Satoshi Is Actually Building an Ethereum Company (and Other Developments)

I’m a big believer in transparency when it comes to systems that greatly affect lots of people (or have the potential to). Vitalik has done a great job with this, and I highly respect him for it.

Transparency is necessary so that people can better understand how a system operates. It’s also necessary in order for developers and investors to properly allocate time and capital towards the correct ecosystem. A large number of Ethereum developers own Ether, a token that has all of the functionality of Bitcoin and will become the staking asset for a platform that will fully realize Nick Szabo’s smart contract vision, and it would benefit Ethereum’s development if the value of this asset increased.

There are significant developments that are unknown or understated to blockchain observers and participants. I will touch on these points:

• Satoshi Nakamoto is Nick Szabo, and he’s building a company on Ethereum
• Coinbase, one of the more ambitious Bitcoin companies and the highest valued one at half a billion dollars, is moving into Ethereum
• Wanxiang Group, China’s largest automotive components company whose founder is one of the richest men in China, has allocated a further 50 million dollars to “blockchain” investments (read Ethereum because Vitalik is a general partner) after purchasing half a million dollars worth of Ether last year

Satoshi Nakamoto is Nick Szabo (explanation). He’s working on an Ethereum company that’s going to bring real world financial assets to the blockchain.

What is truly fascinating is that Bitcoin was also a dogfooding experiment in digital identity. “Satoshi Nakamoto” has turned out to be the first well-known “nym”, a classification of an untraceable identity fragment that Nick came up with in the 90s. I believe his reluctance to bring attention to his true name was an experiment in digital identity that has turned out to be extremely successful in proving the feasibility of operating under a nym. Even though the Eye of Sauron (i.e. mainstream press) has been looking for Satoshi Nakamoto for a long time, very few people know his true name.

I noticed Nick taking extensive notes at a recent Ethereum meetup and briefly asked him about Ethereum and the company that he’s building. Nick asserts that Ethereum is the most advanced blockchain technology and is working with Donald McIntyre on a company called Global Financial Access which seems to be somewhat similar to what string.technology (a company that Fenbushi/Vitalik has invested in) is attempting.

No one is talking about this because apparently, almost no one knows Satoshi’s true name despite Vitalik and others repeatedly claiming it’s Nick.

Some of those who are close to the ground seem to know who Nick is, and I get the impression that they don’t want to rock the boat by publicizing this information. I think it’s important, though. People who are investing their money and time into furthering the goals of the public blockchain should know where to find its history and body of prior thinking.

Ethereum is really Nick’s idea. He’s been writing about the concept of smart contracts since the 90s.

Formalizing and Securing Relationships on Public Networks reads like the playbook that the Ethereum community has been following since its inception. The document explains a shared virtual computer that can run digital cash, reputation systems, content rights management and track supply chains among other things. This is the grandfather of the Ethereum white paper.

“In principle, since any computable problem can be solved on this virtual computer (they are “Turing complete”), any computable economic mechanism can be implemented without a trusted intermediary.”

It’s definitely a good idea to get acquainted with Nick’s blog because many of the things that he has written about are likely to be attempted. Here he writes about “proplets”, internet-of-things devices that control access to property, which is what Slock.it is trying to do.

I’ve only just recently followed the rabbit hole of Nick’s doings, and it’s been magical. I’ve been left in awe at the depth of his ideas and foresight.

“The key is building in, at the most basic level of technology, code (in both the legal and software sense) that allows a widely distributed people, each person having his own unique information, circumstances, and preferences, to cooperate within well known, mutually agreeable, and strongly enforced constraints.”

Coinbase is working on integrating Ethereum into their exchange.

I’ve spoken with Coinbase’s leadership and a number of Coinbase employees who have attended the Ethereum meetups in SF, and it’s clear to me that they are adding Ethereum to their platform. As their engineers become more acquainted with Ethereum’s thought leadership, I believe Coinbase will expand its operations beyond their exchange.

This is noteworthy. Considering the number of large VC stakeholders in Coinbase, I don’t think it will be long before substantial American institutional money begins pouring into the Ethereum sector as Coinbase’s leadership explains to the world’s biggest VC firms why they are moving into Ethereum.

Wanxiang’s Ether purchase and opening of a 50 million dollar Ethereum fund represents the first multi-billion dollar company to have a material stake in Ethereum’s success.

I’m not going to speculate on what Wanxiang’s plans are because I have very little insight here, but large investments in Ethereum from a major Chinese conglomerate will establish legitimacy and generate discussion within many Chinese firms that are interested in exploring blockchain technology. It will be interesting to see which Chinese companies attend DevCon2 in Shanghai.

I’m surprised that there aren’t more American companies jumping into Ethereum with the same level of aggression considering the number of times that I’ve heard companies talk about the “importance of the blockchain”.

Regardless, it’s refreshing that there is another blockchain community that is not tainted with Bitcoin’s degree of drama. The toxicity within the Bitcoin community extends into the core team and can be seen on full display with the the poor handling of the latest “outing” of Satoshi and the recent Mike Hearn announcement. It’s about time that Nick is given credit for the creation of Bitcoin and Ethereum and takes the hot air out of the system.

It’s easy to be optimistic with the direction that Ethereum is headed even without these observations. Ethereum’s ecosystem will continue to attract interest from developers and investors around the world and fully realize Nick Szabo’s smart contract vision. There are now 267 meetup groups with 45,308 members globally.

Progress with the Serenity scaling milestone should accelerate with the recent influx of greater funds and interest. It looks increasingly evident that Ethereum stands the best chance at getting mainstream adoption of the public blockchain.