Korva is a scroll of the internet’s best ideas.
Bitcoin borrowed an anti-spam idea
The digital cash problem
The problem was digital cash that does not require a trusted third party to mediate transactions. The cypherpunk community, a libertarian group of privacy-focused computer nerds, tried for many years to solve it.
Satoshi's solution
Satoshi Nakamoto solved it. In the paper, the pieces come together in a way that makes the whole story unbelievable and fascinating, with Back's email-spam idea as one of the parts.
What Bitcoin is today
Today it works as an ideological vehicle for people with strong views on the government's role in money, who can invest in Bitcoin and feel really good about it. It is also a speculative asset, bought because people think it will go up. PWL, the firm that manages money for a lot of people, has decided not to allocate to it for its clients.
How does an anti-spam idea power Bitcoin?
Adam Back proposed Hashcash in 1997 as a way to make mass email costly: a sender had to find a number that, hashed with the message, produced a result with a set number of leading zeros. Finding it takes many tries, while checking it takes a single step. Bitcoin uses the same asymmetry in mining, requiring miners to find a block hash below a target, and the Bitcoin paper cites Hashcash. The difficulty of that target adjusts every 2,016 blocks.
What did earlier digital cash attempts get wrong?
David Chaum's DigiCash used cryptography to keep payments private, but it depended on a company to issue and verify coins. DigiCash filed for bankruptcy in 1998. In the same year Wei Dai proposed b-money and Nick Szabo described bit gold, both of which used computational puzzles but were never launched as working systems.
Why was a trusted third party the sticking point?
A digital file can be copied, so a digital coin could be spent twice unless someone keeps the record of who owns what. Banks and payment processors do that job. The Bitcoin paper, released on October 31, 2008, replaced them with a public chain of timestamped blocks that the network agrees on through proof of work.
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