Wei Dai

• 1. Introduction

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  Wei Dai is described as an intensely private computer engineer. Yet somewhere in his quiet, unpublicized work sit ideas that now underpin a currency used and argued over worldwide. What did a private engineer build that a pseudonymous stranger later leaned on to invent Bitcoin? And why does his name keep surfacing in the guessing game over who that stranger, Satoshi Nakamoto, actually was?

• 2. Cypherpunks and Rationalists

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  Dai graduated from the University of Washington with a degree in computer science.

  Throughout the 1990s, Dai took part in three mailing lists: the Cypherpunks, the Extropians, and SL4. On SL4, he traded ideas with Eliezer Yudkowsky, Robin Hanson, Nick Bostrom, Aubrey de Grey, and Anders Sandberg, members of a nascent rationalist community.

  That mix of programming skill and philosophical debate would soon turn from ideas exchanged on SL4 to a hunt for actual flaws in encryption software.

• 3. Breaking and Building Ciphers

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  Dai identified critical vulnerabilities in Cipher Block Chaining, an encryption mode used in SSH2, exposing a weakness attackers could exploit. He is also credited with the browser exploit against SSL/TLS known as BEAST, short for Browser Exploit Against SSL/TLS.

  In 1995, Dai released Crypto++, an open-source C++ library offering ready-made implementations of cryptographic algorithms. He kept building on the project until June 2015, when he stepped away to pursue other work, leaving the Crypto++ community to maintain it.

  In April 2007, Dai and cryptographer Ted Krovetz proposed VMAC, a message authentication code built on a block cipher and a universal hash. The two designed it for high performance, a claim they backed with formal mathematical analysis.

  Years before this auditing work, Dai had already tackled the problem of building money that needed no bank, a project he called b-money.

• 4. A Blueprint for Digital Cash

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  In 1998, Dai published a paper titled "b-money, an anonymous, distributed electronic cash system," helping to spark wider interest in cryptocurrencies. In it, he described his proposal as "a scheme for a group of untraceable digital pseudonyms to pay each other with money and to enforce contracts amongst themselves without outside help."

  Dai never framed b-money as a cryptocurrency blueprint, but the properties he listed in it read like one anyway.

• 5. The Mechanics Bitcoin Borrowed

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  Described as "money which is impossible to regulate," b-money first required a specified amount of computational work to add value to the system. That requirement is the same principle cryptocurrencies now call proof of work. The community itself verified that work, updating a shared, collective ledger book, and whoever performed it earned funds as a reward. Every exchange of money ran through that same collective bookkeeping, authenticated with cryptographic hashes.

  Contracts, under this design, were enforced not by courts but by the broadcast and signing of transactions. Those transactions were secured with digital signatures, built on public key cryptography. Dai draws a firm line between his sketch and what came after it, a distinction that would matter once Bitcoin's actual creator entered the picture.

• 6. The Nakamoto Connection

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  Wei Dai and cryptographer Adam Back were the first two people Satoshi Nakamoto contacted directly while developing Bitcoin in 2008. Nakamoto's own Bitcoin whitepaper cites Dai's b-money paper, tying the two proposals together in writing.

  In a May 2011 piece, cryptographer Nick Szabo wrote: "Myself, Wei Dai, and Hal Finney were the only people I know of who liked the idea (or in Dai's case his related idea) enough to pursue it to any significant extent until Nakamoto (assuming Nakamoto is not really Finney or Dai)."

  Dai himself questions how much his paper actually shaped Bitcoin, pushing back against the tidier version of the story. Speculation about Nakamoto's real identity has named Dai alongside Szabo and Finney, three suspects who have each denied being the pseudonymous creator.

  Whatever the truth behind Nakamoto's identity, Dai's 1998 paper remains cited in the founding document of the currency that grew up around it.