“X” posted the idea of Bitcoin in 2002

Satoshi began Bitcoin development in 2007 and launched the first crypto currency at the start of 2009. But a mystery person called “X” posted the idea much earlier:

“Virtual peer to peer banking:

I have this idea of a future with virtual peer to peer banking. A kind of decentralized and secured system. Gone would be the times that governments and banks can track and interfere with our money transfers. Or even interfere with the total amount of money on earth. My envisioned system would have a fixed total amount of money. But each money unit (say virtual coin) is divisible indefinitely. So a kind of deflation would replace inflation. The total value of the money in the world would be a fixed number. It poses no problem for liquidity, because the currency can be divided anytime. However maybe people will not spend their money much, because it’s value will increase often. Other problems raise in the areas of security, malicious use, and how to come towards such system from current systems? These are just ideas, I like to hear comments or about net resources on this subject.” (9 Dec 2002)

The post was made in an odd place—the Usenet uk.finance group as well as the p2p group—just before Christmas 2002, a full six years before Bitcoin was launched. X would have been disappointed by the response. The small number of replies were overwhelmingly negative. One poster pointed out that currencies had to be backed with “some metal”, another that countries would never reach agreement on such a system. X had to clarify that he did not intend to ask permission:

“Maybe the community can bypass the old powers (countries and governments). It wouldn’t be a revolution, but rather evolution. Slowly a new p2p system might take over. The current monetary systems were mainly backed with gold (not anymore now, to my knowledge). Maybe the underlying values of a virtual peer to peer system could be other scarce resources, relatively easy to exchange via internet. Examples are: computer processing power, bandwidth and data storage. These resources would make a limited peer to peer money exchange system possible. Limited to the total real life value of all these resources. However from that point other resources could back up the virtual currency…” (10 Dec 2002)

 In this second post, X is working towards the proof of work. He envisages a currency that could be backed by “computer processing power”. It is not yet a fully worked out idea, but it is heading in the right direction.

•  It is peer-to-peer, eliminating the need for a central third party.
• It would gradually replace government-sanctioned currencies, and there would be no future need for banks.
• There is a fixed total amount of virtual coins.
• Each coin is infinitely divisible, providing the necessary liquidity.
• Deflation would replace inflation and the value of the virtual coins would appreciate.

These were not the only posts X made at this time: he was full of ideas. The most significant was for an untraceable encrypted method of connecting to the internet that prefigured Tor. The Tor browser was actually being tested when X posted, but the test was confined to a small private group. Most people, including X, would never have heard of Tor at that time.  X had the idea independently.

X was a libertarian and all of his ideas revolved around the use of encryption and p2p technologies to subvert authority. For example, he considered p2p radio stations to get round copyright and censorship. He even thought about a new internet based on direct encrypted wi-fi connections between individuals.

So who was X? The Satoshi Enigma shows he is Le Roux.