PANews_

Author: Bai Zhen, Man Kun Law Firm

In the context of the evolving virtual assets, it is crucial for industry participants to understand the relevant terminology and regulatory frameworks. In Hong Kong, there are two key terms that often appear in this context - Virtual Asset Service Provider (VASP) and Virtual Asset Trading Platform (VATP). Although these two terms are related, they are not exactly the same. VASP is a broad concept that covers various entities involved in virtual asset activities, while VATP specifically refers to platforms that facilitate virtual asset trading.

It is important to distinguish between these two concepts, as it directly affects the regulatory approach of different entities under the laws of Hong Kong. The Securities and Futures Commission (SFC) of Hong Kong has developed specific regulatory guidance for VATPs and other VASPs. As VATPs are directly involved in the trading and custody of virtual assets, they are subject to stricter regulation, especially in terms of security measures, anti Money Laundering and Combating the Financing of Terrorism Compliance, and investor protection. On the other hand, VASPs such as virtual asset fund managers and advisors are also regulated, but their regulatory focus is more on Risk Management, client disclosures, and operational integrity.

Before delving into the differences between VASP and VATP, let's first review the definition of "virtual assets" in Hong Kong:

According to the 2022 Anti-Money Laundering and Combating the Financing of Terrorism (Amendment) Ordinance (AMLAO), virtual assets are defined as:

• A digitally represented form of value that is protected by cryptography and can be transferred, stored, or traded electronically, and can be used for payment or investment purposes, such as Crypto Assets and other asset categories in the virtual world.
• A digital representation, protected by cryptography, that grants management rights, governs affairs, or provides rights, qualifications, or access permissions to any cryptographic representation of value, such as governance tokens.

Note: According to AMLAO, the following content does not fall within the definition scope of virtual assets:

• The digitized representation of value issued by the Central Bank or government issuance
• Limited-use digital Token
• Securities or Futures Contracts
• Any floating funds or deposits related to the stored value facility

So why is the above definition so important? Its importance lies in the fact that AMLAO strictly defines virtual assets as "non-securities," excluding virtual assets defined under the Securities and Futures Ordinance (SFO).

Usually, when we think of Type 1 licenses of the SFC, we know that it is related to activities of "securities trading". Therefore, the definition of "virtual assets" mentioned above was originally beyond the scope of SFC regulation. However, under the new virtual asset regulatory regime in Hong Kong, if you hold an SFC license and your business involves virtual assets, you will need to comply with both securities-related and non-securities-related regulations. This means that you need to comply with the Securities and Futures Ordinance and the Anti-Money Laundering and Combating the Financing of Terrorism (Amendment) Ordinance 2022 (AMLAO), as well as other relevant laws, regulations, and guidelines.

In Hong Kong, you may hear the term “dual-regulation” (dual-regulation), and the regulations mentioned above refer to the content of “dual-regulation”. That is to say, the SFC has adopted a dual-regulation approach to virtual asset intermediary institutions to ensure:

• Regulate virtual assets classified as securities (through SFO); and
• Regulate non-securities virtual assets (through AMLAO).

Segmentation Under the Big Umbrella: Virtual Asset Service Providers (VASPs)

The concept of VASP is defined by the Financial Action Task Force (FATF) in its guidance, which Hong Kong also follows. According to FATF guidance, VASP includes any natural or legal person who conducts one or more of the following activities or operations for or on behalf of another person:

• Exchange between virtual assets and fiat currencies;
• Exchange between one or more virtual assets;
• The transfer of virtual assets (in this context, 'transfer' refers to transactions on behalf of another natural person or legal entity, transferring virtual assets from one virtual asset Address or account to another Address or account).
• The custody or management of virtual assets, or tools that enable individuals to control virtual assets;
• Participate in Financial Service related to the issuance and sale of virtual assets with the issuer.

From this broad definition, it encompasses multiple entities, including but not limited to:

• Virtual Asset Fund Manager;
• Virtual asset advisor;
• Virtual Asset Custodian;
• Virtual asset wallet provider; as well as
• Financial Service providers related to the issuance, sale, or sale of virtual assets, such as service providers in ICO projects.

Each entity plays a unique role in the virtual asset ecosystem and is subject to different regulatory requirements based on its specific activities.

For example, virtual asset fund managers managing virtual asset investment portfolios need to implement a strong Risk Management framework to protect investors. They must also provide clear and accurate virtual asset risk disclosure to clients. Similarly, virtual asset advisors providing virtual asset investment advice are expected to maintain high standards of conduct and ensure that their recommendations are suitable for client needs. Custodians holding virtual assets on behalf of others must implement strict security measures to prevent theft or loss of these assets.

In addition, the definition of VASP also includes the following two types of transactions and operations:

• Virtual-to-virtual trading; as well as
• Trading virtual currencies for legal tender.

Other licenses may also be required based on the nature of the business activities. For example, entities engaged in Futures Trading need to apply for a Type 2 license, while entities providing advice for corporate financing need to apply for a Type 6 license.

Focus under the small umbrella: Virtual Asset Trading Platform (VATP)

Now that we have clarified what VASP is, what is VATP?

VATP can be described as a type of VASP (Virtual Asset Service Provider) that focuses on facilitating virtual asset trading, exchange, and typically custody. As an intermediary, VATP connects the buyers and sellers of virtual assets, enabling them to trade in a secure and regulated environment.

VATP plays a key role in the virtual asset ecosystem, providing liquidity and driving price discovery for various virtual assets. In Hong Kong, VATP is regulated by the SFC. If VATP engages in the trading of virtual assets that are considered securities, it must hold a license in Hong Kong. This means that once VATP offers trading of security tokens, the platform operator will need to obtain the following licenses in Hong Kong:

• Class 1 license (securities trading); and
• Class 7 license (automated trading services).

If VATP does not involve any virtual asset transactions classified as securities, it still needs to comply with other relevant regulations (such as AML/CFT requirements), but does not require an SFC license under the existing framework.

When regulating VATP in Hong Kong, SFC mainly follows the regulation of centralized virtual asset trading platforms, rather than regulating peer-to-peer trading markets where investors typically retain control over their legal tender assets or virtual assets.

If an entity applies for an SFC VATP license, but only provides routing services instead of automated trading services related to virtual assets, the SFC will not accept its license application.

Summary by Lawyer Mankun

Understanding the difference between VASP and VATP is crucial for anyone involved in the virtual asset industry. VASP is a broad term that encompasses a wide range of entities, including virtual asset fund managers, advisors, and custodians. VATP, on the other hand, is a specific subcategory of VASP that focuses on facilitating the trading of virtual assets.

This distinction is very important because it affects the regulatory approach of different entities under Hong Kong law. Due to the high risks involved in virtual asset trading and custody, Virtual Asset Trading Platforms (VATPs) are required to comply with strict regulatory requirements. Other Virtual Asset Service Providers (VASPs) are also subject to regulation, but their regulatory focus is on Risk Management, customer disclosure, and ensuring operational integrity. Therefore, Hong Kong's operating entities need to develop tailored Compliance strategies based on the specific services provided by VASPs, which helps ensure their safe and sound operation.

Preface: According to politico, a new documentary from HBO claims to have uncovered the true identity of the anonymous creator of BTC, Satoshi Nakamoto, but HBO's promotional materials did not explicitly make this claim. The most frequently suspected individuals as Satoshi Nakamoto include the late software engineer Hal Finney, systems engineer Dorian Nakamoto, computer scientist Nick Szabo, and Hashcash inventor Adam Back. However, currently, the prediction website ranks Len Sassaman first, far ahead of others. Who is Len Sassamanv, this article provides a comprehensive description.

*We have lost too many Hackers, they chose to commit suicide. What if Satoshi is one of them?

In every Bitcoin Node, an obituary is embedded. This obituary is embedded in the transaction data, becoming a memorial to Len Sassaman - a person who is almost immortalized on-chain. This memorial is fitting in every way.

Len is a true Cypherpunk - combining intelligence, fearlessness, and idealism. He has dedicated his life to defending personal freedom through cryptography, participated in the development of PGP encryption and Open Source privacy technology, and as an academic cryptographer, researched P2P networks under the guidance of blockchain inventor David Chaum.

He is also a stalwart of the Hacker community: a fren and influencer of many important figures in information security and Crypto Assets history.

Loss of Satoshi

As everyone said, Len was supposed to become one of the most important cryptographers of his time. However, on July 3, 2011, after a long struggle with depression and functional neurological disorders, he unfortunately ended his life at the age of 31.

His death coincided with the disappearance of the world's most famous Cypherpunk - Satoshi Nakamoto. Two months before Len's death, Satoshi sent their final communication: 01928374656574839201

I have turned to other things and may not appear again in the future.

After 169 code commits and 539 posts within a year, Satoshi disappeared without any explanation. They left behind a bunch of unfinished features, intense debates about their vision for Bitcoin, and a BTC fortune worth $64 billion that remains untouched to this day.

We have lost too many Hackers, and they have chosen suicide. Aaron Swartz, Gene Kan, Ilya Zhitomirskiy, James Dolan. They are all victims of shame and depression, and this epidemic has also had an impact on technological progress itself. Imagine if the creator of Bitcoin had died before completing it. If that were true, what would they have brought to the world if they received the care and respect they deserved?

I am hesitant about speculating on the identity of Satoshi, because discussions around this topic often veer from misleading to absurd, and even unethical. However, with Craig Wright falsely claiming to be the creator of Bitcoin, it is necessary for us to re-examine this topic and refocus the discussion on those who truly built the cypherpunks of Bitcoin.

Whoever Satoshi is, they are undoubtedly 'standing on the shoulders of giants'—Bitcoin is the culmination of decades of research and discussion in the Cypherpunk community. In this sense, Len is undoubtedly an indirect contributor. But we still can't help but ask, who actually wrote the code, ran the first Node, and released the content under the pseudonym Satoshi?

In order to integrate and realize the various ideas on which Bitcoin is based, the individual or team must possess unique expertise in multiple areas such as public key infrastructure, academic cryptography, P2P network design, practical security architecture, and privacy technology. They are likely deeply rooted in the Cypherpunk community and closely connected with those who have a significant impact on Crypto Assets. Finally, they need to have a firm ideological belief and the Hacker spirit in order to 'roll up their sleeves' and anonymously build a system in the real world, a system that has previously remained in the theoretical realm.

When I look back on Len's life, I see many of the same qualities. I believe Len may be one of the direct contributors to Bitcoin.

Given that Cryptocurrency is receiving unprecedented attention, I hope to make more people aware of the 'unsung heroes' that we should be grateful for. I also hope that we can reflect on the significance of functional neurological disorders, especially those that deserve more attention, in terms of the spirit of following.

Origin

Even when he was young, Len was a self-taught technical expert dedicated to cryptography and protocol development. Although he lived in a small town in Pennsylvania, at the age of 18, Len joined the Internet Engineering Task Force responsible for the Internet's basic TCP/IP protocol, which later became the foundation of the Bitcoin network.

"Because he was smart and always seemed a little different," Len was diagnosed with depression in his adolescence. Unfortunately, he experienced traumatizing treatment from a psychiatrist during his therapy, which resembled abuse. This experience may have deeply eroded his trust in so-called authority figures.

In 1999, Len moved to the Bay Area and quickly became a regular in the Cypherpunk community. He lived with Mojo and Bram Cohen, the creator of Bittorrent, and made contributions to Satoshi's legendary announcement of Bitcoin on the Cypherpunk mailing list. Other hackers remembered him as a smart and easy-going person who once chased squirrels at a Cypherpunk gathering and drove a sports car with a "Get Out of Jail Free" card in case he was stopped by the police.

In San Francisco, Len is committed to defending personal freedom and privacy through technological and political direct action. At the age of 21, he made headlines for organizing protests against government surveillance and standing in solidarity with Hacker Dmitri Skylarov's imprisonment.

PGP

In the early stages of his career, Len emerged as an authority in the field of Public Key cryptography, which is the foundation of Bitcoin. At the age of 22, he was already giving speeches at conferences and co-founded a Public Key encryption startup with the renowned Open Source activist Bruce Perens.

After the startup company collapsed due to the bursting of the Internet bubble, Len joined Network Associates to help develop PGP encryption, which was crucial for Bitcoin. In 2001, during the release of PGP7, Len was responsible for setting up interoperability tests for the OpenPGP implementation, which exposed him to many important encryption technology pioneers. Len also contributed to the OpenPGP implementation of GNU Privacy Guard and, together with the inventor of PGP, Phil Zimmerman, invented a new encryption protocol.

When introducing Bitcoin, Satoshi expressed his hope that Bitcoin could become the same thing in the currency field as strong encryption technologies (such as PGP) play in file security.

Several generations ago, multi-user time-sharing computer systems also faced similar problems. Before strong encryption technology emerged, users had to rely on password protection...

*Then, strong encryption technology begins to popularize among the public, and trust is no longer necessary... Now, it's time to have the same thing in the field of currency.

Hal Finney

At Network Associates, Len worked with Hal Finney to develop PGP. Finney was the second developer of PGP and helped create RFC 4880, the OpenPGP interoperability standard. He was also one of the earliest and most important contributors to Bitcoin after Satoshi:

● Finney is the first person, other than Satoshi, to contribute to the Bitcoin code and run Bitcoin Node.

● Finney is the first recipient of Bitcoin (personally sent to him by Satoshi).

● Finney invented the concept of "Reusable Proofs of Work" on which Bitcoin Mining is based.

●Before the release of Bitcoin, Satoshi had extensive communication with Finney. In their final few exchanges, Satoshi openly expressed his respect for Finney.

Not surprisingly, Finney is one of the most sought-after Satoshi candidates, although that means he needs to fake a large number of email interactions with Satoshi while contributing to Bitcoin under both his real and fake identities. In addition, Finney continued to work for Bitcoin after Satoshi "left" in 2011.

Heavy Postal Equipment

Len and Finney share a rare and relevant skill: they are both developers of postal machine technology, which is one of the predecessors of Bitcoin.

The remailer was proposed by David Chaum, along with Cryptocurrency, and they are specialized servers used for anonymously or pseudonymously sending information. The use of remailers is very common when participating in the Cypherpunk mailing list, which is itself built on the basis of distributed remailers.

Structure diagram of Type II heavy postal machine

Early remailers simply forwarded information and concealed the identity of the sender, while later protocols (such as the most popular Mixmaster remailer) relied on DecentralizationNode, distributing fixed-size encryption blocks of information through a P2P network. Bitcoin's architecture is very similar to remailers, except that its Node transmits transaction data instead of messages. In 1997, encryption anarchist founder Tim May even proposed a form of Digital Money based on remailers.

As the main developer of Mixmaster, Node operator, and main maintainer, Len is an authoritative expert in the field of remailer technology. He also implemented similar technology in the Anonymizer privacy protection project as a system engineer and security architect.

Re-mailer is not only the direct predecessor of Bitcoin technology, but also the foundation of its intellectual history. In the article 'Why Remailer', Finney believes that remailer is the foundation of anonymous digital economy.

The CYRUS server is the 'foundation' of this ideological building-it gives us the ability to exchange messages privately without exposing our true identities. In this way, we can conduct transactions, display credentials, and achieve protocol without worrying about government or corporate databases tracking our every move.

One of Cypherpunk's visions is to be able to conduct transactions anonymously using "Digital Cash".... This is another area where anonymous email plays an important role.

The operator of the postal server was one of the first to realize the demand for Crypto Assets: due to the lack of anonymous payment methods, the postal server had to be operated at the operator's own expense. This has led to scalability issues and has also resulted in spam and abuse becoming the norm. As a result, many fundamental concepts of Crypto Assets originate from the need to create a profit-oriented postal server that is resistant to abuse:

● In 1994, Finney proposed that the Re-Post Office could be monetized through anonymous 'coins' and 'cash Tokens'.

The first discussion of smart contracts took place in the context of preventing abuse of remailers. Nick Szabo's visionary 1997 paper on smart contracts specifically mentioned Mixmaster.

● Ian Goldberg and Ryan Lackey (two important figures known to Len) are key figures in the Remailer community, who developed an unfinished cryptocurrency called HINDE in 1998. Ian later created several early electronic cash clients, while Ryan became the Chief Security Officer of Tezos.

Therefore, in Satoshi's second post about Bitcoin, he mentioned that "paying to send email" was the first real-world use case of Bitcoin.

Initially, it could be used for virtually free Proof of Work applications.

It can now be used to pay for sending emails. The send dialog is resizable, and you can enter messages of any length.

Adam Back

In the small heavyweight community, Adam Back, CEO of Blockstream, who also has intersections with Len, was the first person to communicate with Satoshi.

Back's interest in Cryptocurrency stems from operating mail servers, where he invented the HashCash Proof of Work system for mail server operators to combat spam and DDoS attacks. Satoshi later used HashCash as the basis for Bitcoin Mining.

We know that Len has worked directly with Back, who was listed as a contributor to Len's research paper and a Mixmaster memo. They have both been involved in multiple OpenPGP implementation projects and are interconnected in each other's PGP web of trust.

Interestingly, Back himself has hinted that Satoshi may be a developer at CYBERPUNK, pointing out that these developers '[practice] their own technology' and participate in encryption protocol discussions in a pseudonymous manner. Unlike many cyberpunk characters in the discussions, we know that Len has made extensive contributions in a pseudonymous manner on the CYBERPUNK mailing list through CYBERPUNK.

Chaum and COSIC

After graduating from high school, Len worked to support his family and never had the opportunity to go to college. However, in 2004, he successfully obtained his 'dream job' as a researcher and PhD candidate at the Computer Security and Industrial Cryptography research group (COSIC) at K.U. Leuven in Belgium.

At COSIC, Len's doctoral advisor is the 'Father of Digital Money' David Chaum. Although Chaum laid the foundation for the entire cyberpunk movement and all Cryptocurrencies, few can claim to have directly collaborated with him.

Some of Chaum's important achievements include:

In 1983, the paper "Blind Signature for Untraceable Payments" was published, which invented Cryptocurrency.

● In his 1982 doctoral thesis, he invented the blockchain, describing all the elements of the blockchain in the Bitcoin White Paper, except one.

●He created the first 01928374656574839201 electronic cash system Digicash, where anonymous payments between digital identities were its core vision.

*“[Chaum]In the seemingly unstoppable center of a movement - the digitalization of currency... The unknown variable of the era of digital currency is anonymity, David Chaum believes that without anonymity, we will be in trouble.

Although Digicash failed (partly due to reliance on centralized systems), Chaum hoped to create a second type of Digital Money that could provide both Anonymity and practicality at the same time.

Despite many people seeing its failure as evidence of the infeasibility of Digital Cash, Satoshi still defends the 'old Chaum currency' while acknowledging the troubles brought by centralization.

Many people automatically see Electronic Money as a hopeless thing because all related companies have failed since the 1990s. I hope it is clear that the failure of those systems is only due to their centralized nature.

Len's research

Len worked at COSIC in Belgium until his passing in 2011. During this time, he accumulated 45 publications and held 20 positions on conference committees, achieving remarkable results.

Len's focus is on developing a privacy-enhancing protocol with 'real-world applicability' and writing actual code. His main project is Pynchon Gate, a collaboration with Bram Cohen, which is an evolved version of mixnet technology enabling pseudonymous information retrieval through a distributed Node network without the need to trust third parties.

Pynchon Gate and Metaindex + Bucket-brigade Architecture

This project is closely related to Bitcoin - as Pynchon Gate's research progresses, Len gradually focuses on solving the Byzantine problem, which is one of the main obstacles of early P2P networks.

Byzantine problem diagram

In the context of distributed computing, Byzantine fault tolerance refers to the ability of a network to remain functional even if a Node is compromised or unreliable. The Byzantine issue is one of the biggest issues that needs to be addressed to ensure that the Cryptocurrency system can be secure, decentralized, without double spending or trusting a third party. Satoshi's most important innovation is to successfully solve this problem by proposing a "triple accounting" system through the introduction of the blockchain proposed by Chaum.

During the development of Bitcoin from 2008 to 2010, Len became increasingly active in the field of financial cryptography. He joined the International Association for Financial Cryptography and delivered speeches at conferences on financial cryptography and data, and also served as a committee member. The conference was founded by Robert Hettinga, an early advocate of Digital Cash, which was one of the main topics of discussion at the conference.

Satoshi as a Scholar

There are many clues to suggest that Satoshi may have been working in academia during the development of Bitcoin, a view supported by Gavin Andersen, founder of the Bitcoin Foundation.

“I think he is a scholar, possibly a postdoctoral researcher, or a professor who doesn't want to attract attention.”

Satoshi's code contributions and comments increased significantly during the summer and winter holidays, but decreased significantly during the final exam periods in late spring and year-end, which is consistent with scholars having more time during holidays and being busy with exams or grading at the end of the term.

The unique structure of Bitcoin code also indicates that Satoshi has an academic background. The code is described as "excellent but not rigorous", it does not adopt conventional software development practices like unit testing, but it demonstrates cutting-edge security architecture and a deep understanding of academic cryptography and economics.

This person has a deep understanding of Cryptography...they have read academic papers, possess keen intellect, and combine these concepts in truly innovative ways.

When the renowned security researcher Dan Kaminsky first reviewed Satoshi's code, he attempted penetration testing with 9 different vulnerabilities, but to his surprise, Satoshi had already anticipated and patched these issues.

"I designed a beautiful vulnerability, but every time I attack the code, there is a line in the code to deal with the problem... I have never seen such a situation."

This may indicate that Satoshi and Kaminsky shared similar experiences and expertise in information security. Coincidentally, Len and Kaminsky co-wrote and published a paper demonstrating methods for attacking the Public Key Infrastructure.

In addition, the Bitcoin White Paper was published in a format that is not commonly seen on cypherpunk mailing lists - it is a LaTeX formatted research paper with academic features such as abstracts, conclusions, and MLA citation formats. This is in stark contrast to the irregular blog post style of other proposals such as Bitgold and b-money.

Satoshi in Europe

Because COSIC is located in Leuven, Len lived in Belgium during the development of Bitcoin. This is important because some facts indicate that Satoshi may also have been in Europe, which was also a major focus of early investigations by The New Yorker.

Satoshi's writing style is characterized by typical British English spelling and wording, such as "bloody difficult", "flat", "maths", "grey", and the date format dd/mm/yyyy. However, Satoshi also refers to the Euro instead of the Pound.

The Genesis Block of Bitcoin also included a headline from The Times that day ('The Times, January 3, 2009: Chancellor on brink of second bailout for banks'). This headline refers specifically to the print edition of that day, and the newspaper was only available in the UK and Europe. In 2009, The Times was among the top ten newspapers in Belgium, and it was widely used by scholars and researchers due to its extensive availability in libraries and detailed indexing system.

These clues lead to a paradox: they suggest that Satoshi is European, but the people with the skills and access to its main influences are more likely to be Americans. Most of the meetings and gatherings of the cypherpunk community focus on the United States, especially San Francisco, so many important figures come from the United States. Opportunities to gain experience in cutting-edge information security and encryption technologies are also mostly concentrated in the United States.

Oddly, despite being American, Len uses British English that is identical to Satoshi's.

Analysis of Satoshi's posting history indicates that he was a European "night owl," typically devoting himself to Bitcoin development work after completing his day job or studies. On one occasion, Satoshi mentioned that the increase in Mining Difficulty occurred "yesterday," which obviously wouldn't be true if he lived in the United States.

Assuming Satoshi's life is not just Bitcoin, he would leave his computer at home during the day for work or study... If Satoshi lived in the British Summer Time (BST) time zone, he would mostly work at night, usually until dawn.

When we look at Len's tweet history, we can see that Satoshi's posting time and code submission time are very close to Len's active time at night.

P2P Network

Although Bitcoin is not the first Cryptocurrency, it is the first Cryptocurrency based on a completely P2P distributed network. Satoshi emphasized this point when he first mentioned Bitcoin:

I have been developing a brand new electronic cash system that is completely peer-to-peer and does not rely on any trusted third party.

Dan Kaminsky said that to build Bitcoin, Satoshi must "understand economics, cryptography, and P2P networks," while Len has an extraordinary early exposure to and deep understanding of the three and their application in Digital Money.

Bram and Len's photo during the CodeCon interview

During his time in San Francisco, Len lived and worked with Bram Cohen, the creator of the P2P protocol BitTorrent. Between 2000 and 2002, Bram developed a revolutionary P2P network called MojoNation, which used Mojo Tokens as Digital Money, making it one of the earliest publicly released Digital Money.

In MojoNation's P2P economy, Token can be used to exchange file storage. The file will be encrypted and encoded as 'Block', uploaded to the distributed Node network, and recorded on a public ledger, which is similar to Bitcoin's distributed bilateral accounting system. Mojo is not just an internal accounting Token, but a complete currency that can be exchanged for US dollars and vice versa. Some of the earliest discussions on Token economics revolved around the mechanism of Mojo Token.

One Mojo represents a part of the overall system capability. If you work for me now, I will give you points, and in the future, when the network becomes larger, these points will represent a part of a bigger cake, so their value will increase when you use them.

Satoshi discusses the Token economy in a similar way:

It has the potential to form a positive feedback loop; as the number of users increases, the value will rise, which may attract more users to take advantage of this rising value.

Despite MojoNation's vision, its economic system quickly collapsed due to rampant inflation. Satoshi intentionally designed Bitcoin to avoid this fate by incorporating a built-in deflation mechanism and ensuring its stability without relying on a central 'minting' server.

In 2001, Bram introduced BitTorrent. As a P2P alternative to Napster, BitTorrent foreshadowed the distributed Node topology, Consensus system, and incentive mechanism of the Bitcoin protocol layer. BitTorrent not only innovated technically over networks like Gnutella but also drove design through economic incentives and game theory.

Comparison between BitTorrent and Napster design

Len told Bram in advance, "BitTorrent will make you more famous than [Napster founder] Sean Fanning." Satoshi later mentioned Napster to explain why a completely decentralized network is needed.

The government is good at cutting off the 'head' of centralized networks like Napster, but pure P2P networks like Gnutella and Tor seem to be able to sustain themselves.

Coincidentally, both Len and Tor's founder Roger Dingledine have been involved in the development of the Mixminion email protocol. They also jointly demonstrated at the Black Hat conference and co-founded the HotPETS conference.

In 2002, Len and Bram co-founded a conference called CodeCon, which focused on 'projects with practical, actionable code'. At the 2005 CodeCon, Finney demonstrated 'Reusable Proof of Work' (RPOW) through a modified BitTorrent client, which could send P2P Digital Money. One commentator described it as:

...the world's first transparent server that can facilitate a distributed, collaborative RPOW server world.

Digital Money is an important theme of the first CodeCon, and the conference also showcased Adam Back's HashCash and Zooko's demonstration of Mnet, which is a completely Open Source and Decentralization successor to MojoNation. MojoNation does not rely on a single company and can be independently audited, both of which Satoshi considers to be essential features.

Screenshot of Mnet client

MojoNation co-founders Zooko Wilcox and Jim McCoy also have a significant influence in the cryptocurrency field. Zooko was an early collaborator of Satoshi and worked for David Chaum's Digicash. When releasing Bitcoin v0.1, Satoshi also linked to Zooko's blog on Bitcoin.org. Zooko later founded the privacy-focused cryptocurrency Zcash and proposed the controversial "Zooko Triangle" framework.

"Zooko's Triangle" is a trilemma about the three desirable characteristics of participant names in network protocols

McCoy is also a major influencer in the Crypto Assets space, and Ryan Selkis of Digital Currency Group even suggested that he believes McCoy may be Satoshi.

Hacker Activism

Even by the standards of the cyberpunk community, Len and Satoshi have shown particularly strong ideological beliefs and a firm commitment to open knowledge.

I hope you don't always talk about me... maybe you can focus on Open Source projects and give more recognition to developers and contributors.

Satoshi distributed Bitcoin through a free, Open Source grassroots project, in stark contrast to his predecessors. Chaum, Stefan Brand, eCash, and others took a completely different approach: applying for patents, establishing closed-source venture capital companies, and attempting to promote adoption through corporate partnerships.

This method is similar to Len's extensive contributions to Open Source projects, such as his contributions to PGP, Mixmaster, GNU Privacy Guard, and his volunteer work experience in organizations like Shmoo Group.

Bram expressed a preference for Len's anonymous posting in this story

Satoshi mentioned their ideological inclinations in several comments, stating that Bitcoin is "very appealing" to libertarians and that it can "win a major battle in the arms race, gaining years of new freedom territory."

Len is also committed to defending open knowledge and technological progress, resisting interference from corporations and governments.

The pursuit of knowledge is a fundamental part of humanity. I believe that any form of prior restraint is an infringement on our freedom of thought and consciousness. Therefore, not only do I hope that we can avoid excessive restrictive legislation...I also do not want to see anyone establish frameworks that could be misused.

Ending

Just as Satoshi created Bitcoin behind a pseudonym, Len also lived under his own mask to some extent. Since an incident in 2006, Len has been suffering from increasingly severe non-epileptic seizures and functional neurological issues, which have exacerbated the depression he has been struggling with since his youth.

As a victim of stigma, Len "feels that he has to maintain the illusion of being a superpower" and he is "very afraid" that the deterioration of his health will end his job and disappoint the people he cares about.

Despite these challenges, Len continued to work, write papers, and even gave a speech at Dartmouth College until a few months before his death. Unfortunately, he successfully hid the severity of his condition from almost everyone.

*Very few people know that things have developed to this point... The phrase I keep hearing is, 'We never knew, he seemed fine.'

Len's speech at Dartmouth College shortly before his death

Just as Len is built on the foundation of the predecessors' ideas, we feel his dedication to building things that can surpass himself, which is also one of the reasons he is so committed to Open Source and open knowledge.

"This is our legacy, these studies, these ideas, are leading us into knowledge that has never been seen in human history. We will pass these on to future generations. We must ensure that we are not forced into a dead end where we cannot distribute the research to others, ensuring that the research is not locked in the safe of intellectual property lawyers."

Len's death in 2011 was a huge loss for the cyberpunk and tech communities, as evidenced by the subsequent flood of reminiscences and condolences. One post that particularly stood out to me was by Hacker News user 'pablos08'.

Len and I became frens, once cyberpunks plotting together on the wild frontier. It was a time of reimagining our world, filled with encryption systems that would defend the freedoms we cherished with mathematics. Anonymizing remailers protected speech from retaliation, The Onion Routers ensured no one could censor the internet, and Digital Cash supported a radically free economy. We designed plans to decentralize and distribute everything.

We imagine complex and obscure threats, aimed at the problems we may face one day; we build the future protocol to defend against these threats. It's all highly academic geek utopian practice. And I usually maintain this way, but Len wants to truly participate in it.

Cypherpunk writes code.