Satoshi Nakamoto's Quotes - TrustBy Feb 04, 2020 4 Min Read
List of All Bitcoin founder Satoshi Nakamoto's quotes on trust
I've developed a new open source P2P e-cash system called Bitcoin. It's completely decentralized, with no central server or trusted parties, because everything is based on crypto proof instead of trust. Give it a try, or take a look at the screenshots and design paper: Download Bitcoin v0.1 at http://www.bitcoin.org The root problem with conventional currency is all the trust that's required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust. Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve. We have to trust them with our privacy, trust them not to let identity thieves drain our accounts. Their massive overhead costs make micropayments impossible. A generation ago, multi-user time-sharing computer systems had a similar problem. Before strong encryption, users had to rely on password protection to secure their files, placing trust in the system administrator to keep their information private. Privacy could always be overridden by the admin based on his judgment call weighing the principle of privacy against other concerns, or at the behest of his superiors. Then strong encryption became available to the masses, and trust was no longer required. Data could be secured in a way that was physically impossible for others to access, no matter for what reason, no matter how good the excuse, no matter what. It's time we had the same thing for money. With e-currency based on cryptographic proof, without the need to trust a third party middleman, money can be secure and transactions effortless. One of the fundamental building blocks for such a system is digital signatures. A digital coin contains the public key of its owner. To transfer it, the owner signs the coin together with the public key of the next owner. Anyone can check the signatures to verify the chain of ownership. It works well to secure ownership, but leaves one big problem unsolved: double-spending. Any owner could try to re-spend an already spent coin by signing it again to another owner. The usual solution is for a trusted company with a central database to check for double-spending, but that just gets back to the trust model. In its central position, the company can override the users, and the fees needed to support the company make micropayments impractical. Bitcoin's solution is to use a peer-to-peer network to check for double-spending. In a nutshell, the network works like a distributed timestamp server, stamping the first transaction to spend a coin. It takes advantage of the nature of information being easy to spread but hard to stifle. For details on how it works, see the design paper at http://www.bitcoin.org/bitcoin.pdf The result is a distributed system with no single point of failure. Users hold the crypto keys to their own money and transact directly with each other, with the help of the P2P network to check for double-spending. Satoshi Nakamoto http://www.bitcoin.org
Could be. They're talking about the old Chaumian central mint stuff, but maybe only because that was the only thing available. Maybe they would be interested in going in a new direction. A lot of people automatically dismiss e-currency as a lost cause because of all the companies that failed since the 1990's. I hope it's obvious it was only the centrally controlled nature of those systems that doomed them. I think this is the first time we're trying a decentralized, non-trust-based system.
It is a global distributed database, with additions to the database by consent of the majority, based on a set of rules they follow: - Whenever someone finds proof-of-work to generate a block, they get some new coins - The proof-of-work difficulty is adjusted every two weeks to target an average of 6 blocks per hour (for the whole network) - The coins given per block is cut in half every 4 years You could say coins are issued by the majority. They are issued in a limited, predetermined amount. As an example, if there are 1000 nodes, and 6 get coins each hour, it would likely take a week before you get anything. To Sepp's question, indeed there is nobody to act as central bank or federal reserve to adjust the money supply as the population of users grows. That would have required a trusted party to determine the value, because I don't know a way for software to know the real world value of things. If there was some clever way, or if we wanted to trust someone to actively manage the money supply to peg it to something, the rules could have been programmed for that. In this sense, it's more typical of a precious metal. Instead of the supply changing to keep the value the same, the supply is predetermined and the value changes. As the number of users grows, the value per coin increases. It has the potential for a positive feedback loop; as users increase, the value goes up, which could attract more users to take advantage of the increasing value.
It's not the download so much as verifying all the signatures in all the blocks as it downloads that takes a long time. How long is the initial block download typically taking? Does it slow down half way through or is about the same speed the whole way? I've thought about ways to do a more cursory check of most of the chain up to the last few thousand blocks. It is possible, but it's a lot of work, and there are a lot of other higher priority things to work on. Simplified Payment Verification is for lightweight client-only users who only do transactions and don't generate and don't participate in the node network. They wouldn't need to download blocks, just the hash chain, which is currently about 2MB and very quick to verify (less than a second to verify the whole chain). If the network becomes very large, like over 100,000 nodes, this is what we'll use to allow common users to do transactions without being full blown nodes. At that stage, most users should start running client-only software and only the specialist server farms keep running full network nodes, kind of like how the usenet network has consolidated. SPV is not implemented yet, and won't be implemented until far in the future, but all the current implementation is designed around supporting it. In the meantime, sites like vekja.net and www.mybitcoin.com have been experimenting with account-based sites. You create an account on a website and hold your bitcoins on account there and transfer in and out. Creating an account on a website is a lot easier than installing and learning to use software, and a more familiar way of doing it for most people. The only disadvantage is that you have to trust the site, but that's fine for pocket change amounts for micropayments and misc expenses. It's an easy way to get started and if you get larger amounts then you can upgrade to the actual bitcoin software.
It does in fact download 500 blocks at a time, then the counter counts one at a time as it verifies the blocks. The advantage of letting bitcoin download and verify the blocks is that you do not have to trust the person you're downloading them from. If you downloaded the blk*.dat files from some site, you would have to trust that site, since you would be accepting the data without verifying it yourself. If you're copying blk*.dat from another computer of yours, that should be fine. How long is the initial block download taking for you?
A second version would be a massive development and maintenance hassle for me. It's hard enough maintaining backward compatibility while upgrading the network without a second version locking things in. If the second version screwed up, the user experience would reflect badly on both, although it would at least reinforce to users the importance of staying with the official version. If someone was getting ready to fork a second version, I would have to air a lot of disclaimers about the risks of using a minority version. This is a design where the majority version wins if there's any disagreement, and that can be pretty ugly for the minority version and I'd rather not go into it, and I don't have to as long as there's only one version. I know, most developers don't like their software forked, but I have real technical reasons in this case. Quote from: gavinandresen on June 17, 2010, 07:58:14 PM I admire the flexibility of the scripts-in-a-transaction scheme, but my evil little mind immediately starts to think of ways I might abuse it. I could encode all sorts of interesting information in the TxOut script, and if non-hacked clients validated-and-then-ignored those transactions it would be a useful covert broadcast communication channel. That's a cool feature until it gets popular and somebody decides it would be fun to flood the payment network with millions of transactions to transfer the latest Lady Gaga video to all their friends... That's one of the reasons for transaction fees. There are other things we can do if necessary. Quote from: laszlo on June 17, 2010, 06:50:31 PM How long have you been working on this design Satoshi? It seems very well thought out, not the kind of thing you just sit down and code up without doing a lot of brainstorming and discussion on it first. Everyone has the obvious questions looking for holes in it but it is holding up well Since 2007. At some point I became convinced there was a way to do this without any trust required at all and couldn't resist to keep thinking about it. Much more of the work was designing than coding. Fortunately, so far all the issues raised have been things I previously considered and planned for.
Quote from: sirius-m on June 10, 2010, 01:51:16 PM You can of course use services like vekja.net or mybitcoin.com on a mobile browser, depositing money there to the extent you trust them. I think that's the best option right now. Like cash, you don't keep your entire net worth in your pocket, just walking around money for incidental expenses. They could make a smaller version of the site optimized for mobile. If there was an app, it could be a front end to one of those, with the main feature being QR-code reader, or maybe there's already a universal QR-code reading app that web sites can be designed to accept scans from. If there was an iPhone app that was just a front end for vekja or mybitcoin, not a big involved P2P, would apple approve it and if not, on what basis? It could always be an Android app instead. An app is not really necessary though, just a mobile sized website. A web interface to your own Bitcoin server at home wouldn't be a solution for everyone. Most users don't have a static IP, and it's too much trouble to set up port forwarding.
Announcing version 0.3 of Bitcoin, the P2P cryptocurrency! Bitcoin is a digital currency using cryptography and a distributed network to replace the need for a trusted central server. Escape the arbitrary inflation risk of centrally managed currencies! Bitcoin's total circulation is limited to 21 million coins. The coins are gradually released to the network's nodes based on the CPU power they contribute, so you can get a share of them by contributing your idle CPU time. What's new: - Command line and JSON-RPC control - Includes a daemon version without GUI - Transaction filter tabs - 20% faster hashing - Hashmeter performance display - Mac OS X version (thanks to Laszlo) - German, Dutch and Italian translations (thanks to DataWraith, Xunie and Joozero) Get it at http://www.bitcoin.org or read the forum to find out more.
The design outlines a lightweight client that does not need the full block chain. In the design PDF it's called Simplified Payment Verification. The lightweight client can send and receive transactions, it just can't generate blocks. It does not need to trust a node to verify payments, it can still verify them itself. The lightweight client is not implemented yet, but the plan is to implement it when it's needed. For now, everyone just runs a full network node. I anticipate there will never be more than 100K nodes, probably less. It will reach an equilibrium where it's not worth it for more nodes to join in. The rest will be lightweight clients, which could be millions. At equilibrium size, many nodes will be server farms with one or two network nodes that feed the rest of the farm over a LAN.
It's the same situation as gold and gold mining. The marginal cost of gold mining tends to stay near the price of gold. Gold mining is a waste, but that waste is far less than the utility of having gold available as a medium of exchange. I think the case will be the same for Bitcoin. The utility of the exchanges made possible by Bitcoin will far exceed the cost of electricity used. Therefore, not having Bitcoin would be the net waste. Quote from: gridecon on August 06, 2010, 04:48:00 PM As an overall point, I also do not agree with the idea that the very high computational burden of coin generation is in fact a necessity of the current system. As I understand it, currency creation is fundamentally metered by TIME - and if that is the fundamental controlling variable, what is the need for everyone to "roll as many dice as posible" within that given time period? The "chain of proof" for coin ownership and transactions doesn't depend on the method for spawning coins. Each node's influence on the network is proportional to its CPU power. The only way to show the network how much CPU power you have is to actually use it. If there's something else each person has a finite amount of that we could count for one-person-one-vote, I can't think of it. IP addresses... much easier to get lots of them than CPUs. I suppose it might be possible to measure CPU power at certain times . For instance, if the CPU power challenge was only run for an average of 1 minute every 10 minutes. You could still prove your total power at given times without running it all the time. I'm not sure how that could be implemented though. There's no way for a node that wasn't present at the time to know that a past chain was actually generated in a duty cycle with 9 minute breaks, not back to back. Proof-of-work has the nice property that it can be relayed through untrusted middlemen. We don't have to worry about a chain of custody of communication. It doesn't matter who tells you a longest chain, the proof-of-work speaks for itself.
Here's an outline of the kind of escrow transaction that's possible in software. This is not implemented and I probably won't have time to implement it soon, but just to let you know what's possible. The basic escrow: The buyer commits a payment to escrow. The seller receives a transaction with the money in escrow, but he can't spend it until the buyer unlocks it. The buyer can release the payment at any time after that, which could be never. This does not allow the buyer to take the money back, but it does give him the option to burn the money out of spite by never releasing it. The seller has the option to release the money back to the buyer. While this system does not guarantee the parties against loss, it takes the profit out of cheating. If the seller doesn't send the goods, he doesn't get paid. The buyer would still be out the money, but at least the seller has no monetary motivation to stiff him. The buyer can't benefit by failing to pay. He can't get the escrow money back. He can't fail to pay due to lack of funds. The seller can see that the funds are committed to his key and can't be sent to anyone else. Now, an economist would say that a fraudulent seller could start negotiating, such as "release the money and I'll give you half of it back", but at that point, there would be so little trust and so much spite that negotiation is unlikely. Why on earth would the fraudster keep his word and send you half if he's already breaking his word to steal it? I think for modest amounts, almost everyone would refuse on principle alone.
Quote from: Red on August 12, 2010, 01:10:19 AM Quote from: satoshi on August 11, 2010, 09:07:59 PM I believe the clients would have to keep the entire history back to the original generated coins. The fact that clients have to keep the entire history reduces the privacy benefit. I thought this too at first. But then I convinced myself otherwise. Are you back to talking about the existing Bitcoin system here? I was talking about in the hypothetical system I was describing, if the network doesn't know the values and lineage of the transactions, then it can't verify them and vouch for them, so the clients would have to keep the history all the way back. If a client wasn't present until recently, the two ways to convince it that a transaction has a valid past is: 1) Show it the entire history back to the original generated coin. 2) Show it a history back to a thoroughly deep block, then trust that if so many nodes all said the history up to then was correct then it must be true. But if the network didn't know all the values and lineage of the transactions, it couldn't do 2), I don't think.
In the next SVN rev, I'll make it only go back to the last checkpoint at block 74000. If we need to correct a problem in the future, we can always make sure it goes back at least as far back as the problem. Also, I'm adding code to verify the block index, which means the proof-of-work chain is checked. Still, the system won't be entirely secure against your blk*.dat files. You are trusting someone if you use a copy of their blk files.
I've been working on writing the alert system. Alerts are broadcast through the network and apply to a range of version numbers. Alert messages are signed with a private key that only I have. Nodes can do two things in response to an alert: - Put a warning message on the status bar. - Make the money handling methods of the json-rpc interface return an error. In cases like the overflow bug or a fork where users may not be able to trust received payments, the alert should keep old versions mostly safe until they upgrade. Manual users should notice the status bar warning when looking for received payments, and the json-rpc safe mode stops automated websites from making any more trades until they're upgraded. The json-rpc methods that return errors during an alert are: sendtoaddress getbalance getreceivedbyaddress getreceivedbylabel listreceivedbyaddress listreceivedbylabel
Bitcoin would be convenient for people who don't have a credit card or don't want to use the cards they have, either don't want the spouse to see it on the bill or don't trust giving their number to "porn guys", or afraid of recurring billing.
It's not implemented yet, but the network can support a transaction that requires two signatures. It's described here: http://bitcointalk.org/index.php?topic=750.0 It's absolutely safer than a straight payment without escrow, but not as good as a human arbitrated escrow, assuming you trust the human enough. In this kind of escrow, a cheater can't win, but it's still possible for you to lose. It at least takes away the profit motive for cheating you. The seller is assured that the money is reserved for him, while the buyer retains the leverage that the seller hasn't been paid yet until completion.
As you figured out, the root problem is we shouldn't be counting or spending transactions until they have at least 1 confirmation. 0/unconfirmed transactions are very much second class citizens. At most, they are advice that something has been received, but counting them as balance or spending them is premature. I made changes so they show up in lighter print, with the credit amount in square brackets like [+1.23], and the amount not counted towards your balance and not available for spending. This doesn't apply to transactions you sent, which you implicitly trust, since you wrote them. I didn't make it (+1.23) because parenthesis in accounting means negative. I hope square brackets is different enough to be clear what is meant. The JSON-RPC interface can still see 0/unconfirmed if it wants by specifying 0 confirmations. I uploaded the changes to SVN rev 158. I will post a 0.3.13 RC shortly. If you have any of these transactions in your wallet, do not send any payments until you've upgraded to 0.3.13, which will be coming soon. If you've already sent any of these transactions, or you're the creator of them, then use theymos' patch or make the following change and use it to send your clean transactions to a new wallet to clean things up. change: if (pcoin->GetDepthInMainChain() < 1 && pcoin->GetDebit() <= 0) continue; to: if (pcoin->GetDepthInMainChain() < 1) continue;
It's not the downloading that takes the time, it's verifying and indexing it. Bandwidthwise, it's more efficient than if you downloaded an archive. Bitcoin only downloads the data in blk0001.dat, which is currently 55MB, and builds blkindex.dat itself, which is 47MB. Building blkindex.dat is what causes all the disk activity. During the block download, it only flushes the database to disk every 500 blocks. You may see the block count pause at ??499 and ??999. That's when it's flushing. Doing your own verifying and indexing is the only way to be sure your index data is secure. If you copy blk0001.dat and blkindex.dat from an untrusted source, there's no way to know if you can trust all the contents in them. Maybe Berkeley DB has some tweaks we can make to enable or increase cache memory.
Despite everything else said, the current next step is: Quote Someone should experiment with different Berkeley DB settings and see if there's something that makes the download substantially faster. If something substantial is discovered, then we can work out the particulars. In particular, I suspect that more read caching might help a lot. Quote from: jgarzik on November 28, 2010, 02:33:29 AM Another new user on IRC, Linux this time, was downloading at a rate of 1 block every 4 seconds -- estimated total download time around 4 days. Then something more specific was wrong. That's not due to normal initial download time. Without more details, it can't be diagnosed. If it was due to slow download, did it speed up after 10-20 minutes when the next block broadcast should have made it switch to a faster source? debug.log might have clues. How fast is their Internet connection? Was it steadily slow, or just slow down at one point? Quote We have the hashes for genesis block through block 74000 hardcoded (compiled) into bitcoin, so there's no reason why we shouldn't be able to automatically download a compressed zipfile of the block database from anywhere , unpack it, verify it, and start running. The 74000 checkpoint is not enough to protect you, and does nothing if the download is already past 74000. -checkblocks does more, but is still easily defeated. You still must trust the supplier of the zipfile. If there was a "verify it" step, that would take as long as the current normal initial download, in which it is the indexing, not the data download, that is the bottleneck. Quote from: jgarzik on November 28, 2010, 07:33:55 AM Presumably at some point there will be a lightweight client that only downloads block headers, but there will still be hundreds of thousands of those... 80 bytes per header and no indexing work. Might take 1 minute. Quote uncompressed data using a protocol (bitcoin P2P) that wasn't designed for bulk data transfer. The data is mostly hashes and keys and signatures that are uncompressible. The speed of initial download is not a reflection of the bulk data transfer rate of the protocol. The gating factor is the indexing while it downloads.
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