Chapter 5 - The Timeline and White Paper "draft"

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Chapter 5 

The Timeline and White Paper “draft”

The author came to know the person that would become Satoshi Nakamoto, not as Satoshi Nakamoto, but as another individual with an entirely unrelated name.  It was only later, much later, that the realization set in as to who Satoshi Nakamoto was and how we crossed paths.  It took some connecting of the dots and assemblance of puzzle pieces over time as described in this book.  At my initial knowing of this person, I had never heard of the reference for Satoshi Nakamoto, and it wasn’t until many years later that I would first hear the reference.  However, the name I knew this person by was entirely different and may not have been his true birth name and quite possibly a self-given name in itself.  If so, this would seem consistent with what else I know of him but at the same time erases information of one’s past and limits traceability. 

The author’s first encounter with the person that became known as Satoshi Nakamoto occurred back in the Fall of 2005.  With encounters continuing through the Fall of 2006.  The final encounter extending into November 2006.  So, for a little over a year, the author came to know the person that would become Satoshi Nakamoto.  It’s not clear then or now looking back that this person was using or planning to use the pseudonym Satoshi Nakamoto since it was a good two years prior to the release of the Bitcoin White Paper on October 31, 2008.  

As noted in the known correspondence of Satoshi Nakamoto dated “2008-10-31 18:10 UTC”, Satoshi Nakamoto messages the online, Peer-to-Peer Professional Forum, referred to as the P2P forum; “I’ve been working on a new electronic cash system that’s fully peer-to-peer, with no trusted third party.”

Satoshi Nakamoto also writes in another known correspondence with Hal Finney dated “2008-11-09 01:58:46 UTC”, the following:  

“I appreciate your questions. I actually did this kind of backwards. I had to write all the code before I could convince myself that I could solve every problem, then I wrote the paper. I think I will be able to release the code sooner than I could write a detailed spec. You're already right about most of your assumptions where you filled in the blanks.  

Satoshi Nakamoto”

In thinking about the timeline and the release of the White Paper on October 31st, 2008, my experience with the person that would become Satoshi Nakamoto is consistent.  One might imagine the time in thinking through all the parts that is bitcoin.  Satoshi Nakamoto did not invent a new math solution, or a new formula, or any one real new piece.  It’s the sum of the parts, and the vision in putting all these pieces together in a manner that solves a particular problem around transactions/currency relying upon other third parties.  This is the driving force behind bitcoin and in my view behind Satoshi Nakamoto.  It was the removal of that third party that was at the heart of this creation.  

Relying on other third-party sources for administering currency as we generally have to date can have a considerable effect on the security of that currency. Bitcoin brings uniformity across the globe to transacting and storing currency value in a secure means free of the need for third parties.  Of course, this was  the vision and since has morphed into many transactions today having that third party through cryptocurrency exchanges.  This is in direct conflict with the original vision.   Bitcoin was intended to remove the need to trust a third party in any transaction. Although, current exchange traded funds (ETFs), crypto exchanges, and other regulatory means from certain governments of transactions are overriding this onset goal.  Having said all this, thinking through the potential pitfalls of attacker methods, proof of work concepts, the 21,000,000 limit to bitcoin, the halving of it every 4 years, and other innovative and ingenious methods would take some time.  

One of the most ingenious aspects of Bitcoin is the reduction or halving of its supply and limiting it to the 21,000,000 coins.  At first thought one might simply have a trend line that gets to this limit over a certain time period.  The genius concept here, however, is that the difficulty in achieving a bitcoin through mining it in a blockchain increases or decreases based on a set time frame for achieving the coin.  This method takes into account the ever-increasing computing power or capacity of chips going forward.  If this had not been set up this way, it’s very likely all the coins would have been mined by now.  Or if it was set up very difficult in the beginning it would not have gotten off to a rolling start.  The variation in difficulty across a set timeframe of 10 minutes allows for a certain number of bitcoins to be mined in a relatively predictable manner.  

Back to the timeline for my encounters.  With the above in mind, it would take some time to work through those pieces of the puzzle.  As noted by Satoshi Nakamoto himself, he had to write all the code before he could convince himself every problem could be solved.  No easy task.  Then he wrote the  White Paper which was released on October 31, 2008.  As anyone who’s written anything of significance knows, a final release version always goes through draft versions first with the timeframe for those drafts varying depending on many factors.

It is very likely the person known as Satoshi Nakamoto had been thinking about this for quite some time while diligently working through the problems, the code, and the vision.  Likely for at least two to three years prior to the release of the White Paper. This places the interaction of the author with Satoshi Nakamoto into the plausible timeframe consistent with my experiences.  

The author again states to not have any influence or input into the creation of Bitcoin.  Only that there was peripheral interaction and conversation about similar concepts– in person, and in very broad terms.  I’m sure it’s easy for some to view this as perhaps a grab for attention or credit.  But it is not.  It’s simply a conveyance by this author of experiences to shed a bit of light on the person that has come to be known as Satoshi Nakamoto.    

Some of the conversations this author had with the person that is Satoshi Nakamoto were entirely on other subjects.  Again, this was at a time before release of any public information related to cryptocurrencies.  The author certainly was not following or aware of any progress that had been made in the area of blockchain technologies or any of the foundational processes described in the White Paper.  

For this author, the following was the most critical piece of the puzzle that would prompt the assembly of all the pieces to arrive at the completed puzzle.   The author has a distinct memory of one particular interaction with the person who became Satoshi Nakamoto.  One day in late 2006, while talking with the person I believe to have come to be known as Satoshi Nakamoto, he handed me a few sheets of paper stapled together and asked that I read it and what my thoughts were.  At the time it was only a few sheets, perhaps 5 or 6 in total.  I do recall it was a fairly slow read given its formulas and technical subject matter and new topic area I was not familiar with. As I stood there reading, I remember pausing momentarily part way through not fully understanding things then made some comment I don’t quite remember now and continued on with the rest of the read.  To this day, I can still remember certain details of the surroundings and circumstances of that situation, but not all the details of the information being read.

For the record, digital currency or fundamentally proof-of-work concept, is not this author’s specific area of training or background.  So, reading a technical paper overviewing it , even in concept and casual conversation to an extent how it works was not something l could fully put my head around.  However, as an engineer, college educated and experienced, I do have training broadly in certain technical areas and from this was an innocent ask of opinion.  My opinion at the time after reading, what I now know was an early draft version of the White Paper, before it was published, was fairly non-descript and not very thoughtful.  

As it were more than a decade ago, the concept of digital currency would have been foreign to me and as much of interest to me as nuclear fusion.  Something maybe fun to talk about to a limited extent but seemingly so far out in the future for application that it wouldn’t seem to materialize in my lifetime.  Because of this, the significance of what I was reading did not sink in.   Some of this with respect to the White Paper and a draft version might come across as repetitive but it is a very important part of my interactions with the person that is Satoshi Nakamoto and the impetus for me in solving this puzzle.  

I do remember as I read having a certain curiosity and trying my best to follow along and grasp the concept of “proof of work” tied to the transactions occurring.  The part that intrigued me was the idea that completed blocks would have a time stamp and therefore verifiable and not changeable as it sequenced along. That “timestamp” verifying each connection was the proof of work element that is so critical to blockchain.  That’s as much of it that I could really grasp.   And truthfully, much of it did not make sense to me given the formulas and newness of such an idea.  I still struggle with certain aspects of the operation and proof of work chronology.  

At the time, I just didn’t have the vision for a world that would accept a new common singular currency out of this.  For one thing, currency wasn’t the emphasis of this draft version of the White Paper I was reading.  It was more about the verification process (or completing a block in today’s terms).  I also stated at the time of my read through that I didn’t think this was something that would materialize in my lifetime.  Cleary wrong on that front.  But it is interesting that the person who became Satoshi Nakamoto made reference to a certain timeframe for fruition of bitcoin.  We hadn’t talked specifically about the timeline for global adoption, only that I felt it would be at least a few decades out given all the competition for transacting at the time and widespread use of those alternatives.  

Satoshi Nakamoto would later write; Quote (pre-2010):

“I’m sure that in 20 years there will either be very large transaction volume or no volume. ”  

Well, all this to say this was my single point of confirmation for myself that I once knew the person that would become Satoshi Nakamoto.  I have certainty of dates as I look back at my recorded past.   I know I read a draft version of the paper which would later become the published Bitcoin White Paper well before October of 2008.  I do not have a copy of the draft as it was never given to me to take away.  I know how this sounds, that there is no proof of my reading an early draft of the White Paper.  When you work so hard on something whether it is a patent idea or a new currency or a business proposition there are elements that you are willing to talk about and other elements you would never share.  It is a balance and to a certain extent necessitates an aspect of trust.   I fully understand and can appreciate now the position this person would have been in at the time.  

Handing over written material of a grand vision you believe will change the world would simply be going too far when in the end, you want to remain anonymous.  And yes, one might say why share anything related to this with anyone. Well, it does happen all the time and human nature is such that it is very difficult to keep everything, 100%  of something, bottled up in oneself. It is a very heavy burden.  The fact that I was close enough to have a very early broad discussion of concepts while far enough away from things to feel safe in sharing certain things by Satoshi Nakamoto was that sweet spot.  Any closer I don’t think he would have shared, and any further away I wouldn’t have been available in this way.  It was an alignment of stars.   It wasn’t so much about trusting his secret as I never knew of Satoshi Nakamoto at the time. I was not on those online forums or even in any of those circles of conversation.  It was to a certain extent by happenstance that I was presented with a concept or idea in which who could have ever imagined would develop in the manner it has.

I’m sure it’s easy for some looking back at this with today’s knowledge to think, wow, I would have  been all over Bitcoin had I read an early version of what it was going to become. But this is not the case I can assure you.  It was nothing being talked about in any circles of society whether engineering, computer science, cryptography, finance or otherwise.  To me at the time, I had to ask, well what problem is this solving?  As an engineer, that is what we do -solve problems.  I went on to say in our conversation, we have credit cards, we have banks, we have electronic forms of payment already that allow processing online, and other means for transacting in finance.  And I remember distinctly saying to him, “I could see a need for one day having a purely digital means of transacting securely between two parties, but I could not see it occurring in my lifetime.  In my view, as I conveyed to him, this is something that if it occurred, would occur over decades and not in a short few years or even the near foreseeable future.   This is the part, looking back, I clearly missed.  Not that it couldn’t be useful one day.  But the aspect that it would not develop and have widespread utility as speedily as it has. Essentially, taking a foothold globally over a single decade rather than many decades.   This aspect of a rather rapidly and widely accepted currency actually materializing in this manner goes back to the earlier discussion about the genius of the vision. That is, the mining of bitcoin occurs with relative ease and minimal resistance at first but becomes ever more difficult and limited as time passes and computing power increases.  This puts an urgency or more immediate outcome of digital currency that is Bitcoin and allows it to take a foothold early on.

As I think back on my interactions with the person that would become Satoshi Nakamoto, and the casual conversations in person, few as they were, I know now the connection to what has become a worldwide phenomenon.  I understand how all the pieces of the puzzle fit.  How and why the vision for bitcoin was so important to this person. And how I missed the vision myself even though it was right there before me.  A closed mind will never see the potential in something with such huge implications.  In hindsight for me personally, my regret is more about the loss of opportunity with what could have been a friend with incredible vision and the narrowness of my trust.  It’s hard for some people to trust because we have experiences where trusting can lead to bad outcomes.  However, as discussed later in this book, trust should be proportional to risk and benefit for many, if not all decision making, in one’s life.  

As our paths crossed during this time period mentioned, October 31st was a very significant date for both Satoshi Nakamoto and this author.  Not in the sense that those reading this will likely make of it but significant, nonetheless. And I believe it is not by happenstance that the White Paper was published on October 31st, 2008.  I no longer was interacting with the person that is Satoshi Nakamoto at that time of publication as our paths crossed before that and we now had each continued down our distinct paths in life never to cross again.