Nick Szabo (1964–)

In 1994, Nick Szabo coined the term “smart contracts.” In 1998 he conceived Bit Gold, publishing the full design on his Unenumerated blog on December 29, 2005. On April 10, 2008, in a comment on his own blog, Szabo wrote:

…it would greatly benefit from a demonstration, an experimental market (with e.g. a trusted third party substituted for the complex security that would be needed for a real system). Anybody want to help me code one up?

No one answered it publicly. Four months later, on August 20, 2008, Satoshi Nakamoto sent his first known email about what would become Bitcoin, asking Adam Back to check a Hashcash citation and saying he was nearly finished with a C++ implementation. Nothing in the record shows that he knew of Szabo’s request, or of Bit Gold. Bitcoin v0.1 shipped on January 8, 2009. In 2011 Wired quoted Szabo calling Bitcoin “a great contribution to the world,” and in May Szabo described the new system on Unenumerated as an improvement on his own design:

Nakamoto improved a significant security shortcoming that my design had, namely by requiring a proof-of-work to be a node in the Byzantine-resilient peer-to-peer system to lessen the threat of an untrustworthy party controlling the majority of nodes and thus corrupting a number of important security features.

Szabo is a computer scientist, legal scholar, and cryptographer. His background remains largely private.

The deep conceptual similarities between Bit Gold and Bitcoin, the April 2008 “code one up” request relative to Satoshi’s August 2008 first email, and Szabo’s prolific Unenumerated writing during 2007–2008 have made him a recurring Satoshi-identity candidate — examined in a dedicated identity-hypothesis entry with the Skye Grey / TechCrunch 2013 stylometric report, the Aston University 2014 study, and the Popper / NYT 2015 Digital Gold excerpt as the principal supporting evidence. A 2026 reanalysis of van Dorst’s stylometric corpus extends the same evidence, ranking Szabo at the 4.67th percentile of 12,739 authors — the closest match of any named candidate. Szabo’s consistent denials, e.g., “I’m afraid you got it wrong” to Dominic Frisby (2014), stand as the principal counter-evidence.

Smart Contracts

The 1994 essay that named them opens with a definition: “A smart contract is a computerized transaction protocol that executes the terms of a contract.” Szabo counted digital cash protocols as “fine examples of smart contracts” and carried the idea as far as “smart property,” a car that will not start for anyone but its rightful owner, or that hands its keys back to the bank when the loan goes unpaid. The term describes self-executing agreements with the terms directly written into code. The idea waited two decades for a chain that could actually run it: Ethereum.

Bit Gold

Bit Gold was a design for a decentralized digital currency based on proof-of-work, aimed at creating digital scarcity without a trusted third party. Szabo later reflected: “Nearly everybody who heard the general idea thought it was a very bad idea.”

In the 2005 post, each string of proof-of-work is securely timestamped, chained so that it sets the next challenge, and owned by its place in a distributed title registry on which “no single server is substantially relied on.” Szabo never built it; in April 2008 he was still asking for someone to code a demonstration. The claim that Bitcoin improved on Bit Gold is Szabo’s own, made in May 2011: Nakamoto, he wrote, fixed a shortcoming of his design by making proof-of-work the price of being a node, so that no single party could take over the majority of nodes. Satoshi’s whitepaper credits its proof-of-work to Adam Back’s Hashcash and does not mention Bit Gold.

The comments under the Bit Gold post carry their own dates. The first three are from December 29 and 30, 2005: a note from the tax blogger Kay Bell, a reply signed Nick Szabo (the only comment on the post under his name), and her thanks. The next did not come until July 2008. On January 6, 2009, three days after the genesis block, Daniel A. Nagy asked “What makes it desirable?” and wrote, “I can’t see how bitgold bootstraps into becoming money.” On September 6, 2010, a commenter wrote: “if you are still interested in proof-of-work systems and their applicability as a digital currency, you might want to check out” bitcoin.org. “It’s a decentralized, P2P, cryptocurrency based on a proof of work algorithm.”

The origins of money

In “Shelling Out: The Origins of Money” (2002), Szabo traced money back to collectibles. Wampum, the shell beads the colonists of New England took up from their neighbors, was legal tender there from 1637 to 1661. It lost that standing once the British shipped in more coin and Europeans turned their mass manufacture on it; Western harvesting and manufacture inflated its value “one hundred fold,” and it “gradually went the route that gold and silver jewelry had gone in the West after the invention of coinage – from well-crafted money to decoration.” What made a collectible work as money, he argued, was that it was “unforgeably costly,” and that “costliness must have been verifiable by the recipient of the transfer.” A picture captioned “When costliness becomes forgeable” shows “Glass trade beads, manufactured in Venice in the 16th or 17th century, excavated from Mali, Africa.”

The colonial records behind those dates survive. On November 2, 1637, the Massachusetts Bay General Court, sitting at Newtowne, ordered “that wampampege should passe at 6 a penny for any sume vnder 12d.” On May 22, 1661, citing “much inconvenience,” the court repealed “the lawe for payment of forty shillings in wampampeage in sattisfaction of debts & payments.” Next door, the Director and Council of New Netherland complained on April 18, 1641 that “payment is made in nothing but rough, unpolished stuff which is brought hither from other places,” and on May 30, 1650 they listed loose wampum “without holes and half finished; also some of Stone, Bone, Glass, Muscle-shells, Horn, yea even of Wood and Broken beads,” for which traders would not hand over even “a small loaf of white Bread.”

The essay also counted the necklaces and armshells of the Kula ring, the ceremonial exchange of the islands off eastern New Guinea, as “high power” money. Bronislaw Malinowski, who lived about two years in the Trobriand Islands over three expeditions to New Guinea and wrote the record of the Kula, wrote the opposite in 1922: the valuables “are neither used nor regarded as money or currency,” and “Vaygu’a is never used as medium of exchange or as measure of value.”

Relationship to Bitcoin

Hal Finney, in his November 7, 2008 reply to Satoshi’s whitepaper announcement on the cryptography mailing list, noted that Bitcoin “could be an implementation” of Szabo’s Bit Gold concept — the first time on the record that anyone set Bit Gold beside Bitcoin, and Finney’s reading rather than Satoshi’s. Satoshi answered that post on November 9 without mentioning Bit Gold, so from then on the name and the link had been in front of him; the whitepaper’s reference list cites b-money but not Bit Gold. Satoshi first named Bit Gold himself on July 20, 2010, listing it beside b-money while Bitcoin’s Wikipedia article was up for deletion.

Asked by The Sunday Times in March 2014 why he was sure Szabo was not Satoshi, Wei Dai said that “in Satoshi’s early emails to me he was apparently unaware of Nick Szabo’s ideas,” and the reporter, after Dai forwarded the emails, wrote that Satoshi “had been ignorant of Szabo’s bit-gold plan until Wei mentioned it.” The three emails Dai has published do not contain that mention. The order in which each precursor reached Satoshi is set out in what Satoshi knew before the code was done.