CoinGeek Conversations

Ian Grigg: the “stunning notion” that Bitcoin software could create its own money

August 04, 2021 CoinGeek Season 5 Episode 28
CoinGeek Conversations
Ian Grigg: the “stunning notion” that Bitcoin software could create its own money
Show Notes

The history of Bitcoin began long before Satoshi Nakamoto’s White Paper appeared on an obscure online messageboard. Many of the ideas that Satoshi used had been part of previous cryptocurrencies. But Satoshi combined them in an original way and added his own brilliant solution to problems that had dogged previous attempts at digital currencies.

Around 2008, Ian Grigg was a financial cryptographer on the fringes of a loosely-defined group known as the cypherpunks. They anticipated a blending of cryptography with the ever-growing Internet: “if you put the two together,” Ian said, ”you created the possibility of having, if you like, a new trade space, a new privacy space, new monetary systems.”

There was a distinctly libertarian - if not anarchistic - flavour to the cypherpunks’ aspirations: “they were looking for ways to create a space where people could do things without having to be necessarily controlled by the big governments, the old governments, the crusty institutions that would stop you from doing certain things.”

In the first of a two-part interview for CoinGeek Conversations, Ian Grigg talks about the early days of Bitcoin and how he came to believe, before it had been suggested in the media, that Dr Craig Wright was Satoshi Nakamoto (or at least, the leader of what Ian calls “the Satoshi team”). 

When Ian first saw Satoshi’s proposal on the Cryptography Mailing List, he was sceptical: “I thought, this is never going to work. The notion of spending energy to create consensus, that'll never work. Nobody will do that.”

Nevertheless, being already well-versed in the field, Ian recognised the originality of the ideas: “it was coupling this ‘proof of work’ to the economic incentives in the sense that when you won your lottery ...that caused the generation of money or Bitcoin, and that gave people an economic incentive to do that process.” 

It was this “monetary feedback loop” that was the key to Bitcoin’s ingenious design: “this was quite a stunning notion because up until then, everybody was talking about, ‘oh well, somebody would issue some money and then manually we would pay for stuff’. But nobody had advanced the idea that the machine itself would generate its own money and distribute it.”

Ian followed what was happening in Bitcoin for a few years, until about 2014 when the search for the identity of Satoshi was hotting up. He felt strongly that Satoshi should be allowed to stay hidden: “​​we come from the privacy sector ...And all we're trying to do is take away his privacy. This caused me to be very disquieted.

Ian began spreading this view, and eventually had some effect on his peers. But it didn’t stop Satoshi being unmasked in December 2015. Ian’s role in trying to protect Dr Craig Wright during that episode is the subject of next week’s episode of CoinGeek Conversations.