The First Appearance of Satoshi Nakamoto

On October 31, 2008, a man using the name Satoshi Nakamoto posted to metzdowd.com, a cryptography mailing list, saying, “I’ve been working on a new electronic cash system that’s fully peer-to-peer, with no trusted third party.” He provided a link to the whitepaper, listed the features of his project, and provided an abstract of the paper. He followed this up on January 8, 2009 with a post on the same mailing list that stated, “Announcing the first release of Bitcoin, a new electronic cash system that uses a peer-to-peer network to prevent double-spending. It’s completely decentralized with no server or central authority.” This post included the first download link to bitcoin. The rest is history. But who is Satoshi Nakamoto, really? The answer to that question, as simple as it should be, is shrouded in mystery to this day.

There is no question but that someone or some group of people under the name Satoshi Nakamoto created bitcoin and its underlying blockchain database. The genesis block was created at 18:15:05 GMT on 3 January 2009 and was mined using special code under his name. He continued to mine bitcoin exclusively for the first 10 days, amassing approximately 1 million bitcoins, none of which have subsequently been spent. This is very intriguing, since the total value of his coins at its peak would have been roughly $19 billion.

Why the Mystery?

Why isn’t the identity of someone as famous as the creator of bitcoin well-known? First of all, he provided almost no personal information about himself during his many early discussion posts between 2008 and 2010 when he essentially disappeared from sight. He did originally claim to be a 37-year-old male living in Japan. However, his use of perfect idiomatic English, coupled with the fact that all his software is documented only in English, makes this claim subject to some suspicion. In addition, his use of some common British expressions in both his source code and commentary suggests that he (or at least a member of this group) is from either England or one of the Commonwealth countries. This is given added credence by the fact that some text he embedded in the genesis block came directly from a headline in the London Times newspaper of that day.

Analyzing the timestamps of more than 500 of Nakamoto’s bitcoin posts indicates that it was very unlikely that the poster was in Japan. This is because the only consistent lull in communications suggests that he was sleeping every day between 2pm and 8pm Japanese time, which would be very unusual.

So Who Could He Really Be?

If Nakamoto’s identity is a fiction, who could he actually be? There has been a lot of speculation, which has led to the identification of a relatively small pool of potential candidates.

The first is actually named Satoshi Nakamoto, though he goes by the name Dorian Prentice Satoshi Nakamoto. He was a physicist living in California who had worked as a computer engineer for technology and financial information service companies until being laid off twice in the early 1990s. After his layoff, he became a libertarian, which makes the following comment, embedded in the bitcoin source code, telling. With respect to his project, Nakamoto wrote, “It’s very attractive to the libertarian viewpoint if we can explain it properly. I’m better with code than with words, though.”

In a Newsweek article that appeared in March of 2014, this Japanese-American man was identified as the inventor of bitcoin. During a Newsweek interview, this Nakamoto stated, “I am no longer involved in that and I cannot discuss it. It’s been turned over to other people. They are in charge of it now. I no longer have any connection.” This admission seems to confirm the reporter’s suspicions that this man was the real Satoshi Nakamoto. However, in a later interview, he said that he’d misunderstood the reporter’s question and had never had anything at all to do with bitcoin or blockchain. In fact, this Satoshi Nakamoto went so far as to say, “I have nothing to do with bitcoin. I never worked for the company, I don’t know any people there, I never had a contract there or anything like that. I wasn’t even aware of the product.”

There is an abundance of circumstantial evidence but no proof regarding another candidate — Nick Szabo. He is both a computer scientist and a legal scholar and is credited with inventing the concepts of “bit gold”, the precursor to bitcoin, and “smart contracts”, which became a mainstay of the Ethereum blockchain protocol. Early on, he wrote extensively about decentralization, the dangers of depending on trusted third parties, trust in financial systems in general, and actually outlined a protocol for implementing a digital currency using blockchain architecture. Several investigators have concluded that Szabo is the only person with both the breadth and specificity of knowledge necessary to have created bitcoin. However, Szabo has strongly denied being Satoshi Nakamoto.

The late pioneering cryptographer Hal Finney must also be included in this conversation. He was the second person, behind only Satoshi Nakamoto, to use bitcoin software, file bug reports, and actually submit improvements to the underlying code. How would he even have known about bitcoin at that early juncture if he weren’t intimately involved? What’s also quite interesting is that he and Dorian Nakamoto lived just two blocks away from each other. Some posit that Finney, who was aware that Nakamoto’s house being foreclosed on by the bank and thus saw him as a victim of the current financial system, created bitcoin while symbolically crediting his neighbor for that reason. Nevertheless, Finney has denied being Satoshi, and there is some evidence, including handwriting analysis and other records to suggest that he is telling the truth.

Another intriguing candidate for this list is the Australian academic Craig Wright. In fact, back in December of 2015, Wired magazine wrote that he, “either invented bitcoin or is a brilliant hoaxer who very badly wants us to believe he did.” However, somewhat later on, Wired backtracked on their claim when new evidence suggested that “evidence” obtained by a hacker showing that Wright used “Satoshi Nakamoto” as a pseudonym may have been part of an elaborate hoax. Some went so far as to suggest that Wright had engaged in “intentional scammery” in trying to portray himself as the real Nakamoto.

Other possible candidates have also been mentioned, though there has been no strong evidence or proof of any kind to suggest that any one of them is the actual creator of bitcoin. Many believe that a group of people using the name Satoshi Nakamoto actually created the world’s first cryptocurrency. One reason given for this is the unusual coherence, efficiency, and uniformity of the code base. Some have also speculated that this group may even have included one or more of the individuals mentioned above. On the other hand, this evidence has also been used to suggest that the code could only have been the work of a single individual, especially since the code’s idiosyncrasies are relatively consistent throughout.

It has also been claimed that bitcoin was actually the work of an entire organization. The NSA has been named as one possible source of the project, as has the CIA, KGB, and Mossad. Natalya Kasperskaja, the co-founder of Kaspersky Labs, has stated her strong belief that bitcoin was the brainchild of U.S. intelligence agencies looking to obtain quick cash to fund their activities. However, there is no actual evidence of this being true.

But why would the real Satoshi Nakamoto make such a Herculean effort to remain anonymous in the first place? Some suggest that he was worried about the notoriety or even infamy that might become associated with such a potentially disruptive technology — one that may not even have been legal. After all, look what happened to the creators of the alternate currency the Liberty Dollar around the same timeframe (2009).

However, Jeff Garzik, a member of the core development team of the Bitcoin Foundation, may have hit the nail on the head when he wrote, “Satoshi’s identity may or may not be revealed in time… Satoshi is unlikely to be sitting on a beach in Tahiti next to a multi-million-dollar mansion. Satoshi is unlikely to be prepared for determined, potentially violent thieves and curiosity seekers. Curiosity in Satoshi’s identity is understandable, but please consider responsible disclosure, and the danger such a revelation may generate.” This cautionary statement becomes particularly poignant when one considers that Pavel Lerner, bitcoin expert and analyst from the cryptocurrency exchange Exmo Finance, was kidnapped by Ukrainian gangsters and only released after a $1 million ransom was paid.

So it may never be known who Satoshi Nakamoto really was, but it is unlikely that the world’s curiosity about his identity will ever fade away.

Written by:

Parul Gujral, CEO-Snowball