17 ms·

Ask HN: Why would a government have created bitcoin?

• hollerith 14y ago
  >Bulletproof protocols usually require peer review, yet there have been zero leaks from the reviewers. Aside from leaking their identities (for reputational reasons) I am having a hard time thinking of anything these hypothetical reviewers would be motivated to leak. The best I can come up with is, "The main architect of Bitcoin hates the U.S. government, and his main motivation was to weaken it by depriving it of tax revenue." As to why they are not leaking their identities: they run the risk of being kidnapped and tortured for their BTC if everyone knew who they were -- since (from the point of view of the average Bitcoin-literate thug) it is highly likely that those who got in on the ground floor of Bitcoin hold a lot of BTC.
  • jiggy2011 14y ago
    they run the risk of being kidnapped and tortured for their BTC if everyone knew who they were Doesn't any rich person have the same risk?
    • hollerith 14y ago
      Maybe I am wrong, but I get the impression that the average wealthy person keeps their most liquid assets in an institution where the employees know him or her and there are institutional safeguards against that kind of thing. (ADDED. ATMs for example, have cameras.) Also, the rich do tend to make a point not to let it be publicly known that they are rich if they can. (ADDED. Officers of public corporations for example cannot hide their incomes from the public because of the financial-reporting requirements imposed on the corporations.)
      • jiggy2011 14y ago
        There's plenty of movie plots about "leave a large suitcase full of cash at location X or bad thing Y happens" but I guess large quantities of cash are more difficult to hide and large withdrawls from a bank account would raise red flags.
    • dia80 14y ago
      It's very difficult to receive and enjoy the proceeds with traditional assets. Not so bitcoin.
• guylhem 14y ago
  The possibilities you list are interesting, yet I suggest you read another essay posted here about "legal/illegal" bitcoins, where governments could force one to "declare" what its bitcoin accounts are, and treat all incoming payments and outgoing payment to "undeclared" accounts as illegal, and tax accordingly. This would the the perfect scheme to ensure orwellian control of the economy, with a complete history of the transactions. It is a possibility - that bitcoin is touted as a "libertarian dream" while it can be in fact used for complete control by the governement. Today's currencies are too many and transferts not properly traceable. Make that one currency and add in the design that all transferts are to be logged, and it does not matter whether one uses a bitcoin address or its full identity. With enough social network analysing and recouping information, especially with the governement weigth and files, it should not be hard to "uncover" the true id. I find this possiblity interesting, even if far fetched. EDIT: see the actual thread on https://news.ycombinator.com/item?id=5501803 https://news.ycombinator.com/item?id=5501803 Another possibility would be to reduce the "weight" of the financial sector. Having IIRC 10% of the GDP used for allocating resources is wasteful when there is technology available to do this very thing. I commented on Krugman article on https://news.ycombinator.com/item?id=5541189 https://news.ycombinator.com/item?id=5541189 along with additional details on https://news.ycombinator.com/item?id=5543308 https://news.ycombinator.com/item?id=5543308 Basically, using bitcoin instead of the current financial sector would remove frictions and transaction costs, improving efficiency. It is compatible with the standard economic approach, especially on grow theory, where growth is explained by technical change and human capital in many models - from the augmented Solow growth model to Romer and Lucas. Bitcoin could then be seen as a way to "reallocate" the human capital "spent" in the financial sector to new productive endeavours - the lack of inflation being added to make sure that there would not remain any incentive to waste human capital on looking for ways to speculate. That is the explanation I prefer at the moment - Bitcoin as an experiment created to improve efficiency of our economical system as a planetary level, by someone well versed in economy and computer science. Yet out of your list of possible explanation, I would say (2) is the most likely. But if indeed it was government made, I would not say the US is the most likely author. Look at how the european currencies tried and failed to replace the dollar as the world currency - sum up the Euro currencies place in world commerce before and after the Euro, and you'll see they failed. A bit like HP-Compaq merger, with total share of the market less than their initial shares. This could support (3) and (4). It is also quite interesting to see how EU-wide directives about virtual currencies were implented and voted were created before BTC became very popular- see http://ec.europa.eu/internal_market/payments/emoney/ http://ec.europa.eu/internal_market/payments/emoney/ The second EU electronic money directive, 2009/110 dates from 2009. Considering how long the political process usually takes, I find having a directive voted and ready in its SECOND version in 2009, then implemented with only a year and a half delay in say France, "unusual". http://www.bryancave.com/files/Publication/515cae04-f1c0-46cf-bd5b-15f26e31a147/Presentation/PublicationAttachment/ee3b82d5-0c37-4ed6-bde0-181ed6d0c556/2013%2002%2022%20Briefing%20Paris%20Second%20Electronic%20Money%20Directive%20_DEM%202_%20Transposed%20in%20.pdf http://www.bryancave.com/files/Publication/515cae04-f1c0-46c... The only thing that would not match this is how the ECB follows a Friedman like monetarist approach, with a 4.5% M3 monetary aggregate growth target, while bitcoin is not inflationary. But when you consider the FED bad habits of "quantitative easing" (printing money), it make the US even less likely to be the originator. TLDR : ranked from most likely IMHO: 1- it was created by someone familiar with economics and computer science to improve efficiency (compatible with the current analysis and the initial comment about central banks) 2- it was created by a public organisation, considering virtual currency inevitable, to make the most of them, but in that case, it is more likely from the EU than from the US 3- it was created by a public organisation, either aiming for, or having a side objective of, orwellian control. EDIT2: about this 3rd option, I know the records list Trinity College as one of the potential "epicenters" based on published papers and software, but it does not excludes the possibility the effort was funded with this very goal in sight - give students money, incentive, ideals, and watch while they develop what you wanted. Just like how BTC can be touted as a libertarian dream while it could also be very dangerous, initial creators could have been fooled by only knowing a part of the plan. So I share pg opinion there. Some possibilites should not be discarded too quickly ; if it was possible to create STUXNET to harm Iran nuclear program, with all the complexity involved, and then keep the official involvement hidden for like 10 years, this gives a priory evidence that such a feat could be done as a government project. I am quite concerned by this last "orwellian" option, as unlikely as it may be. One of my side projects at the moment is examining this possibility - not shouting that too loud, because I don't want to be taken as a conspiracy theory nutcase :-) Also, I only have an interest in economics - I'm not a professional economist, so there must be some flaws in my analysis.
• tlb 14y ago
  5. It was a small project at a federal agency, unappreciated by top management. They had access to experts who could keep it quiet, but there was no particular political agenda behind it.
• clamprecht 14y ago
  As to #4, the United States is usually in denial about things like the dollar losing its status as the standard reserve currency. If a government is behind bitcoin, you have to give them credit for it. Some people think the US government invented crack cocaine to fund CIA operations. Who knows...
  • readme 14y ago
    There's plenty of strong allegations of CIA drug involvement that you can just look up: http://en.wikipedia.org/wiki/Allegations_of_CIA_drug_trafficking http://en.wikipedia.org/wiki/Allegations_of_CIA_drug_traffic... There would be one really good reason to invent a crack epidemic. Before that, there was a pretty strong anti-capitalist black nationalist movement. The men behind the curtain would not want that growing.
    • ryanmolden 14y ago
      It would also increase the value of raw cocaine as a pre-cursor to highly valuable (from a cost vs. resale perspective) crack. The CIA being involved in, or simply turning a blind eye to, cocaine smuggling when the funds were to be used to fund things they viewed as necessary but those "idiots" in Washington wouldn't fund is not entirely looney. The angle of increasing the value of a fairly easily smuggleable drug is more compelling to me than a conspiracy targeting African-American communities in particular, like the CIA is run by some crude caricature of a southern grand dragon.
      • marshray 14y ago
        Agree. It was the FBI that was concerned with domestic black militants. The CIA just wanted a way to get cash anonymously to fund weapons-for-Iran and the Contras in Nicaragua. If the CIA was behind Bitcoin, they would have done a better job with the unlinkability.
• wooster 14y ago
  Could bitcoin have been worse from a government's point of view? Yes, it could have been designed to be a viable currency, rather than a lesson in basic economics for crypto-anarcho-libertarian-nerds.
  • wyager 14y ago
    Please, tell us Bitcoin's economic flaws. I do hope you're not going to parrot the same worn-out, fallacious complaints about deflationaryism, volatility, etc. that we've all heard and dismissed.
    • rattray 14y ago
      I don't think your tone is appropriate here. Concerns about deflation and volatility have not been unanimously "dismissed", at least not "here" (hn). They've been actively debated, without resolution. I'm curious about why you think those arguments are fallacious, but another thread might be a better place for that. Though I agree that the GP was unnecessarily snarky as well.
      • eof 14y ago
        Deflation and volatility do not make bitcoin nothing more than "a lesson in basic economics for crypto-anarcho-libertarian-nerds". Contemporary dogma surrounding deflation is broken in multiple ways. The idea that deflation is bad is only considered credible (imho) is because it is touted so loudly. There are very few examples of deflation in history to draw from (as opposed to inflation, which there are many more), and further, many of the existing examples of deflation, while "on paper" are bad are not particularly harmful to the median-income'd person. One rhetoric for deflation-is-evil is predicated on this idea that if consumers know their capital is going to be able to aquire more tomorrow than today, they will wait till tomorrow "too much" for the economy to function. (The analysis tends to get very hand-wavy after this part..). Interestingly, for the past 50~ years we have experienced rapid deflation in computer prices. Consumers have not shied away from purchasing an iphone 5 the second it comes out because it will be cheaper next year and their iphone 4 is basically the same thing. The idea that inflation is 'necessary' to keep an economy going is essentially conjecture; and I disagree; I think a deflationary currency (especially when there are other local currencies competing) will be very good for the economy and encourage more businesses that create things as sexy as the iphone5 (or services equally as appealing to consumers) as it will be the only way to get that currency out of people's hands. When people are hungry or trying to imprss someone, or really desiring of something.. they will spend today even if next year they might be able to get a couple percent more. Anyway, perhaps deflation is the nail-in-the-coffin, but I don't really see evidence of it, just a lot of people really insisting that it's true. As for volatility; I think volatility both a) has a potential to lessen over time, and b) is not an insurmountable barrier depending on how much people want to use bitcoin specifically (if you need to send money somewhere privately) ; they can be exposed to exchange rate for only a few minutes, or, use an escrow service that is also willing to hedge (the silk road does this). bitpay exposes merchants to zero% exchange risk; they get lower rates than cc's and zero charge backs.. no merchant account necessary. However, beyond even all of that, these arguments are dismissed because by every measurement available: bitcoin is acting as a currency, despite deflation* and volatility. People have so deeply ingrained that 'deflation==dead' that when they see a functioning currency that doesn't have the characteristics it is "supposed to" they define it as a " a lesson in basic economics for crypto-anarcho-libertarian-nerds" as if they can predict the future. Quite pompous. Bitcoin has had several major crashes which easily could have dropped bitcoin to zero if it were indeed worthless. Yet it continues on, acting as a medium of exchange between --hundreds-- -thousands- -hundreds of thousands- millions of people; some as a toy, some are betting their lives on it.
• argumentum 14y ago
  Ultimately, keeping a conspiracy under wraps is an n^2 problem, where n is the number of people behind it. If it's a government, it is not a constitutional one with democratic elections. Checks and balances make it much more difficult to carry out a conspiracy with elegance and grace. I'm not saying it's impossible, but if the US did it, it will come out very soon. There are too many conflicting interests in government to keep this under wraps for long. Essentially, crypto-guys who don't leak stuff would have to have been acting at the bottom of a chain of command that does leak stuff clumsily, and is opposed by political forces with the incentive to find stuff out. Plus, no major agency of the government has yet commented, which suggests that they are trying to get their heads around the phenomenon before choosing how to act. All the same, I doubt it's an individual, as you suggested. It's certainly a group or entity with it's own agenda, external to, but perhaps sponsored in some way by a government (perhaps even the US, for the reasons you mentioned).
  • hyperbovine 14y ago
    > Ultimately, keeping a conspiracy under wraps is an n^2 problem, where n is the number of people behind it. I'm puzzled by this statement. You need n people to keep the secret...
    • deleted 14y ago
      [deleted]
      • Filligree 14y ago
        That'd be 2^n, then. n^2 is 'geometrically harder'.
        • argumentum 14y ago
          Yeah, that's what I meant .. thanks.
    • venomsnake 14y ago
      3 can keep secret only if two of them are dead
• HarryHirsch 14y ago
  Alternative hypothesis: Bitcoin was created by a group of quants at some investment bank for a laugh and/or money. Bitcoin has well-known built-in weaknesses, e.g. the limited supply; it was designed to be exploitable, and we see this being done in the real work as we speak. You find the knowledge how to work markets at investment banks.
  • jacquesm 14y ago
    > it was designed to be exploitable That's a pretty bold statement for which I'm not aware of any proof whatsoever. Bitcoin is pretty rough and ready when you first look at it but on closer inspection it is actually remarkably solid.
    • chipotle_coyote 14y ago
      I suspect -- putting words in the OP's mouth, admittedly -- that the argument isn't that Bitcoin is exploitable in terms of software engineering, but rather in terms of BTC market manipulation, given that he mentioned the arbitrary cap on the total number of Bitcoins possible as a limitation. (I recognize that whether this is a flaw or virtue, or perhaps some of both simultaneously, depends on who you ask.)
      • snowwrestler 14y ago
        I assumed that's what he meant too. The total market cap of the entire bitcoin economy today is a bit over $1 billion USD. That is a small enough number that a large financial institution, or maybe even a few rich people, could manipulate the price with large transactions.
  • rthomas6 14y ago
    >Bitcoin has well-known built-in weaknesses, e.g. the limited supply; it was designed to be exploitable, and we see this being done in the real work as we speak. Why do people not realize this? Rant time: Bitcoin's large amount of deflation was a fucking stupid decision and is playing a very large part in its own price volatility. Whoever made it was so blinded by their own economic ideologies that they figured since inflation's a problem, massive deflation must be the answer! Never mind the currency's very design will prevent it from ever really being effectively used for credit or payment installments, like rent or financing for something. I'm so sick of people talking about "investing in Bitcoins." If it rises greatly in price (more than a few percent a year!) it's really bad, not good! If it rises that quickly then it's not a currency because nobody will be incentivized to spend it! And the worst part is, that's the very way it was designed. Can Bitcoin ever be used as a real currency? Someday, once the market cap gets big enough to limit the deflation to a reasonable amount. That won't happen for years. Years and years and years. Until then it will be a volatile, bubble-prone commodity with almost zero intrinsic value, because the creators made the fucking ridiculous decision to cap the supply in a global economy that we expect to (presumably) grow in real terms for at least hundreds of years.
• binarymax 14y ago
  It's way more traceable than cash.
  • Andrew_Quentin 14y ago
    but no less anonymous, maybe more so.
    • marshray 14y ago
      If it's traceable, how is it anonymous? I.e., you could have a wallet full of BTC that no one knows is yours, but the moment you buy anything with it that's linkable to you then all of your BTC becomes non-anonymous.
      • kragen 14y ago
        If you put every incoming transaction into a separate wallet, and create a new intermediary wallet for every outgoing transaction, then only a minimal amount of Ⓑ becomes non-anonymous with each outgoing transaction. But statistical methods can still probably bear fruit.
• pbreit 14y ago
  I don't see the motivation for a government whatsoever. It's easy to envision a person or group of anonymous people creating it. There have been a countless number of individuals coming up with digital cash schemes.
• _red 14y ago
  The truth is that the groundwork for bitcoin was laid down long before it appeared as a specific project. Bitcoin is a classic case of all the threads hanging there, but needing someone to come and tie them together. Wei Dai published his work originally on crypto-currency in 1998 (in fact some suspected that Wei Dai is Satoshi). Moreover Szabo was mirroring lots of the same thoughts with his bitgold proposals. From an economic perspective, the Austrian school has been gaining more and more creditability as it becomes increasingly clear that monopolistic control of currency is unworkable in the long-term. Therefore, there was nothing specifically revolutionary about it. It was really just one of those things that it was just waiting for someone to come tie these things together into a coherent project (I'm not at all minimizing the work satoshi did). This all does beg the larger question; Who is Satoshi and why would he disappear. Personally, I think it was a nom-de-plume of several people who intelligently made the decision to 'disappear' (even though they may still be active on the project using different names). Leaderless projects are very difficult for the various state monopolies to fight.
  • rdl 14y ago
    The people I suspect the most are Wei Dai, Adam Back, Nick Szabo, Ian Goldberg, or a few people of that era. Look at people who did interesting stuff then stopped for a few years... (Zooko, Jim McCoy, some Dutch people, Ian Grigg, etc are all candidates too)
    • gwern 14y ago
      I think we can rule out Zooko. I've been reading his stuff and interacting with him for a while, and between his personal life and Tahoe-LAFS, I simply don't think he had the time; and his delayed reactions to Bitcoin are not at all what I would expect from the creator. He and Satoshi simply sound different.
      • kragen 14y ago
        For some reason Hal Finney is missing from the list.
• rdl 14y ago
  The funny thing is I am pretty sure your hypothesis is very false, but most of the points are true! 1. You haven't worked in government. Their code is worse than Yahoo! or virtually any startup. Bitcoin isn't. 2. Bitcoin is far from the most malevolent possible form for governments. Chaumian blinded money, what I want to build next, with open, non monopolistic exchanges, and protocols designed to be hidden, instant, etc., is the most powerful possible form of anonymous cash. 3. No clue, but probably not, since the concept of a reserve currency is irrelevant. With electronic exchanges, you can separate out the different roles of money. 4. A subset of 3.
  • abstractbill 14y ago
    1. You haven't worked in government. Their code is worse than Yahoo! or virtually any startup. Bitcoin isn't. I bet the NSA and NASA both write code that's orders of magnitude better than anything Yahoo does, just to pick two counterexamples.
    • rdl 14y ago
      Sadly not particularly true of the NSA of 2013. And this wouldn't have been their A team.
      • alexsb92 14y ago
        I'm curious, are you saying that with some particular examples in mind?
      • mooneater 14y ago
        Can we please hear a little more about this, rdl?
        • rdl 14y ago
          Talk to Binney. They contract out everything, and don't even oversee shit well anymore. They have regressed to the USG mean.
• justincormack 14y ago
  Er, if a government had created it you would have to pay taxes in it. That is where the value of money comes from, future taxes you have to pay.
• rattray 14y ago
  My understanding is that whoever built bitcoin was pretty darn good at what they were doing. I question whether the best of the best in cryptography would choose to work for a government over earn enough money to spend time building something awesome, like bitcoin. This is coming off watching the video Gary Tan posted recently [1]. To me, the only question left is about leaking. What's a greater incentive against leaking: coercion by a bureaucratic, nontechnical employer (ie; a government), or the bonds of secrecy between close friends in a common cause? Call me an idealist, but I think the latter has a pretty good shot. The number of leaks coming from Apple vs the number of leaks from Google (higher from Apple, IIRC) seems to support this viewpoint. [1] http://sub.garrytan.com/hackers-can-be-business-guys-and-other-lessons-from-an-interview-with-paul-graham-during-the-first-yc-batch-in-2005 http://sub.garrytan.com/hackers-can-be-business-guys-and-oth..., around 12:30 iirc. EDIT: sentence structure.
  • jiggy2011 14y ago
    I may be wrong, but I don't think that being an amazing cryptographer is necessarily that lucrative of a career. Most of your options are going to be government employment (intelligence services/military) or working in academia. If bitcoin was a top secret government development then it's quite likely they would assign different people to different parts of the project with a minimal number of people overseeing the entire thing.
  • sliverstorm 14y ago
    I question whether the best of the best in cryptography would choose to work for a government over earn enough money to spend time building something awesome, like bitcoin. I question whether the best of the best in cryptography couldn't just work for the government TO earn enough money to spend time building something awesome. I mean, at least in the field of cryptography, it has always seemed like the government would be high on the list of places to work anyway. Crypto is a big deal to government, so they are going to be on the cutting edge, and plenty of other top crypto guys work there.
    • rattray 14y ago
      Fair point. I rescind the first paragraph of my post. Thanks
• guard-of-terra 14y ago
  What if Satoshi is an alien? Extraterrestrial being. Maybe he replicated The Currency that is known to work using local technology. This will explain how Satoshi looks like one person and still does too much stuff for one person and gets it all right in a first try. Even funnier if he's a space traveller, altough I suspect laws of physics disallow "naive" time travel.
• jacquesm 14y ago
  Bitcoin was not created by a government. There are two groups that are on the suspects list for having engendered bitcoin, one group centers around Trinity College, another is a bunch of loosely affiliated international collaborators. Both groups are on the record with precursors to bitcoin (papers, software), neither has admitted openly that they were the ones. If you read their papers in the run-up to bitcoin then there is no doubt that either group had the technical ability and the means to execute on the idea. To posit that a government did this would need to come with some proof that is stronger than the proof pointing at these two non governmental groups.
  • polarix 14y ago
    Mind sharing any links / citations?
    • jacquesm 14y ago
      You're going to have to do your own homework on this one, I got burned once before on HN for id'ing someone that preferred to stay anonymous and clearly these people don't want to be out in the open with what they built. But I can tell you my starting points: there are few threads on bitcointalk that try to ID satoshi, start with those, then read a bunch of papers, figure out who the co-authors are and sooner or later you'll end up with the same set of names. The interesting bit to me is that those two groups are both roughly equally likely but I can't find any clear signs of collaboration between the two.
      • jiggy2011 14y ago
        Assuming all this stuff (the original research) was published, perhaps it was a third party that just connected the dots?
        • jacquesm 14y ago
          It is definitely true that all the pieces were already there, and that bitcoin is more of an integration effort than a from-scratch design. And yet, there is a lot of subtlety going on there, more than I would credit an integrator with. This was no accidental affair.
• deleted 14y ago
  [deleted]
• dropkickbox 14y ago
  to ferret out, and get forensic evidence against those engaged in illegal activities. see the wired egold story. As someone mentions below, "its way more traceable than cash"
• nleyten 14y ago
  I very much doubt that Bitcoin was created by any government. Having said that, one reason why government could be interested in fomenting Bitcoin is because it makes some forms of tax evasion nearly impossible. I've written to some length on this often neglected side of Bitcoin; see the section "On the upside: Bitcoin is transparency friendly" in the following blog post: http://nleyten.com/post/2012/10/24/Announcing-OCaml-bitcoin-1.0 http://nleyten.com/post/2012/10/24/Announcing-OCaml-bitcoin-...
• frendiversity 14y ago
  If this is true, which countries have the computing/network resources to theoretically take over/control the network?
• jey 14y ago
  > so is an individual cooking up bitcoin as an intellectual exercise Is that really far fetched? Seems it's no more far-fetched than an individual coming up with the initial version of Linux. As I understand it, Bitcoin is just one implementation of the "crypto-currency" line of thought. E.g. http://www.weidai.com/bmoney.txt http://www.weidai.com/bmoney.txt
• benologist 14y ago
  There are organizations that would benefit immensely by not having physical cash changing hands, requiring storage, laundering and processing by banks and tax departments. Makes more sense I think for whatever multi-billion dollar cartel to be planning 20 years into the future with bitcoin as a 'version 1' mvp.
• antr 14y ago
  my 2 cents: along the "far fetched" lines, it is definitely a possibility that this was a govt initiative, and possibilities 1 and 2 (not 1 or 2) seem to fit my reasoning. countries that fit my argument are those with large trade deficits; have little or no natural resources; are known to run smuggling networks of drugs, counterfeit money, etc. countries with little or no economic resources are constantly under economic pressure to trade in "trusted" currencies. they need to purchase commodities and resources where counter-parties only accept strong currencies (usd, eur, gbp, chf, nok, etc.). it's impossible doing business with a large/influential commodities trader unless you trade in any of the currencies above. given that these countries are unable to generate enough foreign reserves via exports, large undercover networks that smuggle all kinds of illegal goods/services are unofficially permitted. e.g. class a drugs, counterfeit money (sold at a discount. think for a second why some top notch usd counterfeiters are located in africa and asia), free/subsidised drugs sold back to developing countries by 3rd world countries, etc. consequently the creation of a virtual currency, that does not require an export, and that it can be easily printed with ubiquitous technology/computing power is a great way to make up for the real economic shortfalls. final remark: still, i think the chance of this being the case is very slim. right now the trade deficits/currency needs by many countries that fit this profile are orders of magnitude larger than the overall value of the bitcoin market. unless the size of the btc market grows at a very high rate i seriously doubt this can be an effective tool to run the above operations.
• sheefrex 14y ago
  An interesting question, and option 2 seems to be the likeliest option. However, I would qualify it and say that it was created with the intention of having it fail. This would ease the introduction and attractiveness of any regulation, or prohibition, of virtual currencies. If a government were to create it with the intention of it lasting, then I would imagine they would have designed it such that the supply of the currency increased with the number of transactions; I'd like to hazard the guess that this is both possible, and would prevent both inflation and deflation. Why is preventing both of these necessary? Had they included inflation, it is unlikely bitcoin would have attracted its initial users - that is, the libertarians et al. Similarly, had it been deflationary, then this would possibly constrain government; no seignorage, and the real value of debt rising over time.
  • linhares 14y ago
    to presume that in 2008 someone would be doing this "with the intention of having it fail" is a little far-fetched, isn't it?
• deleted 14y ago
  [deleted]
• hyh1048576 14y ago
  I completely understand your suspicion. The protocol specification is fairly impressive, and runs almost smoothly for 4 yrs. Just one thing that I can remark, the elliptic curve used in the bitcoin protocol (secp256k1, the Koblitz curve y^2 = x^3 - 7 with a 256 bits prime) is not the one recommended by standards, and may contain leak. (It could happen that NSA already know some weakness of Koblitz curve over prime fields.) So 2 possibility here: 1. That's a backdoor set by the designer. 2. Designer just doesn't care about gov recommended specification.
• theGimp 14y ago
  I'm surprised nobody mentioned MintChip [1]. It does not use the exact same concept that bitcoin uses, but it's another crypto currency, and it's being developed by the Canadian government. [1] http://en.wikipedia.org/wiki/MintChip http://en.wikipedia.org/wiki/MintChip
  • neilk 14y ago
    Please. MintChip is not even remotely similar. It's a stored value card with some crypto for signing transactions.
  • bcoates 14y ago
    MintChip looks like yet another stored value smartcard, where the security depends on the difficulty of tampering with a tamperproof chip in the possession of the attacker.
• DanielBMarkham 14y ago
  Sounds far-fetched to me, but I'll play along. Assuming some third-party actor in the game, we make a mistake if we assume there was only one reason. Even if we concentrate on one reason, we may be drifting off-course. The primary value of BitCoin is its anonymity and difficulty to trace. That means that the people that made it appreciated those values. The world economic system is closing up -- slowly the noose tightens, and there's less and less place to hide transactions. That creates a need both at the state and individual level. What I'm interested in is if there is a BitCoin 2.0, or 3.0. I sure hope so. I'd hate to think the very first thing that became popular ends up being the de facto anonymized currency. When I'm thinking about who would build this and how it would be reviewed, everybody jumping on the 1.0 bandwagon doesn't give me the warm and fuzzies.
  • feral 14y ago
    >The primary value of BitCoin is its anonymity and difficulty to trace. That means that the people that made it appreciated those values. There are many simple things that could have been done to make it more anonymous. The blockchain contains huge amounts of information that could have been made much harder to analyze, if anonymity was a main design goal. The rest of the system is almost surprisingly well designed and robust, it seems surprising to me that if they set out to design for anonymity, this is the best they came up with. Hell, if we put our tinfoil hats on, and go with the line of thinking in PGs post, I'd almost say that from an anonymity point of view, in default usage, its closer to the 'clipper chip', where its just obscure enough to make people think they are anonymous, but really reveals a lot if you look at it properly. Not putting that forward as a theory, though!
• lakesta 14y ago
  I like the food for thought but as a lot of people have stated I don't know that it totally all adds up. The idea that a gov't would create a currency that is currently not being taxed doesn't seem like its at the moment that beneficial of a government project (looking at you, USA). However, I suppose it could be a different government (any of the PIGGS countries, Israel, Iran, or any other country that is having a money crisis and wanted a black market way out. That said, couldn't the author also be a big bank? I know big banks here in the US have thousands of coders on staff and while most do meaningless chores more than cool projects perhaps banks in other countries aren't so bad (looking at you Switzerland).
  • nwzpaperman 14y ago
    Don't you think a corporate entity or government would patent the code?
    • mikecane 14y ago
      The most lucrative formulas are never patented. Coca-Cola, for example.
• GHFigs 14y ago
  I've just assumed that Neal Stephenson's next novel is so large that we're actually living inside it.
  • nunb 14y ago
    I can't wait for all of Snow Crash to come true (even though it's just an intermediate step).
  • Kapura 14y ago
    that makes slightly more sense than a government conspiracy.
• altoz 14y ago
  if, say a government created a time machine and figured out that this is the major form of currency in the future, to bring prosperity to the past much quicker.
• mseebach 14y ago
  So, the only piece of evidence pointing to a government is the lack of reviewers, which IMO is a pretty weak indicator. Why would Bitcoin need a ton of reviewers? It's not like it was designed to replace critical parts of the economy overnight. Tons of non-academic "research" is released into the wild (such as nearly all commercial software) with zero peer review. I mean, there's no peer review of AirBNB, that doesn't make it a NSA operation (or does it? Hmm..). My impression is that BTC is a relatively simple application of existing (peer reviewed) crypto-tech, and could therefore have been invented by a single, or small group of, dedicated crypto scientists.
• reaclmbs 14y ago
  You got it right, buddy, but it's an emerging government - not an entrenched one.
• fnordfnordfnord 14y ago
  Well, * if you were a gov't who was consistently on the losing end of problems caused by the current regime, * you'd failed to get relief by diplomacy, * couldn't or wouldn't seek relief by open warfare, * and didn't mind the remote prospect of making your situation worse, Why not? Personally, I don't think a gov't did it. I've always liked Kaminsky's "it's a group of quants" hypothesis. Or maybe Michael Clear. Or maybe some other Physics/CS type. But I really have no idea, and haven't really looked into it more than reading random internet news.
• DesaiAshu 14y ago
  Seems more likely bitcoin was created by a big bank: - Immediate use for it to launder money (HSBC already does this but recently got flagged by the US gov) - Long term (if it became successful) it would enable them to reduce dependency on governments / regulation. Big banks are already more powerful than most governments and are rumored to cause political turmoil in countries to increase dependency on the bank. Why just control transactions when you can control the money itself? - Have the financial knowledge / data to design a currency + have the technical expertise to implement it (due to the masses of quants joining banks in the past 10 years)
  • linhares 14y ago
    Very very unlikely (if you ask me), generally a contender is unable to even see radically new technologies after they're up-and-coming. That they would design it, design it properly, and launch without fanfarre is extremely unlikely to me.
    • DesaiAshu 14y ago
      You're right, we see this a lot in tech, because start-ups are easy to start. But in other places / industries people who want to innovate have no choice but to work in R&D at a big company. For example, in India, it's really hard to start new companies, so big companies (like TATA) continue to out innovate everyone and disrupt themselves. It's really hard to start a new bank, so if you're smart and interested in innovating in finance, you don't really have much choice but to work for a bank. Plus governments are really the incumbents here, so it's less likely for them to start a currency to rival their own than it is for a bank
  • skore 14y ago
    > - Immediate use for it to launder money (HSBC already does this but recently got flagged by the US gov) Actually, considering the circumstances, I don't see the incentive there. Cash is much easier to move (if you have the power of a bank that size) than bitcoins are. The HSBC example proves this point.
• gojomo 14y ago
  Bitcoin isn't nearly as anonymous as many believe. The ever-shifting addresses make it look anonymous to average folks... just like a Three-Card-Monte game might look fair. But, with TLA levels of traffic analysis, plus the cooperation or compromise of a few major entry/exit/exchange points, it's probably quite transparent. So I can buy the theory that it was thought to be a 'manageable' variant drawn from the possibility space of all cryptocurrencies. But also, it may have just been an experiment that grew far beyond expectations. Some deep-secret think-tank group was playing with digital cash scenarios, perhaps as part of scenario-planning about possible futures where a cryptocurrency arises from far-left-field. Bitcoin was one of the ideas that got a lot of review and generated some vibrant internal debate: could this work? A proponent got approval to release it, under a pseudonym, to see how unaffiliated people reacted. So indirectly from a government... but not part of any master plan. (See also my prior comment at https://news.ycombinator.com/item?id=5501803 https://news.ycombinator.com/item?id=5501803 for why I think tax collectors may be very comfortable with Bitcoin in the long run.)
  • nawitus 14y ago
    Copying my other comment here: There's already zerocoin, a proposed extension of bitcoin, which guarantees completely anonymous bitcoins. http://blog.cryptographyengineering.com/2013/04/zerocoin-making-bitcoin-anonymous.html http://blog.cryptographyengineering.com/2013/04/zerocoin-mak...
    • nunb 14y ago
      bitcoin is designed so that miners have an incentive to work on it and not alternatives. The result being much the same as that predicted by Austrian theory: a single money winning in the market, and the rest being demonetized. (A caveat however, when it is easy to convert between the moneys, this need not occur to the same degree.) One would therefore predict low-to-zero chance of monetizing zerocoin/litecoin/namecoin if they compete for the same resources that bitcoin would compete for, namely miner processing power. (edit: zerocoin is not subject to this criticism, I stand corrected; thanks nawitus)
      • 14y ago
• friedland 14y ago
  Bitcoin is a money trading game in the guise of a new type of currency. Most of Bitcoin is being hoarded by traders and speculators who think they actually own something. Bitcoins could never effectively serve as an currency as there will never be stable liquid.
• mooneater 14y ago
  Here's my conspiracy theory: BitCoin was created by a group who found a way to reverse SHA 256. They considered how to monetize this invention. The idea of building a currency around that secret was originally a joke, but a proof of concept got taken seriously by one member. These people can compute bitcoins directly instead of mining, and will therefore control the future money supply. And by enforcing a limit on the supply of Bitcoin, they also figured out how to avoid the inflationary problem inherent in owning an actual currency mint.
  • skore 14y ago
    I knew those people researching quantum computation were up to no good.
• n0mad01 14y ago
  i had similar thoughts and the possibility that bitcoin was written by the us government seems conclusive to me. two more possibilities : * maybe it can be a way to liquidate the overwhelming national debt. * what are these numbers all miners are crunching -> maybe decoding military stuff.
  • nhaehnle 14y ago
    What the miners are crunching is well documented as part of the protocol specification and a clear case of "nothing up my sleeve".
• neilk 14y ago
  Are we overestimating how much crypto is involved? I'm not a crypto guy, but as I understand it, the crypto in Bitcoin is relatively simple and well-understood. The genius idea was how to verify transactions using proof-of-work in a peer system. At least this is what an acquaintance of mine, Paul Bohm, says (http://www.quora.com/Bitcoin/Is-the-cryptocurrency-Bitcoin-a-good-idea/answer/Paul-Bohm http://www.quora.com/Bitcoin/Is-the-cryptocurrency-Bitcoin-a...). Bitcoin lets other people worry about performance and implementation; the protocol just poses a problem. And apparently the first miners, produced by the entity known as Satoshi Nakamoto, were really slow. So maybe one person, or a small group of people, could have made that conceptual breakthrough?
  • rdl 14y ago
    It is way more novel crypto than virtually any other implemented system. Usually you have papers, then protocols, then reference implementations. Bitcoin is a pretty coherent thing, borderline what one great individual would do; more plausibly a small team.
    • betterunix 14y ago
      What novel crypto is there in Bitcoin?
      • chm 14y ago
        This thread is full of claims like this... without evidence to back them up. "I know who wrote the protocol, but I can't tell you. Do your homework." "The protocol is years ahead of everything else, but I can't talk about it."
        • rdl 14y ago
          "Novel" or "difficult to implement" doesn't actually mean better or years ahead. Researchers tweak things to be novel when standard tools will work just for the purposes of experimenting sometimes. I've been arguing that 1981-tech is superior to Bitcoin, even though Bitcoin is novel.
• arthurrr 14y ago
  1. why not just finance the way they normally do, by borrowing (selling bonds), or taking money from the taxpayer? 2. currencies today are already essentially digital. the vast majority of transactions are handled electronically. the value of a bank account are just bits on a disk. 3. bitcoin can't become a reserve currency, there is no such thing as bitcoin bonds. the growth of the bitcoin money supply has been predetermined. government wants to be able to control the money supply, because it gives them power. 4. the usd as a reserve currency will probably be replaced by a global currency, SDR's, to the detriment of humanity. i don't think it is farfetched to cook up bitcoin as an intellectual exercise. i think it is more likely to be 2, or 3 people in collaboration, because design by committee never works. government is too short-sighted to have created something like bitcoin.
• overgard 14y ago
  I do agree that the inception of bitcoin is probably more interesting than we realize, but there are a few premises here I'm questioning: 1. That the sophistication of bitcoin implies a government effort. I'd actually argue it's just as likely to be a corporate effort. This is more of a gut feeling, but modern government seems much more reactive than proactive, and so if they were to have created this, my suspicion would be that it was in response to something. But since I don't see an obvious "something", I'd imagine some sort of corporate entity is more likely to be proactive about an effort like this. Or, maybe even more likely than that, some sort of organized crime effort. I mean the classic stereotype of the "mafia" makes that seem funny, but I imagine modern organized crime entities would be very interested in something like bitcoin. Especially since, outside of idealistic libertarians, I imagine the only reason right now to spend bitcoins is if you want to buy something that can't be tracked back to you. 2. I don't quite buy the premise that bitcoin is a bulletproof protocol. For instance: https://en.bitcoin.it/wiki/Weaknesses https://en.bitcoin.it/wiki/Weaknesses . Some of these are sophisticated problems, but a lot of these things are exactly the kind of problems that could have been caught if there had been a proper peer review.
  • DanBC 14y ago
    > I imagine the only reason right now to spend bitcoins is if you want to buy something that can't be tracked back to you. Why wouldn't they have baked in anonymity if the reason for Bitcoin was anonymous purchasing?
    • jacquesm 14y ago
      Bitcoin solves one problem and solves it well. One way to make it anonymous: https://en.bitcoin.it/wiki/Tor https://en.bitcoin.it/wiki/Tor Side note: if you buy something and it is physical at some point the package will have to be handed to you. That's a pretty tough nut to crack if you want to stay anonymous. At a minimum you're going to have to be proximate to the drop-point which makes playing 33 bits on you a lot easier.
      • pbhjpbhj 14y ago
• Zigurd 14y ago
  Sadly the word "econoterrorism" has already been coined (no pub intended). I would have protected that intellectual property and licensed it to DHS for a reasonable fee.
• somid3 14y ago
  So I'm a hacker currently at MIT Sloan and have been analyzing bitcoins for sometime, so take my views with a grain of salt (I.e.: I not a Phd. I the field) Basically, no government would like to have a electronic curency like the Bitcoin because it impedes them from controlling the money supply and therefore be able to apply monetary policies. A central bank with no monetary policy is limited in its function, consequently, the notion of a Bitcoin is like you having to program in an OS where you do not have root access or can't change versions of certain libraries etc. China and other countries have suggested having a global currency that is backed by a "basket of currencies" -- other governments have suggested different solutions, but I can't imagine a Bitcoin to have been plotted by a government.
  • valugi 14y ago
    Most Keynesian governments will think this way.
• jackgavigan 14y ago
  Why would a government create Bitcoin? Simple! To help them track money launderers and penetrate black marketplaces like Silk Road. Many assume that Bitcoin is anonymous. It's not. At best, it is pseudonymous because every transaction is published in the blockchain for all the world to see. That means that users can be identified by conducting network analysis on the blockchain - see http://anonymity-in-bitcoin.blogspot.co.uk/2011/07/bitcoin-is-not-anonymous.html http://anonymity-in-bitcoin.blogspot.co.uk/2011/07/bitcoin-i... - and matching the results up with data from other sources (e.g. credit card payments records, emails, intel from spyware, etc.). It doesn't actually matter whether Bitcoin was created by an agency like the NSA or not - there is no doubt that they (and probably at least two there intelligence and security agencies) are doing this.
  • gwern 14y ago
    > To help them track money launderers and penetrate black marketplaces like Silk Road. Which explains why the Silk Road is still around...? Creating Bitcoin would be incredibly short-sighted if that was the goal: if you read indictments of other drug markets or illegal markets like the Farmer's Market or the carder.su busts, it's clear that the government gets all the financial info it wants.
    • mikecane 14y ago
      Let me add to the complexity. What if Silk Road is also gov't? We have had proof of CIA drug-running. And the so-called Drug War is a failure. You don't get failure on that magnitude without gov't complicity, even if it's simple bribery. See: Alcohol Prohibition.
      • eurleif 14y ago
        I think the Armory (Silk Road's sister site for weapons) is evidence against that. It was shut down because it wasn't profitable for the owner(s). Funding obviously wouldn't be an issue if it were the government, so if the Armory were good for their strategic objectives, why would they have shut it down? And if it were bad for their objectives, why would they have created it to begin with?
• deleted 14y ago
  [deleted]
• nunb 14y ago
  I was in a bank yesterday and there were all these animals in cages shuffling paper around, worried that their customers would yell at them if they were off by a single digit, (because doing so would be tantamount to robbing the customer of their hard work) and it struck me that all that the shuffling accomplishes is moving tokens of value around, mere accounting entries. And it doesn't even do that well! It's breathtakingly inefficient. For instance, one can't tell how many shoes are sold in a country.. that would require a totally different, feet-on-the-ground statistical survey, or an industry association (voluntary reporting). We can't tell who's doing what at all. We're like the suckers in The Wire Season 1 (which seems so quaint by today's standards) trying to reverse-engineer IRL networks. The hacker solution would be so much more elegant, so much less messy (no meatspace!). It's like your example of hackers in dorms doing voip way before Skype. No self-respecting hacker could (even on the wildest bender) have come up with pushing pieces of paper around as value-tokens. What a hacker cooks up today is what the world will use in the next decade. With bitcoin, unravelling a network is trivial. Bust one node (a snitch or an undercover sting op) and the rest unravel. The combination of government and hackers sits somewhat oddly in my mind. So I shall refrain from pursuing that line of thought. However, in this spirit of prognostication, I like possibility #4. But you understate the case. It's not about USD vs RMB, it's about fractional-banking vs fixed-quantity money. If #4 is the case, some might argue that USG must have pre-mined a bunch of coins (and conversely, that if they didn't, #4 is not the right answer). This need not hold, of course. One can make some predictions if #4 is indeed the case: with bitcoin, taxation is easy and automatic. Smaller governments would result (State, Local & Federal), deficit spending would end, the free-market would still work, but command-and-control would be much easier. edit: I see I'm largely of the same opinion as user guylhem.
• neilxdsouza 14y ago
  Here is my theory. The US did behind the backs of the Federal Reserve, which is currently it's biggest enemy and threat and it's an internal enemy, controlled by the Private Banking economy. The Federal Reserve remains an economic black hole, sucking out money from the US system (at 6% of Profit on Interest in Bonds Raised). Consider the system where the 6% dividend paid out to the share holders of the Federal Reserve is untaxed. Further as US debt spirals, the bonds raised increases and the 6% dividend increases further. It's like a sequence 1.0001 Raised to the power of n will finally start diverging very fast beyond a certain point. Bitcoin takes you back to the days of the US around the Boston Tea party. When the British asked how do you deal with currency, the colonists replied - We print our own notes (not backed by debt paid to the UK). The Federal Reserve represents a similar debt trap. Bitcoin breaks free from this. That's my 2 bit coins.
  • neilxdsouza 14y ago
    A few points to add to the argument above Consider the following scenario: I am a very rich man : i have 1 trillion dollars, everybody else has < 1 million dollars. Goal : I want to continue being the richest man on the planet and control its resources An easy way: Whatever new assets are created, I raise the price far above the value that normal people can afford. If they can afford 1 million, I offer 50 million. It doesnt make a difference to my life, because I have 1 trillion, but I put it out of reach of all the people who have 1 million. In 1977 my parents bought a 1 bedroom apartment for INR 47000. At that time, my dad told me, salaries for average jobs were about INR 600. 100 times 600 = 60,000, so the max leverage was about 100 times. Today in 2013, an average white collar salary in India is about 50,000 a month. Today In Bombay in my locality a 1 bed apartment is 85 lakhs (INR 8.5 million). What's the leverage? 50,000 x 1000 = 50,000,000 = INR 5 million. My leverage is > 1000 times. But wait, if you consider the dollar (my dad was a marine engineer who earned in dollars), I have seen it go up from INR 18 to today's INR 50. So multiply that another 4 times, my leverage is about 4000 compared to 1977. What happened? Inflation. a. Now consider the 6% dividend the Federal reserve share holders pay themselves on the interest gained by bonds raised. b. I need an asset where I do no work, but earn money. Every year people do economic business activities and generate wealth. Private equity companies invest in these companies and hence are able to increase their investors holdings. But consider the extra income from 6% dividend. This is money that gives them an extra edge over everybody else. If the US raises 1 trillion dollars in bonds from the FED at 1% interest, the FED income is USD 10 billion. 6% of USD 10 billion is 600 million USD. But that income is only for the year 2013, to understand the total interest you must add up for all the bonds raised where the debt has not been paid back. The private banks have this extra money to play with, which keeps increasing their ability to jack up prices and decrease the common man's leverage.
• martindale 14y ago
  It's 2007. The economy is in increasing turmoil, with the housing bubble ripe for bursting and concerning news coming from overseas regarding the stability of the Eurozone. The CIA relays some troubling discoveries in the distribution of risk in the largest banks, and the Bush administration makes a request for proposals for contingency plans in the event of a global economic collapse. Enter the NSA's contribution, a distributed proof-of-work currency that provides early adopters with a majority share of the wealth and has the potential to revolutionize currency in general. The CIA is authorized to develop and deploy a series of operations, including the fabrication of a social structure that results in a viably large computing network to sustain the technology long-term with a mind-numbing pace. Enter Bitcoin, wherein the U.S. maintains a majority share of wealth in the event of a global economic collapse.
• dasht 14y ago
  I think PG is asking the wrong questions. None of merely plausible hypotheses as to the motive of an imagined government actor creating bitcoin is testable. Perhaps more importantly, we've skipped entirely past the question -- a question we might actually be able to begin to answer with evidence -- what what bitcoin is actually doing in the real world beyond the obvious and superficial details that make headlines.
• frendiversity 14y ago
  I've long suspected bitcoin was created by Paul Graham. Bulletproof protocols usually require peer review, yet there have been zero leaks from the reviewers. Pools of crypto guys who don't leak stuff are usually employed by startup funds. The part that puzzles me is why Paul Graham would do this. I can imagine several possibilities: 1. To finance his own black operations. 2. Because he thought digital currencies were inevitable, and he preferred bitcoin to some potentially more malevolent form. (Could bitcoin have been worse from Paul Graham's point of view?) 3. A friend suggested this: because he felt his currency would never become the standard reserve currency, and he felt it was better that no one's be if his couldn't be. 4. A variant of the above: Peter Thiel did it because it seemed inevitable that the PayPal account would eventually lose its place as the standard Internet currency, and better to have it replaced by bitcoin than Liberty Reserve. I realize some of these explanations are pretty far fetched, but so is a government cooking up bitcoin as an political exercise. Whatever the explanation of bitcoin's origin turns out to be, it will probably be pretty weird.
  • raldi 14y ago
    > Pools of crypto guys who don't leak stuff are usually employed by startup funds. That's not true, and it's the crucial difference between your version and the original.
    • deleted 14y ago
      [deleted]
• snowwrestler 14y ago
  One reason a government might do it is to shine a light into the dark corners of the online black market. As I understand it (not a crypto expert by a long shot), bitcoin transactions are traceable but not personally identifiable. So even if they cannot see who is transacting, they could build models of the networks that are transacting. Perhaps this could be married up with other sparse data to improve their understanding. Another reason would be pure research--not a specific goal in mind, but simply to see what happens when this sort of tool is released into the Internet. One thing a government would have going for it is a complete lack of interest in the actual monetary value of bitcoins--it's a tiny drop in the bucket of most large governments, and top-secret-level crypto teams are not likely to spill their guts for a few millions dollars...particularly if they know that their transactions would be easily traced.
• saalweachter 14y ago
  I think you're way over-thinking this. Governments do a lot of things. While some things governments do are a top down strategic plan, every person at every level of every part of every government is an intelligent actor capable of doing things for bizarre or obscure reasons. Sometimes these things serve large nefarious purposes. Sometimes these things serve small nefarious purposes. If BitCoin was created by a pool of secret government cryptos, it's possible their mandate was very different from anything related to BitCoin: The Digital Currency. Maybe their mandate was to start an open sourced project which would optimize a cryptographic algorithm. And then one of the guys handed this assignment said to another, "Hey, we should totally do that BitCoin thing you're always talking about at lunch." And they did it, because they thought it was cool, and it technically satisfied the requirements of their assignment, and their manager signed off on it so they thought they might not get fired.
• sneakin 14y ago
  I'd search the social graph around Julian Assange and Wikileaks. Bitcoin came out shortly after they were blockaded. Wikileaks then waited a year or so after Bitcoin was released to start using it. There's also a nexus of cypherpunks around them with the skills and knowledge.
  • marshray 14y ago
    Bitcoin was out almost two years before the Wikileaks blockade: https://en.bitcoin.it/wiki/Bitcoind#History_of_official_bitcoind_.28and_predecessor.29_releases https://en.bitcoin.it/wiki/Bitcoind#History_of_official_bitc... https://en.wikipedia.org/wiki/Wikileaks#U.S._diplomatic_cables_leak_responses https://en.wikipedia.org/wiki/Wikileaks#U.S._diplomatic_cabl... Sure, it was probably someone who exchanged messages with some cypherpunks at some point. Since that includes most of the skilled crypto implementers I know, it doesn't narrow it down much.
• shmerl 14y ago
  Why creating conspiracy theories? You can suggest it's martians who created it with the same level of credibility.
• sneakin 14y ago
  I'd search the social graph around Julian Assange and Wikileaks. Bitcoin came out shortly after they were blockaded. Wikileaks then waited a year or so after Bitcoin was released to start using it. There's also a nexus of cypherpunks around them with the skills and knowledge.
• dragonwriter 14y ago
  > I've long suspected bitcoin was created by a government. Why? > Bulletproof protocols usually require peer review, yet there have been zero leaks from the reviewers. Bitcoin isn't bulletproof, it has (and, as I understand, originally had more) well-known vulnerabilities. These are deemed acceptable by people who decide to use bitcoin (almost by definition, as those who don't deem them acceptable are unlikely to also choose to use bitcoin.) > The part that puzzles me is why a government would do this. There's a whole lot of reasons a government might do something like bitcoin, but its far from clear that a government did it, much less what the motivation was if a government did. Really, this seems to be looking for supposition to pile on supposition to create a conspiracy theory.
• api 14y ago
  A left field speculation of mine: are we sure Bitcoin isn't Japanese? I know there's circumstantial evidence against Satoshi being Japanese, or even being a single person, but considering Japan's economic malaise it seems possible that they would consider bizarre experiments. MtGox, the largest exchange, is also Japanese (or started there).
• yarou 14y ago
  It is clear that Bitcoin was engineered deliberately by some entity. Whether that entity is a government, economic bloc, or group of individuals is an interesting question. My two cents are that this group of individuals are related in some way to the IMF-World Bank. An alternative "currency" was established during the height of the financial crisis, in the form of SDRs. Bitcoin could likely be the logical next step from SDRs. The beauty of the currency is that it can be used to solve policy issues, without necessarily revealing the political actor(s).
• fizx 14y ago
  You have a currency that requires a history of every transaction ever. Perhaps the hypothetical government is confident in its ability to unmask pseudonyms, and it will soon have access to everyone's financial history. </tinfoil>
• tubbo 14y ago
  "3. A friend suggested this: because they felt their currency would never become the standard reserve currency, and they felt it was better that no one's be if theirs couldn't be." I don't think you need to be a government to feel this way. The fact that the United States gets off for so much bullshit compared to other nations is obviously a direct result of the USD being the world's reserve currency. In my opinion, if you could somehow create a world reserve currency that a single nation couldn't control, exploit, and ultimately abuse, that would be beneficial for all humanity. We could do great things, like become a "planetary" species and drop the concept of borders and nations. From there it will be much easier to get to space and begin exploring the stars, which, in my opinion, is all of humanity's ultimate goal.
• oracuk 14y ago
  Possibly because someone wanted a market demand to drive down the cost of ASICs for cracking AES256?
• frozenport 14y ago
  Every Bitcoin transaction an be tracked, and once you associate a wallet with a name you have the entire purchase history of the person.
• Datsundere 14y ago
  Created by a bored japanese man
• stcredzero 14y ago
  If I were in control of a sovereign entity, I might be motivated to create a cryptocurrency at this point. This could be a way to increase a small country's currency reserves. The US government and other major powers would be against this, however, for the same reason why they squashed bearer bonds. Also, given how bad Bitcoin is in some ways, I could believe it wasn't created by crypto experts working for a government. There is no good theoretical basis for secure hashing algorithms.
• myprasanna 14y ago
  My best guess would be a bunch of friends in a crypto lab cooked it up. It's not that there were no leaks. There were reviews done in the cryptography mailing list and changes were made. Just that they happened publicly online. The first idea was proposed in 2008, while the client was first launched in 2009.
• lightblade 14y ago
  Pools of crypto guys who don't leak stuff can also be employed by..the mobs! This make more sense because bitcoin is already being used for acquiring drugs.
• gyardley 14y ago
  Most if not all governments believe a fixed money supply leads to deflation. They also believe that deflation is a bad thing that should be avoided. (Whether you believe this is completely irrelevant. What matters for this argument is what the government believes.) Since Bitcoin's supply is fixed, Bitcoin is inherently deflationary. A government that creates and releases Bitcoin is a government that creates and releases something it believes is seriously flawed. Why would a government release something it believes is seriously flawed? (The most likely answer is 'it doesn't', but let's play along.) Perhaps that government believes the adoption of Bitcoin would damage its rivals more than itself. Perhaps that government fears the adoption of truly-effective digital currency, and therefore chose to release and publicize one with inherent problems that will prevent its widespread adoption - delaying the onset of a truly-effective currency. (Again, dear reader, you might think Bitcoin is fine - but I suspect most government economists are more in line with Paul Krugman.) Finally, perhaps the government truly thinks Bitcoin is a bad idea - but not everyone who works for the government agrees with the government. It only takes one person to leak something. Perhaps the group who created and reviewed Bitcoin were hired during one administration, and then, being unhappy with a future administration, someone decided to leak their what they were working on. Note, for those of you who enjoy tinfoil hats, that the first paper on Bitcoin came out just days before the 2008 presidential election, when the polling was almost uniformly predicting a Barack Obama victory. Is Bitcoin a release from someone who believed both in the project they were working on and that they were about to be unemployed?
• coldtea 14y ago
  5) As a honeypot for crypto fans, anti-government types, money laundering, and such?
• jfoster 14y ago
  Why does "crypto guys who don't leak" equal government? That doesn't sound like it would be all that hard to reproduce outside of government. Most corporates don't leak either.
• mikecane 14y ago
  I was giving this some more thought. Anyone else here familiar with the cast of characters from the book The Predictors ? http://www.amazon.com/Predictors-Maverick-Physicists-Theory-Fortune/dp/0805057579 http://www.amazon.com/Predictors-Maverick-Physicists-Theory-... Is there any possibility of their involvement?
• tptacek 14y ago
  So many weird assumptions baked into this question. * Why do you think Bitcoin is bulletproof? * What kind of peer review do you think Bitcoin has had? * Who are the crypto review firms that routinely leak things? * Why would a non-leaky crypto review imply that Bitcoin was bulletproof? * What about the pools of crypto guys at IBM, at Google, or at Microsoft? * What would make one think Bitcoin is a comparably hard problem to other cryptosystems? * Why is a cryptocurrency, which is a problem that has been tackled repeatedly by both hobbyists and researchers, more far-fetched as an intellectual exercise than, say, Tor? SSL/TLS is the best-reviewed cryptosystem in the world. The USG relies on it in a myriad of different ways. What's the longest stretch we've gone without discovering some horrible flaw in it?
  • Kapura 14y ago
    I disagree with the governement conspiracy thing, but the bitcoin protocol has been incredibly secure. This is pretty common knowledge. People can't "hack" into the bitcoin network and make themselves millionaires.
    • tptacek 14y ago
      It is "incredibly secure" in the same sense as the banks that use TLS are using "military grade" encryption.
    • patio11 14y ago
      Howdy Kapura. (A bit of background knowledge: It might not be obvious if you haven't been here for a while, but the guy you're talking to is something of an expert in making systems dependent on cryptography do horrible, horrible things.) It may be "common knowledge" that the bitcoin protocol is secure, but this is largely because a) most bitcoin users and advocates are not competent to make any determination of security, b) you should probably include an asterix to the claim like "Well, secure if you don't count the successful double-spend attack which necessitated a holy-shit-drop-everything-and-downgrade response by several mining pool operators", and c) acknowledge that one of the main reasons people don't attack the protocol is because Bitcoin exchanges have been coughing up everything one could possibly want, and more, with far less work. I should probably write a blog post digging into what people mean when they talk about "the Bitcoin protocol", by the way. Bitcoin isn't a protocol like HTTP is a protocol. Bitcoin's entire protocol specification is the Satoshi bitcoin client, which you have to warts-and-all emulate to be accepted by the network, because if you ever disagree with the Satoshi client about the validity of any single transaction in history then you're suddenly building off a blockchain which is incompatible with the one used by all the businesses that one would theoretically want to spend Bitcoins at. It is entirely possible for "the Bitcoin protocol" -- the series of steps by which clients agree on the status of the blockchain -- to be bulletproof while the Satoshi client (i.e. the only instantiation of the protocol that matters) to get busted like a pinata via e.g. a buffer overflow attack. One would hope that when that happens, it does not happen on every computer using bitcoin simultaneously, which strikes me as a very plausible scenario given that the designed intent of bitcoin is to fan attacker-chosen executable instructions to every node on the network.
• rooshdi 14y ago
  Bitcoin is a means of control, just like any currency. The incentive is intrinsic.
• wfn 14y ago
  For what it's worth, the protocol is/was not 'bulletproof' [1]. As far as I understand the basic architecture of the protocol, none of the crypto parts used are to be considered 'novel' (public/private keys+signature schemes & hashes) - it was the overall combination of various parts, esp. the combination of proof-of-work + p2p to (also) verify transactions, and the hash-chained blockchain to avoid double-spending etc. that proved to be truly powerful. [1]: "On 6 August, a major vulnerability in the bitcoin protocol was found. Transactions weren't properly verified before they were included in the transaction log or "blockchain" which allowed for users to bypass bitcoin's economic restrictions and create an indefinite number of bitcoins." (http://en.wikipedia.org/wiki/Bitcoin#2010 http://en.wikipedia.org/wiki/Bitcoin#2010; direct link to CVE: https://web.nvd.nist.gov/view/vuln/detail?vulnId=CVE-2010-5139 https://web.nvd.nist.gov/view/vuln/detail?vulnId=CVE-2010-51...)
• prawn 14y ago
  IMO, this question is part-test, part-research by PG who would not be opposed to being involved with a future, digital currency. Equally for reasons of curiosity as for anything to do with profit or changing the world? Which was the sole-founder startup working on something a bit like this? Got rejected but with promising feedback on their first foray. Was it a currency or something else they were working on? An addition for the next Frighteningly Ambitious Startup Ideas list?
• incision 14y ago
  I like bitcoin as a robust, validated communication network with the currency function incentivizing its operation and creating noise to mask the murmur of its true purpose.
• chatmasta 14y ago
  It's entirely possible that the NSA possesses quantum computing capabilities, in which case they also possess the extreme power over bitcoin cryptography. If this is the case, then they are able to track black market transactions including ones among terrorist cells. If I were the NSA, I would say it's a safe bet that when you release am "anonymous" currency, you promote an illicit economy. Andie you secretly have the ability to omnisciently track its activity, why not promote the currency?
• gbog 14y ago
  Already so many comment mine will be buried deep. Anyway: I am happy to see that in fact pg has no China-blindspot. I feared pg and others (eg Fred Wilson) were never talking about China because they droped half of the world out of their sight, as so many people sadly do. In fact it seem to not be the case. It was more of a strong reticence against saying stupid things, and a righteous understanding that not saying stupid things about China is very hard. But still, the nearby horizon is inevitably a confrontation between US and China, and we need clever and trusted people to state their best bets about how to handle this issue, which, left alone, can rot in the wrong hands and have a bad ending for everyone.
• DigitalSea 14y ago
  This reminds me of a theory I heard of that Bitcoin was created to secretly try and crowd-source the breaking of seemingly impossible encryption protocols (encrypted files not meant for anyone other than the intended recipient). I wonder if such a theory is actually plausible though considering the client is open source, what if the block chains people are mining are actually encrypted files and the government are using people as bot-nets for breaking encryption? This is one reason I would suspect the government of creating Bitcoin.
• kcnickerson 14y ago
  Number 4 with additional variant… it's possible that Bitcoin is simply a relatively cheap Straw-man to initiate a real world trial of a global, all digital currency. experiment with the security, anonymity, market, boom/bust, acceptance. under this scenario, there will be others until the system is "perfected" for a unified single global currency.
• leot 14y ago
  I was speaking with a friend just yesterday about how useful and easy it would be (if you're the CIA/NSA) to run, say, the VPN "Private Internet Access". In that conversation I came to similar speculations as pg's about Bitcoin (I mean, the first client was written for Windows, which straight away seems decidedly not-hacker-y). As for motivation: it's not as though this would be the first time that a spy agency found sources of funds extra-congressionally (see, e.g., http://en.wikipedia.org/wiki/Iran%E2%80%93Contra_affair http://en.wikipedia.org/wiki/Iran%E2%80%93Contra_affair). Perhaps, alternatively, they thought it was worth experimenting with, say: http://en.wikipedia.org/wiki/Assassination_market http://en.wikipedia.org/wiki/Assassination_market . Another explanation would be that someone at a gov't agency figured out that a crypto-currency was likely to come into existence at one point or another, and if/when one did, it would be very useful/necessary to buy a lot of it/get involved. If the currency was designed by someone else/a large open source community, it might (or might not) have flaws in it that could render the currency fundamentally unstable and make questionable any involvement of the agency in the currency (e.g., they'd have to choose which cryto-currencies to invest in, they might find it difficult to work with the authors to correct any systemic flaws, they'd probably have to buy a lot of the currency rather late in the game). Another reason is that, if the agency in question designed the currency itself, it would have a large head-start on putting together the hardware that could be used to disrupt it/eliminate it, if need be (c.f. US military control of GPS). Who knows, perhaps the RAND Corporation put out a report forecasting the introduction of crypto-currencies and showing that the organization/state that first introduced it would gain a significant strategic win. If I were an administrator of the NSA/CIA/whatever, I can imagine being won over by arguments that a crypto-currency was inevitable, and that my agency/country would have a major advantage (financially and strategically) if it designed said currency itself rather than letting someone else do it.
• brownbat 14y ago
  Reserve currencies have come and go, but sometimes over spans of hundreds of years. Bitcoin has been around fewer than five. Maybe we should wait a minute or two before discussing its role as a global reserve. No smart government would make the currency dependent upon predictions about its impact on global monetary policy, because that would involve a heady series of presumptions. Also challenging these presumptions: Bitcoin is essentially a proof of concept, which could be copied or forked or reimplemented from scratch at any time. Some alternate coins have been developed already, maybe not enough to exceed the network effects, but these improvements pile up. Something destabilizing could easily unseat Bitcoin over the span of time required to scale to cover a plurality of human transactions.
• hirokami 14y ago
  This theory is so paranoid that I am only willing to raise from a throwaway account through Tor and run through the translation twice to remove the possibility of textual analysis. Standard disclaimer applies, this is just a theory and, apart from the evidence we go down I have no absolute proof that this is true. If a government is truly responsible for the creation of bitcoin, it is possible to paint markers on people who want to subvert the government so they can be properly "handled" at a later date as part of a road to orwellian absolute tyranny. Now legislation is being heavily promoted by the powers in the U.S. to specifically target the types of weapons that would be useful in an uprising militarily under reducing firearms violence when statistics show civilian use of firearms in crime over handguns instead of 5.56 mm rifles show that this is a blatant lie. Recent high-profile attacks on several soft spots throughout the U.S. with peculiar details on close examination indicate at least plausible false flags. In addition, DHS recently purchased 1.6 million rounds of hollow-point ammunition, The "war on terror" is coming to an end of its armed Islamic extremists phase, but the war is the health of the state and will require a new threat to keep the sheep in line, what better threat than a manufactured cabal of illuminati, unholy cross Timothy McVeigh, Kevin Mitnick and distributed shadow mercenary NSA? And what better way to create a "person of interest" initial list of those who have been very active and vocal support bitcoin rising, especially in view of the way that could destabilize / destroy the world's states? In short, it may well be the modern equivalent of standing on a table in a dive tavern and encourage the disgruntled into armed insurrection against the tyrant king, and when the targets behind you leave, having them picked up by the secret police.
• damian2000 14y ago
  The fact that something like Stuxnet could be leaked, and yet something altogether less malevolent like Bitcoin could be tighter, and not leak? Highly improbable in my view. I think its more probable that a genius-level individual came up with it, and subsequently got lucky in that his creation became wildly successful. Would we be discussing this if noone had used it, and it remained a lone individual's spare time project?
• chris_dcosta 14y ago
  I would have thought that if this was a government backed project it would include the ability "to know" - whether that be the persone, the amount or the "where" af transactions. It would be pretty dumb not to include that aspect, but as far as I know, these are exactly the things bitcoin prevents. There would be very few people with peer-to-peer networking skils the programming knowledge to put that together and thhe mathematical knowledge to create the algorithm and the economics knowledge to understand how to control inflation. But there are still weaknesses in the process.
• chris_dcosta 14y ago
  I would have thought that if this was a government backed project it would include the ability "to know" - whether that be the person, the amount and the "where" of transactions. It would be pretty dumb not to include that aspect, but as far as I know, these are exactly the things bitcoin prevents - it provides anonymity. There would be very few people with peer-to-peer networking skils, the programming knowledge to put that together, and the mathematical knowledge to create the algorithm, and the economics knowledge to understand how to control inflation, and the sheer willpower to do it so successfully. It seems like it probably was a team rather than a single person.
• vijayboyapati 14y ago
  From Hal Finney's "Bitcoin and Me": https://bitcointalk.org/index.php?topic=155054.0 https://bitcointalk.org/index.php?topic=155054.0 When Satoshi announced the first release of the software, I grabbed it right away. I think I was the first person besides Satoshi to run bitcoin. I mined block 70-something, and I was the recipient of the first bitcoin transaction, when Satoshi sent ten coins to me as a test. I carried on an email conversation with Satoshi over the next few days, mostly me reporting bugs and him fixing them. Today, Satoshi's true identity has become a mystery. But at the time, I thought I was dealing with a young man of Japanese ancestry who was very smart and sincere. I've had the good fortune to know many brilliant people over the course of my life, so I recognize the signs.
• seferphier 14y ago
  The paypal mafia could be the creators of bitcoin. They certainly have in depth knowledge about the financial markets and technological expertise. Furthermore, the idea of bitcoin is not only original but also frightingly ambitious that fits well with their personalities. i am curious as to peter's opinion on bitcoin.
• chris_dcosta 14y ago
  Isn't it amazing how many commentors actually know nothing about the mechanisms of the currency, preferring to comment from a position of ignorance in tabloid headline statements. I find it very strange coming from a community of so-called "hackers" that this should happen, considering a) the interesting and complex technical mechanisms involved, and b) the "mysterious" circumstances of it's coming about. Who wouldn't want to get their hands dirty with it - at least out of curiosity? In fact, it's what I find more and more irritating about this community, Apologies @pg - just had to let off steam.
• runjake 14y ago
  > Pools of crypto guys who don't leak stuff are usually employed by governments. You're pretty on with this. I do believe it was created by a crypto guy employed within the UKUSA intelligence community, but as a side project -- perhaps even a side project based off of his/her work. I think the theories about the US and the American dollar don't pan out because there are more efficient ways of dealing with this than creating a new, solid (thus far) cryptocurrency and gaining acceptance and real-world value out of it. All this while maintaining absolute secrecy within the IC (where I have friends and acquaintances studying BitCoin, looking for theoretical attack vectors and de-anonymization techniques). SOMETHING should have leaked somewhere (most likely a politician, as they can't seem to keep their mouths shut.)
• dsrguru 13y ago
  I think a much more likely explanation is that the creators wanted to develop a cryptographic currency that was sound enough to become wildly popular and, in doing so, to let early adopters (i.e. themselves) make a ridiculous amount of money. I say adopters in the plural because Wikipedia suggests that Satoshi Nakamoto is three people: http://en.wikipedia.org/wiki/Bitcoin#Identity http://en.wikipedia.org/wiki/Bitcoin#Identity
• asciilifeform 13y ago
  Aside from the traditional "NSACoin" hypothesis (massive transaction graph waiting to be de-anonymized), here's another one: the private keys for the massive hoard of coins mined in the earliest days of Bitcoin are on a bureaucrat's computer, and will be used to crash the exchange rate - discrediting cryptocurrencies for all time. (Discussion here: http://www.loper-os.org/?p=1009 http://www.loper-os.org/?p=1009)
• pasbesoin 13y ago
  Assuming your premise, I would proffer some version of 4), although not necessarily done by the U.S. The U.S. and its currency are toast -- in a decline, if not crash. Those who are relatively apolitical (not overly vested in any particular political system) with U.S.-based assets are going to want them denominated in some "neutral" form of tender.