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Nick Szabo: Creator of digital gold
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Nick Szabo: Creator of digital gold

  • Is the famous cryptographer hiding behind the mask of Satoshi Nakamoto?

lunes 08 de agosto de 2022, 23:30h

08AGO22 – MADRID.- Nick Szabo is a brilliant cryptographer and computer scientist. He introduced the concept of smart contracts, which are now widely used in the Ethereum network, and developed the algorithm for one of the first cryptocurrencies, bit gold. It predetermined bitcoin, although it was not put into practice.

Szabo is unique in that he specializes not only in his technical field. He is an expert in law, finance, history, political science and anthropology, which makes him the only scientist with such a background.

Cipherpan cellar

Many of the concepts that are central to bitcoin were developed in the informal online community of cypherpunks. They dreamed of spreading digital privacy using cryptographic techniques and saw their mission as creating anonymous digital money.

Nick Szabo was also among them. After one of the group meetings, he summed up the diversity of goals of the cipherpunks: "Some participants are libertarians who want to get rid of the government, others are liberals who fight the NSA (National Security Agency), and still others are just poking fun at people in power by hacking something." Szabo belongs to the former, he is a libertarian. He was influenced to some extent by his father, who fought the Communists in Hungary in the 1950s when it was pro-Soviet.

Szabó, like other codebreakers, understood the importance of privacy issues in the new digital reality. There was a case where, on a cypherpunk mailing list, he criticised the Clipper chip, through which the NSA was eavesdropping on phone calls. After a while, this caused a widespread outcry and the chip was abandoned.

If you've enjoyed the article, do not hesitate to visit our cryptocurrency blog where you can find more similar articles on the subject matter.

Gold safe

There were several cryptocurrency experiments in the 1990s. Briton Adam Back created the hashcash algorithm, which was later used in bitcoin. There was also b-money, a cryptocurrency developed by a computer engineer named Wei Dai. In his honour, the minimal unit in the Ethereum network is named Wei.

When these experiments failed, many cryptocurrencies lost interest. But not Szabo. Back in 1998, he sent a plan of his cryptocurrency, which he called bit gold (or digital gold), to a small group of people.

Digital gold was designed to solve the problem of the centralization of financial systems, which manifests itself in their dependence on a trusted third party. According to Szabo, the centre from which all commands come is a security hole. A centralised system is therefore forced to increase security costs, which ultimately leads to additional costs for users. An example of such a system is the often inordinately bloated and voracious government bureaucracy.

What will save us from the devil of centralisation? (A decentralised Jesus? Quite. But no online church yet, though its token would be very valuable)

Sabo suggested decentralised protocols

Sabo's genius belongs not only to computer science but also to jurisprudence, the collision of which gave birth to the idea of smart contracts. In 1994, he proposed the concept of a contractual agreement that could be made between strangers, requiring only a special code and executed automatically. Szabo writes: "The idea of the smart contract is that many contract terms (like liens or sureties) can be built into hardware and software, and breaking the contract will prove costly (prohibitively expensive, if desired) for the violator.


(CN-74)

Nick Szabo: Creator of digital gold
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