Satoshi Nakamoto is undoubtedly the father of Bitcoin. His identity might remain a mystery, but it is his words, effort, and innovation that has brought the world a digital currency for the internet age. While Satoshi’s impact on the world as the founder and creator of Bitcoin is well-documented, the roots of smart contracts might actually be found elsewhere.
Before the era of Blockchain
The term “smart contract” is linked to both Bitcoin and blockchain technology, but the term – as we have now discovered – actually predates the 2000s. Nick Szabo might not be a name that’s familiar to most, by the computer scientist and cryptographer appears to be the first man to discuss the idea of smart contracts publicly. In texts that are now being shared on Twitter, a Szabo glossary from more than 20 years ago discusses many of the terms we associate with Blockchain – smart contracts included.
14 years before Bitcoin made its triumphant debut, Szabo discussed public and private keys, digital signatures, and the idea of smart contract transactions. He even used the classic “Alice and Bob” crypto placeholder within his examples. The texts were published in 1995 and have been recovered from Szabo’s early website – szabo.best.vwh.net – which played host to his writings. These notes are accessible thanks to archive.is and they certainly make for fascinating reading in 2018.
An undeniable vision
With his glossary being rediscovered, we expect Szabo’s name to be thrust back into the spotlight. What his prior work details is effectively a precursor to Bitcoin in the form of Digicash. Digicash – much like Szabo himself – is often overlooked, as it carries a far more important role in the emergence of today’s cryptocurrency market than many realize. What Szabo and Digicash outlined was a key set of promises, which included protocols that are not completely unlike what we see used today within Bitcoin and various other cryptocurrencies.
Obviously, what we are dealing with here is a smart contract idea in 1995 – the days before the digital revolution gripped the world. Szabo simply outlined principles, but at the time there was simply no way to materialize his theories and ideas. Until 2009 the idea of smart contracts would remain dormant, then Blockchain technology became a reality, with the concepts coming alive in Bitcoin, Ethereum, and other altcoins.
Szabo’s vision was to evolve and change the practices of contract law, as such simplifying e-commerce protocols between strangers on the Internet. He was passionate in his belief that smart contracts would make up an important part of future business practices – specifically impacting the financial sector, the banking industry, and government agencies.
From Szabo to Satoshi
Satoshi is lauded for the creation of Bitcoin and how it has gone on to change the world. But, Nick Szabo is a name that needs to be discussed in a similar vein. Once rumored to actually be Satoshi himself – he dispelled that myth several years ago – Szabo’s vision has clearly helped forge the way for today’s leading digital currencies.