Honestly, I don't think he did come from a financial background.  Had he come from a financial background, block rewards would not be adjusted downwards in 50% increments.  In fact the kool-aid in the financial industry is universally that mild continuous inflation is a good thing, so if Satoshi were educated in that industry, then block rewards would probably eventually start going *up* by a few percent a year to keep the capital dedicated to hashing (ie, block chain security) in a constant proportion relative to the bitcoin money supply (ie, the value that must be secured), and we wouldn't be looking at a 21M coin maximum.  

I am concerned that down the line the sudden drops in hashing reward are likely to create dislocations of  capital and hashing infrastructure.  Meaning, that at some point the financial return on miners' invested capital suddenly justifies only about half of it, and then what do they do with the rest?  

The thing about ASIC hashing infrastructure is that the thing that's required to secure the blockchain -- that is to say, hashing power -- is the very same thing that's required to attack it.  And the weirdo economics here have caused a huge amount of it to be built -- much more than will be financially justified three or four more halvings down the line.  The miners have sunk costs in dedicated equipment, so that equipment is not going to just go away because there's not a financial justification for the amortized expense of acquiring it.  And it's ASICs, so they're not going to be able to switch it as general computing power to any other purpose.

I'm concerned that when the profits from hashing go down suddenly, a bunch of people looking for the most profitable use of their dedicated sunk-cost in hashing infrastructure will start to consider attacks.  Way back when we were working on this, I took it for a lark.   I never *imagined* the current value of Bitcoin or the idea that eventually dedicated farms of ASICs that literally cannot be used for anything else except supporting OR ATTACKING the blockchain would exist.

So I would be much less nervous with a very gradual adjustment to keep the miners in something closer to a steady state.  Gradual adjustments make gradual dislocations, with plenty of time for equipment to wear out, turn into doorstops, blow power supplies, etc.  and keep the amount of active usable infrastructure close to the amount that's financially justified by the declining block rewards.

Both Hal and Satoshi preferred FORTH because it had the simplest (easiest to verify correct/secure) implementation of any useful scripting language.

Look, "Satoshi" was a construction made explicitly for the purpose of launching Bitcoin.

That purpose is fulfilled.  The person who created "Satoshi" has no further need for him.  Thus ends the story.

He *was* just about ready to post the code.  This was a debate about what value an already-defined constant ought to have.  In fact I've already posted an archive of his code from just a few *days* later in another thread here for historical interest. 

Hal and I were essentially giving it a last-minute looking over to see if we thought there was any way to attack it.  I have the impression that Hal communicated with Satoshi a lot more than I did, but he was looking at a  much tougher problem.  The blockchain structure is essentially a mathematical proof -- very straightforward, you follow it and you can say with reasonable certainty that it's right or not.  But a scripting language is generative.  And generative structures present exponentially more attack surfaces. 


You're kidding right?  Ethereum's scripting language is limited only by the amount of steps it will run a calculation.  Hal would have pitched a fit about the Denial-of-Service possibilities.


Yeah, I made up a fake person because at first I didn't want people here to know who I was.  I was kind of afraid they'd get freaky about it.

Uhh, I don't remember ever agreeing to keep it secret, but we didn't talk about it on the list either.  At that time Hal was elbows-deep in the transaction scripting code, and I was checking Satoshi's work on the crypto on the blockchain architecture. 

Finney had a lot to worry about with the transaction scripting and wound up blocking out about a dozen more opcodes than Satoshi had wanted to, but I found essentially nothing wrong with the block structure.  I am still freakin' amazed how tight he got that blockchain design. 

And, yeah, I'm Ray Dillinger.

I've been watching the market, and I *think* I'm seeing a pattern.

I could be wrong about this.  But the market response to price changes in Bitcoin has been "off" of normal patterns for several months. 

When the price of Bitcoin is lower, substantially more of it changes hands daily.  This is a normal pattern in itself, but for the last few months, the market's volume response to prices is MUCH steeper than it had been previously -- in fact steeper than makes any sense according to my understanding of the market.   

In practice, it looks like there is a lot of money out there waiting to buy Bitcoin, but it's in absolutely no hurry, absolutely not worried that the price might go up before it gets to buy as much as it wants, and calmly waiting for the price to go lower. 

And indeed, when the price goes even a little higher than its recent averages we see the volume of sales drop like a rock.  The scarcity of trades on price upswings is just as pronounced as the huge volume on the downswing that the so-called 'bear whale' brought out.  In fact the 'bear whale' nailed the pattern:  price declined by ~$30 US, volume more than tripled.

The thing is, for this behavior to be rational, some HUGE investors (who want to be long in Bitcoin, in the long run) have got to be utterly, completely confident that the market price will NOT recover before they damn well want it to.  Whoever it is - or whatever coalition of people it is - that has this money appears to be absolutely certain that nobody ELSE with money will set off a bull market before they have as much bitcoin as they want.

That's what I'm saying.  He doesn't want to be found.  EVER.

You will never find him.

I remember this discussion, actually. 

Finney, Satoshi, and I discussed how divisible a Bitcoin ought to be.  Satoshi had already more or less decided on a 50-coin per block payout with halving every so often to add up to a 21M coin supply.  Finney made the point that people should never need any currency division smaller than a US penny, and then somebody (I forget who) consulted some oracle somewhere like maybe Wikipedia and figured out what the entire world's M1 money supply at that time was. 

We debated for a while about which measure of money Bitcoin most closely approximated; but M2, M3, and so on are all for debt-based currencies, so I agreed with Finney that M1 was probably the best measure. 

21Million, times 10^8 subdivisions, meant that even if the whole word's money supply were replaced by the 21 million bitcoins the smallest unit (we weren't calling them Satoshis yet)  would still be worth a bit less than a penny, so no matter what happened -- even if the entire economy of planet earth were measured in Bitcoin -- it would never inconvenience people by being too large a unit for convenience.

Miners are leaving transactions out of blocks today because the blocks propagate faster (ie, have more odds of being confirmed) if they are <250K.  Odds on losing the block fee exceed the transaction fees available, and the miner leaves the transaction unconfirmed. 

Raising the size of the largest allowed blocks will not change that. 

Do we have an implementation yet of broadcasting only the block header, and then letting the nodes assemble the blocks out of transactions they've already received over the network?  That would reduce miners' disincentives for including transactions, so wouldn't that would be the more immediate means of increasing the number of transactions per block?

I agree that the block size needs to be increased; I'm just saying that increasing the allowed block size won't help if miners still have a financial incentive to limit the actual block size to 250K.

Why should he give anyone a reason to think otherwise, if he wants to remain anonymous?

I'm pretty sure he's not going to be defending those old usernames either.  If he did, someone could use his actions to track him down.  If you want to be anonymous, you have to just walk away from your old points of contact and abandon them to whatever happens.

So at this point, it's his old ISP's that control the user names, and they will do whatever's their policy with 'em.  Satoshi would have to be insane to try to hang onto them or prevent others from getting them. 

If Satoshi wants to go public, he will sign a message with the key of one of the unspent coinbases known to belong to Satoshi.

But I am very confident that will never happen.

I will not disclose the email addresses themselves.  But if you issue a command such as 'echo address@provider.com > addy' and a subsequent invocation of 'sha512sum' as done below reveals one of the following hashes, you have one of the addresses I mean.  

No email from one of these addresses, at the current date or any later date, is actually from Satoshi Nakamoto, even though he did control each of these addresses in the past.  


$ sha512sum addy
2e8099af77cb42acd4263883ee95753013197dfec0af49ddfe7f2f57eb518f834bccbec19bea1a4 ff3dfaa359c1d4cf788e5a21dfd7243f163eaa846c43356a2

$ sha512sum addy2
f198ad5999ece1373f2d3a23791b9276f882d3151ad9fc46b5bde316cc91980c78300907854c3d0 93fd8367e8308cf3256e318ca226e4e87b282260c82414448  addy2

$ sha512sum addy3
4cd4bdb33ec840e218725233d1818ed16c078599e07b18c002a82ed65ef9398733d6275e6b56249 9508e6b40e7382589e8e946432d76be06a2242eb1f8c5b97c  addy3

$ sha512sum addy4
caaf36ea511e3766fe5f9fd4602bee109d2f60615e2aa89634c0fa1209ccb13b0c729c7796eb29d 91321eca9691ba4176c7d254ee50be6f1d84c9a2926c87399  addy4

$ sha512sum addy5
abf31b3179bcc6ef9827bc01c422a330927e9078fcf212b2db378dee94ace5c81113c8388cd4d0b 3f9968098b2787961d582b3953eaea35b5ff85460ce3f308c addy5


To repeat:  These hashes are for email accounts that used to be Satoshi's, but now are definitely NOT SATOSHI ANYMORE.

Okay, I have something useful which will not further degrade whatever privacy Satoshi still has.

I have prepared by putting each of my known addresses for Satoshi into a file by itself.  Each file has the email address and a single newline character followed by end of file.

Here is a paste from my command line.

$ sha512sum addy
2e8099af77cb42acd4263883ee95753013197dfec0af49ddfe7f2f57eb518f834bccbec19bea1a4 ff3dfaa359c1d4cf788e5a21dfd7243f163eaa846c43356a2

$ sha512sum addy2
f198ad5999ece1373f2d3a23791b9276f882d3151ad9fc46b5bde316cc91980c78300907854c3d0 93fd8367e8308cf3256e318ca226e4e87b282260c82414448  addy2

$ sha512sum addy3
4cd4bdb33ec840e218725233d1818ed16c078599e07b18c002a82ed65ef9398733d6275e6b56249 9508e6b40e7382589e8e946432d76be06a2242eb1f8c5b97c  addy3

$ sha512sum addy4
caaf36ea511e3766fe5f9fd4602bee109d2f60615e2aa89634c0fa1209ccb13b0c729c7796eb29d 91321eca9691ba4176c7d254ee50be6f1d84c9a2926c87399  addy4

$ sha512sum addy5
abf31b3179bcc6ef9827bc01c422a330927e9078fcf212b2db378dee94ace5c81113c8388cd4d0b 3f9968098b2787961d582b3953eaea35b5ff85460ce3f308c addy5


These hashes are for email accounts that used to be Satoshi's, but now are definitely NOT SATOSHI ANYMORE.  If you recieve any email that purports to be from Satoshi, but the address matches one of these hashes, it is DEFINITELY NOT SATOSHI. 

FWIW, I used to have five different email addys for Satoshi. 

As of today, every last one of them except the one referred to in the OP of this thread is bouncing.  And as others have already noted, nothing coming from that one appears to have a signature that would indicate that the user behind it is the same user who used to be Satoshi.

It appears that Satoshi is no longer keeping ANY of his old addresses. 

The fee structure is inaccurate and needs to be fixed. 

It's not acute yet, as the primary cost of securing the network is borne by miners in exchange for block subsidies, but in the future we will need to pay miners for securing the network, and the current fee schedule is flatly wrong.  It is not charging for security in proportion to that which needs secured, and it will not pay miners to provide extra margins of security when those extra margins are needed. 

Right now we're charging fees based on transaction size.  Transaction size isn't what we're trying to secure, although under the 1MB block limit I suppose it is a resource we need to protect.  But what we're trying to secure is the value that the blockchain represents, and with tx fees not in any way based on the value to be protected we're leaving large transactions open to attack. 

Miners who don't get paid any more money to secure a block where a million-BTC transaction goes through won't make any extra effort to secure that block.  But attackers running a scam where they can temporarily rent mining power to compromise or undo that million-BTC transaction have an instant motivation directly in proportion to the value that is being secured. 

In fact when you consider the case of miners *as* potential attackers, this gets far worse.  Large transactions paying more to attackers but not defenders can switch the course of greatest profit from honest to dishonest use of the same resources. 

This (transaction fee based on storage space/transmission cost of the tx) is a flaw in the Bitcoin protocol. 

We pay transaction fees to miners (at least in theory) to secure the network.  But it is not the storage space or transmission cost that is what makes the network require security. 

It seemed to make sense under the initial using-spare-compute-power model that the expense of securing the network was largely a bandwidth and storage expense borne in common by everybody - but that is not how it has turned out.  The expense of securing the network is in hardware for hashing farms and in power bills.  bandwidh and storage expense is not the major expense of providing what we're paying for, and charging people for bandwidth and storage is an inaccurate allocation of resources.  The people who secure the blockchain - ie, the miners - are paying the major expenses associated with security themselves when they buy the hardware and pay their power bills. 

What we are trying to secure is the value on the blockchain - and therefore IMO the transaction fees to secure it ought to be based on the value transferred. 

We need to move to an accurate economic model because an inaccurate one (such as we have now) cannot endure in competition with an accurate one.

I have observed ridiculously high prices on LBC from time to time - mostly with very small (<$US50) volumes, and mostly within one minute following a lower-than-market-price sale.

So that's consistent with a market manipulation strategy; someone trying to create a perception of higher value using the market where they can completely determine both sides of one sale and timing that sale to quickly erase a lower price from the frontpage and index.  

But I've also seen consistent 15% premiums over the course of entire months, with substantial amounts traded.  

Of course sellers who have to give up the coins immediately charge more than sellers who get to ride the float for four days, and of course that premium is higher when prices are rising.  That makes sense.  

I guess when it comes down to it It may be just the delay involved; if someone wants to be able to sell within hours, or possibly minutes, after making the buy, LBC or other private-treaty sale is their only option.  But people who want to be able to sell within minutes of buying are plainly speculating on short-term movements rather than investing.  If the price premium is driven by speculation on short-term investments, I'd expect it to vanish, or nearly vanish, during long periods of relative price stability - like now.

Everybody can see that the price of bitcoins at localbitcoins is consistently higher than the price elsewhere.

In some weeks it is much higher.  In others, not so much.

The amount of the price premium is without a doubt some kind of signal.  It says something about the market.  Localbitcoins is considerably less easy to use than the various online exchanges for both seller and buyer.  The sellers are clearly motivated by the price premium to go there instead of elsewhere. 

The buyers used to be motivated by increased privacy, or so I thought, and therefore treated the price premium an index of buyers' fear of economic interference.  But that's not really applicable anymore with localbitcoins doing all the reporting they're doing now. 

Still the patterns haven't changed much.  I guess I was wrong about the buyers' motivations, and therefore wrong about what the price premium for localbitcoins.com means.

So what does anyone else think it means?