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Bitcoin

12 Years Later: Do We Know Who Invented Bitcoin?

Bitcoin, Satoshi Nakamoto Original Email, October, 2008
The original vision of the bitcoin payment system was communicated by inventor Satoshi Nakamoto by email on October 31st, 2008 and made reference to the now-legendary whitepaper.

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Bitcoin Cypherpunk

Bitcoin Has Redefined Money

Bitcoin is a digital phenomenon that will continue to spread until it is as socially accepted as email is today. In this post, I will explain not only why this rapidly expanding computer network has changed the paradigm on what defines money, but why the blockchain represents a historical image of the digital economy and provides a record of any past activity due to the nature of peer-to-peer timestamp verification.

The Blockchain Is A Monetary Image

For the purposes of illustrating why bitcoin has redefined money, let us assume there exists two users on a blockchain – User A and User B. User A controls 3.0 million bitcoin on the entire network. User B controls 3.6 million. There also exists 14.4 million unmined bitcoin.

User A has used their private key to authorize a transaction to User B worth 1.8 million bitcoin. User A sends this amount to User B’s public key. At this point, the transaction has been authorized by User A and is in the process of being confirmed by miners of the network.

After the transaction has been confirmed, the bitcoin network now reflects the change in hands of the 1.8 million bitcoin User A sent User B.

Note that no currency has moved from point A to point B, but an authorization on behalf of User A to alter the network in a way which increases User B’s control of the blockchain by a measurement of 1.8 million bitcoin at the expense of User A. In bitcoin, this ledger payment system is the money supply and is radically different from any type of money we have previously seen.

When an individual makes a transaction on the bitcoin network, no actual currency is moved. That is – no file has moved. No commodity or asset has moved. No private or public key has moved. Rather, the only thing which changes is the percentage of the blockchain ledger which User A & B claim control over. When a transaction occurs in the realm of bitcoin, the image of the blockchain is altered. Nothing ever changes but the composition of this blockchain record.

The blockchain is a historical record of the bitcoin economy. There is no separation to be made between the blockchain and bitcoin. They are one in the same. Without the blockchain, you have no bitcoin ecosystem. Without an accompanying cryptocurrency, you have no measuring tool to determine the ownership of the blockchain.

Money is now an image, rather than something which can be separated from the system itself. This image of money is being constructed, altered, and verified by the thousands of machines acting as miners across the globe, and it’s a composition on public display for all to see. The miners are the painters of this network composition. The users, the brush and strokes.

In the bitcoin digital economy, money is an image continuously being constructed, verified, and reattributed by way of cryptographic authorization.

“Tangible money, old-fashioned money … is a phantom from the past, an anachronism. In its place is an entirely new form of money based not on metal or paper, but on technology, mathematics, and science. This new ‘megabyte’ money is creating a new and different world wherever it proceeds. Money now is an image.”

– Joel Kurtzman, The Death of Money

With the intrinsically valuable property of decentralization, we have a monetary system that comprises a historical record of purchasing power at any point of time in existence. The timestamping function of the blockchain allows anyone to go back and publicly determine the holdings of any address (perhaps soon any individual).

A payment conducted with bitcoin represents a paradigm shift in our concept of money – one where there is no division between currency and the system through which it flows.

Bitcoin has redefined money. Money is now an image.

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Bitcoin Cypherpunk

Don’t Let Anyone Tell You the Identity of Satoshi Nakamoto Does Not Matter

The world’s first trillionaire by USD valuation could quite possibly be the creator of bitcoin, Satoshi Nakamoto. If bitcoin continues to climb the ladder of exponential price appreciation, than once Nakamoto decides to move their money and make transactions with it, there will be a seismic shift in the perceived supply of money.

In the numerous attempts to lift the veil of bitcoin’s mysterious inventor, people have gotten hurt. Homes have been raided. Journalists have been ostracized. Following these chaotic rumours however, seems to be a cultish mantra echoing from the chambers of bitcoin’s disillusioned – that “the identity of Satoshi Nakamoto does not matter.”

This is not only terribly untrue, but dangerous. Naive to the nature of the emerging bitcoin digital economy, the disillusioned will claim that the identity of Satoshi Nakamoto does not matter because the software is open source. Anyone can read the source code of bitcoin. Anyone can identify vulnerability in the protocol’s architecture. Anyone can fork it and create their own implementation. This is well known of bitcoin, and it is not the reason its creator’s identity still holds crucial importance.

The 21st Million

The Nakamoto wallets comprise roughly 5.5% of the total bitcoin which will ever be in circulation and about 9.3% which are available today. If there is one party controlling five percent of all currency that will ever be created in an economy, this poses a huge risk to the integrity of decentralization. One in ten bitcoin today lies dormant, but alive. Truly, the mammoth wallets owned by Satoshi Nakamoto are one of the biggest threats to price stability and the principle of decentralization of bitcoin.

In a world where we rage about the centralization of our current economic circumstances, it is plain to see that bitcoin may not be as different as it initially seems.

Satoshi Nakamoto Wallets

Almost all are owned by a single entity, and that entity began mining right from block 1 with the same performance as the genesis block. It can be identified by constant slope segments that occasionally restart. Also this entity is the only entity that has shown complete trust in bitcoin since it hasn’t spent any coins (as last as the eye can see). I estimate at eyesight that Satoshi fortune is around 1M Bitcoin. – Sergio Demian Lerner

World’s First Trillionaire

At this point, not much can be done about the large volume of bitcoin that lie hidden in Nakamoto’s wallets. We don’t know which addresses they belong to and we only have estimates of the amount they hold. What we do know is that Nakamoto has multiple wallets rather than one, and that they have since discontinued their mining activities.

Will the Nakamoto funds ever move? Or have they already been purposefully destroyed? If Nakamoto were to take such a route, it might cause a bullish run on the rest of the bitcoin in circulation because of increased scarcity.

Lost coins only make everyone else’s coins worth slightly more.  Think of it as a donation to everyone. – Satoshi Nakamoto

If bitcoin should continue to challenge the status quo, it is indeed worthwhile to ask the types of questions which would uncover the identity of a party which controls the largest stake in an emerging economy. Satoshi has no obligation to reveal their identity, yet if bitcoin should become worth 10 or 100 times its current value, questions about their identity may haunt those who are deeply invested in this emerging digital economy, both in terms of financial and ideological investment.

Money has a profound way of influencing people. Business leaders recognize the opportunity to shake up the world that comes with owning massive capital. When it comes down to it, the effect bitcoin has on the world may correlate sharply with the causes Nakamoto dedicates their purchasing power to, if they do eventually move their money. Nakamoto can either use that ability to power the common good, or for less noble reasons. The causes this money is dedicated to will forever forge the legacy of the great anonymous wizard Satoshi Nakamoto.

Regardless, don’t let anyone tell you the identity of Satoshi Nakamoto does not matter.

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Bitcoin

Who Is Satoshi Nakamoto?

Satoshi Nakamoto set in motion the unraveling of the nation state and the end of central banking … two closely related institutions that have directed history since history has been recorded. The creator of bitcoin is one of the greatest disruptors in modern history, and this is reason enough not to want an identity attached to the source code.

So who is Satoshi Nakamoto?

Information on the creator of bitcoin remains obscure. It has since evolved without their direct input, put forth for anyone willing to experiment with the technology. Satoshi’s last call was to deemphasize their unknown identity. As it still remains today, the true identity of Satoshi Nakamoto is unknown and the alias is considered a pseudonym. Whoever the creator was, they wanted to remain invisible, and thus far they have achieved such.

When Satoshi had the basic foundation of the bitcoin client built, they transitioned the responsibilities to a group of early enthusiasts and withdrew back into the shadowy depths of anonymity. Nothing tangible has been heard since.

Satoshi Claims

Satoshi claimed to reside in Japan, although searches and inquiries into their true identity turn up few results. In their early days working on the project, Satoshi was known for a business-like demeanor and very seldom revealed details about themselves, instead focusing feverishly on the bitcoin project. If the work of the bitcoin client was produced by one person, and began in 2007 as Satoshi claimed, then it must have required serious commitment for several months before releasing it.

At one point, when early adopters aimed at increasing its popularity, after users began lobbying for WikiLeaks to accepting bitcoin donations, Nakamoto intervened. Giving decisive orders to the team, Satoshi wrote, “No, don’t bring it on. The project needs to grow gradually so the software can be strengthened along the way. I make this appeal to WikiLeaks not to try to use bitcoin. Bitcoin is a small beta community in its infancy. You would not stand to get more than pocket change, and the heat you would bring would likely destroy us at this stage.”

Then, as mysteriously as they had appeared, Satoshi Nakamoto vanished.

Easter Eggs

Satoshi listed their date of birth as April 5th, 1975, and at first glance this appears to be insignificant. However, upon further analysis we find that On April 5th, 1933 U.S. President Franklin D. Roosevelt signed two executive orders: 6101 of Civilian Conservation Corps, and 6102 which forbade the hoarding of gold coin, gold bullion, and gold certificates by U.S. citizens. We then find that in the year 1975 gold ownership was relegalized for citizens of the US.

The birth dates coupled with the insertion of a link buried within the genesis block to a London Times article entitled ‘Chancellor on Brink of Second Bailout for Banks’, make it clear Satoshi Nakamoto was politically motivated and displayed such through easter eggs hidden within their work.

What’s In A Name?

Some researchers proposed that the name ‘Satoshi Nakamoto’ was derived from a combination of tech companies consisting of Samsung, Toshiba, Nakayama, and Motorola. The notion that the name was a pseudonym is clearly true and it is doubtful they reside in Japan given the numerous forum posts with a distinctly English dialect.

Linguistic Analysis

British formatting in their written work implies Nakamoto is of British origin. However, they also use American spelling which may indicate they were intentionally trying, somewhat successfully, to mask their writing style – or that Satoshi is more than one person.

Many in the bitcoin space also believe Satoshi to be of American nationality, asserting that the time frames for code submission coincided neatly with someone living in an EST time zone.

Technical Analysis

As for the code itself, it has been dubbed multi-disciplinary and of extremely high expertise in the area of cryptography and C++ programming language, causing many to believe Satoshi Nakamoto is a small group of computer programmers rather than a single individual. Nakamoto claimed to have begun work on the bitcoin project in 2007 and published the whitepaper in the following year.

In 2008 Satoshi first released their work through a cryptography mailing list, where one of the first partners in development was cryptography expert Hal Finney. Based on analysis from other programmers who worked on the source code, it does not appear to be written by someone who is well versed in professional programming but rather has a strong academic or theoretical knowledge of cryptography.

He was the oracle to which we would go for questions about the system, but he rarely followed standard engineering practices, like writing unit or stress tests or any of the standard qualitative analysis that we’d perform on software. Several things had to be disabled almost immediately upon public release of Bitcoin because they were obviously exploitable.

– Jeff Garzik, early bitcoin developer

Adam Penenberg of FastCompany came to the conclusion that Satoshi Nakamoto may in fact be a trifecta of programmers, arguing through linguistic analysis that phrases from the whitepaper match in very unique sense to a patent application for updating and distributing hashing functions, which was filed around a remarkably similar time frame as the bitcoin.org domain name was registered. The domain was listed as being registered in Finland, and one of the patent authors had traveled there months before the domain was registered.

Regardless, all three programmers deny the claim to the Nakamoto throne.

In any case, when bitcoin.org was registered on August 18 2008, the registrant actually used a Japanese anonymous registration service, and hosted it using a Japanese ISP. The registration for the site was only transferred to Finland in May 2011, which weakens the Finland theory.

I exchanged some emails with whoever Satoshi supposedly is. I always got the impression it almost wasn’t a real person. I’d get replies maybe every two weeks, as if someone would check it once in a while. Bitcoin seems awfully well designed for one person to crank out.

– Laszlo Hanyecz, early bitcoin developer

Blockchain Analysis

Based on a blockchain analysis technique created by Sergio Lerner, an authority on bitcoin and cryptography, a dominant entity believed to be Satoshi Nakamoto had been mining the network from block 1 up until their disappearance, with identical performance. Lerner claims this miner is “the only entity that has shown complete trust in bitcoin, since it has not spent any coins,” estimating that Satoshi holds around 1 million BTC.

Many in the early community wondered why Satoshi had forsaken them in a project they poured their energy into for so long. Perhaps it was the fact bitcoin was starting to gain traction, evolving without their direct counsel, and the decision to hand the reins of power over was necessary.

However, the question still lingers, have we seen the last of Satoshi Nakamoto?