The real identity of Bitcoin’s inventor is crypto’s greatest mystery (Satoshi Nakamoto)

Satoshi Nakamoto

On January 3rd, 2009 — at around 18:15:05 UTC — Satoshi Nakamoto mined the very first bitcoin. Which was fitting, given that Satoshi is to Bitcoin as Alexander Graham Bell was to the telephone. The inventor had revealed the creation to a tiny online community of cryptography-obsessed computer scientists and hackers two months earlier. In that scene, Satoshi was already a familiar name — if not a real one. Years before the world heard a peep about Bitcoin, someone using the Satoshi pseudonym had been posting to message boards and emailing fellow developers, never identifying a location, a nationality, or even a real name. Satoshi released Bitcoin and saw it begin to catch on, and then — in April 2011 — sent an email to a developer friend saying, “I’ve moved on to other things.” 

After that? Satoshi disappeared into thin air.

What Satoshi said about Bitcoin

The question of the real identity of Bitcoin’s creator is one of the greatest modern mysteries. Who was Satoshi Nakamoto? Why that name? And where did Satoshi go? Beyond having invented an entirely new kind of money that has gone on to achieve a market cap of more than $1 trillion, Satoshi is widely believed to hold more than a million bitcoin, which would be worth tens of billions of dollars in March 2021. 

(Note: In some of the early-Bitcoin history portions of this story, we refer to Satoshi as “he” or “him” because the people Satoshi was communicating with at the time presumed Bitcoin’s creator to be a young man. But of course, Satoshi’s gender is one of the unknowns. Another is whether Bitcoin’s inventor worked alone; some experts suspect that Satoshi is actually a group of developers.) 

If Satoshi left clues, they can be found in the code and messages the crypto inventor wrote between 2008 to 2011. The entire output, numbering just a few hundred total messages that mostly consist of posts to a forum he created called BitcoinTalk in 2009, has been meticulously cataloged like a sacred text. At this point, millions of people have pored over Satoshi’s words, but when they were first written they were mostly read by a few dozen hermetic members of the Cryptography Mailing List — made up of programmers who specialize in inventing techniques for secure communication. Many on the mailing list identified as “cypherpunks” who advocated the use of cryptography to bring about social and political change.

By his own account, Satoshi began coding the first version of Bitcoin in the C++ programming language sometime in the spring of 2007. In 2008, he shared his idea with a couple of fellow cryptographers who had launched the proto-cryptocurrencies b-money and Hashcash. Soon after, he shared his idea more widely via the Cryptography Mailing List. 

Bitcoin was initially greeted with a collective yawn. “When Satoshi announced Bitcoin on the cryptography mailing list, he got a skeptical reception at best,” recalled legendary cryptographer Hal Finney, the first person to ever receive bitcoin from Satoshi. “Cryptographers have seen too many grand schemes by clueless noobs. They tend to have a knee-jerk reaction.” 

Satoshi’s October 2008 announcement — a whitepaper outlining the mechanics of Bitcoin — didn’t have the bombastic tone you’d expect from someone who understood he was about to change the world. “I’ve been working on a new electronic cash system that’s fully peer-to-peer, with no trusted third party,” Satoshi wrote matter of factly. 

But the nine-page, equation-filled treatise did introduce a solution to a knotty problem that had bedeviled the cypherpunk community for years. No prior digital money concept had cracked what Satoshi referred to as “the double-spending problem.” 

How can you prevent a currency with no physical form from being duplicated like any other computer file and spent over and over — the way kids shared endless copies of Eminem mp3s via Napster earlier in the 2000s? 

“We propose a solution to the double-spending problem using a peer-to-peer network,” Satoshi wrote. 

A peer-to-peer system would eliminate the need for any kind of central authority (like a credit card company or a bank) to validate transactions. The need for central authorities, Satoshi reasoned, was the failure point for earlier attempts at digital currencies. “A lot of people automatically dismiss e-currency as a lost cause because of all the companies that failed since the 1990s,” he wrote. “I hope it’s obvious it was only the centrally controlled nature of those systems that doomed them. I think this is the first time we’re a decentralized, non-trust-based system.” 

To accomplish this “trustless” system, Satoshi proposed a publicly available shared ledger that would document every transaction. He called it the “blockchain.” (Read more about how Bitcoin works.)

Bitcoin’s independence from the existing financial system was an idea that must have been particularly appealing at the time, given that Satoshi had just witnessed the global financial system meltdown over vastly irresponsible bets made by big investment banks. 

“The root problem with conventional currency is all the trust that’s required to make it work,” Satoshi noted. “Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve.” 

In the “trust-based model” of internet commerce, third parties like payment processors reap rewards for acting as an intermediary. Bitcoin could make the intermediaries obsolete. And by 2010, the idea had attracted considerable attention outside the insular cryptography scene. 

That December,  an article in PC World suggested that Bitcoin might be a tool Wikileaks could use to avoid government interference. Satoshi reacted with uncommon emotion. “It would have been nice to get this attention in any other context,” he noted on the Bitcoin forum. “WikiLeaks has kicked the hornet’s nest, and the swarm is headed towards us.” 

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