If you have ever been curious about the origin of cryptocurrency, you would have encountered the name Satoshi Nakamoto a few times. Although no one knows who they are, whether male, female, or even a group of people, the white paper of Bitcoin, the first ever cryptocurrency, was written by “Satoshi Nakamoto,” which is predicted to be a pseudo-name.
Who is Satoshi Nakamoto?
Satoshi Nakamoto has long been a household name in forums dominated by computer scientists, cryptographers, and hackers, where the name “Satoshi Nakamoto” had come up in several discussions before Bitcoin was created.
Eventually, in 2008, Satoshi Nakamoto published Bitcoin’s white paper titled “Bitcoin: A Peer-to-Peer Electronic Cash System,” explaining how Bitcoin would work, and eventually, in January 2009, Nakamoto mined the first Bitcoin block.
What is The Bitcoin Backstory?
In the Bitcoin white paper, Nakamoto explained how Bitcoin would work without the need for trusted third parties while ensuring that double-spending is avoided. He introduced the Proof-of-Work algorithm to verify transactions and secure the network by expending computing power from various decentralized network nodes, which can join and leave anytime. Hence, the blockchain isn’t at the mercy of anybody but is fully decentralized.
Three months later, the first Bitcoin was mined, and since then, over 19 million Bitcoin have been mined. In addition, over 20,000 cryptocurrencies have been created, of which some copied Bitcoin’s code (such as Litecoin, Dogecoin, Zcash, etc.), having some similarities with Bitcoin. Similarly, blockchain technology has evolved, and several new blockchains now use the energy-efficient Proof-of-Stake algorithm and its variants; others use the Proof-of-Authority, Proof-of-History, and several other attempts to maintain the blockchain trilemma of decentralization, scalability, and security.
Satoshi Nakamoto created Bitcoin as a solution to the global recession of 2007/08 that started as a result of reduced interest rates that led to a devaluation of the real estate industry and an overall economic crisis; this, alongside several experiences of colossal failures of the Banking industry, to regulate finance led to Nakamoto’s desire to decentralize financial institutions and put power in the hands of the people via cryptocurrency; hence, Bitcoin was created.
Bitcoin is deflationary in nature, capped at 21 million units, which helps to counter the crazy inflation experienced in traditional finance. Bitcoin isn’t issued or printed; instead, miners who secure the network by validating transactions are rewarded with Bitcoin; initially, this reward was set at 25 BTC; however, to maintain the deflationary mechanism and scarcity; bitcoin rewards are halved after every 210,000 blocks (approximately 4 years); currently, the Bitcoin rewards are set at 6.25 BTC. Hence, Bitcoin cannot be printed indiscriminately like fiat notes; instead, it is scarcely acquired.
Bitcoin was first used in a physical transaction on May 22, 2010, when Laszlo Hanyecz bought two pizzas for 10,000 Bitcoin when it was only worth a quarter penny.
Has Satoshi Nakamoto Been Unmasked?
Unlike many crypto creators who have actively stayed in the cryptocurrency space, Satoshi was last heard of in 2011, when he sent an email to one of Bitcoin’s developers that he had “moved on to other things,” after which no further communication was obtained from any of Satoshi’s known email addresses; they also didn’t contribute to any discussion in forums, Nakamoto simply vanished.
However, there has been a curious quest to discover who Satoshi Nakamoto is, and this has followed through with so many controversies; some believe Nakamoto is a group of people, a woman disguised as a man or even a wanted criminal. In the quest to unravel the mystery behind the pseudonym “Satoshi Nakamoto,” a few individuals have been linked to the identity; they include:
Dorian Satoshi Nakamoto: Perhaps, this was the closest to getting an identity related to Satoshi Nakamoto. In 2014, journalist Leah McGrath Goodman published an article identifying Dorian as Bitcoin’s creator.
Dorian has several similarities with the pseudonym, of which the most obvious was the name, and others included mathematical prowess, as Dorian was a retired physicist and has worked in computer engineering. However, Dorian denied having any links to Bitcoin and claimed he was impoverished.
The then 64-year-old man said, “I have no knowledge of nor have I ever worked on cryptography, peer-to-peer systems, or alternative currencies. I have not been able to find steady work as an engineer or programmer for ten years. I have worked as a laborer, poll taker, and substitute teacher. I discontinued my internet service in 2013 due to severe financial distress. I am trying to recover from prostate surgery in October 2012 and a stroke I suffered in October 2013. My prospects for gainful employment have been harmed because of Newsweek’s article.”
As a result of his submission, about 2,000 members of the Bitcoin community raised 47.5 Bitcoin, which was worth $20,000 at the time.
Hal Finney: After Dorian Nakamoto, the most compelling person suspected to be Bitcoin’s creator is American computer scientist and software developer Hal Finney. In his early years, he worked on developing games before developing an interest in cryptography.
Finney attracted much interest as Bitcoin’s creator for two major reasons; first, he was the first person asides from satoshi Nakamoto to debug and improve Bitcoin’s open-source code. Secondly, he was the recipient of Satoshi’s first transaction in January 2009. Quite interestingly, Hal Finney lived a few blocks from Dorian Nakamoto, a hugely suspicious fact; hence, many believe that Finney was Satoshi or, at the very least, had a close relationship with Satoshi Nakamoto.
That’s not all; upon comparing Nakamoto’s writing style to Hal Finney’s, an independent writing analysis service found the styles to be dashingly similar; hence, there is a wild conclusion that Hal Finney is either Satoshi Nakamoto, his friend, his ghostwriter, or a member of a group who named themselves Satoshi Nakamoto.
Hal Finney denied the claims and presented communication between himself and Satoshi Nakamoto via emails and his Bitcoin wallet history. Eventually, Hal Finney died in 2014, his relationship with the pseudonym remaining a mystery.
Nick Szabo: Nick Szabo, a computer engineer of Hungarian descent, wrote a blog post about a future digital currency, “Bitgold,” that would not depend on the trust of third parties; also, prior to that time, he wrote about “smart contracts” in 1996, and has similar references to Satoshi Nakamoto. Of course, like the others, Nick Szabo denied being the pseudonym.
Craig Wright: Of all the people suspected to be Satoshi Nakamoto, only Craig Wright has claimed the identity. Craig was a computer scientist who owned a blog; coincidentally, in 2008, a blog post about cryptocurrency was released on his blog, a few months before Bitcoin’s white paper was released; other documents, including emails and transcribed statements, showed some level of knowledge or involvement in Bitcoin’s creation.
However, it was eventually proven that the blog post was backdated, and several other pieces of evidence were fabricated. Hence, Craig Wright was eventually seen as an imposter before eventually backing away from the claim.
Facts About Satoshi Nakamoto
- Satoshi Nakamoto is a talented computer programmer who created Bitcoin with 31,000 lines of code, which has never been hacked since its creation. Although it has been debugged a few times, its code has never been prone to hacks. Even a world-renowned hacker, Dan Kaminsky, who discovered a flaw that could lead the internet to be shut down, was unable to hack Bitcoin’s code.
- Satoshi Nakamoto’s writing style is British, as seen in the white paper and other emails sent to Hal Finney and other Bitcoin developers; hence, some people believe he is British.
Mysteries About Satoshi’s Nakamoto
- John McAfee, a cybersecurity analyst, and creator of McAfee Associates Inc., claimed that Satoshi Nakamoto is a team of eleven people who worked on it for five years. He said one of them who wrote the paper, definitely wrote in British English; McAfee said, upon conducting the linguistic analysis of the white paper, he definitely knew the author, but he won’t divulge the identity of the author and his teammates for security reasons.
Perhaps, the anonymity of Satoshi Nakamoto is a good thing, as it has helped to maintain decentralization and zero pressure from governments. As a result, Bitcoin has become very popular and, at its peak, was worth over a trillion dollars in valuation, and it is seen as the future of global finance.
Although Bitcoin is mainly seen as a store of value, many companies are starting to accept Bitcoin as a payment method, and it is expected that with reduced volatility, it will become a global borderless currency, eclipsing the U.S. dollar as the global means of exchange.