Who was Nick Szabo?

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Bitcoin's history is preceded by several innovations and technological advances. Many people have contributed throughout history through research, experiments and the dissemination of ideas in favor of privacy, freedom and the dissemination of cryptography.

There are not many documented details about Nick Szabo's personal life, as he always seems to have shown a lot of discretion and zeal for privacy.

What we know will be seen below:

With Hungarian descent and born in the USA, Nick Szabo has a degree in computer science from the University of Washington, with a diploma acquired in 1989 and also in law, from the George Washington University of Law.

The breadth and depth of his interests and knowledge is not limited to these areas, but expands to the economic sciences, philosophy, history, cryptography and issues related to
personal freedom, which is why he is considered by many to be a polymath.

Although some media claim that Nick was a professor of law at George Washington University, there is no record that he was part of the academic staff, except as an honorary professor at Francisco Marroquin University.

Like Hal Finney, Nick Szabo was also an enthusiast of extropianism, a philosophy that studies scientific and technological techniques for the extension of life.

According to a NY Times article, Szabo had a libertarian mentality and was partly attracted to these ideas because of his father, who fought against communists in Hungary in the 1950s before fleeing and going to the United States, where Szabo was born. 51 years ago. Although he does not speak Hungarian, in Twitter posts he often gets involved in issues related to his country of origin.

PUBLIC APPEARANCES

In recent years, he has made several public appearances, speaking at events, including the Ethereum Developer Conference and the International Contract Simplification Conference. He also participated in some podcasts, highlighting the Tim Ferriss Show, on Let’s Talk Bitcoin, where he talked about the problems that Bitcoin solves, the strengths and weaknesses of Ethereum, the ICOs and the mainstream adoption of smart contracts.

The conversation was also attended by Naval Ravikant, president of AngelList and one of the most successful investors in Silicon Valley, as well as one of Nick's biggest admirers.

Why Nick is such a private guy is unknown. There is no clear evidence as to the true reason for this, but it seems to be clear that he is more proud of his work than of himself.

Despite the unknown about his life, his work and brilliant contributions to technology and innovation speak for themselves. His research is extremely valuable, has an impact to this day and has strongly influenced the development of the crypto ecosystem as we see it today.

BLOG

His blog, Unenumerated, is, as the name says, a collection of brilliant publications on "an infinite variety of topics", ranging from economic law to the history of commerce, to his reflections on topics relevant to the current state of Bitcoin and other digital currencies.

As expected, his biography section on the blog is very restricted and does not give details about personal information.

Twitter account: In 2020 he was very active on Twitter, giving opinions on the centralization of the financial sectors, political issues and other things.

SMART CONTRACTS

Unlike most cryptographers, Szabo has a background in law and this background has enabled him, by combining programming and law, to develop one of the most used concepts in the crypto ecosystem today, that of Smart Contracts.

Szabo says that property and contract law are the building blocks of a free market economy and society and his goal with the proposal for smart contracts is to find out how to integrate these building blocks in cyberspace, creating what he calls "highly evolved practices of contractual law of electronic commerce protocols among strangers on the internet”.

It also defines a contract as "a set of promises agreed between the parties, outlining the responsibilities between them" and the idea of ​​smart contracts, to give a digital format to this process, would eliminate the figure of the trusted third party and integrate them with several sectors, such as conventional finance.

Smart Contracts were an advanced contribution for the time and a decade later they found their specific use.

In 2008, as an essential piece in the Bitcoin software; and in 2013, with the creation of Ethereum and Solidity programming languages, which made smart contracts much simpler and easier to build.

Nick Szabo has written several articles on smart contracts. Among them, what was published in the beginning of 1996 in the magazine Extropy, where Szabo accurately predicted the benefits and parameters of this mechanism that has gained more and more adoption over the years.

In this other, from 1997, he compares smart contracts to vending machines. The machine receives the coins and,
through simple calculations, distributes the product according to the selection displayed by the user.

Example of using a Smart Contract

Imagine that you need to sell a property.
 
This process is usually time-consuming, as it involves paperwork and communication with a number of intermediaries, not to mention the risks involved.
 
It is for this reason that most people turn to a broker, who is responsible for most of the bureaucratic procedures.

The other intermediary is the bank, which offers the custody service, which is very useful for such transactions since the amounts involved are usually very high, which makes trusting the person with whom you are dealing be risky. So when the business is
When finalized, brokers get 5% of the sale price as a commission, representing a financial loss for the seller.

In situations like this, smart contracts make a lot of sense, as they make the whole process faster, safer and less costly, mainly solving the trust problem, because smart contracts work based on the “If-Then” principle, which means that ownership of the property will be passed on to the buyer only when the agreed amount of money is sent to the system.

They also function as custody services, as both money and property rights are stored in the system and distributed to participants at exactly the same time. In addition, the transaction is witnessed and verified by hundreds of people, thus guaranteeing flawless delivery. Since trust between the parties is no longer an issue, there is no need for an intermediary.

This is just one example of the potential uses for smart contracts. Even though it is still a new technology, smart contracts have the potential to be an integral part of our lives in the near future.

BIT GOLD

Throughout the 1990s and into the 2000s, Nick Szabo developed and introduced the mechanism for a project that would make it widely known in the cypherpunk community, the decentralized digital currency Bit Gold, which never actually got implemented, but already had many of the resources that would structure the creation of Bitcoin, 10 years later.

These features include:

• Clear focus on privacy.
• Use of a decentralized structure.
• Use of advanced math and cryptography tools.
• The creation of new currencies should be similar to the gold mining process, limited and increasingly difficult. For this, Proof of Work was used, a process that requires computational power to solve mathematical problems in the creation of new ones units and maintaining network security.
• Registration with date and time safe and accessible to the public.

In addition, the concept behind Bit Gold included a scarce digital token and the possibility of sending it electronically, by anyone, without the need to pass through a central authority such as a bank. Due to all these architectural similarities, Nick Szabo's invention is widely considered to be the direct precursor to Bitcoin.

What prevented Bit Gold from proceeding were some technical limitations, such as the non-resolution of the problem of double spending and the use of a Byzantine method that required a quorum of network addresses instead of a quorum of computational power, which caused the network to be vulnerable to Sybil attacks.

SIMILARITY BETWEEN BIT GOLD AND BITCOIN

The Problem of Trust in Third Parties

Nick Szabo has always highlighted the vulnerabilities and security flaws that exist in the process of delegating trust to third parties.
 
In 1997, he published an articles called “Formalizing and Securing Relationships on Public Networks”, where he reported on the radical changes in trust relationships that could be caused for the digital age and like public networks, cryptography and smart contracts would be the main tools in this transition.

In the article “Trusted Third Parties are Security Holes”, Szabo highlights the risks of trust in intermediaries, due to the possibility of a breach of credibility, see the big techs, technology giants
that can easily share the data of millions of users and their services with governments.

RELIABLE THIRD PARTIES ARE SAFETY FAILURES by Nick Szabo

Rumors about Nick Szabo being Satoshi Nakamoto

Such a similarity between Bit Gold and Bitcoin has given rise to rumors that Nick Szabo was Satoshi Nakamoto or was directly part of the Bitcoin development process.
 
Some indications may point to this, as we will see below:
In 2014, a survey conducted by experts in forensic linguistics at the Aston University Center for Forensic Linguistics in Birmingham, England, sought to study how to write potential candidates for Satoshi's real identity.

The team of 40 students, led by Professor Dr. Jack Grieve, compared the Bitcoin white paper with the writings of 11 other individuals and the report concluded that Szabo's writing contains features that link the style and metrics used by Satoshi.

Common phrases included: “trusted third parties”, “for our purposes”, “need for…”, “chain of…” among others. In addition, the researchers found that the Bitcoin white paper was written using LaTeX, an open source document preparation system that was also used by Szabo in all of his publications.

Researcher Skye Gray analyzed the Bitcoin white paper and came to the same conclusion.

Linguistic analysis is a technique often employed by criminal investigators and intelligence agencies, among other organizations. Although it is not a foolproof method, in many cases it is the only way to gather vital information from documents.

In addition to the linguistic traits, another curious point is that Szabo and Satoshi contacted the same group of people for feedback and advice on their respective digital currency projects.

Looking at his blog, you can see that Szabo changed the date of a post asking for advice to launch Bit Gold, making it look like he wrote it after the release of Satoshi's white paper in 2008.

In the Bitcoin White Paper, reference is made to b-money, hashcash and Wei Dai concepts related to Bitcoin, projects less related to Bitcoin, while Bit Gold, with all similarities and influence, is not mentioned.

A May 2011 post was one of the last posts Szabo made before taking a long hiatus to work, he said later, on a new concept he called time programming. May 2011 was also the last time that Satoshi privately communicated with other Bitcoin contributors. In an email that month to Martti Malmi, one of the first participants, Satoshi wrote: "I moved on to other things and I probably won't be around in the future."

In addition, the first letters of the names may also raise suspicions: Nick Szabo / Satoshi Nakamoto = "N.S / S.N".

Interestingly, in Hungary, almost exclusively in the world, surnames come first.

Many believe that there are few people in the world with the breadth of knowledge needed to create Bitcoin and that Nick would certainly be one of them. The mystery about who Satoshi Nakamoto is seems to be endless. Nick Szabo has repeatedly denied these rumors and although he is fully capable of actually being the creator of Bitcoin, that specifically does not matter. What really matters are their contributions that will continue to impact the future development of crypto assets.
 
The work of Nick Szabo added to that of Wei Dai, Hal Finney and so many other brilliant minds are the basis for the creation of Bitcoin and we just need to thank you for the road you have built.