense.

Yeah. So I covered that in the last episode with Parker where we talked about, we talked about money, we talked about how money has changed and lots of different things have been money, which Nick talks about, whether it's, you know, the yap stones or it's shells or it then becomes metals, you know, trying to have help people understand that if you forget about a physical versus non physical, if you can abstract yourself away from thinking money has to be something to produce by the government and has to exist in notes. If you just think based purely on the properties of this. I think it's six different properties there are. If you actually look at Bitcoin. Bitcoin is the evolution from gold and fiat money because it solves a couple of the problems in that it's essentially gold that you can transfer over the Internet.

Exactly. And one property that I didn't mention is of course that all of these properties need to be there without need for trusted third party.

Because a Nick's croak. Trusted third parties are security holes.

Exactly. Yeah.

You were about to say it.

I was, yeah.

So were there any other innovations in BitGold?

Yeah, for sure. I mean, in a way it was kind of a precursor of a blockchain in a way. So I'll explain that very shortly. So he embraced this idea of proof of work as a way to creating new money. And in his system, the way proof of work would work is that you'd have a candidate string which is just a random number and then you'd have to use that to create a valid proof of work. So you'd have to, you know what we explained? You had to make a bunch of hashes, invest a bunch of energy until you find a valid follow up proof of work on that candidate string. This would give a new candidate string for others to hash on. So and then they would have to use that candidate string and they'd hash and hash and hash, invest energy until they would find the valid hash. So then that would be the new candidate string. So then you got a string of candidate strings. Basically you got a string of hashes and you know, that's almost what a blockchain is.

So what happened with BitGold? Because Nick wanted to build it, right? He requested a few people to help, and he never actually got around to building it.

Yeah, he requested people to help it. As late as 2008, he posted on his blog, like he wants to actually implement it. And no one responded publicly. Maybe someone responded privately, we don't know. And maybe someone privately had some extra ideas. We don't know that. But no one responded publicly. Let's keep it at that.

All right, cool. So from that we then get Bitcoin.

[Peter McCormack]

So we won't.

[Aaron Van Weerdem]

We don't need to go into this too much because I'm going to touch on that in the next episode. But. Yep, October 31st, I'm in Las Vegas. It's my birthday. So my birthday is white paper day. The white paper comes out. I don't. I don't see it. I didn't see it two years later. But a white paper drops for what.

[Peter McCormack]

Bitcoin is from Satoshi Nakamoto.

[Aaron Van Weerdem]

So still, at that point, this was just another proposal. Just like Beanie Money was, just like.

BitGold was and like many others were. Yeah. By the way, at that point, the cypherpunk mailing list, of course, didn't exist anymore. So it was posted to the cryptography mailing list, which was kind of the unofficial successor of the cypherpunk mailing list. Yes.

So did you look much into the reception of the white paper at the time?

I did look at it. It's been a while, but yeah, I.

Read the thread and then I guess three months later we get the code drop.

Yeah, there wasn't much anthesism for it on the email list at first, except from Helvini. Helvini, we haven't really discussed yet, but he also had his own digital currency project called rpal, which I think I mentioned it. He published that in 2005. Yeah. He was one of the few, if not the only really positive recipient of the. Of the proposal. And then, yeah, a couple months later.

That was the code and we're here 11 years later. So we can say this is the most successful project. It looks like it will last. I mean, it has, you know, always will have threats. So what is it?

I'll know one thing that I think is interesting. What. What happens between the white paper and the co drop, which is that for Some reason the 21 million limits was implemented there. It wasn't really explained why I think it wasn't in the white paper. It wasn't discussed on the mailing list. It was just a new thing that was in the code. And I think that was a very important insight because, and I kind of suspect personally that Helvini may have told Satoshi to do this because by giving it this 21 million limit, there was actually a reason for people to speculate on future value, to actually buy it, to actually want to hold it. And by people speculating on future value and wanting to hold it, that gives incentive for miners to actually mine it. Shall I read you one quote from Helvini?

Yes.

All right. I'm going to read you one quote for Helvini. And that's why part of me suspects that this may have been his contribution to bitcoin. So he wrote, and I think this was after bitcoin launch, he wrote as an amusing thought experiment. Imagine that Bitcoin is successful and becomes the dominant payment system in use throughout the world. Then the total value of the currency should be equal to the total value of all the wealth in the world. Current estimates of the total worldwide household wealth that I have found range from 100 trillion to 300 trillion. With 20 million coins that gives each coin a value of about 10 million. So the possibility of generating coins today with a few cents of compute time may be quite a good bet with a payoff of something like 100 million to 1. Even if the odds of bitcoin succeeding to this degree are slim, are they really 100 million to one against something to think about? So there you see, like this 21 million limits gives sort of a game theoretical reason for people to actually want to buy it and mine it and invest in it. And I think that was, that was actually a pretty crucial idea.

And there are people who will say volatility, you have to have volatility. You can't go from something from zero to worth trillions without volatility. And another thing I'll just drop in is stuck with me that Dan Held said he puts in that the four year halvening creates a marketing hype cycle and with that that helps grow the network.

Yeah, but you know, like Vaidai said, maybe it's actually a very bad idea. And Nick Saba wasn't sure either. He said in one of his posts, I think in 2011 or 2013 that, you know, he's not sure if the 21 million limit is a good idea. But we can say that at least it works. At least we have something that's working today.

Yeah. So were there any other Innovations within Bitcoin and the white paper that really stood out, that made it work.

Oh, yeah. I mean, the clever insight was of course, to combine the proof of work system with a consensus system. So these were kind of the two aspects that, for example, why they were struggling with, like how do you get the coins into circulation? And also if there's a dispute on the state of the ledger, then who gets his way? Like, which one is the real ledger? So bitcoin brilliantly combined these things by having new coins come into circulation through proof of work, but not as the proof of works themselves, but through a, you know, distribution, distribution mechanism. The proof of work just works as a lottery to decide who gets the new coins. And at the same time, the longest chain determines which is the true state of the ledger. So two big problems were brilliantly solve with one stone.

Amazing. Okay, well, this has been fantastic. Really useful. I'm going to share all your articles in the show notes if people want.

[Peter McCormack]

To read out more.

[Aaron Van Weerdem]

Are there any other parts of history that are missing here that you want to raise before we close out?

I mean, there's a lot. There's a lot of Austrian economics, of course, that I think led up to Bitcoin. I think Hayex did. The nationalization of money was very important work. Although Hayek's idea was closer to Wide Eye's idea in the sense of that currency needs to be stable. He expected the market to pick a stable currency. But it's interesting that the denationalization of money was published in 1976, which was also the year that Diffien Hellman published their white paper on public key cryptography. So in a way, I kind of see that as the birth year of bitcoin. Like these two ideas published in the same year.

Well, it's a fascinating bit of history. It's fascinating to look back. I really appreciate the work that you did for this. I really think it's. It's very helpful to me. You know, it's very helpful to me to read them all in one go and kind of piece it all together. You said you're going to do some more work on this, which is great. I look forward to it. But yeah, I really appreciate this. Just before we close out, if people want to follow your work, Aaron, where can they find you?

So I'm on Twitter, Aaron van W. If you speak Dutch. I have my own podcast with two friends, which is the Bitcoin show, so you can find that on YouTube and of course Bitcoin magazine. Still write for Bitcoin magazine.

Well, listen, thanks for doing this. I'll let everyone know you've come and done this very last minute. It's a bit late for both of us, so. Look, I appreciate your help here. I owe you one now, so ever need anything from me, you let me know, alright?

Thanks for having me, Peter.

Thank you.

[Peter McCormack]

Okay, so what did you make of that one? Did you enjoy that show?

[Aaron Van Weerdem]

Have you listened to the other two.

[Peter McCormack]

Parts of the Bitcoin Beginner's Guide? If you haven't, definitely go and check them out. Also, keep an eye on the future shows coming. I'm going to be running this for the next. I think it's going to be going for about the next six weeks. So while I've read all of Aaron's Genesis Files articles before, this was the first time that I'd read them all together and it really highlighted to me the evolution of digital money. Learning about the cypherpunks and what they stood for also helped me understand why such people as Matt O'Dell keep on about me about the importance of bitcoin privacy. These people were so ahead of the time and the stuff they were fighting for even in the 90s, like privacy online and data protection are still things people are working on today. They were looking at this before the Internet had become what it was before we had our mobile phones, you know, before everything had happened with Edward Snowden and all the data thefts. They were looking at it then. The cypherpunks would also be credited with so many other achievements. Julian Assange's WikiLeaks, PGP, TOR and of course bitcoin. It was also great to hear about all the work that went into some of the precursors to bitcoin like B Money and Bitcold before Satoshi pieced it all together and came up with bitcoin. So that is the prehistory of bitcoin done. It could be a lot more in depth. I think in the future. I might even do a whole series on itself because it really, really is fascinating. Anyway, on Tuesday I will be back and I'll have part four where I'll be looking at what bitcoin is with Dan Held.

[Aaron Van Weerdem]

And if you've got any questions about.

[Peter McCormack]

This, do feel free to hit me up. My email address is [e-mail] and listen, if you're enjoying this series, if you want to support the show, there's so many things you can do. You can leave me a review on itunes. You become a patron, you can become a sponsor. They all help me keep the show going. Just head over to my website. It's what bitcoindid.com click on the support section. That will explain everything. Anyway, I hope you have a great week weekend.

[Aaron Van Weerdem]

If you've got any questions, as I.

[Peter McCormack]

Said, feel free to hit me up. My email address is [e-mail].