Big Questions: What did Satoshi Nakamoto think about ZK-proofs?

What was once a passing interest of Bitcoin inventor Satoshi Nakamoto, zero-knowledge-proof technology is now a major part of the crypto world.

From privacy coins to shiny iris-scanning orbs, zero-knowledge proofs have become synonymous with crypto, scalability and privacy.

In 2022, investors gave over $700 million in funding to companies pushing the envelope with zero-knowledge proofs. This year, ZK-proofs has arguably become one of the biggest blockchain trends, with several major Ethereum scaling protocols hitting mainnet.

ZK-proofs are a cryptographic protocol that allows one party to prove the truth of a statement to another party without sharing any of the statements contents.

An often-cited example is proving to a bartender that youre old enough to drink without showing your ID or even telling them your birthdate.

Well, it seems that Satoshi Nakamoto, the pseudonymous creator of Bitcoin, once found the technology pretty interesting.

A better version of Bitcoin

In August 2010, the user Red on the online forum Bitcointalk asked whether there could be a way to improve the privacy of Bitcoin transactions.

One of the things that bugs me about bitcoin is that the entire history of transactions is completely public, the forum-goer said. Another member piped in, suggesting that zero-knowledge proofs could be the solution.

This is a very interesting topic, replied Nakamoto.

If a solution was found, a much better, easier, more convenient implementation of Bitcoin would be possible.

However, Nakamoto wasnt convinced the tech could get around the double-spending problem a fundamental flaw that exists in all digital cash protocols where a bad actor could spend the same digital tokens more than once.

Its the need to check for the absence of double-spends that requires global knowledge of all transactions, said Nakamoto.

*Satoshi Nakamotos response to users suggesting ZK-proofs to raise the privacy of Bitcoin transactions. (Bitcointalk)*

Its hard to think of how to apply zero-knowledge-proofs in this case. Were trying to prove the absence of something, which seems to require knowing about all and checking that the something isnt included, he argued.

Years later, someone cracks the code

Little did Nakamoto know that the cypherpunks would eventually find a way to solve the problem.

Privacy-focused cryptocurrency Zcash was launched in October 2016 by Electric Coin a firm made up of computer scientists from the formative years of Bitcoin. Zcash was built by modifying Bitcoins original source code.

It was also the first time zero-knowledge proofs were used in a real peer-to-peer cryptocurrency, allowing users to hide or shield the crypto wallet address sending or receiving funds.

The world finally knows that famed whistleblower Edward Snowden was one of the pivotal members of the Zcash Ceremony, where six people combined portions of the projects private key to launch it in 2016. https://t.co/Lgag6bGA0n
— Cointelegraph (@Cointelegraph) April 28, 2022

The founding scientist of Zcash, Eli Ben-Sasson, would then go on to found StarkWare, a company known today for using zero-knowledge proofs to scale Ethereum through rollups.

Ben-Sasson tells Magazine that the early enthusiasm from Bitcoin core developers for ZK-proofs played a pivotal role in his eventual co-founding of StarkWare.

The Bitcoin 2013 conference in San Jose marked my Eureka moment.

Mike Hearn, a then-Bitcoin developer and one of the earliest Bitcoin adopters, went as far as to declare my talk on ZK-proofs as the most crucial of the event due to its potential impact on the future of blockchain.

It was there that I realized the transformative potential of the Validity Proofs I was developing, says Ben-Sasson.

Fast forward to today, Bitcoin itself now stands ready to enter the world of ZK-proofs.

So what would Nakamoto think?

Its evident from Satoshis past remarks that he strongly favored the use of ZK-proofs for privacy, says Ben-Sasson.

Nakamoto was a stickler for anonymity. His public interactions on Bitcointalk and his emails were all reportedly done using the IP-masking browser, Tor. Its the main reason his public IP address could never be traced back to him.

*The administrator for Bitcointalk says Nakamoto has always used The Onion Router (Tor) to access the forum. (Bitcointalk)*

The Bitcoin creator even dedicated a section to privacy in the Bitcoin white paper, suggesting users keep their public keys anonymous so that, even though the public can see transactions occurring, they dont know who is involved, like a stock exchange.

*Privacy diagram as shown in the Bitcoin white paper. (Bitcoin.org)*

Its clear that Satoshi would have been intrigued by the privacy innovations my peers and I contributed to at Zcash, says Ben-Sasson.

Unfortunately, Nakamoto never approached the subject again before he vanished from the public eye on Dec. 12, 2010 the date of his last post on Bitcointalk.

Ben-Sasson, however, believes if Nakamoto had continued to be active, he would have likely pushed to bring ZK-proofs to Bitcoin.

While they have recently found their way into Bitcoin through ZeroSync, I believe Satoshi would have been inclined to make the necessary adjustments to integrate them further, he says.

After all, for Bitcoin to realize its vision as a global currency, the imperative to scale cannot be ignored, especially considering its current state of ossification.

Big Questions: What’s with all the crypto deaths?

Coin Telegraph

Stuffed down toilets, dismembered in suitcases — crypto has been the common denominator for several gruesome murders and mysterious deaths this year.

Last month, Bulgarian plumbers were called to clear a blocked drain at an apartment block in the capital of Sofia.

The blockage turned out to be the decomposing remains of 41-year-old United States crypto mogul Christian Peev suspected to have been battered to death with a dumbbell by a friend out of jealousy.

Weeks earlier, a group of children stumbled across the body of missing cryptocurrency millionaire Fernando Prez Algaba in a river in the Buenos Aries province. Police say he was shot three times before being stuffed into a suitcase, pointing the finger at organized crime.

Missing Crypto Millionaire found dead and chopped up in suitcase.

Police have launched a murder investigation after the dismembered remains of missing millionaire Fernando Prez Algaba, 41, were discovered by a group of children in Argentina over the weekend.#Crypto pic.twitter.com/mnhIKRzAlq
— Dulz (@dulzwg) July 27, 2023

Its only the two most recent cases in a 10-month-long stretch of crypto-related deaths including a helicopter crash in France, a fatal stabbing in the U.S., and a suspected suicide in South Korea, to name a few.

So, whats connecting all of these grizzly deaths around the world?

Organized crime to blame

Ken Gamble, the co-founder and executive chairman of financial crime intelligence firm IFW Global, tells Magazine that many of these kinds of deaths are likely linked to the rise of organized crime and money laundering using crypto.

Crypto-related crime has become bigger than ever before. And money laundering using cryptocurrency is now the number one way for every organized crime group on the planet.

In May, Gambles organization took down a billion-dollar call center scam syndicate in Malaysia. His firm has investigated a number of criminal organizations across Asia and Europe over the years.

Whats happening is that these organized crime groups, particularly the Chinese, have suddenly come into masses of money. They have had more money now than theyve ever had traditionally, said Gamble.

Theyre making so much money that its become extremely dangerous now […] they have to now reach out to more groups and more people to try and move the money broadening their money laundering capabilities, he added.

Gamble argues this has inevitably led to crypto holders getting mixed up with the wrong crowds.

Retribution for deals gone south

Matt Hussey, former editorial director of Near Protocol and a founder of crypto media firm Decrypt, has also been trying to make sense of the murders.

In a May 19 blog on LinkedIn, Hussey argued that some of the killings are the result of disgruntled investors simply taking matters into their own hands and blamed the fuzzy area crypto continues to operate.

Because crypto straddles the legal and illegal worlds, it is regarded by many as a place where law enforcement does not tread. As a result, retribution and revenge are, for some, the only recourse they have, he said.

Crypto holders are easy targets

Some of the deaths could simply be because rich crypto millionaires are seen as easy targets amid a time when the cost of living continues to drive upward.

Crypto is easy to move and easy to steal. Try walking into a bank and taking some money. Yeah, good luck with that. But beat the crap out of someone and drill holes in them? Youve got a chance of getting away with it, wrote Hussey.

Gamble said there is no doubt that organizations out there are targeting and issuing hits on people who hold a lot of crypto.

Organized crime figures are going after crypto because its not money in the bank; it’s crypto that you can take off someone like cash.

You can steal their credentials and pack their laptop, and if youve got their passphrase, youve actually got their money.

Or, it has nothing to do with crypto

Of course, there is also a good chance that most of the deaths have nothing to do with crypto or nefarious people at all.

Out of the 10 reported deaths since November 2022, only the Gangnam womans murder in Seoul was seen as the direct result of her connection to crypto. None of the reports have mentioned any cryptocurrency being stolen by their suspected assailants either.

Not to mention, three of the deaths arent even being treated as potential homicide.

At the same time, one could also argue that the rise in reported deaths is simply a result of more mainstream coverage of crypto.

The number of crypto deaths reported by mainstream media went from less than one a year to at least 10 since November 2022, when the crypto industry witnessed the collapse of crypto exchange FTX.

Data compiled by public relations firm Vuelio shows that the total number of crypto stories pushed by traditional media outlets surged after the collapse of Sam Bankman-Frieds crypto exchange, sometimes even beating out the number of stories written by crypto media outlets.

It stands to reason that news desks have become more aware of cryptocurrencies over the past year. Someone dying or being murdered somewhere in the world isnt likely to make a headline, but someone dying due to their connection to a purportedly shady world of crypto? You bet itll make a headline.

Crypto’s Big Questions