Nick Szabo, the Man Behind Smart Contracts and more
Whether you’re a full-fledged crypto expert or just starting out you need to know the name of Nick Szabo. If you haven’t, don’t worry, today is your lucky day. You will know all about Nick Szabo after reading this blog.
He may not be as famous as Vitalik Buterin or Satoshi Nakamoto. But as far as the cryptoverse is concerned, he is close to being the mayor of the city. Let’s take a look why and start by a fact that might amaze you. Are you familiar with smart contracts? If not, read this post to find out all about them. He invented them. That’s how much influence he has in the cryptoverse.
For that reason you want to know more about this man Nick Szabo. Everything you know from above is just the tip of the iceberg. Hold on for a minute, and you’ll be amazed. We promise!
Who is Nick Szabo?
Not much is known about this man. The man certainly enjoys his privacy. Other than tracing his roots in Hungary, the rest is blank. He keeps a blog on whose biography section is a collection of reviews of his works.
Education and interests
Nick Szabo is from the United States. He has a degree in Computer Science from the University of Washington. He also has a doctorate in jurisprudence from the George Washington University of Law. For his continued work in academia, Universidad Francisco Marroquín awarded him an honorary professorship.
Nick Szabo research
His passion for research has led him to publish a great deal of literature. His papers, essays and tutorials on various topics are brilliant, the most notable of his research are papers on BitGold and smart contract. We will explore the two later.
He tackles all his topics with authority. But his work on cryptography, blockchain and Bitcoin is exciting. He delves deeper into the functionality of the crypto world.
Nick Szabo travels all around the world giving lectures on cryptocurrency.
What is giving him his authority in the crypto space?
Are you wondering what gives the man so much influence? How about, we’ll tell you that he laid the foundation on which Bitcoin was built. Bitcoin was conceived in 2007 and released to the public in 2009. Bitcoin used the idea of smart contracts. Nick Szabo visualized the idea more than a decade before Bitcoin.
Moreover, Nick’s writings in his 2003 paper on Bit Gold give him an advantage. Some people believe he is the mysterious creator of Bitcoin: Satoshi Nakamoto.
Is Nick Szabo Satoshi Nakamoto too?
The mystery of who Satoshi Nakamoto is never ending. The endless debate seems to be with us for a while yet. Nick Szabo is associated with the real Satoshi Nakamoto. He, however, denies this.
Why is it suspected that Nick Szabo is Satoshi Nakamoto? Research by a team of researchers at Aston University in Birmingham, England, has contributed to this. The university’s centre for forensic linguistics analysed Nick’s literature. They found that his writing style was similar to this in the Bitcoin whitepaper (you can read ours here).
So, does that make him Nakamoto? We don’t know for sure. What we do know, however, is that he is a genius. Moreover, we know that he may be the real Nakamoto. Or maybe he was part of a Bitcoin creation team. The mystery, however, is a story for another day.
Nick Szabo on Trusted Parties
In his paper “Trusted Third Parties Are Security Holes“, he gives his opinion. For him, trusted parties betray what they are meant to solve. Trusted parties are designed to enhance commercial security. Commercial security includes protection against data breach, privacy, integrity and property. In Nick’s argument, he is against trusted parties. In addition, he feels that trusted parties are too expensive and too risky.
Here are some of his reasons. They limit the imagination. Designing a third party that relies on protocols is easy. So it limits the imagination to come up with those that don’t. Trusted parties have hidden agendas and interests. In addition, transaction costs are too high.
“A trusted third party is one that does not exist” – Nick Szabo.
So he is a great anti-trusted third party crusader.
The crypto journey of Nick Szabo
Before the first cryptocurrency was invented, Nick was into cryptography. He has a lot of work to prove this. Moreover, he created smart contracts in 1996. So when Bitcoin was released in 2009, he was ready for it. Along with some notable names: Hal Finney and Craig Wright. He was one of the first to get behind the Bitcoin blockchain. They took up the idea almost immediately.
Other cryptocurrencies such as Ethereum, EOS and many others followed Bitcoin. With these entries, his influence is only growing. His idea for smart contracts continues to grow.
So far, we have established that Nick is a force in crypto. Moreover, it is clear that the man is a genius. However, there is a lot more to this man. You don’t want to leave until you understand the rest of the story.
Why is Nick Szabo so private?
The subject of Nick being such a private man is unknown. There is no unequivocal evidence as to why he keeps so much to himself. However, we can only speculate. Shall we?
Well, the most reasonable explanation is: Nick likes his works to speak for him. As mentioned earlier, his biography section in his blog includes reviews of his work. Besides, the blog is all about literature he has researched, this is a man who is prouder of his work than of himself.
Who is Nick Szabo: projects and ideas
Nick is a quiet cryptocurrency master. Although he pulls the strings behind the scenes, Nick has his contributions in blockchain.
One could easily say that the best thing that could happen to him was designing a mechanism for a digital currency. The mechanism was the inspiration for the Bitcoin blockchain.
The connection of the BitGold mechanism and Bitcoin made Nick ‘Satoshi Nakamoto’. People have also gone on to call him ‘Nickimoto’. For efforts and first relationships with the first blockchain.
Nick is one of the developers and promoter of blockchain. Nick has also come up with ideas that are part of the blockchain industry today.
The most important of his contributions is smart contract idealization and BitGold design. Including them are thoughts he has shared to move blockchain forward.
Smart contract conception
A contract is a legal agreement between parties that outlines their responsibilities to each other. Nick’s idea was to make this digital.
If you happen to read about crypto and blockchain, you will come across smart contracts. Their potential is unimaginable. Smart contracts change the way an industry works.
Heard of ICOs and their tokens? They are the basis of smart contract invention.
Nick Szabo invented smart contracts in 1996. The best current implementations of the smart contract are Ethereum and EOS. Keeping promises with respect to other promises is the basis of smart contracts. These digital contracts are implemented within computer networks.
The proponents of this concept admire the feature that it abolishes third parties.
Nick’s smart contract coinage refers to traditional paper contracts as law code. The coinage goes further to explain the benefits of smart contract as a dry code. Also, accurate and secure within a blockchain. The different interpretation of Law code discredits it. In addition, it is difficult to enforce a paper contract.
In 1996, Nick explained the benefits in a paper. In the paper, he outlines other earlier forms that we call smart contracts. They include POS systems and electronic data interchange used by large corporations or SWIFT used by banks.
In the 1996 paper, the smart contract design must include the contractual clauses. The clauses are embedded in the hardware and software. Making breach of contract expensive for the breaker.
The fundamental objectives of the smart contract concept are verifiability, observability, privacy and enforceability. Thus, with the smart contract, you can expect an efficient system.
Forerunner of Bitcoin: BitGold
BitGold stands for two important features of online transactions. While Bit stands for sending and receiving information, Gold stands for the system that does not use third parties.
Nick developed the BitGold mechanism in 1998. As a cryptographer, Nick proposed a digital money system. In attempts to change the gold market system. Overly exaggerated, he wanted to get rid of third parties that made the gold system inefficient. So he proposed a secure cryptographic process.
Nick’s paper outlining the BitGold was not implemented. Even with that, the paper is a direct precursor to the Bitcoin blockchain. As a result, you can enjoy the benefits of blockchain with Nick’s idea.
“Trustworthy third parties are security holes” – Nick Szabo
Nick’s quote discredits third parties. Although he lists them as trusted, Nick desires a protocol in which third-party influence is minimal. To him, the system should be transferred, stored and tried.
Trusted third parties are vulnerable to attack. In particular, the mere fact of centralization leads to third-party security breaches that are very costly. Worse, you as a third party will have to account for the additional costs. Do you know who will bear the cost? The end users of the system.
Here are the steps for proposing Nick’s Bit Gold:
- Create a public string known as a challenge string
- Generation of a proof-of-work string from the challenge string by one of the computers on the network
- Time-stamping the proof-of-work string in a distributed fashion
- Addition of the challenge string and time-stamped proof-of-work string to a distributed title register
- The next challenge string is created based on the previous last challenge bits
- The unreformable chain of the title is checked for ownership verification
- Verification of challenge bits, proof-of-work string and the timestamp to establish the value of a string.
The steps work in a distributed system with several servers providing the same services, such as time stamping and title registration operations. You can trust the system when the security of time stamping and title registration is guaranteed
The blockchains you see today all started as a result of this concept and other technologies.
Thanks to the BitGold concept, now you know who Nick Szabo is in the blockchain start-up.
Nick’s thoughts on currency
Nick has a good understanding of history, money and cryptocurrency. All this makes his writings more informed, with a legal background. You cannot miss the invaluable resource of his writings.
He has several types of written literature on what he likes best – blockchain and cryptocurrency. They span from 1993 to the present. Some of the literature may seem irrelevant. But they will still be valuable in thinking about how blockchain works.
In addition to writing valuable literature on cryptography, money and property, Nick indulges in his opinions on cryptocurrency and blockchain.
In a recent tweet, Nick shares the important areas of improvement in cryptocurrency. He says that in the coming years, secure storage than before and decentralized exchanges are important. With more focus on the consumer, he emphasizes the importance of user-friendly systems.
Regarding security, Nick criticized EOS for its centralization issues. He stated that the aspect of EOS centralization makes the project vulnerable to breaches and attacks. Even worse for account holders, EOS can seize and suspend accounts.
Another good analysis by Nick is that of the history of money and its evolution. The insight from this analysis has provided useful information in cryptocurrency. In the analysis, he says that we exist in a state with multiple currencies derived from the exchange system. But even with technology, you will still see numerous currencies.
Less can be said about Nick’s profile. But his body of work speaks volumes that he is in blockchain, law, technology, history, cryptography and commerce.
Despite the confusion in his role as Satoshi Nakamoto, he makes valuable contributions. And for that matter he is a respectable and influential person in the world of cryptography.
If you are a crypto enthusiast like us, take the time to know who Nick Szabo is.