Satoshi Nakamoto’s explanation behind his intention of adopting “proof-of-work”.

What does this mean for the Security of Bitcoin?

The Original Bitcoin White Paper, published under the pseudonym Satoshi Nakamoto in 2008, spent much of the 9 pages speculating upon the Security of Bitcoin. If we are to refer to Bitcoins as Units of Value, it suggests that you need two things to maintain integrity:

Value Units distributed approximately equally between persons, and

In contrast to the concept that one person could obtain multiple IP addresses, Page 4 asserts using Hash Power as “proof-of-work is essentially one-CPU-one-vote”. It cites this broad distribution of Value Units as a Byzantine mechanic to ensure Nodes (often interchanged with Mining, as they were presumed to be one and the same at the time of original authorship) remained ‘honest’. Within the context of the paper, ‘honest’ means uncoordinated.

As block chain technology is reliant upon many persons agreeing upon a single Bill of Accounts, so long as each Node is interrogated independently, only the truth is capable of being consistent. Any sort of lie, or misstatement, would be immediately contradicted by the majority, who are presumed honest.

2. Hash Power does not become significantly coordinated, or concentrated.

Indeed, approximately 3 pages of the 9 page document warn against the dangers of concentrated hash power. The symbols used on page 8 translate as follows : q = % of Hash, and z = Number of Blocks (or 10 minutes). Page 8 of the White Paper suggests that Bitcoin should strive for 99.9% accuracy. Accuracy increases with the number of blocks created, and percent of uncoordinated Node verification. The White Paper asserts the following, to obtain 99.9% Accuracy:

90% Independent Hash Power : Wait Time 5 Blocks, or 50 Minutes

75% Independent Hash Power : Wait Time 15 Blocks, or 150 Minutes

60% Independent Hash Power : Wait Time 89 Blocks, or 890 Minutes

55% Independent Hash Power : Wait Time 340 Block, or 3,400 Minutes

Within the White Paper, it does not even speculate the continued use of Bitcoin should the Hash Power become concentrated beyond 50%, aside the off-hand comment “it would undermine the system and the validity of his own wealth.” This of course was true in 2008, before the Crypto Currency Marketplace, but today there are many other versions of “Bitcoin”, and the Bitcoin brand name has been muddled with copycats, and modern sources of information (such as the Bitcoin Twitter handle) redirecting to similarly named products of divergent objectives from those of Satoshi Nakamoto : Which we can simplify to creating a trust-less system of agreement, one in which many independent actors participate, or “peer-to-peer”. Within context, “peer-to-peer” is not meant as the exchange of coin, but the hosting of Nodes and computing of Hash. In other words, the ‘Bank’ would be powered and protected “peer-to-peer”, not merely exchanged.

Page 8 runs through a variety of scenarios, at differing levels of Hash concentration, however it speculates little beyond 10% and 30% concentration. As these are the only two value ranges presented, we can assert this to mean less than 10% concentration to be inconsequential, and over 30% presumably intolerable.

For a mere 95% rate of accuracy, with a 10% concentration of hash, this can be achieved after 2 blocks, or 20 minutes. With a 30% concentration, this requires 10 blocks, or 100 minutes. No other values are provided, but at a 45% rate of concentration, we can speculate achieving 95% accuracy would require 6 to 12 hours. Even the achieving the lowest value presented in the White Paper, of 80% accuracy, might take 3 hours alone.

In conclusion, I ask you to agree or disagree to the following statements, and present your reasoning if you so desire:

Satoshi Nakamoto warned against hash concentration over 10%. Satoshi Nakamoto would consider Bitcoin insecure. Satoshi Nakamoto knew the timing of future values of Bitcoin. Bitcoin is a protocol, or code, and change there to is ‘not Bitcoin’. Bitcoin is an independent ledger, and degradation there of is ‘not Bitcoin’. Bitcoin is a peer-to-peer dispersion of global technology and wealth. The most important aspect of Bitcoin is the micro exchange of payments. The most important aspect of Bitcoin is the advancement of technology. The most important aspect of Bitcoin is the Independence of Nodes. The most important aspect of Bitcoin is the acquisition of GigaHash.

Satoshi Nakamoto, Bitcoin, 2008

The Fugio Cent. “We Are One” showcasing the 13 Links of the Original 13 colonies. During the reconfiguration of the nations, the colonist were scared by the mass media gazettes into believe each ethnicity, language, or religion needed their own territory. These divisive labels were countered with One: ‘The Continentals’.

Keller Barnette, CPA, Tennessee