CRYPTO CURRENTLY
Nakamoto’s New Era
O
Terms like “mining” and “proof of work” are essential for cryptocurrency literacy. In his latest book, Anthony Scaramucci simplifies the complex and explains why his firm now wholly embraces bitcoin 32
n Oct. 31, 2008, a link to an eightpage white paper written by Satoshi Nakamoto titled “Bitcoin: A Peerto-Peer Electronic Cash System” was posted to a cryptography mailing list. No one had ever heard the name Satoshi Nakamoto before. Who is Nakamoto? His paper contained only an email address and a link to a website called bitcoin. org, a domain registered without fanfare in August 2008. The author was a mystery, and no one at bitcoin.org would ever come forward. “The ramifications of the creation of Bitcoin are so profound for both economics and computer science that Nakamoto should rightly be the first person to qualify for both a Nobel prize in Economics and the Turing award,” wrote respected software engineer and economist Vijay Boyapati. What Nakamoto proposed in his white paper was as elegant as it was revolutionary: “What is needed is an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party.” Let’s take a second to pick this apart. The paper describes a way for two parties to exchange money without a bank, material goods, or a government backing its worth. Replacing the “trust” granted to a currency with “cryptographic proof” means the network is protected by complex computer algorithms that verify the sanctity of the transaction. The paper gave birth to a new concept—the coin. “We define an electronic coin as a chain of digital signatures,” it stated. “Each owner transfers the coin to the next by digitally signing a hash of the previous transaction and the public key of the next owner and adding these to the end of the coin. A payee can verify the signatures to verify the chain of ownership.”
Luckbox | October 2021
2110_TOPICS_mooch.indd 32
8/26/21 9:11 AM
