Satoshi Nakamoto

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Who Is Satoshi Nakamoto?
Satoshi Nakamoto is the name used by the creator/s of the protocol used in the Bitcoin cryptocurrency.

Though the name Satoshi Nakamoto is nearly synonymous with Bitcoin, the physical person that name represents has never been found, leading many people to believe that it is a pseudonym for a different person or group of people.

Satoshi Nakamoto may not be a real person! The name might be a pseudonym for the creator or creators of Bitcoin who wish to remain anonymous.

Satoshi Nakamoto in Context
Satoshi Nakamoto is considered the most enigmatic character in cryptocurrency. To date, it is unclear if the name refers to a single person or a group of people. What is known is that Satoshi Nakamoto published a paper in 2008 that jumpstarted the development of cryptocurrency.

The paper, Bitcoin: A Peer-to-Peer Electronic Cash System, described the use of a peer-to-peer network as a solution to the problem of double-spending. The problem – that a digital currency or token could be duplicated in multiple transactions – is not found in physical currencies since a physical bill or coin can, by its nature, only exist in one place at a single time. Since a digital currency does not exist in physical space, using it in a transaction does not necessarily remove it from someone’s possession.

Solutions to combating the double-spend problem had historically involved the use of trusted, third-party intermediaries that would verify whether a digital currency had already been spent by its holder. In most cases, third parties, such as banks, can effectively handle transactions without adding significant risk.

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

Nakamoto proposed a decentralized approach to transactions, ultimately culminating in the creation of blockchains. 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.

Because the record of transactions is distributed across many nodes in the system, it is difficult if not impossible for a bad actor to gain enough control of the system to rewrite the ledger to their own advantage. The blockchain records are kept secure because the amount of computational power required to reverse them discourages small scale attacks.

Satoshi Nakamoto History
The persona Satoshi Nakamoto 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.

Nakamoto’s involvement with bitcoin ended in 2010. The last correspondence anyone had with Nakamoto was in an email to another bitcoin developer saying that they had “moved on to other things.”

Possible Candidates for the Real-Life Nakamoto
The inability to put a face to the name has led to significant speculation as to Nakamoto’s identity, especially as cryptocurrencies increased in number, popularity, and notoriety.

While the identity of Nakamoto has not been ascribed to a provable person or persons, it is estimated that the value of bitcoins under Nakamoto’s control — which is thought to be about 1 million — may exceed $5 billion in value. 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.

Several people have been put forward as the “real” Satoshi Nakamoto, though none have been definitely proven to be Nakamoto.

Dorian Nakamoto
Dorian Nakamoto is an academic and engineer in California who was named as the creator of Bitcoin by Leah McGrath Goodman in a Newsweek article in March of 2014. McGrath’s article says, “the trail followed by Newsweek led to a 64-year-old Japanese-American man whose name really is Satoshi Nakamoto,” but subsequent investigation ruled Nakamoto out of the running.

Hal Finney
Bitcoin is the product of the cypherpunk movement, and one of the pillars of that movement was Hal Finney who 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.

Nick Szabo
Like Finney, 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.

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.

 

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