Review: The Blockchain Code, Part 2: Cryptic Origins

This is Part 2 of a 7-part review of the book, The Blockchain Code, by Dave Kinsey. To read the previous installation, CLICK THIS LINK. For the next installation, CLICK THIS LINK. Thanks for reading!

Cryptic Origins

Click book cover to find on Amazon.

Dave Kinsey fashioned his book, The Blockchain Code after Dan Brown’s 2003 novel, The Da Vinci Code. That’s because The Da Vinci Code was mysterious and cryptic, and so is blockchain code. Like the novel, he alternates chapters with snippets of history and technical explanations. I found Kinsey’s history of blockchain to be both fascinating and chilling, while the technology he describes seems ingenious in its simplicity, while highly complex in its application.

How about if we deal with the history first, before we examine the nuts and bolts of blockchain? Knowing blockchain’s cryptic origins can help us appreciate why it has such a mysterious design.

The idea behind blockchain began to formulate and percolate in the brains of its inventors back in the 1980s. A retired electronic engineer from Intel, named Timothy C. May, was one of the first to kick around the idea of using computer technology to start a crypto-anarchy movement. May was an anarchist. He hated government, and saw the advancing developments in computer science as an opportunity to subvert Big Brother.

Another early advocate of crypto-anarchy was a computer scientist named David Chaum. He published a dissertation in 1982, entitled, Computer Systems Established, Maintained, and Trusted by Mutually Suspicious Groups. This is the first known proposal of a blockchain protocol. Chaum also pioneered digital cash, and founded a company called DigiCash in 1989. DigiCash went bankrupt in 1998, but it can be considered a forerunner to Bitcoin.

In 1988, Timothy May published his Crypto Anarchist Manifesto, which advocated the destruction of all governments through the use of computers and cryptology. Other technology nerds joined his crusade, and by 1992 they had formed a movement called the Cypherpunks.

Most Cypherpunks were very intelligent people, who knew a lot about computer technology. They liked to brag that they were smarter than any government in the world. And this was not an empty boast. These nerds were true geniuses.

They exchanged their brilliant ideas using a list of email addresses called The Cryptography Mailing List. Through these emails, they brainstormed and gradually developed a viable system of crypto-anarchy that could thrive, hidden away, on the internet.

Many members of the Cypherpunks eventually joined other anarchist groups, such as Anonymous and WikiLeaks. This includes the founder of WikiLeaks, Julian Assange.

We don’t know the names of all the Cypherpunks, because many used pseudonyms while communicating through the Cryptography Mailing List. And it seems some of the members who used their real names were often wary, and had a tendency to employ pseudonyms while discussing subjects that might attract unwanted attention from the government.

Kinsey suspects Tim May of using the pseudonym, James A. Donald, and he suspects a computer scientist named Nick Szabo of hiding behind the name Wei Dai. Kinsey, and many others, also suspect Szabo of being Satoshi Nakamoto, who is attributed with creating Bitcoin. However Szabo has steadfastly denied this.

One notorious Cypherpunk who did not use a pseudonym was James Dalton Bell. In 1995, Bell published an essay on how to assassinate politicians using something he called crowdfunding, with digital cash and anonymous communication.

His fellow Cypherpunks called Bell’s idea “Assassination Politics,” or AP. Some felt mortified about AP, and thought Bell was going a bridge too far. But after careful analysis, they determined that if an anonymous digital cash system were to be invented, which facilitated private, untraceable transactions, AP would work. Hitmen could be hired with impunity to kill off politicians and other well-known figures.

But I’m not so sure. Cryptocurrencies such as Bitcoin have been around since 2009, and so far we haven’t seen a rash of assassinations. So maybe Bell’s idea wasn’t so workable after all. Or maybe the Cypherpunks have become so rich from Bitcoin that they’ve lost interest in plotting assassinations and toppling governments.

Bell probably should have used a pseudonym, as he became the target of an IRS investigation. Things soon got out of hand, for him. He got pissed off when they served a search warrant on his living area at his parents’ house. So he retaliated by sending a stinkbomb to the IRS office in Vancouver, Washington. He was arrested for this and other offenses, and ended up spending over a decade in prison for various violations of federal law.

In December 2005, Nick Szabo published an article entitled, “Bit gold,” where he outlined the technical framework for what would later become Bitcoin. This included proof of work, and a vital technology for blockchain, called distributed timestamping.

On Halloween 2008, Satoshi Nakamoto (a pseudonym, not a real person) sent an email to The Cryptography Mailing List, entitled, Bitcoin P2P e-cash paper. Less than three months later, on January 8, 2009, Bitcoin was born when Satoshi released the software, Bitcoin v0.1.

At the time, one bitcoin was worth next to nothing. But after some hiccups and growing pains, bitcoins have grown in popularity and demand to such an extent that one bitcoin is now worth many thousands of dollars.

Now that we’ve covered a brief history of blockchain and Bitcoin, it’s time to learn how these technologies work. So come on back in a few days, for Part 3.


Categories: business

25 replies »

    • If what they wanted was to facilitate organized crime through enabling money laundering with impunity, then yes, they achieved their goal. But I suspect their “loftier” goal of toppling all the world’s governments took a backseat to more material goals, after they began making a ton of money off of cryptocurrency.

      As for “proof of work,” this relates to Bitcoin mining. It uses a lot of electricity, and environmentalists have raised objections to it, due to its impact on global warming.

      Liked by 2 people

      • Well, I was just thinking about the chaos at places like Coinbase. And being rather old-fashioned, “work” still means doing something of actual value… though I suppose that running on a treadmill to generate electricity might qualify..

        Liked by 2 people

        • Well, with Bitcoin losing about 2/3 of its peak value, I guess all the cryptocurrency exchanges have been hurting. They often own cryptocurrency, themselves, so they try to keep the prices as high as possible. Cryptocurrency exchanges have been suspected of playing a large role in manipulating the market to keep prices inflated.

          Liked by 1 person

  1. Eh, I don’t see how otherwise intelligent people fall in for ridiculous things like anarchy and communism. I guess when you surround yourself with only people saying and believing the same things, you create a self-reinforcing echo-chamber, which is basically how social media works.

    If it wasn’t for porn, money laundering, crime, etc., where would the internet be today?

    Liked by 3 people

  2. I wonder how much Nick Szabo is worth today. I’m sure that money was the last thing on the minds of most of the guys (and I’m guessing it was almost all guys) who started Cypherpunks. and my other guess is that once they got some serious money, a lot of their original plans just faded away…

    Liked by 1 person

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