Free Digital Gold by Nathaniel Popper Page A

nothing more than a private key. The users, at this point, were mostly young men whose lives were untethered to anything other than their laptops, in constant communication with people on the other side of the world. For them, moving money around the globe with a paper check or an old-fashioned wire transfer seemed absurdly backward.
    Satoshi chimed in on the forums to note that the Bitcoin software was designed to do more than just move coins. The software also had the capability to attach specific instructions to each coin so that the coins could behave in a particular way, according to the users’ wishes. A coin on the blockchain could, for example, be programmed to move from one address to another only if it was signed off on by three or four different private keys, enabling its use in the types of legal transactions that currently required cumbersome and expensive middlemen.
    â€œThe design supports a tremendous variety of possible transaction types that I designed years ago,” Satoshi wrote. “Escrow transactions, bonded contracts, third party arbitration, multiparty signature, etc. If Bitcoin catches on in a big way, these are things we’ll want to explore in the future, but they all had to be designed at the beginning to make sure they would be possible later.”
    Satoshi had advertised Bitcoin as a trustless system that didn’t require its users to rely on any central authority. But like all forms of money, Bitcoin did rely on its users’ trusting the ideas and integrity of the system supporting it—in this case, code and math—and the small elite of cosmopolitan coders was more than willing to do that. These new converts, in turn, were providing not just enthusiasm, but also fresh sets of eyes to examine the code with a level of programming experience that had been scarce up to this point.
    In late July Gavin and Satoshi got an e-mail from one such user, a programmer from Germany going by the screen name ArtForz, who had found a previously undiscovered weakness in the code that governed transactions on the network. The flaw made it possible to spend Bitcoins in someone else’s wallet.
    Gavin and Satoshi immediately realized this was not just a bug but a fatal flaw that could doom the entire project. If someone else could spend your coins the whole system was all but useless.
    Satoshi quickly put together a fix—the flaw was not actually difficult to correct. But in the meantime, Gavin and Satoshi agreed to keep the flaw secret until they got everyone on the network using new, repaired code, for fear that someone would take advantage of it.
    â€œFor now, don’t call it the ‘1 RETURN’ bug to anyone who doesn’t already know about it,” Satoshi wrote to Gavin.
    Because the patched software “has a dozen changes in it,” Satoshi wrote, “it won’t necessarily be obvious what the worst vulnerability was. That may give people a head start to upgrading if any attackers are looking for the vulnerability in the changes.”
    That ArtForz had not taken advantage of the bug himself was a minor miracle. But it was also what the incentives in the Bitcoin system were designed to encourage. ArtForz had been mining coins himself—using the GPU technology that Laszlo had first pioneered—and he knew that if confidence in the system was undercut his coins would be worthless. The market incentives were working as they were supposed to work. This turn of events also confirmed Gavin’s confidence in the power of decentralized systems. ArtForz was a part of the network, and as such, he didn’t just passively use the network. He and Gavin, and all the others, were helping to build this thing.
    A FEW MONTHS earlier the big concern plaguing the Bitcoin forum was how to attract new users, but now the problem was how to deal with the influx of new users, their potentially malicious behavior, and their competing interests.
    These problems