October 14, 2018
by Sharon Moran
Editor’s Note: January, 15, 2020 Since writing this article, my understanding of the possible escrow system that Satoshi was referring to in the Bitcoin whitepaper has improved. Essentially, it’s the Lightning Network. Also, since writing this article, the ecosystem that Electroneum is trying to create in developing countries received praise from a founding father of blockchain, Scott Stornetta.
We already know Richard Ells likely read, The Psychology of Decimals before deciding on a two-decimal place currency. Electroneum’s goal is mass adoption by targeting 99% of the world’s population that hasn’t been introduced to cryptocurrency yet, so a 21 billion supply hardly seems like enough. After all, 99% of the 7.7 billion people on the planet is 7.6 billion!
Yet, amid all of the misinformation and criticisms of Electroneum over the last year, there is one point that is worth emphasizing. The structure of the instant payment system that Richard Ells has implemented with Electroneum is actually hinted at in the Bitcoin whitepaper.
In October 2008, Satoshi Nakamoto published the Bitcoin whitepaper. At the bottom of page one, this particular sentence stands out, “Transactions that are computationally impractical to reverse would protect sellers from fraud, and routine escrow mechanisms could easily be implemented to protect buyers.”
The term “routine escrow mechanisms” definitely sounds a lot like what Richard Ells has implemented with Electroneum: the patent-pending, centralized instant payment system that ring fences transactions and provides merchants with instant verification, thereby eliminating the usual wait time for blockchain confirmation.
One could argue that Satoshi was exclusively talking about smart contracts when he mentions “routine escrow mechanisms,” but why would he choose such language that usually and overwhelmingly refers to third parties? He published the whitepaper in 2008, a full 14 years after Nick Szabo coined the term “smart contracts.” If he didn’t at least recognize a somewhat centralized component as a viable option if desired, he probably wouldn’t have chosen a word that is strongly associated with third party intermediaries.
Smart contract terminology already existed even though the technology to implement executable, trustless smart contracts wasn’t fully evolved when Satoshi wrote the whitepaper. (And it’s still evolving.) He could have just as easily said, “routine escrow mechanisms in the form of trustless, smart contracts.” Yet, he didn’t.
Entire technologies have been “leapfrogged” in developing nations; landlines never existed in developed parts of the world. As a result, people that never had a home phone because the traditional landline infrastructure was never implemented in their towns skipped over an entire century-old technology and went straight to cell phones once they became available.
That’s what’s happening with Electroneum. An estimated 2 billion unbanked people in the world will, for the first time ever, have access to a seamless digital payment solution that is faster, more convenient, and more beneficial than any system the traditional banking industry that so long ignored them could have ever provided.