The Pioneers of Internet Money

4 min read

Bit Gold

If Las Vegas ever decided to create betting lines for all the folks who might be Satoshi Nakamoto, American computer scientist Nick Szabo would likely be among the favorites.

Szabo, who has been described as a large bearded man with a bald pate encircled with salt-and-pepper hair, could very well be the man behind the Satoshi Nakamoto pseudonym.

Nick Szabo graduated with a degree in computer science from the University of Washington back in 1989. Much like Hal Finney, who was the subject of our 2nd installment, Furthermore, Szabo was involved in the cypherpunk moment in the late 1990s. A part of the group’s mission at that time was to create an anonymous digital currency.

Some interesting connections

In 1998 Szabo created “a direct precursor to the Bitcoin architecture,” known as bit gold. The system he devised relied on computers to solve cryptographic puzzles and send the solved puzzles to a public registry. Then each solved puzzle became part of growing chain, with the puzzle’s solution becoming a part of the next challenge. Ideally, the chain would provide a mechanism to time-stamp and verify new bit gold coins.

However, his plans for bit gold never came to fruition, as Szabo was unable to solve the problem of double-spending, without handing over (at least some) control to a central authority, which he had no desire to do.

While bit gold was never implemented, the mechanism Szabo created for it defiantly has similarities to how Bitcoin functions today. The use of time-stamps, a public registry, and a growing chain are a few of the more obvious similarities. In fact, Szabo himself has acknowledged the parallels between bit gold and Bitcoin. He even told New York Times reporter, Nathaniel Popper,

“I mean, the reason people tag me (as being Nakamoto) is that you can go through secure property titles and bit gold- there are so many parallels between that and Bitcoin that you can’t find anywhere else.”

Evidence or coincidence?

British author Domini Frisby can also be counted among those who believe there is a strong likelihood that Szabo and Nakamoto are one and the same. In 2014 Frisby wrote, “Of all those on whose shoulders Bitcoin is standing, there is one man who ticks an uncanny number of boxes. He’s a shy, retiring computer coder based in California. He’s been heavily involved in digital cash systems almost all his working life. He is an intellectual heavyweight and polymath. And his knowledge of money is second to none. Everything about his works screams, ‘Bitcoin!’ This man is Nick Szabo.”

Nick Szabo speaking at a FinTech Conference

In 2014 Szabo was involved in a Bitcoin start-up company known as Vaurum. Though his exact role with the company has been kept secret, he apparently made quite an impression on his colleagues there. Several of those whom he worked closely with him during his brief tenure at Vaurum believe, based on the knowledge he demonstrated, that the cypherpunk was involved (at least to some degree) in the creation of Bitcoin.

There is clearly some evidence, albeit much of it circumstantial, that Satoshi Nakamoto is indeed Nick Szabo.

That being said, Szabo himself has come out and denied being the mysterious Bitcoin inventor on numerous occasions. In an e-mail response to David Frisby, the author who suggested that the bearded computer programmer was Nakamoto, Szabo wrote, “Thanks for letting me know. I’m afraid you got it wrong doxing me as Satoshi, but I’m used to it.”

Is Nick Szabo truly the man who created Bitcoin…or simply the person who laid the groundwork with bit gold?


Join us next time for the final installment; Finding Satoshi Nakamoto: Part 6 – Is He A She? If you missed our last installments of Finding Satoshi Nakamoto, check them out here!

If you are interested in learning more about Bitcoin, we have a helpful resource guide that goes over key parts to the network and currency.