BIRTH OF PEER-TO-PEER NETWORKS

There are several interesting similarities between BitTorrent and Bitcoin beyond their shared prefix. When Bram Cohen announced the first working version of the BitTorrent client in 2001, it was to a mailing list and the debut was decidedly low-key: “My new app, BitTorrent, is now in working order, check it out here,” he wrote.

The initial response was underwhelming, with the sole reply a confused “What’s BitTorrent, Bram?” It was a soft launch that Satoshi was to recreate seven years later and an inauspicious start, yet by 2004, BitTorrent accounted for up to one-third of all internet traffic. Along the way, the file-sharing network courted its share of controversy, sparking a backlash from media companies intent on shutting it down – heat that was to come Bitcoin’s way too, once it got too big to hide.

Bram Cohen had entered the 2000s as a talented programmer frustrated by dot-com failures and fascinated by file sharing. Throughout the ’90s, the self-taught coder worked at several startups that never produced a successful product. By 2001, Bram was determined to create “something that people would actually use.”

A seed had been planted during his time at MojoNation, a startup building a distributed data haven. MojoNation’s software could break files into encrypted chunks and distribute them across many computers. It even had an internal digital currency (“Mojo”) to reward users for contributing bandwidth. Bram realised that “breaking a big file into tiny pieces might be a terrific way to swap it online.” Multiple peers could share the work of uploading a file, transforming file distribution into a cooperative group effort.

There’s a certain irony in two of the world’s most successful peer-to-peer networks having been created by solo developers. Both Bram and Satoshi envisioned systems whose network effects would strengthen them as more users joined – but were forced to launch them alone. The visionary founders were quite literally peerless.

A New Bit Is Born

Both BitTorrent and Bitcoin were essentially one-man creations, which meant the original code reflected their creators’ idiosyncrasies. Bram’s Python BitTorrent client was functional but not user-friendly since it required interacting via command-line or simple GUIs. Satoshi’s 0.1 Bitcoin client, meanwhile, relied on an IRC bootstrapping mechanism – a crude solution later replaced by hard-coded DNS seeds. 

Despite the initial client’s rudimentary design, by 2004 over 20 million people had downloaded the BitTorrent application, whose impact rippled far beyond file sharing. BitTorrent proved the viability of large-scale decentralised networks, foreshadowing principles that would later become synonymous with Bitcoin. What BitTorrent did for files, Bitcoin did for finance. Bram Cohen himself saw the connections, venturing that “Bitcoin is like BitTorrent for money. The name clearly is an homage.”

BitTorrent showed that millions of strangers could form an ad hoc network to reliably and efficiently perform a task. This P2P model is exactly what Bitcoin uses to propagate transactions and blocks. Each Bitcoin node connects to others in a mesh, much like each BitTorrent client connects to peers in a swarm, with no central authority in control – the network is self-organising.

As one retrospective Noted, BitTorrent “single-handedly sparked a new file-sharing revolution” and “never needed likes to go viral. The file-sharing protocol sold itself and soon conquered the Internet.” Be it wittingly or unwittingly, it was a playbook Satoshi replicated when it was his turn to exit the lab and invite the world to turn his creation into an unstoppable peer-to-peer network.