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Proof-of-Work

657.

The Developers’ third point concerned the change (and improvement) in the proof-of-work system between what was proposed in section 4 of the Bitcoin White Paper and what Satoshi implemented in the original Bitcoin Source Code. This point is closely related to challenges made by COPA to parts of Dr Wright’s evidence about the proof-of-work mechanism that he (as Satoshi) designed in the Bitcoin system and his interactions with Wei Dai and Dr Adam Back. It also relates to the counter-challenge by Dr Wright to Dr Back’s evidence.

658.

In Wright1, Dr Wright described those interactions in these paragraphs:

‘91. In August 2008 1 reached out to a small number of individuals, including Wei Dai and Adam Back, by sharing the link to the White Paper via email as Satoshi Nakamoto, most likely using my satoshi@anonymousspeech.com address. I sent them a link to upload.ae where I had uploaded a single draft of the White Paper. …

92.

Wei Dai was a distinguished academic who had previously proposed a digital currency concept called B-Money, which profoundly impacted my thinking. His work was highly influential and laid the groundwork for some ideas incorporated into the Bitcoin project. Notably, Wei Dai's contributions were the first that I acknowledged in the White Paper. After I provided him with a copy of the White Paper, he played a significant role in the development process, guiding me to various signature algorithm libraries, including his secure hash algorithm {SHA-256), which I successfully incorporated into the Bitcoin code base.

93.

Adam Back was known for his work on Hashcash (a proof-of-work algorithm different to that in bitcoin which he had proposed to combat email spam). He showed little interest in Bitcoin. His attitude was quite dismissive; he stated that digital cash had been attempted before and was bound to fail. At the time, I did not understand he was pointing at issues associated with creating a cryptocurrency and not digital cash.

94.

Contrary to popular belief, Bitcoin's proof-of-work system does not utilise Adam Back's Hashcash system. Instead, it more closely aligns with the methodologies described in Aura's paper. Due to Aura's lack of response, I felt it necessary to reference Adam Back in the Bitcoin White Paper due to the thematic parallels in our work and Back's notable presence in the field.’

659.

For the reasons which follow, this was all made up by Dr Wright, even though some of the technical details may have had some substance. These paragraphs appear to represent his deduction as to what happened, based on his study of the Bitcoin White Paper, the references in it and his other researches (e.g. into the earlier paper by Tuomas Aura et al). His deduction is wrong in a number of important respects. Satoshi would not have got these points wrong.

660.

Understandably, COPA gathered various pieces of evidence to dispute these paragraphs in Wright1. I deal with several topics in turn.

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