What Do We Know about Satoshi Nakomoto — the Creator of Bitcoin?

Photo by Andrew Haimerl on Unsplash

A translation of my article originally published at: https://magazine.decenter.org/ru/1-blokchein-i-kriptovalyuty/29-chto-izvestno-o-sozdatele-bitkoina-satoshi-nakamoto

On 31 October 2008 a pseudonymous user Satoshi Nakomoto sent a message via a cryptography mailing list Metzdowd. He said he was working on an electronic cash system for money transfers that would allow to send online payments “directly from one party to another without the burdens of going through a financial institution.” The email contained a link to a paper named “Bitcoin: A Peer-to-Peer Electronic Cash System”.

Satoshi’s first public appearance is associated with the two emails sent from his address. The first one (from satoshi@anonymousspeech.com) was sent on 22 August 2008 to Wei Dai. Back in 1998 Dai published a proposal on b-money — an anonymous, distributed electronic cash system (although he has never followed through on that idea).

“I was very interested to read your b-money page. I’m getting ready to release a paper that expands on your ideas into a complete working system,” Satoshi wrote to Dai two months before releasing the bitcoin paper. In the same email he mentioned Adam Back, who had noticed the similarities between Satoshi’s and Dai’s ideas and had pointed the bitcoin inventor to Dai’s site.

Back is a British cryptographer, crypto-hacker, the creator of proof-of-work algorithm called hashcash and CEO of Blockstream. In the interview during Bitcoin Hackathon in Miami (2016) Back claimed he “might have received the first email from Satoshi ever,” whereby Satoshi sent him the copy of the paper before it was released. Back’s hashcash system developed in 1997 with the initial idea of limiting email spam and DoS attacks became the basis for proof-of-work algorithm used in bitcoin.

On 3 January 2009 Satoshi mined the first block in the bitcoin blockchain. It contained the first 50 bitcoins. It also contained a text message: “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.” It was a headline of an article published at the front page of The Times and released on the same day as bitcoin was. This way, Satoshi wanted to prove the real date of bitcoin launch and probably to hint at the problems of the banking sector that might be replaced by decentralized cryptocurrencies.

It’s one of the stunning features of the bitcoin blockchain: one can leave messages and links in it, and they will be encrypted as a hash in a hex format. For instance, the first block’s hash looks like: 000000000019d6689c085ae165831e934ff763ae46a2a6c172b3f1b60a8ce26f. To read a message hidden this way you need to decrypt a hash of a corresponding transaction via specialized sites like CryptoGraffiti, Satoshi Uploader, P2SH Injectors, Apertus (they can be used for message encryption as well). This is the feature that led to the scandal broke out in March, as a group of researchers from the Aachen University published a paper on the illegal content being stored in the bitcoin blockchain. Among others, there were pornographic images and links to the child pornography.

On 8 January 2009 Satoshi delivered the first version of the bitcoin software, and 4 days later a cypherpunk Hal Finney received the first-ever bitcoin transaction (he is also the creator of the first reusable proof-of-work protocol — RPOW). Satoshi sent Finney 10 bitcoins to test the system. Finney later recalled, “when Satoshi announced the first release of the software, [he] grabbed it right away.” “I think I was the first person besides Satoshi to run bitcoin,” Finney wrote. He also remembered maintaining “an email conversation with Satoshi over the next few days,” in which he mostly reported bugs.

Soon after releasing the bitcoin and forming an inner circle of the first committed developers, Satoshi started to fall off the radar.

In December 2010 he wrote the last post on bitcointalk concerning DoS attack resistance. 23 April 2011 Satoshi sent the last email from satoshin@gmx.com. The recipient was Mike Hearn, a lead developer at Google at that time and one of the first bitcoin users. In 2014 Hearn left Google to “focus on Bitcoin development full time,” and in January 2016 he quit Bitcoin to join R3 project, where he is a lead developer of the Corda platform. Hearn sent his first email to Satoshi in April 2009 saying he had read the Bitcoin paper “with great interest… found it a bit confusing though.” He put several questions, including “what blocks contain.”

Satoshi wrote back on the same day, noting he would be “glad to answer any questions” and pointing out his plan to “write a FAQ to supplement the paper.” The communication has lasted for 3 years (with many interruptions).

In 2011 Hearn asked Satoshi, whether he was “planning on rejoining the community at some point (eg for code reviews), or [was his] plan to permanently step back from the limelight.” Later Satoshi’s answer has been dispersed among publications as he said: “I’ve moved on to other things. [Bitcoin is] in good hands with Gavin and everyone.” Gavin Andresen mentioned by Satoshi in this last email stayed a lead developer of the bitcoin software up to 2014, and even after that he proceeded with contributing to Bitcoin Core till February 2016 (his commit access to the code was revoked in May 2016). Gavin’s name also stands on one of the main bitcoin developer list on Sourceforge. Satoshi attached a link to this list in an email to Hearn in 2009, having promised to “always announce new versions there.” Apart from Andresen the other developers mentioned as the main ones on the Sourceforge mailing list are Jeff Garzik and Pieter Wuille (aka sipa).

Who is Satoshi?

The P2P Foundation profile states that Satoshi Nakomoto is a 43 year old citizen of Japan. It also contains a link to bitcoin.org — a domain registered on 8 August 2008. After 2011 the profile was inactive, exclusive a couple of posts left by this user in 2014. The authenticity of these latest messages is dubious though as Satoshi’s email was compromised in the same year.

It’s still unknown who hides behind the pseudonym ‘Satoshi Nakamoto’. Moreover, it can be a group of people or the person behind the mask may be not alive anymore. Here are the most popular hypotheses about Satoshi’s identity:

  • Nick Szabo — a computer scientist, cryptographer and legal scholar. In 1994 he was the first to describe the idea of smart contracts. In 1998 he proposed a cryptocurrency system called Bit Gold. It has never been developed into a working system, but it has been addressed as a “direct precursor to the Bitcoin architecture.” In 2013 a researcher named Skye Grey published an article under the title “Satoshi Nakamoto is (probably) Nick Szabo”, but in the interview for TechCrunch Grey admitted that he is not sure in his assumption. In 2014, in a Keiser Report TV show a British comedian and financial journalist Dominic Frisby provided an indirect evidence of Szabo being the mystical figure. “I’m afraid you got it wrong doxing me as Satoshi, but I’m used to it,” Szabo wrote in an email to Frisby (the latter cites this response in his book “Bitcoin: The Future of Money?”). In 2015, The New York Times reporter Nathaniel Popper said that “much of the most convincing evidence pointed to a reclusive American man of Hungarian descent named Nick Szabo.” Szabo has repeatedly refuted such assumptions. Wei Dai has spoken against this theory as well while commenting on a question of the Sunday Times reporter.
  • Hal Finney — a cryptographer, cypherpunk (among other things he has launched the first cryptographically based anonymous remailer), a developer at PGP Corporation, the recipient of the first bitcoin transaction and one of the first users of bitcoin. Died in 2014. In 2011, in an email conversation with Mike Hearn Satoshi confirmed that ‘Hal’, the participant of the discussion on bitcoin.org, was Hal Finney and that he “was supportive on the Cryptography list and ran one of the first nodes.” In 2013 Hal wrote a long post on Bitcointalk titled ‘Bitcoin and me (Hal Finney)’. Therein he recalls himself “extensively” corresponding with Wei Dai and Nick Szabo, as well as Satoshi, and describes his reaction to the appearance of bitcoin. “Today, Satoshi’s true identity has become a mystery. But at the time, I thought I was dealing with a young man of Japanese ancestry who was very smart and sincere,” Finney wrote.
  • Dorian Satoshi Nakomoto, a 68 year old Japanese American. He was claimed to be the new Satoshi by Newsweek in 2014. Dorian himself though admitted to have heard the ‘bitcoin’ term for the first time in mid-February 2014, from his son. It turned out, his son had been contacted by a journalist. Later, Dorian said, the journalist was waiting for him next to his house, and he called the police. “I ask that you now respect our privacy,” Dorian said in his last statement on that matter published by his lawyer.
  • Elon Musk — an entrepreneur, a billionaire, co-founder of PayPal, CEO of Tesla and SpaceX, a board member of SolarCity. The idea that Musk was Satoshi was first expressed by Sahil Gupta in November 2017. Gupta, a computer science student at Yale University, used to be a software engineering intern at SpaceX. His assumptions were based particularly on the fact that Musk had “a firm grasp of C++,” a programming language, which was also used by SpaceX development. Gupta mentioned that Musk “wrote production-level internet software” for Paypal and his other companies. Musk soon tweeted: “Not true,” also having pointed out that a friend had sent him “part of a BTC a few years,” but by 2017 he already didn’t know where it was.
  • Charlie Lee — the creator of litecoin. He was declared to be the true Satoshi by a user of TradingView in June 2017. A man under the nickname MonocoleDundee noted that litecoin was created two years later after bitcoin was — in 2011. Thus, bitcoin could be a prototype for Lee’s real platform. Furthermore, MonocoleDundee assumed that ‘Satoshi-Lee’ had preferred not to disclose his identity, while bitcoin was not to be the main product. “Before this gets too out of hand… No, I’m definitely not Satoshi Nakamoto,” Lee tweeted a couple of days later, having put a sad smiley at the end of the post.
  • The next pretender requires a remark being made before the main story. In 2015, a professor at the University of California, Bhagwan Chaudhry, nominated Satoshi Nakamoto for the Nobel Prize in economics, noting that the invention of bitcoin will change not only our perception of money, but also the role of central banks in monetary policy. The Swedish Royal Academy of Sciences rejected this initiative at that time, having noted that it wouldn’t consider Nakamoto’s candidacy until he reveals his identity. But what is more interesting is that shortly afterward, the editors of Cointelegraph received an email signed by Satoshi Nakamoto. The author stated that he had no intention to win the Nobel Prize for inventing bitcoin and blockchain and mentioned, among other things, that Ted Nelson had already offered him to nominate for this award, but he had rejected the proposal.

Ted Nelson is well known in the computer world. It was he who came up with the basic principles of hypertext and even the term ‘hypertext’ itself. For a long time Nelson has been developing his own hypertext system Xanadu, which, however, was unable to compete with HTML. Most notably, he lived for many years in Japan, where he worked in a private research laboratory and taught at the Japanese University of Keio. Given that Satoshi Nakamoto, most likely, is a Japanese, it is logical to assume that he might have been one of the students or colleagues of Ted Nelson. They are very similar in character as well, since Nelson is a typical ‘rebel from the seventies’ and a fighter against the system, constantly criticizing large corporations, and Nakamoto is a fighter against the dominance of banks.

Nelson runs his channel on YouTube, and to test the guesses DeCenter wrote him in the comments asking to tell how he got to know Satoshi Nakamoto. In response, we received a video published in May 2013, wherein (at about the 8th minute) Nelson pronounced the name of bitcoin creator — Shinichi Mochizuki. Mochizuki became famous throughout the world when in August 2012 he published a series of four works in which he proved the renowned ABC conjecture, one of the most important assertions in number theory. The total volume of those publications exceeded 500 pages, and for several years mathematicians from all over the world have tried to understand Mochizuki’s computations, but without much success. In the summer of 2016, four years after the announcement of his discovery, ‘the Japanese Perelman,’ as Mochizuki is called, agreed to read a lecture to his colleagues explaining his computations. All this happened after bitcoin was created, and the supporters of this theory believe that ABC conjecture was the “other things” Satoshi “moved on to” in 2011. Although Mochizuki still hasn’t refuted this assumption, there are people who disagree with naming him Satoshi, as well as those disagreeing with his proof of ABC conjecture.

  • The last ‘Satoshi’ we’re going to mention here is an Australian entrepreneur Dr. Craig Wright. Among all the pretenders for this role Wright himself has been the most ardent supporter of the hypothesis that he is the true Satoshi. This story goes back to 8 December 2015, when two publications, Gizmodo and Wired, simultaneously published the results of their separate research claiming Wright to be the possible Satoshi. On 2 May 2016 Craig published a post in his blog, confirming to be the creator of bitcoin. He said that he was in charge of writing the code and his friend, a cryptographer and computer criminalist Dave Kleiman, was busy with releasing the paper.

The Economist stated that Wright (on a confidential basis) has provided the publication with his private key as a proof of owning one of Satoshi’s address. This theory attracted such prominent supporters as Gavin Andresen and ex-director at Bitcoin Foundation Jon Matonis. When the community asked for other evidences, Wright declined to provide them. Later Andresen has regretted having played the ‘Who Was Satoshi’ game. Due to a lawsuit filed in February ‘Faketoshi’ legend has been irrevocably debunked: Ira Kleiman, the brother of deceased Dave Kleiman, accused Wright of illegally appropriating more than 1.1 million bitcoins. After that Kim Nillson, a specialist at bitcoin security company WizSec analyzed about 20 bitcoin addresses which have been mentioned in the lawsuit and it turned out that all of them (aggregating 1.1 million of ‘Satoshi’s bitcoins’) were fabricated retrospectively, i.e. assigned by Wright to himself as a part of ‘Satoshi legend.’

A bitcointalk user created a detailed list of more than 150 pretenders for the Satoshi’s role.

How many bitcoins (and dollars) does Satoshi own?

For the first four years after bitcoin creation the block reward was 50 BTC while bitcoin was mined by a small number of cryptographers and developers, and mainly — by Satoshi himself. According to bitcoin protocol, a block time is approximately 10 minutes. It allows to suggest that Satoshi, no matter who he or she is, is definitely a rich person.

In 2013 Sergio Lerner published a paper on the Satoshi Nakomoto’s fortune. Lerner used to work as a full-time security developer at Bitcoin Foundation, and now he is a lead engineer at RSK. He came to the conclusion that most of the first 36,288 blocks mined from 3 January 2009 till 25 January 2010, were generated by the same computer. Given this, 63 percent of the bitcoins mined through that time (i.e. 1,148,800 BTC of 1,814,400 BTC) have never been spent. Lerner assumed that these untouched treasures “belong to the mystery entity.”

As of May 2018 more than 1.1 million bitcoins supposedly owned by Satoshi amounted to $4.5 billion and constituated 6.4 percent of the current bitcoin supply. Furthermore, the calculations carried out by Quartz during the December fever resulted in $19.4 billion, which would rank Satoshi as high as the 44th spot on Forbes’s list at that time. In the same month Bitcoin.com reported that Satoshi’s adorers keep sending bitcoins to his account. The genesis address, which has once received 50 coins for the first block generated, now already contains 66.8 bitcoin being sent in the course of 1244 transactions.

Considering this, the inheritance problem is an acute one. It has been illustrated by the story of Michael Moody, a programmer who is unable to get to bitcoins mined by his late son. Cryptocurrency wallets constantly remind their users that they won’t be able to help regain access to a user’s wallet in case he or she has lost or forgotten their password. Nor can they help a person who has never owned the wallet they want money from, without regard for their motives, i.e. even if it is a matter of inheritance. The only solution would be to ‘bequeath’ the bitcoin fortune to the fullest extent of the law specifying the wallet password and private keys. As far as Satoshi is concerned, it seems to be an unlikely scenario, which means, if Satoshi is already dead, his fortune will remain untouched.





Love podcasts or audiobooks? Learn on the go with our new app.

Recommended from Medium

Rigel Protocol - the blockchain decentralized Protocol. (A Value driven Protocol)

Punk.Network Weekly Update: May 28th, 2021

Which is the best Cryptocurrency| Cryptocurrency Investment Advice?

Why crypto holders should consider trading futures on Binance Futures

Coinmarketcap Review

MATH Global and Solana announce $20M strategic investment partnership

Cross Chains: A Bridge Connecting Reputation Value in Silo — Part 2

Gene Finance Announces April 23rd Launch on Metaverse

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
Daria Smirnova

Daria Smirnova


More from Medium

Bitcoin Mining: Why the energy waste narrative is completely backwards

Intuit Turbo Tax “Free” Filing Campaign Scammed Taxpayers Out of $100 Million

The Crazy Bitcoin Craze

How to Explain Bitcoin to a No-Coiner Loved One