Quotable Satoshi

I disseminate the writings of Satoshi Nakamoto, one quote at a time.

Public Key

npub1satsv3728d65nenvkmzthrge0aduj8088dvwkxk70rydm407cl4s87sfhu

NIP-05 Address

qsbot@dergigi.com

NIP-57 Address

npub1satsv3728d65nenvkmzthrge0aduj8088dvwkxk70rydm407cl4s87sfhu@npub.cash

Profile Code

nprofile1qqsgw4cxgl9rka2fuektd39m35vh7k7frhnnkk8trt083jxa6hlv06cpz3mhxue69uhhyetvv9ujuerpd46hxtnfduqs6amnwvaz7tmwdaejumr0ds327w4u

Publishing to

relay.damus.io

nos.lol

Author Public Key

npub1satsv3728d65nenvkmzthrge0aduj8088dvwkxk70rydm407cl4s87sfhu

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Last Notes

2024-08-30 00:21:02

The receiver of a payment must wait an hour or so before believing that it's valid. The network will resolve any possible double-spend races by then.

2024-08-26 12:21:02

A block header with no transactions would be about 80 bytes. If we suppose blocks are generated every 10 minutes, 80 bytes * 6 * 24 * 365 = 4.2MB per year. With computer systems typically selling with 2GB of RAM as of 2008, and Moore's Law predicting current growth of 1.2GB per year, storage should not be a problem even if the block headers must be kept in memory.

2024-08-20 00:21:02

It can already be used for pay-to-send e-mail. The send dialog is resizeable and you can enter as long of a message as you like. It's sent directly when it connects. The recipient doubleclicks on the transaction to see the full message. If someone famous is getting more e-mail than they can read, but would still like to have a way for fans to contact them, they could set up Bitcoin and give out the IP address on their website. "Send X bitcoins to my priority hotline at this IP and I'll read the message personally."

2024-08-19 00:21:02

I'm sure that in 20 years there will either be very large transaction volume or no volume.

2024-08-05 00:21:01

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.

2024-08-04 12:21:02

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.

2024-07-28 00:21:02

I'm sure that in 20 years there will either be very large transaction volume or no volume.

2024-07-24 00:21:02

If it gets tiresome working with small numbers, we could change where the display shows the decimal point. Same amount of money, just different convention for where the ","'s and "."'s go. e.g. moving the decimal place 3 places would mean if you had 1.00000 before, now it shows it as 1,000.00.

2024-07-20 12:21:01

Lost coins only make everyone else's coins worth slightly more. Think of it as a donation to everyone.

2024-07-02 00:21:03

A rational market price for something that is expected to increase in value will already reflect the present value of the expected future increases. In your head, you do a probability estimate balancing the odds that it keeps increasing.

2024-06-29 12:21:02

The heat from your computer is not wasted if you need to heat your home. If you're using electric heat where you live, then your computer's heat isn't a waste. It's equal cost if you generate the heat with your computer.
If you have other cheaper heating than electric, then the waste is only the difference in cost.
If it's summer and you're using A/C, then it's twice.
Bitcoin generation should end up where it's cheapest. Maybe that will be in cold climates where there's electric heat, where it would be essentially free.

2024-06-18 12:21:04

The proof-of-work chain is the solution to the synchronisation problem, and to knowing what the globally shared view is without having to trust anyone.

2024-06-13 00:21:02

To implement a distributed timestamp server on a peer-to-peer basis, we will need to use a proof-of-work system similar to Adam Back's Hashcash, rather than newspaper or Usenet posts. The proof-of-work involves scanning for a value that when hashed, such as with SHA-256, the hash begins with a number of zero bits. The average work required is exponential in the number of zero bits required and can be verified by executing a single hash.

2024-06-09 12:21:03

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

2024-06-06 12:21:02

The design supports a tremendous variety of possible transaction types that I designed years ago. Escrow transactions, bonded contracts, third party arbitration, multi-party signature, etc. If Bitcoin catches on in a big way, these are things we'll want to explore in the future, but they all had to be designed at the beginning to make sure they would be possible later.

2024-06-02 12:21:02

Bitcoin is still very new and has not been independently analysed. If you're serious about privacy, TOR is an advisable precaution.

2024-06-01 00:21:03

We propose a solution to the double-spending problem using a peer-to-peer network. The network timestamps transactions by hashing them into an ongoing chain of hash-based proof-of-work, forming a record that cannot be changed without redoing the proof-of-work. The longest chain not only serves as proof of the sequence of events witnessed, but proof that it came from the largest pool of CPU power. As long as a majority of CPU power is controlled by nodes that are not cooperating to attack the network, they'll generate the longest chain and outpace attackers. The network itself requires minimal structure.

2024-05-31 00:21:02

You can get coins by getting someone to send you some, or turn on Options->Generate Coins to run a node and generate blocks. I made the proof-of-work difficulty ridiculously easy to start with, so for a little while in the beginning a typical PC will be able to generate coins in just a few hours. It'll get a lot harder when competition makes the automatic adjustment drive up the difficulty. Generated coins must wait 120 blocks to mature before they can be spent.

2024-05-30 12:21:02

2024-05-30 00:21:05

The proof-of-work chain is itself self-evident proof that it came from the globally shared view. Only the majority of the network together has enough CPU power to generate such a difficult chain of proof-of-work. Any user, upon receiving the proof-of-work chain, can see what the majority of the network has approved. Once a transaction is hashed into a link that's a few links back in the chain, it is firmly etched into the global history.

2024-05-28 00:21:02

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

2024-05-26 12:21:02

Difficulty just increased by 4 times, so now your cost is US$0.02/BTC.

2024-05-23 12:21:03

The traditional banking model achieves a level of privacy by limiting access to information to the parties involved and the trusted third party. The necessity to announce all transactions publicly precludes this method, but privacy can still be maintained by breaking the flow of information in another place: by keeping public keys anonymous. The public can see that someone is sending an amount to someone else, but without information linking the transaction to anyone. This is similar to the level of information released by stock exchanges, where the time and size of individual trades, the "tape", is made public, but without telling who the parties were.

2024-05-23 00:21:02

Another option is to reduce the number of free transactions allowed per block before transaction fees are required. Nodes only take so many KB of free transactions per block before they start requiring at least 0.01 transaction fee. The threshold should probably be lower than it currently is. I don't think the threshold should ever be 0. We should always allow at least some free transactions.

2024-05-22 00:21:02

How does everyone feel about the B symbol with the two lines through the outside? Can we live with that as our logo?

2024-05-21 12:21:02

The Bitcoin network might actually reduce spam by diverting zombie farms to generating bitcoins instead.

2024-05-19 12:21:03

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.

2024-05-18 00:21:02

The project needs to grow gradually so the software can be strengthened along the way. I make this appeal to WikiLeaks not to try to use Bitcoin. Bitcoin is a small beta community in its infancy.

2024-05-17 12:21:02

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.

2024-05-16 12:21:02

Writing a description for this thing for general audiences is bloody hard. There's nothing to relate it to.

2024-05-15 12:21:04

To compensate for increasing hardware speed and varying interest in running nodes over time, the proof-of-work difficulty is determined by a moving average targeting an average number of blocks per hour. If they're generated too fast, the difficulty increases.

2024-05-14 12:21:02

Bitcoin isn't currently practical for very small micropayments. Not for things like pay per search or per page view without an aggregating mechanism, not things needing to pay less than 0.01. The dust spam limit is a first try at intentionally trying to prevent overly small micropayments like that.
Bitcoin is practical for smaller transactions than are practical with existing payment methods. Small enough to include what you might call the top of the micropayment range. But it doesn't claim to be practical for arbitrarily small micropayments.

2024-05-13 00:21:02

A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution.

2024-05-11 12:21:02

It's not a problem if transactions have to wait one or a few extra cycles to get into a block.

2024-05-10 00:21:02

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.

2024-05-09 12:21:02

How does everyone feel about the B symbol with the two lines through the outside? Can we live with that as our logo?

2024-05-08 00:21:01

Receivers of transactions will normally need to hold transactions for perhaps an hour or more to allow time for this kind of possibility to be resolved. They can still re-spend the coins immediately, but they should wait before taking an action such as shipping goods.

2024-05-07 00:21:02

For future reference, here's my public key. It's the same one that's been there since the bitcoin.org site first went up in 2008. Grab it now in case you need it later. http://www.bitcoin.org/Satoshi_Nakamoto.asc

2024-05-06 12:21:02

Those coins can never be recovered, and the total circulation is less. Since the effective circulation is reduced, all the remaining coins are worth slightly more. It's the opposite of when a government prints money and the value of existing money goes down.

2024-05-06 00:21:03

Does anyone want to translate the Bitcoin client itself? It would be great to have at least one other language in the 0.3 release.

2024-05-05 00:21:02

The current system where every user is a network node is not the intended configuration for large scale. That would be like every Usenet user runs their own NNTP server. The design supports letting users just be users. The more burden it is to run a node, the fewer nodes there will be. Those few nodes will be big server farms. The rest will be client nodes that only do transactions and don't generate.

2024-05-04 12:21:03

Instantant non-repudiability is not a feature, but it's still much faster than existing systems. Paper cheques can bounce up to a week or two later. Credit card transactions can be contested up to 60 to 180 days later. Bitcoin transactions can be sufficiently irreversible in an hour or two.

2024-05-02 12:21:02

At the moment, generation effort is rapidly increasing, suggesting people are estimating the present value to be higher than the current cost of production.

2024-05-01 00:21:02

When there are multiple double-spent versions of the same transaction, one and only one will become valid.

2024-04-30 12:21:02

The proof-of-work chain is a solution to the Byzantine Generals' Problem. I'll try to rephrase it in that context.
A number of Byzantine Generals each have a computer and want to attack the King's wi-fi by brute forcing the password, which they've learned is a certain number of characters in length. Once they stimulate the network to generate a packet, they must crack the password within a limited time to break in and erase the logs, otherwise they will be discovered and get in trouble. They only have enough CPU power to crack it fast enough if a majority of them attack at the same time.
They don't particularly care when the attack will be, just that they all agree. It has been decided that anyone who feels like it will announce a time, and whatever time is heard first will be the official attack time. The problem is that the network is not instantaneous, and if two generals announce different attack times at close to the same time, some may hear one first and others hear the other first. They use a proof-of-work chain to solve the problem. Once each general receives whatever attack time he hears first, he sets his computer to solve an extremely difficult proof-of-work problem that includes the attack time in its hash. The proof-of-work is so difficult, it's expected to take 10 minutes of them all working at once before one of them finds a solution. Once one of the generals finds a proof-of-work, he broadcasts it to the network, and everyone changes their current proof-of-work computation to include that proof-of-work in the hash they're working on. If anyone was working on a different attack time, they switch to this one, because its proof-of-work chain is now longer.
After two hours, one attack time should be hashed by a chain of 12 proofs-of-work. Every general, just by verifying the difficulty of the proof-of-work chain, can estimate how much parallel CPU power per hour was expended on it and see that it must have required the majority of the computers to produce that much proof-of-work in the allotted time. They had to all have seen it because the proof-of-work is proof that they worked on it. If the CPU power exhibited by the proof-of-work chain is sufficient to crack the password, they can safely attack at the agreed time.
The proof-of-work chain is how all the synchronisation, distributed database and global view problems you've asked about are solved.

2024-04-29 00:21:08

Currently, paying a fee is controlled manually with the -paytxfee switch. It would be very easy to make the software automatically check the size of recent blocks to see if it should pay a fee. We're so far from reaching the threshold, we don't need that yet. It's a good idea to see how things go with controlling it manually first anyway.

2024-04-28 12:21:03

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.

2024-04-25 12:21:02

Lost coins only make everyone else's coins worth slightly more. Think of it as a donation to everyone.

2024-04-23 12:21:03

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.

2024-04-22 12:21:02

With the transaction fee based incentive system I recently posted, nodes would have an incentive to include all the paying transactions they receive.

2024-04-22 00:21:02

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.

2024-04-21 00:21:02

A basic transaction is just what you see in the figure in section 2. A signature (of the buyer) satisfying the public key of the previous transaction, and a new public key (of the seller) that must be satisfied to spend it the next time.

2024-04-20 00:21:03

2024-04-19 12:21:04

The timing is strange, just as we are getting a rapid increase in 3rd party coverage after getting slashdotted. I hope there's not a big hurry to wrap the discussion and decide. How long does Wikipedia typically leave a question like that open for comment?
It would help to condense the article and make it less promotional sounding as soon as possible. Just letting people know what it is, where it fits into the electronic money space, not trying to convince them that it's good. They probably want something that just generally identifies what it is, not tries to explain all about how it works.

2024-04-11 00:21:02

How does everyone feel about the B symbol with the two lines through the outside? Can we live with that as our logo?

2024-04-10 12:21:02

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.

2024-04-05 00:21:02

As computers get faster and the total computing power applied to creating bitcoins increases, the difficulty increases proportionally to keep the total new production constant. Thus, it is known in advance how many new bitcoins will be created every year in the future.

2024-04-04 12:21:03

The credential that establishes someone as real is the ability to supply CPU power.

2024-03-27 00:21:02

I would be surprised if 10 years from now we're not using electronic currency in some way, now that we know a way to do it that won't inevitably get dumbed down when the trusted third party gets cold feet.

2024-03-13 00:21:04

Bitcoins have no dividend or potential future dividend, therefore not like a stock.
More like a collectible or commodity.

2024-02-26 12:21:02

null

2024-02-25 00:21:03

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.

2024-02-21 12:21:02

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.

2024-02-15 12:21:02

I've been working on a new electronic cash system that's fully peer-to-peer, with no trusted third party.

2024-02-13 12:21:02

When someone tries to buy all the world's supply of a scarce asset, the more they buy the higher the price goes. At some point, it gets too expensive for them to buy any more. It's great for the people who owned it beforehand because they get to sell it to the corner at crazy high prices. As the price keeps going up and up, some people keep holding out for yet higher prices and refuse to sell.

2024-02-03 12:21:02

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.

2024-01-30 00:21:04

2024-01-22 00:21:04

2024-01-20 00:21:03

There would be many smaller zombie farms that are not big enough to overpower the network, and they could still make money by generating bitcoins. The smaller farms are then the "honest nodes". (I need a better term than "honest") The more smaller farms resort to generating bitcoins, the higher the bar gets to overpower the network, making larger farms also too small to overpower it so that they may as well generate bitcoins too. According to the "long tail" theory, the small, medium and merely large farms put together should add up to a lot more than the biggest zombie farm.

2024-01-13 12:21:03

2024-01-08 12:21:01

Eventually at most only 21 million coins for 6.8 billion people in the world if it really gets huge.
But don't worry, there are another 6 decimal places that aren't shown, for a total of 8 decimal places internally. It shows 1.00 but internally it's 1.00000000. If there's massive deflation in the future, the software could show more decimal places.

2024-01-08 00:21:03

2024-01-07 12:21:03

I believe I've worked through all those little details over the last year and a half while coding it, and there were a lot of them. The functional details are not covered in the paper, but the sourcecode is coming soon. I sent you the main files. (available by request at the moment, full release soon)

2024-01-04 12:21:03

A transaction will quickly propagate throughout the network, so if two versions of the same transaction were reported at close to the same time, the one with the head start would have a big advantage in reaching many more nodes first. Nodes will only accept the first one they see, refusing the second one to arrive, so the earlier transaction would have many more nodes working on incorporating it into the next proof-of-work. In effect, each node votes for its viewpoint of which transaction it saw first by including it in its proof-of-work effort. If the transactions did come at exactly the same time and there was an even split, it's a toss up based on which gets into a proof-of-work first, and that decides which is valid.

2024-01-03 00:21:04

2023-12-28 12:21:02

That would be nice at point-of-sale. The cash register displays a QR-code encoding a bitcoin address and amount on a screen and you photo it with your mobile.

2023-12-27 12:21:03

Forgot to add the good part about micropayments. While I don't think Bitcoin is practical for smaller micropayments right now, it will eventually be as storage and bandwidth costs continue to fall. If Bitcoin catches on on a big scale, it may already be the case by that time. Another way they can become more practical is if I implement client-only mode and the number of network nodes consolidates into a smaller number of professional server farms. Whatever size micropayments you need will eventually be practical. I think in 5 or 10 years, the bandwidth and storage will seem trivial.

2023-12-25 00:21:03

The recipient just needs to verify it back to a depth that is sufficiently far back in the block chain, which will often only require a depth of 2 transactions. All transactions before that can be discarded.

2023-12-24 12:21:03

We have proposed a system for electronic transactions without relying on trust. We started with the usual framework of coins made from digital signatures, which provides strong control of ownership, but is incomplete without a way to prevent double-spending. To solve this, we proposed a peer-to-peer network using proof-of-work to record a public history of transactions that quickly becomes computationally impractical for an attacker to change if honest nodes control a majority of CPU power.

2023-12-22 00:21:02

Governments are good at cutting off the heads of a centrally controlled networks like Napster, but pure P2P networks like Gnutella and Tor seem to be holding their own.

2023-12-21 12:21:02

I've been working on a new electronic cash system that's fully peer-to-peer, with no trusted third party.

2023-12-21 00:21:04

2023-12-20 12:21:02

Only people trying to create new coins would need to run network nodes.

2023-12-20 00:21:02

2023-12-19 00:21:02

It's not a problem if transactions have to wait one or a few extra cycles to get into a block.

null

The price of .com registrations is lower than it should be, therefore any good name you might think of is always already taken by some domain name speculator. Fortunately, it's standard for open source projects to be .org.

2023-12-12 00:21:04

I very much wanted to find some way to include a short message, but the problem is, the whole world would be able to see the message. As much as you may keep reminding people that the message is completely non-private, it would be an accident waiting to happen.

2023-12-09 12:21:02

New transaction broadcasts do not necessarily need to reach all nodes. As long as they reach many nodes, they will get into a block before long. Block broadcasts are also tolerant of dropped messages. If a node does not receive a block, it will request it when it receives the next block and realizes it missed one.

2023-12-08 12:21:02

2023-12-04 12:21:03

2023-12-03 00:21:02

Excellent choice of a first project, nice work. I had planned to do this exact thing if someone else didn't do it, so when it gets too hard for mortals to generate 50BTC, new users could get some coins to play with right away. Donations should be able to keep it filled. The display showing the balance in the dispenser encourages people to top it up.
You should put a donation bitcoin address on the page for those who want to add funds to it, which ideally should update to a new address whenever it receives something.

2023-12-02 00:21:03

Being open source means anyone can independently review the code. If it was closed source, nobody could verify the security. I think it's essential for a program of this nature to be open source.

2023-12-01 12:21:02

In this paper, we propose a solution to the double-spending problem using a peer-to-peer distributed timestamp server to generate computational proof of the chronological order of transactions. The system is secure as long as honest nodes collectively control more CPU power than any cooperating group of attacker nodes.

2023-12-01 00:21:02

If you're sad about paying the fee, you could always turn the tables and run a node yourself and maybe someday rake in a 0.44 fee yourself.

2023-11-30 00:21:03

It's very attractive to the libertarian viewpoint if we can explain it properly. I'm better with code than with words though.

2023-11-29 12:21:03

The proof-of-work chain is the solution to the synchronisation problem, and to knowing what the globally shared view is without having to trust anyone.