"Somebody of us should go there and answer questions/resolve issues asked in the comments below the article. LWN.NET is read by some important figures in the geek world."
The call to action by BitcoinTalk user "ShadowOfHarbring" may not seem like much by today's standards – after all, Bitcoin is now cited daily in major global newspapers. But in late 2010, the idea that the software project was then attracting the attention of a notable "webzine" was enough to give a jolt of excitement and immediacy to the Bitcoin forums.
The article, published in LWN.net on November 10, 2010, appears to mark the first time Bitcoin was highlighted in a notable tech publication. I'll stop short of describing LWN.net as a news source (while I'll admit, I'm not familiar with the site, I'm not quite sure it meets that criteria).
Coming about a month before the first mainstream media article on Bitcoin (which hit a month later in the wake of the Wikileaks controversy), I haven't seen much (if any) references to it and so wanted to dig in and see how the author did by today's standards.
That this is interesting to me is because I've always been curious about how Bitcoin has been described and understood, and likewise how our descriptions of it have changed over time.
Overall, I continue to be surprised by the depth and accuracy of the early articles on Bitcoin.
When I began my career at CoinDesk in 2013, Bitcoin had entered the mainstream on a very different narrative – that it would or could disrupt traditional mobile payments (a narrative that has fallen out of favor for a great many reasons).
Today, the Bitcoin narrative is defined by its properties as a "store of value asset." (As Bitcoin students know, the emphasis on each has its problems – ie the 'store of value asset' narrative, though strong, probably undersells what will likely be Bitcoin's eventual utility for payments as well as the possibility it is more of an economy than an asset).
That aside, what we see clearly in the LWN.net article is that early Bitcoin articles benefited greatly from the fact they were written by people who had much in common with its early users.
Namely, they were people who understood open-source, and who could describe Bitcoin as a technology project (even if as we'll see, with some limitations). It appears this was a trend of late 2010, which would prestage its mainstream breakout in 2011.
Before we dive in, I also wanted to spotlight the author Nathan Willis (who you can follow on Twitter here). I'm curious to hear more about whether he stuck with Bitcoin or invested in it and intend to reach out. (So maybe more on that soon).
Until then, I unpack my 4 highlights and takeaways from the article's rereading.
1. Strong Descriptions of the Network
The best moments in Willis' article for me are certainly his spot-on descriptions of how Bitcoin works as a software system.
It's worth highlighting those first, as it's especially refreshing to read his descriptions at a time when Bitcoin is generally referred to only as an asset. As Willis makes clear, it is an asset (he uses the term "currency" which was then in vogue), though importantly, it's an asset defined by an open peer network.
His grasp of this is most obvious is his initial characterization of Bitcoin as "a decentralized, peer-to-peer network structure that verifies Bitcoin transactions cryptographically."
Indeed, Willis gives a lot of emphasis to how Bitcoin is a peer network and he describes well the role network nodes (then called clients) play in defining bitcoins as a currency or asset.
I really like the description below as it highlights how the bitcoin asset is symbiotic with the system itself:
"Actual Bitcoins do not exist as independent objects anywhere in the Bitcoin network. Instead, the P2P network of Bitcoin clients keep track of all Bitcoin transactions — including the transfer of Bitcoins from one Bitcoin address to another, and the creation of new Bitcoins, which is a tightly controlled process."
Elsewhere, he talks about how the network solves the double-spend problem, the principal computer science innovation that enabled Bitcoin to operate as a decentralized currency.
"For example, a rogue client simultaneously (or nearly simultaneously) broadcasts two transactions to different parts of the network that total more BTC than the client actually has, both transactions could temporarily be validated if two different clients simultaneously solve the current block. In that case, however, one of the two competing blocks will be invalidated by the next block solved, and all of the transactions in the invalidated block returned to the general queue.
Not as elegant as his other descriptions, it still cuts to the core of how Bitcoin nodes determine which blockchain to follow in the case there are multiple competing chains.
It also highlights that, in the span of just a few pages he covers a lot of information about the Bitcoin system and was able to identify its most important technical features for readers.
2. Subtle Illustrations of Challenges to Come
The article also subtly alludes to the changing dynamics of Bitcoin. As we know now, as the Bitcoin network grew larger (and demand for bitcoins grew) this led to the creation of specialized clients designed to mine its newly issued currency.
It feels a bit odd to think of miners as "specialized clients," but that's maybe the best description of what they really are. Today, Bitcoin essentially has two types of clients (nodes, which validate transactions and store a copy of the blockchain) and miners (which propose blocks and compete for the network's newly issued bitcoins).
In late 2010, this distinction (and the problems that would result from it) was just beginning to become obvious. As Willis alludes to in his piece, under the design proposed by Satoshi all clients were theoretically supposed to compete for new bitcoins.
However, some clients were already running specialized clients designed to optimize for solving blocks and claiming new bitcoins. He writes:
"Despite a design in which all clients supposedly have an equal chance of solving the next block and earning the reward, some Bitcoin users on the project's official forum seem to think that the current system is driving away casual users, because users with fast GPUs can check hashes ten- or twenty-times faster than a typical CPU."
Willis even refers to a Bitcoin Talk thread in which noted early Bitcoin developer Jeff Garzik alludes to how he is unable to effectively mine bitcoins even with a "beefy multi-core CPU."
That thread is probably worth unpacking on its own, but is a nice citation to this piece and shows that Willis really did his research.
3. Elegant Descriptions of Bitcoin's Economics
As alluded to above, one of my recent pet peeves is that Bitcoin is often now referred to as an "asset" when in reality it's an asset controlled by its own programmatic economy.
Here, we're veering into commonentary I would consider preferential, but I do find the following description to be really fitting in how it describes how the Bitcoin software manages its economy.
"One of Bitcoin's advantages over other currency systems is that it does not rely on a central authority or bank. Instead, the entire network keeps track of — and validates — transactions."
Ultimately, such descriptions will give way to the phrasing preferred by Michael Saylor and Safedean Ammous, that Bitcoin is a "central bank of cyberspace," which is how we understand the network today.
I also really like the way Willis describes Bitcoin's economic programming. Today, we're still just grappling with the impact of Bitcoin's programmatic supply reductions and how they impact the price of bitcoins as an asset. We're also more aware of how long it takes for these to occur (each halving is four years apart).
That's why it's a bit fun to see how he distills descriptions of how the Bitcoin economy will operate over centuries to just a few lines.
"The Bitcoin network is currently in currency-issuing mode; during this phase, whenever a client solves and publishes the network's next block, the client is credited with 50 freshly-created Bitcoins... The block-solving reward amount is scheduled to drop on a regular basis; eventually dropping to zero. At that point, transaction fees will replace Bitcoin-generation as an incentive for clients to participate."
4. Claims About Anonymity and Micropayments
If there's a snafu in the article, however, it's certainly the emphasis on anonymity, which as we now know, isn't a feature of the Bitcoin network.
That this was included in the article isn't surprising. Bitcoin's early supporters were very keen on highlighting the idea bitcoins were private, which eventually led to its widespread adoption in online dark markets in the mid-2010s.
Of course, this would subside as researchers revealed it is possible (and trivial) to trace exchanges of bitcoins through the blockchain. Still, it was a concern at the time. Willis writes:
"Another wrinkle is that Bitcoins are effectively "virtual cash" — which makes them untraceable. Although the anonymity is important to some early-adopters, some are concerned that if the system were ever to catch on in widespread usage, governments would intervene to ban or block it because of the relative ease of tax evasion or money laundering."
Finally, Willis also gives a shout-out to a use case that's still very much a work-in-progress today, the idea Bitcoin can enable micropayments.
"Because Bitcoin does not rely on brick-and-mortar banks and because the Bitcoin currency is divisible down to eight decimal places, it is seen by proponents as a potential micropayment system that works better than the fee-based, currency-backed banking systems of today.
As we know, this still remains a dream of the Bitcoin system, though one that won't likely be accomplished on the first layer of its software. (Due to the economics of how clients work described in takeaway #2).
Still, as the Lightning Network comes to fruition, this could change. In some ways, it's nice to see this use case alluded to with the knowledge that, 10 years later, it remains a possibility.
It's a good reminder that the Bitcoin system (and economy) is a work in progress, to be built over time. Or as Nic Carter says "a cathedral" to be passed from one generation to the next, always increasing in its investment and utility.
READ THE FULL ARTICLE ON LWN.NET
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What are your biggest takeaways from the article? Leave your thoughts below.