Digital Gold

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Digital Gold Page 35

by Nathaniel Popper


  CHAPTER 29

  309In a statement, Mark explained: While material from the Mt. Gox web-site has been deleted, the full statement is still available at http://pando .com/2014/02/10/blame-game-embattled-mt-gox-points-to-flaws-in-bitcoin-protocol-bitcoin-community-calls-bs/.

  310He was wearing a short-sleeved shirt: The confrontation was recorded and is viewable at https://www.youtube.com/watch?v=ob9Ak1t09Ao.

  315“This tragic violation of the trust of users”: The statement is available at http://blog.coinbase.com/post/77766809700/joint-statement-regarding-mtgox.

  316lawyers in Chicago and Denver filed a lawsuit: Jonathan Stempel and Emily Flitter, “Mt. Gox Sued in United States over Bitcoin Losses,” Reuters, February 28, 2014, http://www.reuters.com/article/2014/02/28/bitcoin-mtgox-lawsuit-idUSL1N0LX1QK20140228.

  317An academic study in 2013: Tyler Moore and Nicolas Christin. “Beware the Middleman: Empirical Analysis of Bitcoin-Exchange Risk.” In Ahmad-Reza Sadeghi, editor, Financial Cryptography, volume 7859 of Lecture Notes in Computer Science (New York: Springer, 2013).

  317“The only way to stabilise the system is”: Izabella Kaminska, “Magic: The Undercapitalized Gathering Online,” FT Alphaville, March 3, 2014, http://ftalphaville.ft.com/2014/03/03/1787992/magic-the-under capitalised-gathering-online/.

  CHAPTER 30

  319The Newsweek reporter, Leah McGrath Goodman, had: Leah McGrath Goodman, “The Face Behind Bitcoin,” Newsweek, March 6, 2014, http://www.newsweek.com/2014/03/14/face-behind-bitcoin-247957.html.

  321“Why did you create Bitcoin, sir?”: The video of Dorian Nakamoto leaving his house is viewable at http://www.theguardian.com/technology/2014/mar/07/satoshi-nakamoto-denies-inventing-bitcoin.

  323“simply be an old man saying ANYTHING”: Gavin’s letter to McGrath Goodman is available at http://www.reddit.com/r/bitcoin/comments/1zqjq6/open_letter_to_leah_mcgrath/.

  323In an Amazon review of Danish butter cookies: The review is available at http://www.amazon.com/review/R3U92F9YRUSF37.

  323The AP’s story and video from its interview: The interview is viewable at https://www.youtube.com/watch?x-yt-ts=1422579428&x-yt-cl= 85114404&v=GrrtA6IoR_E.

  324An Argentinian security expert, Sergio Lerner, had done: Sergio Demian Lerner, “The Well Deserved Fortune of Satoshi Nakamoto, BitcoinCreator, Visionary and Genius,” Bitslog, April 17, 2013, https://bitslog.wordpress.com/2013/04/17/the-well-deserved-fortune-of-satoshi-nakamoto/. 333 “Friends, citizens, Bitcoiners, there is nothing”: Charlie’s speech is viewable at https://www.youtube.com/watch?v=xH7mCO5EnDU.

  334“I think it’s very obvious to all of us”: Gregory Ferenstein, “Google’s Jared Cohen: It’s ‘Obvious’ Bitcoin-Like Currencies Are ‘Inevitable,’” TechCrunch, March 8, 2014, http://techcrunch.com/2014/03/08/googles-jared-cohen-its-obvious-bitcoin-like-currencies-are-inevitable/.

  335“You don’t get the new technology from”: Andreessen’s comments are from his speech at Coinsummit 2014, which is viewable at https://www .youtube.com/watch?v=iir5J6Z3Z1Q.

  CHAPTER 31

  339Nick’s writing: Nick’s writings are available at http://unenumerated .blogspot.com/.

  339-40Most bizarrely, Nick altered the dates: the dates that Nick later put on the posts are at the top of each post. But the URL addresses of the posts still show the original posting date. For instance, his post on “Bit Gold Markets” says that it was written on December 27, 2008, but the URL is http://unenumerated.blogspot.com/2008/04/bit-gold-markets .html#links.

  339“repeated use of ‘of course’ without isolating commas”: Skye Grey, “Satoshi Nakamoto Is (Probably) Nick Szabo,” LikeinaMirror, December 1, 2013, https://likeinamirror.wordpress.com/2013/12/01/satoshi-nakamoto-is-probably-nick-szabo/.

  348a hacker demanding ransom was targeting Hal: Robert McMillan, “An Extortionist Has Been Making Life Hell for Bitcoin’s Earliest Adopters,” Wired, December 29, 2014, http://www.wired.com/2014/12/finney-swat/.

  353The United States Marshals Service had auctioned off the 29,655: Tim Draper’s announcement is available at https://medium.com/mirror-blog/tim-draper-wins-govt-auction-partners-with-vaurum-to-provide-bit coin-liquidity-in-emerging-markets-88f04a1d8598.

  353Wences officially announced the $20 million: The Xapo announcement is available at https://blog.xapo.com/xapo-raises-20-million-investment-led-by-greylock-partne/.

  354Gates had initially bet against the open Internet and built a closed network: Kathy Rebello, “Inside Microsoft: The Untold Story of How the Internet Forced Bill Gates to Reverse Course,” BusinessWeek, July 15, 1996.

  INDEX

  “The pagination of this electronic edition does not match the edition from which it was created. To locate a specific passage, please use your e-book reader’s search tools.”

  Abedier, Osama, 101

  Alcor Life Extension Foundation, 7

  Alibaba (Chinese Internet company), 261

  Alice (hypothetical user), 9, 11, 21–23, 358–359

  Alipay (Chinese payment processor), 260–261

  Allen & Co., 181, 292, 349, 353

  altoid (screen name), 69, 248. See also Ulbricht, Ross

  Andreessen Horowitz, 186, 192, 329

  Andreessen, Marc, 181, 186–187, 293–295, 303, 335

  Andresen, Gavin

  beginnings with Bitcoin, 44–47, 49–50, 323

  as Bitcoin central figure, 59–62

  Bitcoin mining, 53, 192–197, 329

  Bitcoin promotion, 75–76, 101–106

  creation of Bitcoin Foundation, 138, 141–142

  dealing with scandals, 99

  relationship with Satoshi, 55–56, 80–86

  responding to Mt. Gox collapse, 309

  2014 Bitcoin Pacifica (Lake Tahoe), 346–348

  Anoncoin (digital currency), 270–271

  Anti-state.org (website), 29

  Argentina, 153–161, 182, 240–242, 259, 277–280, 286, 349–353

  ASIC (computer chip), 189–190, 259, 329–330

  Assange, Julian, 56–57

  Athey, Susan, 345

  Atlantis, 245

  Australia, 44–45, 117, 168, 171

  Automated Clearing House (ACH), 133

  Avalon (ASIC), 190, 206

  Back, Adam, 17–22, 339, 348

  Baidu (Chinese search engine), 261–262

  bank bailout of 2008, 32, 111

  Bank of America, 272

  Bates, Richard, 75–77, 115–116

  bee-te-bee (Chinese Bitcoin), 255–256

  Beijing Summer Olympics (2008), 145

  Benchmark Capital, 282, 293, 305

  Bernanke, Ben, 266

  Bezos, Jeff, 353

  Bharara, Preet, 299–300

  Bill and Melinda Gates Foundation, 353–355

  Bitcoin

  arrival of Gavin Andresen, 44–47

  arrival of Martti Malmi, 29–30

  building trust, 24–25, 33, 48, 61–62, 69, 99–100, 279, 315, 339

  buying/selling with, 43–44, 82, 119–120, 129–130

  changing business model, 236–239

  characterization as “cryptocurrency,” 36

  comparison to gold, 157–158, 165, 182

  comparison to paper money, 219, 286–287

  creation and operation of original code, 4–6, 20–24

  disappearance of Satoshi Nakamoto, x–xiii

  hacking and scandals, 91–99

  increasing price/value, 38, 66–69, 79, 81–85, 89–91, 131, 175, 180, 184, 193–196, 204–206, 210–211, 250–253, 262–264, 267, 271–275, 284–285

  legality/government regulation, 196–198, 251

  limitations based upon computers, 347

  Mt. Gox collapse busts bubble, 308–317

  origin and ideology, vii–xv, 5, 113–114

  as Ponzi scheme, 220

  proof-of-work, 18–19

  Bitcoin Foundation

  candidacy of Bobby Lee, 345

  dealing with Bitcoin collapse, 314–315

  Ga
vin Andresen as member, 192

  involvement in Senate hearing, 265–267, 270, 300–302

  Patrick Murck as member, 176

  planning and creation of, 138–142

  regulatory problems, 217–219, 233–236

  resignation of Charlie Shrem, 302

  Bitcoinica, 237

  Bitcoin Investment Trust, 314

  Bitcoin Meetups. See conferences (Bitcoin and others)

  Bitcoin mining

  about process vulnerability, 41–42

  creating blocks and recording transactions, 359–361

  creation of ASIC chip, 189–192, 259, 329–330

  creation of Avalon chip, 190, 206

  formation of mining companies, 294–295, 328–329

  formation of mining pools, 192–194

  GPU technology, 42, 56, 189–191

  growth in China, 259–261, 329

  Litecoin mining, 283

  more users increased difficulty, 53

  role in securing system, 100

  Satoshi Nakamoto patterns, 324

  specialized computers/computing power, 105, 170, 190, 233, 324, 330, 347

  The Bitcoin Show (TV program), 102, 128

  Bitcoin software

  about operation, 23, 357–362

  beta testing, 25–26, 58

  changes to code, 22–24, 35–39, 43–46, 55–58, 61–62, 141, 309, 346–347

  creating/maintaining protocol, x, 5–6, 32, 99, 215–216

  creation and launch, xiv, 30–31, 319, 346

  downloads, 49–51, 80, 237, 261

  Google interest, 100–102

  hard fork, 193, 195

  “1 RETURN” bug, 56

  role of public-key

  cryptography, 9–10, 17–18

  running on Macintosh, 41

  transaction malleability problem, 309–314

  updates and old versions, 37, 59, 193–195

  version 0.2, 37

  version 0.3, 47–48

  version 0.319, 59

  version 0.7, 194–195

  version 0.8, 194–195

  The Bitcoin Trader (blog), 195

  Bitcoin White Paper, 21, 45, 339

  Bitfury, 330

  bit gold, 18, 338–339

  BitInstant. See also Shrem, Charlie

  attracting investors, 130–135

  creation and function, 128–130

  dealing with problems and competitors, 201–207

  hacker penetration, 150

  investment by David Azar, 134, 150–151

  investment by Roger Ver, 128

  investment by Winklevoss twins, ix, 173–176, 211–215

  involvement of Erik Voorhees, 135–137

  management problems, 220–222

  regulatory problems, 222–224

  trading volume, 201, 205–207

  BitLicense, 302, 317

  Bitomat (Polish exchange), 97–98

  BitPagos (Argentinian payment service), 278–279

  BitPay, 134, 211, 219, 272

  Bitstamp (Slovenian exchange)

  about founding, 203

  attendance at 2014 Bitcoin Pacifica, 252–253, 337

  regulation of virtual currencies, 271

  response to Mt. Gox collapse, 309–310, 315

  surpassing Mt. Gox volume, 236

  trading volume, 262–263, 267

  working with banks, 327

  blind digital signatures, 12

  blockchain

  banking interest in the technology, 324–328

  Bitcoin transfers, 97–98, 133, 148, 182, 203–204, 235–237

  creation and function, 21–26, 43, 55, 61, 340

  dealing with hard fork, 193–194

  generating new coins, 361–362

  increasing file size, 100–101

  sidechains, 348

  use by mining pools, 191–194

  use by money transfer projects, 188–189, 336

  winning acceptance and approval, 269–274, 289–290, 345

  winning blocks, 361

  Blockchain.info, 237–241, 252, 270, 315, 330–331

  Blodget, Henry, 182–184

  Bloomberg, Michael, 144, 325

  b-money, 339

  Branson, Richard, 297

  Briger, Pete, 163–165, 201, 236, 252–253, 281–283, 287–288, 302, 342–343. See also Fortress Investment Group

  Brito, Jerry, 79–80

  Bruno, Joe Bel, 322

  BTC China, 255–264, 267–269, 275, 284–285, 300, 315, 343–345. See also China

  BTC Guild, 195

  BTC King (screen name). See Faiella, Robert

  Buffett, Warren, 353

  Burges, Kolin, 310–312

  Business Insider, 184

  BusinessWeek, 197

  Byrne, Patrick, 289

  Canada, launch of Mint Chip, 133

  Carper, Thomas (senator), 235, 267–268

  Cary, Nic, 239, 252, 296–298, 333

  Casares, Belle, 154, 162, 243, 352

  Casares, Wences. See also Lemon Digital Wallet and Xapo

  background and arrival at Bitcoin, 153–165

  Bitcoin as commodity, 274

  Bitcoin holdings, 287–288

  Bitcoin promotion, 179–180, 185–187, 197, 209–210

  Bitcoin promotion in Argentina, 240–242

  conference attendance, 181–185, 214–216, 349, 351–355

  development of Lemon Digital Wallet, 201–205

  sale of Lemon Digital Wallet, 252, 280–283

  seeking business investors, 291–296

  startup business financing, 305–306

  2013 Argentina, Bitcoin meeting, 277

  Xapo founding and operations, 349–351

  Casascius coins, 126–127

  chronicpain (screen name). See Green, Curtis

  cimon (screen name). See Variety Jones [vj]

  cirrus (screen name), 246–248

  Chaum, David, 10, 12, 23, 71. See also DigiCash

  China, xiii, 128, 183, 190–191, 273–275, 280, 329. See also BTC China

  CIA. See U.S. Central Intelligence Agency

  Coinapult, 174, 338

  Coinbase (Bitcoin service). See also Ehrsam, Fred

  about the founding and operation, 203–204, 211–213

  investment by Andreessen Horowitz, 293–295

  maintaining private keys, 281

  regulation of virtual currencies, 271

  regulatory compliance, 236–237

  response to Mt. Gox collapse, 315

  transaction fees, 290

  working with banks, 305–306

  CoinLab, 138, 144, 200, 213

  COIN (Nasdaq ticker symbol), 353

  Collins, John, 265–266

  conferences (Bitcoin and others)

  2011 CIA interest in Bitcoin, 81

  2011 NYC Bitcoin World Expo, 102–106, 135

  2011 Thailand, Bitcoin, 104

  2012 Amsterdam, Bitcoin, 104, 297–298

  2012 Federal Reserve on money transfer, 132–133

  2012 NYC, Bitcoin, 104

  2013 Allen & Co., 181, 349

  2013 Argentina, Bitcoin, 277–283

  2013 San Jose, Bitcoin, 214–216

  2014 Allen & Co., 262, 349, 353–355

  2014 Austin, Bitcoin, 331–336

  2014 Bitcoin Pacifica (Lake Tahoe), 337–345

  2014 SXSW, 334–336

  2014 Utrecht technology, 298

  The Construction and Operation of Clandestine Drug Laboratories (Jack B. Nimble), 69

  Costollo, Dick, 181

  Cowen, Tyler, 286

  CRASH (CRypto caSH), 12

  credit cards

  Bitcoin as replacement, 23, 158–160, 235, 292

  digital wallets and, 101, 154, 209

  disputes and chargebacks, 64, 134, 343

  lack of privacy, 11

  Target Corporation, data breach, 288–289

  transaction fees, xii, 102, 240–241, 272, 277–278, 290, 343

  WikiLeaks blockad
e, 57

  Crisis Strategy Draft, 313–315

  cryogenics, 7

  cryptocurrency, 36

  Cryptonomicon (Stephenson), 19, 252

  currency debasement, 30–31

  Cypherpunk Manifesto, 8–12

  Cypherpunks

  awareness of privacy and data vulnerability, 8–9

  conceptualizing future of money, 11–13, 16

  facing digital money obstacles, 19–20

  philosophical influences, 70

  termination of mailing list, 20

  Dai, Wei, 19–20

  Darkcoin (digital currency), 270–271

  Debt: The First 5,000 Years (Graeber), 157, 179

  decentralized systems/technology. See also Blockchain

  about Bitcoin ideology, 236

  Bitcoin comparison to gold, x

  building Bitcoin system, 55–56, 141, 292–294

  development of payment systems, 129, 133

  disadvantages of centralization, 113–114

  Internet as, 182

  Occupy Wall Street movement and, 111

  open source software and, 45–47

  P2P Foundation and, 30

  regulatory compliance, 269–270

  resolving problems, 195

  Silk Road and, 118

  trend toward centralization, 99–100, 347

  Der-Yeghiayan, Jered, 246–248

  DigiCash, 12, 19, 21, 23, 26, 158. See also Chaum, David

  digital currency

  Anoncoin, 270–271

  Chinese potential, 260–261

  creation of early systems, 12–13

  Darkcoin, 271

  Finney experimentation, 5

  Greenspan prediction, 17

  Liberty Reserve, 218

  Mint Chip, 133

  Q coin, 257, 260–261, 268

  DigitalInk (screen name). See George, Jacob

  Dimon, Jamie, 303–306

  Dixon, Chris, 181–182, 186, 294

  Dodd, Nigel, 16

  Donahoe, John, 262

  Donald, James, 24

  Draper, Tim, 353

  Dread Pirate Roberts [DPR] (screen name), 118, 121, 168–169, 171, 213, 225, 227, 248. See also Ulbricht, Ross

  drugs/drug trafficking. See Silk Road

  eDonkey (file sharing website), 50–51

  Ehrsam, Fred, 334–336. See also Coinbase (Bitcoin service)

  Electronic Frontier Foundation, 80, 270

  Eleuthria (screen name), 195

  encryption technology, 8–12. See also Public-key cryptography

  exchange-traded funds (ETF), 222, 250

  Extropians, 11

  Facebook, 145

  Faiella, Robert (aka BTC King), 130, 138, 299

  The Far Wilds (online game), 50–51

 

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