Nick Szabo — A Man At The Top Of The Crypto World

The name of Nick Szabo is associated with the most mysterious person in the Crypto World — the father of Bitcoin, Satoshi Nakamoto. Some think that this is one person who seeks control over the world economy, while remaining in the shadows. Sabo’s personality is no less mysterious than Nakamoto himself — very little is known about his life. His Twitter account hasn’t been live since 2021. Who is he, this American developer, the founder of the concept of smart contracts?

Brief biography of Nick Szabo

Nick Szabo was born in 1964 in the United States in a family of Hungarian immigrants. In 1989, he successfully graduated from the University of Washington with a degree in Computer Science, and later added Jurisprudence to it. Nick got into the scientific environment early. Almost immediately he became an expert not only in the field of jurisprudence and information technology, but also in history, political science, anthropology and finance. All that made him a unique professional.

Nick keeps his personal life in confidence — he hides from the world. However, from time to time Szabo gives lectures, advises large IT projects, shares online (until March 2021 on Twitter) his thoughts on innovations in the world of finance and technology.

Since 1998, Sabo has begun working on the Bit Gold project. The new concept combined his knowledge of law, finance and technology. Szabo pursued the goal of creating a new financial model — digital money. According to him, the value of money depends on trust in third parties (banks), which often creates conditions for inflation and hyperinflation. Therefore, it is worth creating a new financial model that will exclude third parties from the relationship between the seller and the buyer. Szabo was sure, that the ideal currency should meet the following factors:

• it must be secure in order to prevent loss or theft as much as possible;
• it must be unique (like modern NFTs);
• it should be guided by a simple measurement of value.

Szabo wanted to find an equivalent to natural materials such as gold and precious metals. And just like that the idea of creating a decentralized economy and a new digital currency was born. In 2005, Szabo published his article “Bit Gold”, which is still considered by many to be the beginning of the Bitcoin history.

The concept of smart contracts

We cannot call Nick Szabo the founder of Bitcoin, because Satoshi Nakamoto was the one who formulated and finalized it after all. However, we have every right to recognize him as the creator of smart contracts. In 1996, Szabo published an article about Smart Contracts. Based on his knowledge of anthropology and studies of primitive societies, he made a conclusion that the basis of the economy and the proto-economy of the free market has always been a contract. Therefore, his concept is not so much an innovation as a continuation of the natural course of things in the new digital era.

A smart contract makes any transaction transparent for both parties. Participants in the transaction can freely monitor the fulfillment of the terms of the agreement without involving anyone else. This technology helped to decrease the cost of implementing the contract: it is able to automatically fulfill the conditions on its own. If an error is made, the operation will fail. Szabo compares this principle to the vending machine. If you place a coin of the desired size and weight in it, then the machine will automatically give you a can of soda. If the coin does not meet the criteria for weight and size (the terms of the contract), then the soda will not be provided, and the coin will be returned back.

In his article, Nick Szabo identified 4 main tasks performed by a smart contract: controllability; confirmation; privacy; performance. To find out more about smart contracts you can read our article.

Nick Szabo has made a huge contribution to the development of the Crypto World. Thanks to him, the world economy began to transform, due to the rules of the new digital era. All crypto-researchers, entrepreneurs, investors and analysts now refer to the works of Nick Szabo in their studies. Have you heard about Nick Szabo before? Let us know in the comments!

If you want to learn more interesting facts about crypto then check out our blog! You might like our articles “What Is A Smart Contract” and “The Layers Of Blockchain”.

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