The Mystery Of Bitcoin Creator Satoshi Nakamoto

Who is Satoshi Nakamoto?

Who is Satoshi Nakamoto? At this point he, she, or they have reached mythical status in the crypto world. The creator of Bitcoin has managed to remain anonymous for over 10 years, which is no easy feat in the modern world of hacking, doxing and online sleuths. The mystery surrounding the enigmatic progenitor is legendary and, like all good mysteries, there has been no shortage of speculation, theory, and folly in the story Satoshi Nakamoto.

The Origins Of Bitcoin

The story of Bitcoin can actually be traced back to almost 10 years before Satoshi first entered the picture. The cryptographer and computer engineer Wei Dai developed what is now regarded as a precursor to Bitcoin called b-money in 1998. It was an “anonymous, distributed, electronic cash system.” Satoshi even referenced Dai in his whitepaper for Bitcoin.

Nick Szabo is another computer scientist that made an indelible contribution to the crypto world. He created a project – BitGold – that laid the groundwork for the blockchain, the mechanism that would make Bitcoin possible.

Bitcoin’s Dominance In The Crypto Market

Bitcoin genesis block satoshi nakamoto

Bitcoin has been the preeminent cryptocurrency since its inception and continues to lead all others by a significant margin. Let’s look at some of the statistics:

There are nearly 18 million BTC in circulation and, with a current price of around $8,300, that puts the market cap at over $150 billion USD. With a daily volume of over $15 billion, Bitcoin trades more than double the next highest-ranked cryptocurrency. In order to see just how significant Bitcoin is on the global market, it can be useful to look at the user numbers as well.

There are over 32 million wallets containing BTC around the world. However, this is not necessarily the best metric to use to judge BTC’s user total: no doubt some wallets are no longer used and many users may have multiple wallets.

Coinbase, the premier wallet and exchange provider for BTC, has around 13 million users. However, some of the largest BTC markets are unrepresented by Coinbase. China, S. Korea, and Japan cannot use Coinbase and make up a large portion of all BTC trade. It is more likely that there are around 25 million users globally trading Bitcoin on any given day.

Who Is Satoshi Nakamoto?

The first instance of the name Satoshi Nakamoto came in the form of a user profile on a forum for the peer to peer advocacy and development organization P2P Foundation. In this profile, Satoshi’s personal information lists his date of birth as 1975 and his nation of residence as Japan. His fluent, perfect English and use of UK Commonwealth colloquialisms suggest otherwise, however. His early discussions on the platform center on cryptocurrency and the faults that make traditional fiat currencies, and the institutions that hold them up, inherently flawed. Satoshi also eventually put up links to his Bitcoin whitepaper on this forum.

On October 31, 2008, Satoshi’s 9-page whitepaper “Bitcoin: A Peer-to-Peer Electronic Cash System” was released on a cryptography mailing list. This document lays out the Bitcoin protocol, which separates it from other electronic currency systems as well as the foundations of cryptographic tools and development that allowed Bitcoin to arise. Satoshi’s extensive reference list includes Wei Dai (b-money), Dr. Adam Back (Hashcash) and Dr. Ralph Merkle and his work on cryptography, acknowledging his debt to other researchers as well as the crypto community at large.

Within the whitepaper, he also hints at his dissatisfaction with the current models of currency and exchange and why there must be a sea change, a recurring theme in Satoshi’s persona. “What is needed is an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party.”

The Launch Of Bitcoin

Satoshi Nakamoto identity

The Genesis Block was mined on January 3, 2009, with the second block mined 6 days later on January 9. The Genesis block contains 50 BTC that cannot be spent, either by design or a coding error. Along with these primary Bitcoins, there is a message: “The Times 03/Jan/2009 Chancellor on brink of the second bailout for banks.” This serves as both a timestamp, a play on holding a newspaper up in a photograph, as well as another swipe at the state of affairs in the financial world and the failings of megalithic financial institutions.

Satoshi continued to remain active in forums and blogs over the next few years as Bitcoin exploded on the world scene: the Silk Road garnered major media attention as a free for all anonymous marketplace inhabited by drug dealers and hitmen, all using Bitcoin as their currency. Then the forks came. In 2011 the first BTC fork, Litecoin debuted with the goal of becoming a competing cryptocurrency. It seemed that Satoshi had broken the seal on a new and revolutionary method for transaction. Through it all he, she or they, remained anonymous. Until one day, Satoshi simply disappeared.

The Possible Identity Of Satoshi Nakamoto

The mystery of Satoshi has been growing and changing for ten years. Much like Sasquatch and the Loch Ness Monster, a number of theories have been advanced. And, much like these other mysteries, there are ideas that are more and less plausible. Elon Musk has been named as a potential candidate with his technical prowess and penchant for the unorthodox, although he has publicly denied all connection with Nakamoto. Some people have even gone so far as to claim that Satoshi is a “Deep State” operative and puppet of the Illuminati. There are, however, many more likely suspects to be inspected.

Dorian Satoshi Nakamoto: Sharing A Name

One of the first and most easily dismissed claims was that of Dorian Satoshi Nakamoto. The 68-year-old Japanese-American living in California was identified in a 2014 Newsweek article as the elusive Bitcoin creator. Despite his work as a systems engineer on classified US defense projects as well as his background in digital finance, the homonymous nature was sheer coincidence.

Nick Szabo: The Crypto Pioneer

The next person on the list is a bit more plausible. A cryptography enthusiast as well as a pioneer in decentralized digital currency, Nick Szabo developed a precursor to Bitcoin, BitGold. He definitely had the interest and experience in the field to put him at the top of the list. His various writings on forums, blogs and emails were also the subjects of a stylometric analysis by researcher Skye Grey indicating that he was, in fact, Satoshi Nakamoto. Despite these claims, Szabo has roundly denied being Satoshi: “Thanks for letting me know. I’m afraid you got it wrong doxing me as Satoshi, but I’m used to it.”

Hal Finney: The Cryptographer

The next suspect in the case is Hal Finney. Finney, another cryptographer with ties to BTC, died of amyotrophic lateral sclerosis in 2014 at the age of 58. Interestingly, he was supposedly Dorian Nakamoto’s neighbor and also received the first BTC transaction from the true Satoshi Nakamoto. Once again, a stylometric analysis was employed, this time by Forbes journalist Andy Greenburg.  Although at first glance it more closely resembled the writings of Satoshi than any they had previously come across, after a more involved inspection of his email exchanges with Satoshi, as well as his BTC wallet transactions, he was dismissed as another dead end.

This brings us to the latest, and most interesting, if not most compelling suspect: Craig Wright.

Craig Wright: The Self-Claimed Creator

where is satoshi nakamoto

Craig Wright is an Australian academic who was brought into the spotlight of Satoshi when Wired Magazine published an article in 2015 claiming Wright “either invented Bitcoin or is a brilliant hoaxer”. Shortly after the Wired article was released, Gizmodo released their own article stating they were contacted by a supposed hacker that had gained access to Wright’s emails and claimed that Satoshi Nakamoto was a pseudonym for Wright and his accomplice, the deceased cybersecurity expert David Kleinmen.

Craig Wright has publicly claimed that he is the man behind the mask, and is indeed Satoshi Nakamoto. However, when asked to provide evidence – a list of addresses associated with the Tulip Trust, said to hold almost 1 million BTC – the documents were highly redacted and shed little light on the true nature of Wright’s involvement in the birth of Bitcoin. His story is not finished here, however.

Another interesting facet to this investigation is that on the same day that Wired released their article identifying Wright as Satoshi, the Australian Tax Office raided Wright’s house and offices with federal warrants and executed searches. The ATO stated this was a coincidence and claimed: “This matter is unrelated to recent media reporting regarding the digital currency bitcoin.”

The Real Satoshi?

One more piece to the puzzle comes in the form of an extensive interview of Wright by the Australian Tax Office. In it, they discuss a series of transactions and business dealings between different entities and Wright’s holdings. In 2014, the ATO declared that Bitcoin will be classified as an asset for capital gains tax, and this seems to be a main topic of contention in the interview: Bitcoin’s classification for tax purposes. There is also much discussion of several trusts that hold BTC located in different locations including the Seychelles and Singapore and Wrights association with them.

In this interview, Wright also claims that he has been “running” Bitcoin since 2009: “I did my best to try and hide the fact that I’ve been running Bitcoin since 2009 but I think it’s getting—most—most—by the end of this I think half the world is going to bloody know.” However, a request to the ATO to verify the authenticity of the transcripts was denied based on confidentiality.

The Founder Of Bitcoin

The mystery of Satoshi Nakamoto is an interesting case. Even after ten years, we still do not have a definitive answer. News agencies and amateur sleuths have suggested many possibilities, yet none have proved to be true. It is ironic, however, that possibly the most convincing suspect, Wright, who actually claims to be Satoshi, is called a fraud and hoaxer.

It seems that perhaps we will never know the true Satoshi. He has become a larger than life character; people have heaped upon him so much of their own ideas about who he should be and how he should act, that no one person can live up to the idea that Satoshi has become. And maybe there is nothing wrong with that; maybe Satoshi can do more for everyone as a disembodied persona than he ever could as any one person.

 


 

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References

Bitcoin. (2019, May 13). Coin Market Cap. Retrieved from: https://coinmarketcap.com/currencies/bitcoin/

Branwen, G. and Greenberg, A. (2015, December 18). Is Bitcoin’s Creator This Unkown Australian Genius? Probably Not. Retrieved From: https://www.wired.com/2015/12/bitcoins-creator-satoshi-nakamoto-is-probably-this-unknown-australian-genius/

Chester, Sommer, Wright. (2014, February 18). Interview.  Australian Taxation Office. Retrieved from: https://www.documentcloud.org/documents/2644012-20140218-Transcript-Redacted.html

Farrell, P. and Hunt, E. (2015, December 9). Reported Bitcoin ‘Founder’ Craig Wright’s Home Raided By Australian Police. Retrieved from: https://www.documentcloud.org/documents/2644012-20140218-Transcript-Redacted.html

Garg, P. (2019, May 10). Craig Wright’s Evidence He’s Satoshi in Un-redacted Court Documents is a “Lazy Copy-Paste Job”. Retrieved from:  https://cryptoslate.com/craig-wrights-evidence-hes-satoshi-in-unredacted-court-documents-is-a-lazy-copy-paste-job/

Greendburg, A. (2014, March 25). Nakamoto’s Neighbor: My Hunt For Bitcoin’s Creator Led Me A Paralyzed Crypto Genius. Retrieved from: https://www.forbes.com/sites/andygreenberg/2014/03/25/satoshi-nakamotos-neighbor-the-bitcoin-ghostwriter-who-wasnt/#452238624a37

Jenkinson, G. (2018, October 31). Bitcoin Whitepaper: 10 Years Since Satoshi’s Vision Was Brought to Life. Retrieved from: https://cointelegraph.com/news/bitcoin-whitepaper-10-years-since-satoshis-vision-was-brought-to-life

Lielacher, A. (2019, February 11). How Many People Use Bitcoin in 2019? Retrieved from: https://www.bitcoinmarketjournal.com/how-many-people-use-bitcoin/

O’Neal, S. (2019, January 3). From Dorian Nakamoto to Elon Musk: The Incomplete List of People Speculated to Be Satoshi Nakamoto. Retrieved from: https://cointelegraph.com/news/from-dorian-nakamoto-to-elon-musk-the-incomplete-list-of-people-speculated-to-be-satoshi-nakamoto

Repzilla. (2018, January 4). Satoshi Nakamoto Controls Bitcoin or the Illuminati (Who Made Bitcoin). Retrieved from: https://www.youtube.com/watch?v=inm9sc8ErNg

Rhodes, D. (2018, December 15). A Complete History of Bitcoin (2008-2019 Timeline). Retrieved from: https://blockexplorer.com/news/bitcoin-history-timeline/

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