Bit gold

In his 2011 retrospective, Szabo dated the idea to 1998 and its main public description to 2005. SNI dates Bit Gold to 29 December 2005, while the author's blog currently displays 27 December 2008. This discrepancy is retained here; the surviving article is not labeled a “1998 whitepaper.”

A computer solves a challenge, timestamps its proof-of-work and registers ownership in a distributed registry. One result supplies the next challenge, while signatures record transfers of title. Security depends on distributing trust in timestamping and registration; costly bits alone do not settle every problem.

Hardware improvements change production costs, so Bit gold from different periods need not have equal value. Bit gold markets proposes market pricing and pools of differently valued results to form standard-value units. This explains the proposal's monetary design, rather than Bitcoin's eventual issuance rules.

Bitcoin's whitepaper does not cite Bit gold. On 20 July 2010, however, Satoshi described Bitcoin as an implementation of the b-money and Bit gold proposals and linked their texts. That establishes an explicit historical connection, without documenting exactly which design elements were borrowed or when.

In 2011, Szabo credited Bitcoin with improving resistance to a fabricated majority of nodes and simplifying the design through difficulty adjustment. He also distinguished his proposal from working implementations. His retrospective helps compare the systems, but remains the author's assessment after Bitcoin appeared.

Nick Szabo studies digital protocols, contracts and monetary institutions. He proposed Bit gold and discussed its design on his Unenumerated blog. His 1997 First Monday paper examines how smart contracts and security protocols can protect relationships conducted over networks.