The Bitcoin Whitepaper

OCT 31 2008 · 12:00

The Bitcoin logo, the public emblem of the protocol first described in Satoshi Nakamoto's whitepaper of 31 October 2008. Place: the metzdowd cryptography mailing list, the early internet Figures: Satoshi Nakamoto, identity unknown Six Weeks After Lehman Lehman Brothers fails on 15 September 2008. On 7 October, Iceland's three largest banks collapse in 36 hours. The Troubled Asset Relief Program (TARP) passes the US Congress on 3 October, authorizing 700 billion dollars to recapitalize failing banks. The Federal Reserve opens dollar-swap lines with foreign central banks at unprecedented scale. Whatever the Westphalian state was supposed to do for its currency, that month it does an enormous amount of it. On 31 October, a nine-page paper titled Bitcoin: A Peer-to-Peer Electronic Cash System is posted to the metzdowd cryptography mailing list by someone using the name Satoshi Nakamoto. The paper describes a digital cash system that requires no central authority, no nation-state, no bank. The cryptographers on the list, who have been trying to build such a thing for two decades (DigiCash, Hashcash, b-money, Bit Gold), recognize that this proposal works. Genesis Block On 3 January 2009, Nakamoto mines the genesis block. Embedded in the coinbase parameter, the field that lets miners include arbitrary data with their block, is a UTF-8 string from that day's London Times front page: The Times 03/Jan/2009 Chancellor on brink of second bailout for banks. It is the most explicit timestamp of intent in software history. A medium of exchange whose protocol makes sovereign currency manipulation impossible has been deployed, with a citation to the specific failure it intends to correct. Bitcoin's market capitalization over the next sixteen years grows from zero to (in the trillions of dollars). The technical primitive (a censorship-resistant, fixed-supply, peer-to-peer ledger) becomes the substrate for an entire alternative financial system. Whether this constitutes an exit from Westphalian monetary sovereignty, or merely a parallel system the Westphalian state will eventually capture, is the live question Hope and Ludlow's Farewell to Westphalia takes up directly.