Nick Szabo is an American citizen of Hungarian descent. To date, neither the date nor the place of his birth is known. In 1989 he earned a Bachelor’s degree in Computer Science from the University of Washington. More recently, in 2017, he received an Honorary Doctorate in Social Sciences from Universidad Francisco Marroquín.
It is unknown whether he is or has ever been married or whether he has children; his private life is, precisely, private in every sense. However, the high level of confidentiality surrounding his private life is in keeping with his great achievements. In this article, we will review a bit of Nick Szabo’s life and how his work has meant major advances in blockchain technology.
Early developments
His earliest known work dates back to 1995, and it is truly impressive. At that time, on a simple web page, he began talking about smart contracts. This first introduction was named the Smart Contracts Glossary, a work that we at Bit2Me have translated.
Then, in 1996, he went even deeper with the publication of the paper Smart Contracts: Building Blocks for Digital Markets. This work laid the initial foundations for how smart contracts would operate on digital platforms. In fact, it is one of his brilliant contributions that were ahead of their time. It would not be until 2013, following the creation of Ethereum, that smart contracts would have a concrete use.
The basic idea of smart contracts is that many kinds of contractual clauses (such as liens, bonding, delineation of property rights, etc.) can be embedded in the hardware and software we deal with, in such a way as to make breach of contract expensive (if desired, sometimes prohibitively so) for the breacher.
Nick Szabo
Smart Contracts: Building Blocks for Digital Markets – 1996
Bit Gold: Nick Szabo’s precursor to Bitcoin
In 1998, Nick Szabo presented the work that would make him widely known in the online cypherpunk communities: Bit Gold. A digital currency that never actually came into full existence. However, the initiative explained many of the necessary structures that would later give life to cryptocurrencies.
These features included:
- Use of a decentralized structure.
- A clear focus on privacy.
- Use of cryptography.
- Proof-of-work functions.
This set of implementations worked together to provide a secure, decentralized digital currency that anyone could access. With it, he conceptually anticipated the creation of Bitcoin by ten years, although the project never got off the ground.
Bitcoin is widely credited with solving the double-spending problem, something Bit Gold was never able to achieve. The Bit Gold proposal called for using a Byzantine method that required a quorum of network addresses instead of a quorum of computing power. As a result, this left the Bit Gold network vulnerable to Sybil attacks. Later, the Bitcoin project’s block confirmations provided the secure solution to double spending. In this way, ten years later, Bitcoin completed the journey begun by Nick Szabo and his Bit Gold proposal.
Nick Szabo
Nick Szabo attributes to cryptocurrencies such as Bitcoin defensive properties against governments that abuse their authority.
Concerned about online privacy
Another front that occupied much of Nick Szabo’s early work was privacy in the digital age. In 1997, he published a paper titled Formalizing and Securing Relationships on Public Networks. Szabo described the importance of the digital age for humanity and the radical change in the relationships of trust that could be hosted within it. He argued that the computing era could completely transform working and trust relationships. He added that cryptography and smart contracts would be the primary tools of those changes. Changes that would improve the privacy of the parties involved. His vision in this work, aimed at the business world, highlighted the ability to transform anything that “could be adapted to computational transactions”.
Along these lines, in 1998 he presented another paper called Coalition Design for Secure Protocols. With this work, N. Szabo clearly addressed the design of highly secure digital communication protocols. He drew inspiration for this work from an earlier paper called Quorum-based secure multi-party computation, written by Donald Beaver and Avishai Wool that same year. A paper describing the construction of efficient protocols for multi-party computations that are theoretically secure against passive attacks.
Later, in 1999, he developed his paper The God Protocols. In this work, he brought together concepts from earlier papers such as Contracts with Bearer and Negative Reputations. All of this led him to present a paper discussing unlinkable transactions, privacy and blind signatures.
New developments for the new millennium
With the arrival of the new millennium, N. Szabo continued his work. In 2001, he published Trusted Third Parties Are Security Holes . This work, focused on demonstrating the various security flaws inherent in the “Trusted Third Parties” model, turned N. Szabo into a crusader for security, and the following quote can be drawn from it:
The best trusted third party of all is one that does not exist.
Nick Szabo
Trusted Third Parties Are Security Holes
In 2002, Nick Szabo wrote Shelling Out: The Origins of Money. In this work, he analyzed in depth the origins of money and how it had evolved up to the present day. A retrospective look with a clear message: the need to evolve the concept and the way we view money today.
In 2004, Nick Szabo introduced to the world the Proof of Work mechanism, which effectively uses computing power to generate a store of value. Obviously, this is very close to one of the core concepts of Bitcoin, which launched five years later. This particular concept was also supported by the distributed nature of the transaction. Nick Szabo linked the idea of the difficulty of mining gold with that of his digital currency, Bit Gold. The latter referred to an earlier work on intrapolynomial cryptography.
The rumors behind the creation of Bitcoin
With the release of Bitcoin, much of Nick Szabo’s earlier work became more and more prominent. This led many people to ask: Could Nick Szabo be Satoshi Nakamoto? Hence, the most common association for the person behind the anonymous figure of Satoshi Nakamoto is Nick Szabo. Something he himself has always denied. However, this takes nothing away from all the achievements he has earned over his long career as a researcher and developer. Ahead of his time, Nick Szabo laid the foundations of cryptocurrencies and smart contracts. The key lies in his vision of distribution, cryptography and not trusting third parties. With it, he gave users back control over their privacy, information and money.
Later developments
Following the development of cryptocurrencies such as Bitcoin, Nick Szabo devoted himself to developing new features for cryptocurrencies. His interest focused on solutions to increase Bitcoin’s scalability, security and privacy. His contributions have been geared toward developing the sidechains that make possible the development of Lightning Network and similar solutions. He has also given his view on scaling cryptocurrencies such as Bitcoin by increasing their block size. On this option, his opinion is:
Nick Szabo’s official Twitter, August 16, 2015
“A rapid increase in block size presents an enormous security risk: it is reckless to do so on a system worth 4 billion dollars.”
In addition to his public contributions, Nick Szabo actively keeps his blog up to date with his work and updates. All without revealing a shred of his personal life. His private life is something he keeps only for himself and those who are part of it.
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