The Power of Pseudonymity

19. December 2017 Uncategorized 0

Open to Interpretation

September 15, 2008 marked the height of turmoil for financial markets. The Dow plummeted 500 points. Oil dropped below $100 per barrel for the first time in a year. And Lehman Brothers, the 4th largest investment bank in the world, filed for Chapter 11 Bankruptcy Protection.

While hell broke loose on Wall Street, a shadowy character under the guise of a pseudonym posted to an internet message board. Though largely unnoticed by the mainstream at the time, this post, and the mystery of the persona behind it, would go on to become the stuff of internet legend.

I am talking about @dril. @dril (also known as ‘wint’) is the pseudonymous Twitter account that uncannily parodies everyone you’ve ever considered unfollowing on the internet. Firmly in the realm of the absurd, bordering on the unintelligible, @dril’s humor has reached cult status and has created an internet subculture unto itself: Weird Twitter.

What’s most incredible to me, however, is not the popularity of @dril (over 850,000 followers). Most astounding is that @dril has managed to remain masked.

Cursory research indicates that there has not been much serious attempt to reveal @dril’s identity. Whether consciously or not, @dril’s fans must know that the humor of their favorite Twitter account would be eroded if they knew who was behind it. So they don’t want to know. @dril’s tweets can mean anything to anyone in his (her? their?) audience. Pseudonymity allows the consumer to impose their own meaning, independent of the intent of the author or creator.

A few weeks after @dril’s initial post, another pseudonymous figure who would go on to attain cult-status emerged on a different forum.

The last day of October 2008 was a Friday. Traders, beaten from the last several sleepless weeks, went home that night hoping they would still have a job come Monday. It was the worst month on record for Wall Street. Three days earlier, the consumer confidence index had printed an all-time low.

That day, Satoshi Nakamoto posted a paper to the Cryptography Mailing List. The Bitcoin Whitepaper.

The breakthroughs of the Bitcoin Whitepaper need no retelling here. For the first time, thanks to Satoshi’s design, fully peer-to-peer electronic cash was possible.

The Bitcoin Whitepaper, without doubt, represented a technological leap forward. But, interestingly, many of the components of the protocol had been around for years by the time it was released.

The new combination of these various pieces is cited as the real differentiator and innovation of bitcoin. While (pretty much) all the pieces were there in 1998, it took ten years to assemble them correctly.

Or perhaps that was not really the hard part. Maybe Satoshi put those pieces together back in 1998 — and then spent ten years figuring out where, when, and how to successfully release the idea.

After all, in order for this new model to work, in order for this system to truly be decentralized, it could not have a long term figurehead. Trust in the technology (or lack thereof) needed to be based on objective assessment, not based on an individual or organization backing it. Trust in the asset, likewise, needed to respect the fact that value is a social construct. By publishing under a pseudonym, Satoshi Nakamoto enabled consumers to make their own judgments of the technology and determine the value of the asset independent from its creator.

Just as with @dril’s humor, pseudonymity allowed individuals to impose their own meaning on Satoshi’s creation. Incredibly, almost a decade later, Satoshi has also remained masked.

In order to pull this off, Satoshi needed to ensure that his identity would not be uncovered even when under scrutiny from the likes of journalists, security experts, and government agencies. This would have demanded consideration of not only technical problems of operational security, but would also have entailed composing his code and the language of the whitepaper such that semantics would not allow him (her? them?) to be traced. Discussing ideas related to bitcoin with family, friends, colleagues was to be scrupulously avoided, as was posting anything online that could possibly link his pseudonym to his real-world identity.

(For an example of how not to do this, one need look no further than one of the first major commercial adopters of bitcoin, Dread Pirate Roberts.)

But Satoshi was not only solving for how to keep his identity private. He was also solving for how to make sure the idea would end up in the right hands, would be implemented, and would gain adoption.

He had to craft a go-to-market strategy that would take care of itself, once set in motion. He had to figure out in what format to release the idea (whitepaper), in what forum (the Cryptography Mailing List), and at what time of day so that it would be picked up by the right people. He had to find a name to release it under, such that it would not be traced back to him or anyone else. A name that would be neutral. A name that would invoke trust.

But perhaps most of all, he had to consider the broader societal circumstances under which to release it. He must have waited patiently for a time when the world was doubting the structures that had held the global financial system in a precarious balance. Maybe he woke up that morning of September 15, when Lehman filed, and thought to himself: this is it. Maybe he spent the next six weeks getting organized.

The message Satoshi embedded in the bitcoin genesis block, the headline of the Times that day, is a pointer to this consideration. And was also a masterstroke of marketing. “Chancellor on brink of second bailout for banks.”

Banksy, the subversive, pseudonymous artist has said: “if you want to say something and have people listen then you have to wear a mask.”

It certainly seems to help with the listening. It also helps with the longevity. Only when separated from their creators can concepts, humor, inventions, and content be fully open to interpretation.

This is why bitcoin is so many different things to different people. This is why forks happen and why, with every forking debate, there is a vocal faction asking the question “What would Satoshi do?”

But this inefficiency is also one of the main value propositions of bitcoin. It does not have a leader who can answer that question, who can decide on forks, and who can steer the community or consumer. So the purpose of the network and the value of the asset remain uncorrupted by intent. Often cited as a problem, this may in fact be the feature that will ensure Bitcoin’s staying power.

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