In a twist that could shake the foundation of the crypto world, a recently declassified report suggests that Bitcoin, the trailblazer of digital currencies, might be an invention of the National Security Agency (NSA).
The NSA granted permission to Fried Frank (Fried, Frank, Harris, Shriver & Jacobson) LLP, a leading international law firm, to share the report titled “HOW TO MAKE A MINT: THE CRYPTOGRAPHY OF ANONYMOUS ELECTRONIC CASH“.
The document delves into the intricate world of electronic cash systems, shedding light on the cryptographic underpinnings and the security features that make them indispensable in today’s digital economy.
The research by Laurie Law, Susan Sabett, and Jerry Solinas from the NSA’s Office of Information Security Research and Technology, Cryptology Division represents a significant collaboration between the government and the private sector. It underscores the vital role electronic payment systems play in ensuring secure online transactions, with a primary focus on privacy, authenticity, and nonrepudiation.
According to the paper, electronic cash transactions, like Bitcoin’s, encompass three key phases: withdrawal, payment, and deposit, which can happen either online or offline. However, these transactions are not without their vulnerabilities, particularly concerning counterfeiting. Threats such as token forgery and multiple spending demand robust protection mechanisms, including authentication and secure hashing.
The NSA Invented SHA256
The report extensively explores cryptographic techniques aimed at fortifying the security of electronic cash systems, with a special emphasis on anonymity and payment untraceability.
SHA-256 is a popular cryptographic algorithm for data security. This hashing algorithm is extremely secure as it produces hash values that are irreversible and unique. It is also the encryption algorithm that encrypts Bitcoin blocks on the network that was developed by the NSA. Engineers employed at the agency invested heavily in developing the algorithm, and first published it in 2001 – eight years before Bitcoin came into existence.
Read the Bitcoin complete Bitcoin whitepaper.
The report explains that electronic cash, similar to Bitcoin, is designed to emulate the characteristics of physical currency, offering portability, recognizability, transferability, untraceability, and most importantly, anonymity, through digital signatures. At its core, public-key cryptography serves as the linchpin of electronic cash systems, where users possess secret keys and public keys for authentication purposes.
Another fun fact about this report is that one of the sources included in the list of references is “Tatsuaki Okamoto”, which sounds very similar to the mysterious Bitcoin creator that goes by the pseudonym “Satoshi Nakamoto”.
This payment electronic cash system sounds eerily similar to how Bitcoin works. There is no outright statement that connects the NSA to Bitcoin invention. However, the coincidences are too specific to ignore.