We Study Billionaires - The Investor’s Podcast Network BTC022: Dr. Adam Back & Bitcoin's Proof of Work (Bitcoin Podcast)
Apr 21, 2021
Dr. Adam Back, the pioneering inventor of Hashcash and CEO of Blockstream, shares his insights into the crucial role of Proof of Work in Bitcoin's ecosystem. He discusses how this system impacts Bitcoin's price stability and introduces Blockstream's innovative initiatives in mining. Back explains the concept of liquid security tokens and their potential benefits, while also addressing strategies that can reduce volatility in Bitcoin investments. His perspectives on the evolving landscape of Bitcoin mining and financial instruments provide a fascinating glimpse into the future of cryptocurrency.
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Early Spam Problems
- Dr. Back's work on anonymous remailers led him to address spam, a major issue affecting email users and discussion forums.
- Spam, often nonsensical, was amplified by Usenet, causing denial-of-service issues and a backlash against remailers.
Beyond IP Blocking
- Traditional spam solutions like blocking IP addresses proved ineffective and risked online privacy.
- Dr. Back recognized the need for a cost-based deterrent rather than identity-based restrictions, considering electronic cash but facing challenges in its implementation.
Hashcash and the Birthday Paradox
- Hashcash emerged from exploring hash functions and the birthday paradox, a concept in probability.
- The idea was to make computation tunably expensive yet instantly verifiable, providing proof of work.
