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A new academic paper on Bitcoin’s formative years reveals that the Bitcoin network in its first couple of years was more centralized and fragile than what was generally thought.
The flagship cryptocurrency was able to survive and thrive thanks to a select group of pioneers, who chose not to attack the network in times when they easily could have done so.
The study, co-authored by nine researchers from six universities across the world, offers a fascinating read on the cooperation of unknown and anonymous parties. It said:
“Anonymity can interfere with the cooperative mechanisms of reciprocity, relatedness and reputation and is thus believed to reduce cooperation in general.”
Even when they didn’t know each other, counterintuitively, the 64 parties controlling most of the hash power all acted with the best interest of the network in mind.
Co-author and researcher Erez Lieberman Aiden told crypto news medium Coindesk:
“We sought to understand the socioeconomic process by which bitcoin transitioned from a digital object with no market, to a functional medium of exchange.
We therefore chose to study the period between launch and price parity with the U.S. dollar: the 25 months after Bitcoin’s launch.”
Aiden noted that the groups research was made possible by the high degree of data leakage in the early days of Bitcoin, saying:
“In the end, we found that there was a lot of data leakage that we could exploit, which made our study possible.
He further added that the research project “was able to succeed because of a high degree of metadata leakage from the blockchain during the period we studied. There’s no particular reason to believe that the data leakage is limited to the period of time we studied.”
The paper on Bitcoin’s early days is expected to ignite big discussions about many of Bitcoin’s challenges and on the origins of its pseudonymous creator, Satoshi Nakamoto.