Who is Satoshi Nakamoto?

Gemma says…

The identity of the creator of Bitcoin, Satoshi Nakamoto, remains a mystery to this day.

The original concept for Bitcoin was released to the world via a post to a cryptography mailing list in October of 2008 as a technical white paper titled, “Bitcoin: A Peer-to-Peer Electronic Cash System.” The report and the 30,000 lines of Bitcoin code released three months later were clear in that they introduced blockchain technology and solved the double spend problem. However, many questions remained after their publication, with the most notable and intriguing mystery surrounding Bitcoin being the true identity of its creator.

The original white paper and code were authored by “Satoshi Nakamoto.” Satoshi registered the domain name bitcoin.org in 2008 and released the first Bitcoin software client in 2009. It is likely, however, that the project began sometime in 2007.

Satoshi was active in the early days of Bitcoin. The account associated with the creator posted to forums and communicated with other Bitcoin developers, but Satoshi relinquished all efforts in 2011 when he told one developer, “I have moved on to other things.” This choice was perplexing since Bitcoin was finally starting to gain traction, but Satoshi’s exit seemed later to have been part of a grand design.

What is clear is that the person or people behind Satoshi Nakamoto intended to remain anonymous. Many in the Bitcoin community argue that the identity of Satoshi Nakamoto is irrelevant and that knowing it is unwanted because, should the identity be revealed, the ensuing media circus would detract from the true value of Bitcoin as a decentralized currency without a central authority figure.

Speculative Theories

There have been many theories linking Satoshi Nakamoto to various figures in the academic and cryptographic fields, but, so far, none of them have been proven.

Michael Clear

In 2011, Joshua Davis ran a story in The New Yorker suggesting that Satoshi Nakamoto was actually Michael Clear, an Irish computer science student with a background in cryptography, economics, and peer-to-peer networks. Davis claimed that Clear’s writing matched that used in the Bitcoin white paper. Clear denied these claims and told Davis, “I’m not Satoshi, but even if I was, I wouldn’t tell you.”

Neal King, Vladimir Oksman, and Charles Bry

A story by Adam Penenberg published in 2013 in Fast Company argued that Neal King, Vladimir Oksman, and Charles Bry were the true creators of Bitcoin. These three Finnish cryptographers submitted a patent application for updating and distributing cryptographic keys three days before the bitcoin.org domain was registered. This patent also featured the term “computationally impractical to reverse,” which is used throughout the Bitcoin white paper. All three have denied any claims tying them to the identity of Satoshi Nakamoto.

Dorian Satoshi Nakamoto

Newsweek published a cover story in 2014, confidently titled “The Face Behind Bitcoin,” that claimed that retired physicist Dorian Satoshi Nakamoto was the true creator of Bitcoin. The piece linked together the secret nature of Dorian’s work, his distaste for the government and the financial pressure he faced during the same time frame of Bitcoin’s development. What seemed like a promising discovery soon turned into a bit of a media frenzy in which Dorian repeatedly denied any connection to Bitcoin. You can read about Dorian’s side of the story here.

Craig Wright

In late 2015, Wired and Gizmodo published stories claiming that Australian computer scientist Craig Wright was the pseudonymous Satoshi Nakamoto. Some prominent figures in the Bitcoin community, like former core developer Gavin Andresen, have also asserted that Wright is, in fact, the individual behind the pseudonym. More recently, though, the story has been viewed as a large-scale hoax. Wright, after proclaiming himself to be the true Satoshi Nakamoto, provided a fake signature while pretending it was a real signature. He also made mistakes talking about how Bitcoin works at a protocol level that the real Satoshi would be unlikely to make. While Wright did not provide the community with the closure it has been looking for, he nonetheless reinvigorated the search for Bitcoin’s elusive creator.

Other Prominent Bitcoin Community Members

Notable figures in the Bitcoin community have at one point or another been tied to the true identity of Satoshi Nakamoto. Jed McCaleb, founder of the Bitcoin exchange Mt. Gox and the Ripple and Stellar Lumens cryptocurrency payment networks, was linked to Satoshi in part because of his love for Japanese culture.

Some of the earliest Bitcoin adopters and active members of cryptographic forums have also been named as Satoshi candidates. Prominent developers including Hal Finney, Michael Weber, and Wei Dai have all been suspected of playing a part in Bitcoin’s creation. Nick Szabo, creator of the pre-Bitcoin decentralized digital currency “bit gold” and a thought leader in the crypto world, has also been named as a suspect.

Satoshi’s BTC Holdings

Popular rumors claim that Satoshi Nakamoto owns close to or over 1 million BTC, earned mostly by mining the earliest blocks on the Bitcoin blockchain, and worth around $3.5 billion USD at the time of writing. If all of this wealth was sold on the market suddenly or over a short time, the price of BTC would drop precipitously. More bitcoins in circulation have an inflationary effect on the currency, because each one in circulation makes the BTC currency less scarce. On the other hand, if one person no longer holds 1 million BTC, that fact becoming widely known could increase overall trust in the system. As such, the price could increase if those bitcoins are already sold and known to be in general circulation.

To Be Continued…

Uncovering the true identity of Satoshi Nakamoto would make for an exciting story, but it may prove better for Bitcoin to operate without a single “leader.” Theoretically, if Satoshi were to be revealed to the public, that entity’s opinion could exert undue influence over the future of the protocol.

Bitcoin’s decentralized nature has made it difficult to come to a consensus on technical challenges with far-reaching implications. The current ecosystem has multiple parties vying for the support of miners and users. Nevertheless, Bitcoin’s decentralized consensus system compels members in the community to be more willing to reach consensus.

The quest to find Satoshi Nakamoto also distracts from the primary motivations behind the creation of Bitcoin. Whoever did create the first decentralized peer-to-peer payment network was probably not doing so for fame or profit, but rather to draw attention to how their new digital currency invention could enable a more egalitarian monetary system. Bitcoin allows people who know nothing about each other to confidently transact from anywhere in the world without a central authority. That is the most important story of all.