The secret history of Bitcoin mining: A miner mined 1.1 million Bitcoins through the "Patoshi model" in the early days

According to news.bitcoin.com, on April 16, Sergio Demián Lerner, chief scientist of RSK Labs, published a new research report on the earliest mined blocks on the Bitcoin network. The report on one of the earliest Bitcoin miners provides strong evidence that a miner processed 22,000 Bitcoin blocks. In addition, Lerner also released a new website called Satoshi Blocks, which aims to help crypto enthusiasts have an intuitive understanding of the earliest mining of the Bitcoin protocol.

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New data from Bitcoin’s earliest miners reaffirms previous claims

A few years ago, independent researcher and cryptographer Sergio Demian Lerner published one of the most in-depth studies of the earliest days of Bitcoin mining. According to his first study published on April 17, 2013, the vast majority of Bitcoin’s initial mining was done by a single miner.

In addition, Lerner tracked the extranonce field in the coinbase field that originated from the coinbase transaction itself and generated a data set from its analysis. Lerner accurately calculated that the miner mined 1,814,400 bitcoins at the time. In addition, 63% of these massively mined bitcoins, or 1.1 million, have never been used since their creation.

Fast forward 6 years, and Lerner has published another rigorous study that provides a stronger argument for his previous views. In his latest paper, titled “The Return of the Deniers and the Revenge of Patoshi,” he first discusses his original research and how he originally came to his previous conclusions. Lerner details how he discovered information within the extranonce field and how certain flaws can reveal information in a “non-privacy-preserving way.”

After identifying a miner who mined about 1.1 million bitcoins between 2009 and 2010, Lerner called the pattern represented by these blue lines the "Patoshi Pattern." This is a visualization of the Patoshi Pattern (blue) and other miner patterns (green). The data can be viewed on Lerner's new website, satoshiblocks.info.

Lerner’s paper goes on to discuss the single miner known as “Patoshi” and describes how he found the pattern of miners. Lerner explains that a few years later, some people have accepted the existence of the Patoshi pattern, but they still believe that there may have been multiple miners at the same time, or that some form of early mining pool has existed since the creation of the genesis block. Lerner refutes these arguments with many reasons, while explaining it through various factors:

• 99.9% of Patoshi blocks are unused.

• Each Patoshi block is “linked” to one block in the pattern set, but not to any other block.

• At certain time intervals, the Patoshi pattern breaks abruptly.

• The mining pool was created a few years later.

• Mining pools were created to reduce reward disparity since the individual probability of solving a block is lower, but in 2009, individual miners could solve blocks frequently and easily.

By the end of 2013, Lerner said, he had found “proof beyond a reasonable doubt that this pattern was real and that it used a completely different approach.” His latest research describes how he discovered that all of the blocks mined by Patoshi could be identified by the number of spent nonce used in blocks processed within a certain range.

Lerner didn’t add much to his previous research from 2014 to early 2019, but other recently published studies suggest that Patoshi mined only about 700,000 bitcoins. However, Lerner’s latest research proves “with high probability” that a single miner in his Patoshi model acquired all of those bitcoins, well over a million. His new argument is based on computer clocks, because even in the early days, miners used the clock of their local computer to mark processed blocks of data.

According to Lerner, Patoshi also suspended mining for 10 days. Lerner also said that the miner named "Patoshi" gave away about 550 bitcoins to others in the form of donations.

Lerner wrote:

“If you’ve studied the Bitcoin protocol, you’ll know that block timestamps are not necessarily monotonically increasing. This has been true since Bitcoin source code 0.1.0, up to the latest versions of Bitcoin Core with internal miners (before mining pools were created).”

Clocks and timestamps

Some of the latest evidence Lerner provides also explains why he is convinced that this single miner mined nearly 1.1 million bitcoins, even more than the 1 million he found mined several years ago. For example, Lerner points out that "computer clocks can be out of sync with each other," "timestamps are not continuously updated during mining," and "the Bitcoin software adjusts block timestamps to match the median time of the peer nodes connected to the node." For these reasons, the study points out that the same computer will almost never reverse its own timestamps, and "the difference between reversed block timestamps indirectly measures the hash rate of the parent block miner."

Lerner's research showed several examples of timestamp reversal.

Lerner's report continued:

“There are no time reversals between blocks mined by Patoshi, which is a value of zero, which is very valuable considering that Patoshi blocks account for 43% of the first 50,000 blocks. I have thought of other explanations, but to me it can only mean one thing: it was a single PC clock that timestamped Patoshi’s blocks. A single piece of software controlled the creation of the block templates, and it was a single miner. ”

The RSK Labs chief scientist concluded that there is evidence that the Patoshi pattern is related to Satoshi Nakamoto, but he would rather stop there and "never bother with Patoshi again." Lerner believes that the evidence he provided is solid, but he hopes that more people will question the information on the forum. Lerner also deduced that he found a more accurate pattern and wrote a more accurate pattern tracking algorithm, which can be viewed on his new website satoshiblocks.info.