Did the NSA Create Bitcoin?

Did the NSA Create Bitcoin? The mysterious origins of Bitcoin have led to endless theories pertaining to who Satoshi Nakamoto actually is. One prominent theory which is sometimes circulated in the liberty movement, is that Bitcoin is nothing more than a trojan horse of the establishment, designed to move people away from cash and gold, and towards digital currencies.

The basis for this argument tends to lean heavily on a paper written by three employees of the National Security Agency (NSA) Office of Information Security Research and Technology, Cryptology Division, in June 1996. The paper was titled: How to Make a Mint: The Cryptography of Anonymous Electronic Cash.

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For those who think that this paper is somehow smoking gun information exposing how Bitcoin was created by the NSA, I would disagree. After all, the paper spends a large amount of time making statist arguments and talking about how bad an anonymous currency would be from the perspective of the establishment.

I understand that Bitcoin is not fully anonymous, but this is because Satoshi had to make structural trade-offs in the design of Bitcoin, rather than Satoshi having any statist concerns about tax evasion or whatever else. In order to create a decentralized network that minimizes the need for trust, Satoshi employed a blockchain when creating Bitcoin. As a blockchain is a distributed public ledger where all transactions are publicly verified and recorded, anonymity is reduced.

If we turn our attention back to the NSA paper, it is anti-Bitcoin in its tone and principals. For instance, the NSA paper employs the same statist argument made against Bitcoin today in regards to how money laundering may be made easier by cryptocurrencies:
“In particular, the dangers of money laundering and counterfeiting are potentially far more serious than with paper cash. These problems exist in any electronic payment system, but they are made much worse by the presence of anonymity. Indeed, the widespread use of electronic cash would increase the vulnerability of the national financial system to Information Warfare attacks. We discuss measures to manage these risks; these steps, however, would have the effect of limiting the users' anonymity.”

Furthermore, the NSA paper advocates the introduction of third parties to counter money laundering, with the idea of a third-party dispute layer being totally anti-Bitcoin, as peer-to-peer Bitcoin removes the need for third parties as much as possible…

Sources:

Laurie Law, Susan Sabett, Jerry Solinas - National Security Agency Office of Information Security Research and Technology, Cryptology Division (18 June 1996) HOW TO MAKE A MINT: THE CRYPTOGRAPHY OF ANONYMOUS ELECTRONIC CASH https://groups.csail.mit.edu/mac/classes/6.805/articles/money/nsamint/nsamint.htm

David Chaum (1985) SECURITY WITHOUT IDENTIFICATION: TRANSACTION SYSTEMS TO MAKE BIG BROTHER OBSOLETE, Communications of the ACM, 28:10 https://www.cs.ru.nl/~jhh/pub/secsem/chaum1985bigbrother.pdf

Chaum D. (1983) Blind Signatures for Untraceable Payments. In: Chaum D., Rivest R.L., Sherman A.T. (eds) Advances in Cryptology. Springer, Boston, MA. https://link.springer.com/chapter/10.1007/978-1-4757-0602-4_18#citeas

DigiCash, Investopedia https://www.investopedia.com/terms/d/digicash.asp

Timothy C. May (1988) - The Crypto Anarchist Manifesto https://nakamotoinstitute.org/crypto-anarchist-manifesto/

Nick Szabo (2005) Bit Gold https://nakamotoinstitute.org/bit-gold/