Original Blockchain & Bitcoin: Different Paths to Decentralization

Blockchain co-inventor, Scott Stornetta discusses why Satoshi’s Bitcoin (BTC) design diverted from his implementation of blockchain.

In our previous articles, we described Stornetta’s views on Satoshi’s background and the philosophical evidence of why Stornetta could have been Satoshi. Now, we focus on an important design difference between the original blockchain that Stornetta created with longtime partner Stuart Haber and Satoshi’s Bitcoin.

Block rotation vs. validation rotation

In the original blockchain, there was no rotation of the block producers. Instead, block validation was decentralized. Also, since there was no built-in cryptocurrency, the reward was paid out in cash. Stornetta believes that Satoshi decided to go with rotation of the block producers to make the network censorship-resistant:

“And this is as much for reasons of anti-censoring provisions as it is that he chose to rotate the creation of the next block amongst the community. Whereas for us, it was rotating the validation of the blocks amongst the community.”

However, Stornetta, contends that it is the decentralization of the validation that is essential to the cryptographic security, not the decentralization of the block producers:

“What is essential to ensure the cryptographic integrity of the system, and the decentralization of validation, is in fact, truly central. It is the unavoidable aspect of making a credible record. But the rotation of the successive block creation, its purpose is not achieving the purpose of increasing the cryptographic strength of the system.”

According to Stornetta, there is no danger in having the same party create consecutive blocks as long as the community has a clear view of what is happening and the algorithms control the validation process.

Why Satoshi cited Stornetta 3 times

Bitcoin whitepaper cites three works Stornetta co-authored. Considering that Stornetta’s foundational paper “How to time-stamp a digital document” was published in 1991, it pondered a question — didn’t Satoshi have something more recent to cite? Stornetta asserts that Satoshi did not have much else to cite since Bitcoin builds directly upon his work:

“Let's think a little bit about it, here's a quote of Satoshi’s that I think is interesting. He says ‘Bitcoin is just a decentralized timestamped server for money.’ And so let's break that down. It's a timestamp server. Then he says it's for money. Ours was a general purpose ledger. His was a ledger specifically focused on transfer of an asset on the ledger.”

According to Stornetta, the only missing piece from his work that Satoshi had to add to create Bitcoin was decentralized money, the idea that Satoshi likely borrowed from Adam Back’s Hashcash, another work cited in the Bitcoin whitepaper:

“But what is not well understood is that the timestamped server itself was already decentralized. OK. What he's decentralizing is the Is the at its heart, it is the injecting of the money into the system that is what he decentralized.”

Jokingly, Stornetta suggests another reason why three of his works being cited by Satoshi:

“Or another explanation could simply be that, you know, he was a friend of ours and wanted to make us look important.”

Stornetta believes that much of the work in the crypto space is focused on solving wrong problems. Meanwhile, he has continued thinking about creating more effective decentralized systems and may release an updated version of a blockchain in the future.