I referred to this esoterically in early writings and I want to make a more easily accessible explanation. The early writings are from my github and include:
On The Origins of the Digital Age of the Historical and Global Shadow‐Banking Empire
Byzantine Encryption‐Hayekian Compression Of a Machiavellian Field
On Useful Metaphors and Balancing (aka Not Weighting) Possibilities
The concept presented here is two-fold. Its not necessarily a claim there exists a shadow blockchain. But I think it would be useful to open Overton window to the possibility that there is. In this way the name and concept of a shadow blockchain can simply serve as useful thought experiment and reference for dialogue.
On the Origins of the Shadow Chain
Ian Griggs paper “Triple Entry Accounting” serves as a nice proxy for the invention of the scaled out concept. It’s not easy for people to understand most especially because he wrote it devoid of its context.
In simple terms he’s claiming to have came up with a cryptographic solution that allows a centralized shadow bank to extend itself through shadow bank subsidiaries.
The concept creates “inside” shadow money where “inside” is a reference to what we basically call central bank reserves (George Selgin calls this inside money, a more general term, as he writes of studies of a private banking field where central banking doesn’t exist.).
But Grigg is not the origin of such an insight. He’s simply making an observation as an employee of the shadow banking system…the same cryptographic technique served the Medici’s I would claim-and predated them.
Grigg’s was an observation of our evolution to a digital such system.
The Role and Function (aka Power) of a Shadow Blockchain
The power of this chain is simple: it could allow near untraceable unstoppable banking systems to appear ANYWHERE it’s communication network can. It has no other physical bounds and can be extended through cryptographically secure communications (why I reference the Medici’s power via ciphers etc.).
The claim here then is the world is run by a tokenized shadow blockchain system.
“Meet the greatest simple equation since e=mc2”
Nick Szabo explains ‘blind signatures’ encapsulated in this formula and compared it to Einstein’s formalization of light:
gSf(m) = S(m)
But WHY is it so significant? No one has ever written about Szabo’s comment in this regard as far as I know. It has to do with the nature of Bitcoin’s Genesis block.
I won’t go into the details. I’ll leave the math too be argued by cryptographers and mathematicians. But I’ll explain in laymen's terms…
On The Shadows Keys
Typically we think of encryption as a coded message and its cipher key. Advancements in cryptography have created the concept of private/public key cryptography which for this explanation is comparable to a secret msg and the code needed to decrypt the message and reveal its contents.
Let’s say we need to defeat the shadowbanking empire to be free from our slavery it ensures. Then we assume we need the owners (ie Shadow-Satoshi’s) private key(s). In cryptographic communication you leave in public “offshoots” of the private keys. Cryptographically linkable but only if you have the private key.
Which was thought…UNTIL Chaum’s discovery.
The TRUE Nature of the Genesis Block
In the context of the Bitcoin genesis block what Chaum discovered is that you could “commutatively” infuse the PUBLIC FACING Key offshoots into the Bitcoin genesis block and make it so that the shadow key owner can sign it and reveal what’s encrypted beneath it.
The cleaver part is you don’t need their private key to set it up.
And it means that any private shadow keys held would sign as Satoshi.
The Extending Interesting Nature of Chaum’s Discovery
It’s not just one key you can do this with. You can do this with anything thats cryptographically paired, which means for example, you could embed the origins of COVID in the Bitcoin genesis block and you can still ALSO embed any amount private shadow keys (this would suggest why there are multiple obvious criminals claiming to be Satoshi for no apparent reason).
On Bitcoin as a Reverse Nuclear Strike
This means that Bitcoin would effectively be ultra secure evidence of the shadowchain only destroyable by signing it with the shadowkey(s) but bringing the shadowchain down with it…while in the meantime the comparatively deflationary supply schedule draws out of the inflationary nature of the shadowchain thus creating a ticking time-clock for the shadowmasters.
Effective Decryption of Otherwise Undecryptable Systems
The shadowmasters would be in an unsolvable quandary ie either destroy their own chain or watch it lose all its power…but without the good guys ever having first discovering the cipher keys themselves…it would be a remarkable implementation of Chaum’s formula and it would certainly deserve the credit Szabo gives Chaum in regard to it.
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