WIRED:Whether or not Bitcoin succeeds, it does not depend on trust in a single human being
NEARLY A year ago, I wrote about an idea called “Bitcoin”. It was a carefully crafted, ingenious, piece of software that digitally reproduced the scarcity of a restricted, commodity-based currency, and the accounting system of a bank – both in a decentralised, semi-anonymous way. It was a carefully considered attempt to create a close equivalent to hard cash in the soft, virtual environment of the net.
I said at the time that I could not predict how “bitcoins” would play out. Would they become a viable currency, or just a fad loved by “goldbugs” and other fringe currency enthusiasts? One of the reasons it seemed so hard to predict is that all the incentives and promise of Bitcoin were locked into how it was designed. That design is fixed, but not really “owned” by anyone.
Like open source software, its success was determined more by what people collectively made of it rather than the drive or brilliance of one particular person.
Except, perhaps, "Satoshi Nakamoto", the cryptographer who set the whole project in motion in 2009 in a self-published paper. Nakamoto has long been assumed to be a pseudonym. This week, New Yorkerreporter Joshua Davis implied that the author was really Michael Clear, a recent computer studies graduate from Trinity College.
The trail isn’t strong. All Hibernophile Nakamoto-hunters have to go on is an ambiguously worded denial from Clear, in which he says, “I’m not Satoshi. But even if I was, I wouldn’t tell you.” That sounds far more like the dry humour of the average cryptographer than a playful admission of guilt.
But the splendid virtue of Bitcoin is that it does not depend on trust in a single human being – or an institution. In the fine old tradition of a handful of networked projects, its integrity stands and falls on its design only, not who runs it. E-mail would carry on working, even if the man who did most to create it fell down dead (it was, arguably, Jon Postel, and he did). The internet continues as a viable platform, even as its original networks fade away. Linux would suffer from Linus Torvalds being hit by a bus, but not mortally.
And so with Bitcoin. I’m capitalising its name but, if it succeeds, it will join the web and the net as being slowly lower-cased into a generic existence.
Contrast that with the last 10 years of innovations that have been pioneered and trademarked by the corporations on which they rely. Facebook, Paypal, Google, Skype: all turned into verbs, but all still controlled by a small group on whom we must trust our communications, our money and our privacy.
In the last year, Bitcoin has gone through the kind of gyrations that make it, right now at least, unfit for the task that Nakomato intended it for. Its price shot up to $35 a coin, then plummeted to under $5. Few purchases are transacted in bitcoins, because most bitcoins are probably being bought for speculative purposes.
Its built-in deflationary characteristics may, in the belief of many economists, rule it out as a currency for its foreseeable life.
But despite its flaws, Bitcoin lives on. No massive security flaw has killed it outright (though sites dealing in it have been hacked, and their chests of untraceable virtual gold whisked away). No government has worked out a way to prohibit it, despite hearings in the US Senate, and a site, Silk Road, which arranges anonymous drug deals denominated in it. And despite its ups and downs, you can still cash a coin for five bucks, and have been able to do so for more than a month now.
Meanwhile, others have taken the principle, and sought to apply it to other domains. Namecoin is a proposed adaptation of the Bitcoin system for allocating domain names without the need for a centralised authority. Those unhappy with the hardwired ideals of Satoshi – that a currency should be deflationary, or that coins be minted from computers processing otherwise unimportant calculations – can still take the Bitcoin idea and transmute it into alternative systems, currencies or not.
This week, the industry mourns the death of Steve Jobs, a man whose firm hand on the tiller of Pixar and Apple coincided with those two companies’ amazing growth and creativity. There are few who doubt the causal connection between those facts: a great man can inspire great works, when given complete control. But great men are mortal. It is the struggle of our age, as the creators of the digital revolution get old and retire or pass away, to guess which of their monuments can survive them.
Some of our older technological institutions may have a wobbly few years, as they walk for the first time without their creators’ support. Microsoft has stumbled without Bill Gates. Hewlett- Packard’s legacy has already faded. Apple wandered when Jobs was first expelled, and may fall again despite the deliberate attempts of all there, including Jobs, to ensure it outlives him.
Perhaps the most likely to remain with us will be those lower-cased inventions which blossomed from near birth without much tending or protection from their makers, like Bitcoin. Or perhaps it will be those products, owned or disowned, that gather and prolong the most permanent of devotion from strangers.
