Satoshi Nakamoto mined the first bitcoin on January 3rd, 2009, about 18:15:05 UTC. Which was appropriate because Satoshi is to Bitcoin what Alexander Graham Bell was to the telephone. Two months ago, the creator had unveiled the invention to a small online group of cryptography-obsessed computer scientists and hackers. Satoshi was already a well-known — if not actual — name in that environment. Years before the rest of the world heard about Bitcoin, someone using the Satoshi alias had been posting to message boards and contacting other engineers, without revealing their location, country, or even true names. Satoshi created Bitcoin and saw it grow in popularity before telling a developer buddy, “I’ve moved on to other things,” in April 2011.
What happens next? Satoshi vanished into thin air.
What Satoshi Nakamoto had to say about Bitcoin
One of the biggest contemporary mysteries is the true identity of Bitcoin’s founder. Who exactly was Satoshi Nakamoto? Why was that name chosen? And what happened to Satoshi Nakamoto? Satoshi is popularly thought to own more than a million bitcoin, which would be worth tens of billions of dollars in March 2021, in addition to inventing a completely new kind of money with a market valuation of more than $1 trillion.
(Note: We refer to Satoshi as “he” or “he” in several early Bitcoin history sections of this account since the individuals Satoshi was talking with at the time assumed Bitcoin’s developer was a young male. However, Satoshi’s gender is one of the unknowns. Another question is whether Bitcoin’s creator worked alone; some experts believe Satoshi is really a team of engineers.)
If Satoshi left any hints, they may be discovered in the code and communications he composed between 2008 and 2011. The whole output, which consists mostly of postings to a forum he founded in 2009 called BitcoinTalk, has been scrupulously catalogued as if it were a holy scripture. Millions of people have seen Satoshi’s comments by now, but when they were initially penned, they were primarily read by a few dozen hermetic members of the Cryptography Mailing List – a group of programmers who specialise in developing secure communication systems. Many people on the mailing list identified as “cypherpunks,” or those who supported using encryption to effect social and political change.
Satoshi, according to his own account, started developing the initial version of Bitcoin in the C++ programming language in the spring of 2007. In 2008, he discussed his concept with two other cryptographers who had created the proto-cryptocurrencies b-money and Hashcash. Soon after, he shared his concept with the Cryptography Mailing List.
Bitcoin was met with a collective yawn at first. “When Satoshi launched Bitcoin on the cryptography mailing list, he received a doubtful welcome at best,” cryptographer legend Hal Finney, the first person to ever receive bitcoin from Satoshi, recalls. “Cryptographers have seen far too many great ideas by ignorant newcomers.” They have a tendency to respond quickly.”
Satoshi’s October 2008 announcement — a whitepaper describing Bitcoin’s mechanics — lacked the bombast you’d expect from someone who realised he was going to transform the world. “I’ve been working on a novel peer-to-peer electronic currency system with no trusted third party,” Satoshi wrote matter-of-factly.
However, the nine-page, equation-filled book did provide a solution to a vexing issue that had plagued the cypherpunk movement for years. No previous digital money scheme has solved what Satoshi called “the double-spending dilemma.”
How do you keep a money with no physical form from being cloned and spent like any other computer file, the way youngsters swapped infinite copies of Eminem mp3s over Napster in the early 2000s?
“We offer a peer-to-peer network solution to the double-spending dilemma,” Satoshi stated.
A peer-to-peer system would do away with the necessity for a centralised authority (such as a credit card company or a bank) to verify transactions. Satoshi reasoned that the requirement for central authority was the failure point for previous efforts at digital money. “Because of all the firms that failed during the 1990s, many people instantly regard e-currency as a lost cause,” he said. “I suppose it’s clear that it was just the centralised structure of such institutions that destroyed them.” This is, I believe, the first time we’ve been a decentralised, non-trust-based system.”
Satoshi recommended a publicly accessible shared ledger to capture every transaction in order to achieve this “trustless” system. He referred to it as the “blockchain.” (To learn more about how Bitcoin works, go here.)
Bitcoin’s independence from the current financial system may have seemed especially enticing at the time, considering that Satoshi had just watched the global financial system collapse due to massively reckless wagers made by large investment banks.
“The core issue with traditional money is all the trust necessary to make it function,” Satoshi observed. “Banks must be trusted to retain and move our money electronically, yet they lend it out in waves of credit bubbles with just a portion in reserve.”
Third parties, such as payment processors, benefit from functioning as a middleman in the “trust-based paradigm” of online commerce. Bitcoin has the potential to render middlemen obsolete. By 2010, the concept has gained traction outside of the exclusive cryptography environment.
In December, an article in PC World proposed that Wikileaks may utilise Bitcoin to escape government involvement. Satoshi’s reaction was very emotional. “It would have been fantastic to have this attention in any other setting,” he said in a Bitcoin forum post. “WikiLeaks has stung the hornet’s nest, and the swarm is heading our way.”
Tracking along the breadcrumb trail
Journalists, hackers, and spy organisations have all examined the breadcrumbs Satoshi left behind in the hopes of determining the identity of the Bitcoin creator. Though Satoshi never disclosed any personal information in his contacts, he did once represent himself (in a peer-to-peer forum profile) as a 37-year-old man residing in Japan – a truth that almost no one believes. So, where did he come from?
Satoshi buried a possible Easter egg in the Genesis block’s metadata – the very first bitcoin ever mined: “The Times 03/Jan/2009 Chancellor on verge of second financial rescue.” The text is taken from a headline in the Times of London that day. Satoshi also used Britishisms like “favour,” “maths,” “flat” (for his abode), and the word “bloody hard” often. All of this would indicate to the creator being from or residing in the United Kingdom, unless Satoshi had been concocting red herrings from the early days of Bitcoin’s conception.
Researchers examined timestamps from Satoshi’s numerous online activity and determined that the Bitcoin developer was most likely in the UK (GMT), the US Eastern (EST), or the US Pacific time zones (PST).
Some believe Satoshi is not a single individual, but rather a group of programmers, maybe including someone from the NSA. In 2011, Dan Kaminsky, one of the world’s top Internet security experts, told The New Yorker, “He’s a world-class coder with a solid mastery of the C++ programming language.” “He is knowledgeable on economics, cryptography, and peer-to-peer networking.”
What is Kaminsky’s conclusion? “Either this was done by a team of people or this man is a genius.”
Satoshi Nakamoto’s Identity Revealed
If Satoshi is just one guy, he is part of a highly specialised group of programmers that is likely to number in the dozens. There have been several theories concerning his identity. Some have been absurd. With considerable hoopla, Newsweek revealed in 2014 that it had identified Bitcoin’s inventor in Southern California – in the guise of a 64-year-old retired scientist called Dorian Satoshi Nakamoto. Based on his apparent confusion upon learning about his supposed invention, this Nakamoto definitely merely had a similar name. (In 2014, Satoshi or someone with his login information came on the Bitcoin forum and said, “I am not Dorian Nakamoto.”
Naturally, many characters have claimed to be Satoshi. Jörg Molt, a German ex-DJ with Las Vegas-magician hair, has promoted himself as a “cofounder of Bitcoin” in order to sell Bitcoin-branded sparkling wine, among other things. And Australian Craig Steven Wright, who “either developed bitcoin or [is] a clever hoaxer who desperately wants us to think he did,” according to a 2019 Wired story.
Two of the most likely suspects have both denied any involvement. The first is cryptography pioneer Hal Finney (a cypherpunk who was among the early Bitcoin users). He died of ALS in 2014, but even on his deathbed, he insisted that he was not Satoshi and had no knowledge of the Bitcoin creator’s true identity. He laboriously answered to a Forbes reporter’s questions through eye-tracking equipment late in his ALS: “You have recordings of my reaction to Bitcoin’s announcement, and I struggled to grasp it.” You may argue that I was able to fake it, but I’m not sure what to say to that. I’ve made some modifications to the Bitcoin code, and my approach differs greatly from Satoshi’s. I write in C, which is compatible with C++, but I don’t grasp Satoshi’s techniques.”
Another notable suspect is computer scientist and cypherpunk Nick Szabo (founder of 1998 Bitcoin forerunner Bit Gold and originator of the smart contract idea that drives decentralised financial applications), who has continuously denied any participation. Is there one easy reason to trust him? Under his own name, Szabo has been a prominent member in the crypto industry before, during, and after Bitcoin. Why would he make up a fake persona only for this one project?
There’s also the heartbreaking, persistent notion that Satoshi was a brilliant cryptographer called Len Sassaman, who committed himself in 2011 after a lengthy struggle with depression. Indeed, two months before Sassaman’s death, Satoshi wrote a cryptic email to another developer in one of his last exchanges, stating that he “probably won’t be around in the future.”
Why Satoshi would want anonymity
If the actual Satoshi Nakamoto exists, there are several strong reasons to remain anonymous. The US government has a long history of punishing anybody who are bold enough to design a currency to compete with the dollar. According to The New Yorker, it is a violation of federal law for people to “establish private coin or currency systems to compete with the official coinage and money of the United States.” In reality, federal authorities brought a slew of charges against the creators of e-Gold in 2007, arguing that their company failed to specifically prohibit money laundering and other crimes.
Assuming Bitcoin’s inventor is still alive, Satoshi Nakamoto may be on his way to becoming the world’s wealthiest person. But there is one more intriguing surprise. Because the Bitcoin blockchain is public, analysts can reasonably identify a large portion of the bitcoin Satoshi mined in the early days of his creation. Satoshi’s coins seem to have never been transmitted, spent, or capitalised on from the very beginning, when Satoshi distributed a few bitcoin to early testers like Finney. Over the last decade, as Satoshi’s assets have grown to be worth potentially tens of billions of dollars, a large portion of the money Satoshi created has stayed undisturbed – a big cache of so-called “lost coins” that might be in circulation but aren’t.
So, who exactly is Satoshi? One of the leading suspects? One of the numerous other persons that have been recognised as the founder of Bitcoin throughout the years? Someone who has never been suspected? Is Satoshi still alive? Is it a single inventor or a group? As time passes, it is more probable that we will never know the answers.
Satoshi’s trillion-dollar invention, a tiny cache of communications, and maybe one last gift are all that remain. “Lost coins very marginally increase the value of everyone else’s coins,” Satoshi commented in response to a BitcoinTalk topic concerning users losing access to their wallets in 2010. “Consider it a gift to everyone.”