Nick Szabo: Bitcoin is safer than gold

Nick Szabo is perhaps best known for his research on digital currencies and the concept of smart contracts he proposed. In the past, Nathaniel Popper, author of Digital Gold, claimed that he had convincing evidence that Szabo was Satoshi Nakamoto, the creator of Bitcoin.

Whether true or not, Mr. Szabo’s work is well respected in the community, and the computer scientist, lawyer and cryptographer has rarely appeared in public in the past few years. However, at a recent Bitcoin investor conference, Szabo decided to give a relatively brief speech on Bitcoin and other blockchain assets.

Using computer science to improve gold

Before talking about Bitcoin, Szabo spent part of the time talking about his own creation, Bit Gold, which is often considered to be the predecessor of Bitcoin and the two systems share many common properties. Szabo said:

“Bit gold was a very transparent attempt to leverage the economic properties of gold, but we could improve its security properties… The idea was to use computer science to come up with something better.”

Gold is difficult to store safely

One of the reasons why Szabo wants to create a new digital age of gold is that gold is not very secure. The creator of bit gold mentioned real-world examples of gold not being secure enough in his speech, saying:

“Gold has been a very unsafe currency throughout its history. The Spanish looted the Aztecs, the British looted the Spanish, and then Roosevelt confiscated the gold. There are many, many examples of situations where gold is not safe to use.”

Compared to gold, Bitcoin is easier to store because when someone owns Bitcoin, they actually own a private key corresponding to a Bitcoin address. This private key can be stored on a computer, on a piece of paper, or even in anyone's brain. In many cases, information is easier to protect than physical objects.

Bitcoin as a better reserve currency

As Bitcoin’s security advantage over gold, Szabo also mentioned that the digital currency could be useful as a reserve currency for banks and governments, explaining:

“Reserve currency, Bitcoin has not yet achieved this function, but it is what I envisioned when I invented bit gold. Governments and banks can use Bitcoin as their reserve currency, and when political distrust breaks out (war), holding cryptocurrency will be safer than holding gold, especially since a lot of the world’s gold is held by the US government.”

It seems that Szabo has decided to become a public figure, and he recently spoke at the DEVCON conference in London. Whether Szabo created Bitcoin or not, the cryptocurrency community is happy to see Nick Szabo starting to speak out.

Original article: http://insidebitcoins.com/news/nick-szabo-bitcoin-more-secure-than-gold/36100
By Kyle Torpey
Compilation: Overnight porridge
Source (translation): Babbitt Information (http://www.8btc.com/nick-szabo-bitcoin)