The first time anyone ever heard of Satoshi Nakamoto, it was in the form of an email list on "The Cryptography Mailing List". Satoshi decided the best place to begin testing the underlying concepts of their ideas was on a cryptography forum. This post analyses the first of Satoshi's emails.

Analysis

Satoshi linked the official Bitcoin whitepaper in the initial email. It is reasonable to assume that Satoshi didn't sit down on the morning of October 31st, and write the entire whitepaper that day. This is a project that had been in the works for Satoshi for at least a couple of months. Significant research went into the final product that the world now knows as the bitcoin whitepaper.

The Main Properties

Satoshi listed in point format, the main properties or features as they saw it.

Double Spending Prevention

We now know that the peer to peer network is just a small aspect of what solves the double spending problem. The Peer to Peer aspect of the network is essential to preventing the double spending of bitcoin, but so is the property of immutability on the network. It is only when you combine the peer to peer technology, with the proof-of-work algorithm that you end up preventing the double spend problem. 

No Mint

This in my opinion is one of the ultimate features of cryptocurrency in general. Before Bitcoin, there was a serious reluctance to believe that any currency could exist without a centralized mint of some sort. It was common belief that in order for any currency to exist, trust had be established between all of the participants. One integral part of the network was for it to function without the establishment of trust. 

Participants Can Be Anonymous

I thought the word choice of this point was interesting. Satoshi used the word "can" instead of "is". Throughout this series, I will be emphasizing that I think Satoshi was deliberate and calculated in most if not all of their communications. I think that Satoshi understood pre-emptively the pseudo-anonymity of the network they were building. One of the reasons why I think Satoshi chose to use the word "can" is because they had already made up their mind about being, and staying anonymous themselves. To be identified on the internet is therefore a choice. Satoshi's word choice highlights this point.

New coins are made from Hashcash style proof-of-work

Hashcash is the main precursor to the technology that runs bitcoin. Hashcash was invented in 1997 by Adam Back, a now prominent figure in the blockchain and cryptocurrency space. Satoshi ended up borrowing several technologies from several places. One of the technologies they incorporated into Bitcoin, was proof-of-work. When talking about the creation of new coins, this is only achieved through the spending of computational power, and thus, electricity. Satoshi must have understood that participants needed to put in some amount of input, in order for the corresponding output (bitcoin) to be valued in some way shape or form. Satoshi had an acute understanding of the economic incentives that needed to be built into the network in order to guarantee the long term success of the network. 

The Problems that Bitcoin Solves

The next section of the original email talks mostly about the problems that Bitcoin can potentially solve. The use cases of Bitcoin are touched on this section which gives the reader an idea of the scale of practicality of the network. Satoshi was particularly concerned with how all traditional payments needed to pass through a traditional bank. Cash doesn't operate like this. When we transact in cash, we are transacting on a peer to peer basis, without the permission of any third party. I believe this is the reason why Satoshi emphasized that Bitcoin is an e-cash system. Satoshi never mentions the word blockchain anywhere within the email, nor in the whitepaper, but makes use of the constructs that community participants would then label as the blockchain.

"The network timestamps transactions by hashing them into an ongoing chain of hash-based proof-of-work, forming a record that cannot be changed without redoing the proof-of-work."

I computer science terms, Satoshi Nakamoto defined a completely unique data structure with properties not yet seen by the world. Satoshi also touched on one of the aspects of blockchain in general; Immutability. By touching on this aspect in the initial email to the Cryptography Mailing List, they simultaneously invoked the idea that transactions being irreversible is not such a bad thing. Permanence and censorship resistance are one and the same thing.

Support the Author

If you want to support me in writing this series, consider donating in whatever bitcoin you think is the real bitcoin. All proceeds will go directly to me, Keegan Francis. I am currently building a company called Atlantic Blockchain Company and a Crypto Podcast called Go Full Crypto. All money will be used to help me achieve the goal of furthering the adoption of cryptocurrency worldwide. Cheers.

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