Satoshi Nakamoto: fact or fiction?

There’s no denying that the Bitcoin project is one of the greatest, if not the greatest, inventions in the modern financial industry. This cryptocurrency managed to make all standard payment methods look obsolete thanks to its user-orientated approach. As a result, Bitcoin is well-accepted by the cryptocurrency community, and even though many governments deem it as an outlaw currency, they are still using it. 

The cryptocurrency has had a volatile history as an asset class, but that doesn’t come close to its creator’s buzz. One of the most commonly talked-about subjects in the cryptocurrency world is the Bitcoin creator, and yet, no one in the world knows who invented Bitcoin.

All we know is a name: Satoshi Nakamoto. So many mysteries are surrounding this individual, which is why we wanted to take a close look into this person and lay out everything that we know. 

Who Is Satoshi Nakamoto?

Satoshi Nakamoto is the anonymous name used by the creators of the Bitcoin cryptocurrency. Although the name Satoshi Nakamoto is often synonymous with Bitcoin, Satoshi Nakamoto’s persona was involved in the early days of Bitcoin, working on the first version of the software in 2009.

Communication to and from Nakamoto was conducted electronically, and the lack of personal and background details meant that it was impossible to find out the actual identity behind the name. To date, it is unclear if the name refers to a single person or a group of people. What is known is that he published a paper in 2008 that jump-started the development of cryptocurrency.

Bitcoin Whitepaper

For most people, Satoshi Nakamoto is the most enigmatic character in cryptocurrency. But, according to Investopedia, Bitcoin came to life when Nakamoto published his famous white paper on cryptography.

The cryptography mailing list described a digital currency that would allow secure, peer-to-peer transactions without the involvement of any middleman, whether that be the government, financial system, or a company, as a solution to the problem of double-spending.

Solutions to combating the double-spend problem had historically involved the use of trusted, third-party intermediaries that would verify whether its holder had already spent a digital currency.

However, this trust-based model still results in fraud risk if the trusted party can’t actually be trusted. Removing the third party could only be accomplished by building cryptography into transactions.

Nakamoto proposed a decentralized currency approach to transactions, ultimately culminating in the creation of blockchains. These decentralized currency transactions would be tracked through a blockchain. A blockchain is like a ledger used by any financial institution, except that this ledger would be distributed across an entire network, with exact duplicates held by all participants and visible to all, secured by cryptographic means.

In a blockchain, timestamps for a transaction are added to the end of previous timestamps based on proof-of-work, creating a historical record that cannot be changed. As a result, there would never be more than 21 million Bitcoin.

Bitcoin community

According to Nakamoto, Bitcoin’s creation was aimed to wrest control of currency from financial elites and put it in the hands of the commoner. The first Bitcoin transaction occurred when Nakamoto sent 10 Bitcoins to Hal Finney, a well-known developer who had downloaded the Bitcoin software on its release date.

The first commercial transaction came in 2010 when a programmer named Laszlo Hanyecz bought himself two Papa John’s pizzas for 10,000 Bitcoin.

Bitcoin code is open-source, meaning its design is public. As a result, no one person owns or controls Bitcoin, and anyone can participate.

While Satoshi continued to control Bitcoin’s development, users and developers congregated in Bitcoin forums to contribute code and work on the project, which had become a collaborative effort. The users running the Bitcoin software were the ultimate authority.

History of Bitcoin’s creator

Satoshi Nakamoto is a pseudonym used by the person or persons who developed bitcoin. In the process of developing bitcoin, Nakamoto also developed the first blockchain database in the world.

Until 2010, Nakamoto was involved in the development of bitcoin but, following that, immediately disappeared. Communication to and from Nakamoto was conducted electronically, and the lack of personal and background details meant that it was impossible to find out the actual identity behind the name.

The last correspondence anyone had with Nakamoto was in an email to another crypto developer saying that they had “moved on to other things.” However, the inability to put a face to the name has led to significant speculation about Nakamoto’s identity, primarily as cryptocurrencies increased in number, popularity, and notoriety.

Over the years, several attempts have been made to reveal the true identity of Nakamoto. Still, none have decisively proved that the people outed as Nakamoto was, in fact, the one behind the nom de plume.

Nakamoto has never done interviews, hasn’t made any political statements or any statements whatsoever. If Nakamoto is indeed a real person, he/she/they are highly reclusive. But this isn’t all. Some have suggested that Nakamoto isn’t one single person but rather a group of people.

The claim made by Nakamoto’s online handle of him being a Japanese man has been called into question by the simple act of tracking the timings of the posts. Several people have claimed to be the masterminds behind Bitcoin.

Still, all their claims have been conclusively dismissed, making the identity of the bitcoin inventor likely as valued as the amount of bitcoin in Nakamoto’s wallet.

While the identity of Nakamoto has not been ascribed to a provable person or persons, it is estimated that the value of bitcoin stash under Nakamoto’s control—which is thought to be about 1 million in number—may exceed $60 billion in value.

Moreover, given that the maximum possible number of bitcoins generated is 21 million, Nakamoto’s stake of 5% of the total bitcoin holdings has considerable market power.

In 2012, Nakamoto claimed to be a 37-year-old male living in Japan. However, this is generally accepted as a false statement, even though it has come from the proverbial horse’s mouth. One of the biggest reasons this claim is believed to be false is how comfortable Nakamoto seemed to be in using the English language.

Additionally, due to the usage of certain words in their early interactions with fellow developers, it is also accepted that Satoshi Nakamoto is likely British or someone from the Commonwealth.

A Times headline in 2009 in the first bitcoin block Nakamoto mined also points to Nakamoto being in England and not Japan. Several people such as Dorian Nakamoto, Nick Szabo, and Craig Wright have been put forward as Bitcoin’s founder or creator. However, none have been proven to be Nakamoto.

Dorian Nakamoto

This perhaps was the most high-profile attempt to reveal bitcoin’s founder. Newsweek in March 2014 identified Dorian Nakamoto as the currency’s creator. Publication of the article caused a commotion in the crypto and wider tech community. This was the first time a mainstream publication had attempted to learn the identity of bitcoin’s creator.

The Newsweek story claimed there are several similarities between Satoshi Nakamoto and Dorian Nakamoto. For example, both supposedly held libertarian leanings and a Japanese connection. Dorian Nakamoto is a 64-year-old Japanese-American who studied physics from California Polytechnic and later went on to work on classified defense projects. The article’s author also claimed Nakamoto said he was “no longer” involved with bitcoin and that he had “turned it over” to other people.

Dorian Nakamoto later denied being the brain behind Bitcoin and subsequent investigation ruled Nakamoto out of the running. However, the Newsweek publication also revealed a photograph of Nakamoto’s home. A cursory image search could quickly reveal its location.

While many did not believe Dorian Nakamoto was Bitcoin’s founder, the crypto community was against his privacy being violated. However, the media buzz was not without profit for Dorian.

An online campaign raised more than 100 bitcoins on his behalf. The fund was the Bitcoin community’s way of saying “thanks.” In April 2014, Dorian Nakamoto appeared in a YouTube video along with fundraiser Andreas Antonopoulos to thank people for their support.

Nick Szabo

Like Finney, Nick Szabo was an early cypherpunk and was friends with many people in that circle. In 2005, he wrote a blog post hypothesizing a digital currency called “Bitgold” that would not depend on the trust of third parties.

Finney

Bitcoin is the product of the cypherpunk movement, and one of the pillars of that movement was Hal Finney. Finney died in 2014. Finney was active in the Bitcoin community before and after its launch, and Finney is the first person to receive Bitcoin in a transaction.

He also coincidentally lived a few blocks from Dorian Nakamoto, who, it has been surmised, might have been the inspiration for a pseudonym invented by Finney.

Craig Wright

One of the more colorful characters to be nominated as the person behind Satoshi Nakamoto is Craig Wright, an Australian academic and businessman. Two articles in Wired and Gizmodo suggested that Wright might be the person behind Bitcoin, but subsequent investigations have concluded that he had perpetrated an elaborate hoax. He still claims, however, to be the man behind the coin.

Why we might never know Satoshi 

If the real Satoshi lives and breathes, there are some compelling reasons to stay hidden. First, the US central bank has a well-established track record of going after individuals or organizations audacious enough to invent a competitor to the Dollar.

It is a violation of federal law for individuals to create private coin or currency systems to compete with the United States fiat currencies. In fact, the federal government is known to tiredly pursue and charge creators of any commodity that competes with the sovereignty of the Dollar. 

Assuming Bitcoin’s creator is alive, Satoshi could be on track to becoming the wealthiest human being on the planet. But there’s one more fascinating twist. Because the Bitcoin blockchain is open, it’s possible for researchers to plausibly identify much of the bitcoin Satoshi mined in the early days of his invention.

After the very beginning, when Satoshi sent a few Bitcoins to early testers like Finney, Satoshi’s coins seem to have never been sent or spent or capitalized on in any way.

Over a decade, as the Bitcoin inventor’s holdings have grown to be worth potentially tens of billions of dollars, the share of money Satoshi quite literally made has sat untouched. So who is Satoshi? One of the prime suspects? One of the many other people that have been identified as Bitcoin’s creator over the years?

Someone nobody has ever suspected? Is Satoshi alive or dead? A single inventor or a team? As the years have passed, it seems increasingly likely that anyone will successfully unveil Satoshi Nakamoto’s true identity. What we’re left with is Satoshi’s trillion-dollar creation and a small cache of communications.