The alleged Bitcoin founder went to law school for fun — and that says a lot about what Bitcoin is really for
But before they can drive off the lot, many subprime borrowers
like Ms. Bolender must have their car outfitted with a so-called
starter interrupt device, which allows lenders to remotely
disable the ignition. Using the GPS technology on the devices,
the lenders can also track the cars’ location and movements.
Szabo has certainly been thinking about contracts and how programming can be applied to the legal system for a while. In 1997, he published a paper on smart contracts in First Monday, a peer-reviewed journal about internet economics. Smart contracts would apply the idea of rules dictating property ownership (which is what contracts are) to the digital realm. Instead of having to go to a lawyer to know the rules, a computer can just assign property based on what its code says.
And the way the current system works for many subprime lenders, according to a 2014 New York Times story:
...we can create a smart lien protocol: if the owner fails to make payments, the smart contract invokes the lien protocol, which returns control of the car keys to the bank. This protocol might be much cheaper and more effective than a repo man. A further reification would provably [sic] remove the lien when the loan has been paid off, as well as account for hardship and operational exceptions. For example, it would be rude to revoke operation of the car while it's doing 75 down the freeway.
Here's the idea, from Szabo's 1997 paper:
He had returned to school in part because he had become convinced that the singular focus on markets, among libertarians and crypto-anarchists, was naive. Szabo believed that society had multiple "protocols" beneath markets, such as the legal system, which determined how markets worked. All of this, though, had just been a hobby for Nick, until very recently.
The New York Times' Nathaniel Popper thinks that he's found Satoshi Nakamoto, the elusive, pseudonymous creator of Bitcoin.
According to his new book, Digital Gold (which comes out next week), Popper met Szabo at a party and asked him about about his time at George Washington:
Popper thinks Satoshi is Nick Szabo, a programmer with a longtime interest in cryptography and law. Szabo even went to law school at one point (for fun, basically).
In his paper from almost two decades ago, he actually predicted a smart contract that exists today: auto lenders being able to remotely disable a car's ignition if the owner misses a payment.
That's becoming relevant now as bitcoin becomes more popular and the companies that use it and promote it become increasing regulated.
If it's true that Szabo is Satoshi, and this really is the reason that Szabo went to law school, that adds a really interesting layer to the history of bitcoin. It means that bitcoin was created with more thought toward US legal structure than it's normally given credit for.
The devices, which have been installed in about two million vehicles, are helping feed the subprime boom by enabling more high-risk borrowers to get loans. But there is a big catch. By simply clicking a mouse or tapping a smartphone, lenders retain the ultimate control. Borrowers must stay current with their payments, or lose access to their vehicle.
Can you imagine thinking of that mechanism back in 1997?
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