Who is Satoshi Nakamoto?

Let’s talk about Satoshi Nakamoto - the creator of Bitcoin.

You’ve probably heard his name in the news lately. That’s because a man named Craig S. Wright recently claimed to be the man behind this pseudonym. He’s almost certainly not, but we’ll get to that later.

Craig S. Wright is the only person to claim to be Satoshi Nakamoto and actually provide some evidence to back it up. He’s actually done it twice. But several people over the years have been accused of being Satoshi Nakamoto. Was he Dorian Satoshi Nakamoto, a 64-year-old Japanese-American former defense contractor? Or was he Hal Finney, a programmer working for the PGP corporation developing cryptography software, who died of ALS in 2014? Or even Nick Szabo, a cryptographer who in 2005 published the idea for a currency called "Bit Gold", which was strikingly similar to Bitcoin, released three years later?

We’re going to go through all of these theories. But first, let’s talk about what we know about Satoshi Nakamoto himself.

Satoshi Nakamoto, the identity, was born in May of 2008 when he published the original Bitcoin whitepaper to a cryptography mailing list. This whitepaper was a short eight-page overview, meant for technically-minded readers, about how such a system would work. Nakamoto had found a way to combine pre-existing cryptographic constructs in such a way to make a system like Bitcoin possible. Despite the novelty of a system that could allow money to be transmitted over the internet, Bitcoin wasn’t immediately popular.

This original post can provide us with some clues as to who Satoshi Nakamoto is. For one, the name seems likely to be a pseudonym. The english in his original post is perfect, and certain words in the whitepaper are spelled in the British fashion. This suggests that Satoshi Nakamoto lived somewhere that is or was part of the UK. And this does not include Japan.

There is also something implied by the fact that he saw a need to create Bitcoin. This implies some amount of distrust of financial institutions and the government.

A few months later, in January of 2009, Nakamoto released version 0.1 of the Bitcoin software. With this, he created the "genesis block", the first block in the Bitcoin blockchain. This block included a message - it was the headline of the British newspaper The Times, and read "Chancellor on brink of second bailout for banks". This adds more evidence to the theory that Nakamoto is British, and that he sees a problem with the traditional banking system.

One of the first replies to Nakamoto’s release of Bitcoin was by a man named Hal Finney. Finney was born in California in 1956, graduating from Caltech in 1981 with a BS in Engineering. He then went into video game development, with his credits including the Atari 2600 games Adventures of Tron, Armor Ambush, and Astrosmash. His previous exploits in cryptography included postings on the legendary Cypherpunks mailing list and running a contest to break the Netscape internet browser’s encryption. In 2004, he published a reusable proof-of-work system, commenting on its possible applications in an online payment system.

Hal Finney was the first person to receive a Bitcoin transaction, from Satoshi Nakamoto himself. Bitcoin itself used a proof-of-work system similar to what Finney had proposed. Finney’s history in cryptography, his previous work, and his proximity to the Bitcoin project until his death in 2014 all suggest that he might be Satoshi Nakamoto. But is he? Let’s see what other possibilities there are.

Even though we just started, it’s time for Satoshi Nakamoto to leave this story. Nakamoto’s involvement in the project only lasted until mid-2010, and that’s long before Bitcoin really became interesting. In 2010, Satoshi started talking to a developer named Gavin Andresen. Andresen, a developer based in Amherst, Massachusetts, had only recently started contributing to the Bitcoin project. He’d created a site called "Bitcoin Faucet", which would give free Bitcoins to anyone who wanted to play around with them. As Andresen became more involved in the project, Nakamoto began to trust his judgement more and more. Eventually, Nakamoto offered to place Andresen’s email address on the Bitcoin website, as someone people could contact for help. What Andresen didn’t know was that his email was replacing Nakamoto’s - Nakamoto was, in a kind of sneaky way, distancing himself from the project.

Soon after, Nakamoto handed over control of the project page, and the key to the Bitcoin alert system to Andresen. He hasn’t been heard from since, and though Nakamoto controls around a million bitcoins, worth around $440 million dollars at this time, they haven’t been moved.

Why did he leave the project? There’s several theories. One of them was that he was displeased as to the transformation of the Bitcoin community from that of a small group of cryptography-minded futurists to one of money-focused libertarians and anarchists. However, there is some evidence that he was worried about increasing government interest into Bitcoin. Some of his last posts on the Bitcoin Forums were about his fears that Wikileaks accepting Bitcoin donations might lead to the wrong kind of attention on the project, stating that "the heat you would bring would likely destroy us at this stage." Probably the most damning evidence for this theory is that Gavin Andresen states that his last email to Nakamoto was about a meeting Andresen was about to have with the CIA about Bitcoin.

Whatever the reason, Nakamoto was gone by the end of 2010. But the human mind, in the absence of facts, loves to speculate. Such was the case with Nakamoto: now that he was gone, people began to speculate about his true identity.

The first serious theory as to his identity came about in 2011. It was then, in a piece in the New Yorker, that Joshua Davis claimed that the true identity of Satoshi Nakamoto was that of Michael Clear, a graduate student in cryptography at Trinity College in Dublin. He’d written papers about peer-to-peer technology, which Bitcoin uses, and had worked for Allied Irish Banks on improving their currency trading software. Evidently, Clear had a fair bit of experience in economics and cryptography. Davis met Clear, and Clear pointed him to another man named Vili Lehdonvirta. Lehdonvirta denied it, and Clear stated that "I’m not Satoshi, but even if I was I wouldn’t tell you." After the story was published, Clear stated that he was joking when he said "even if I was I wouldn’t tell you," and that he was definitely not Satoshi Nakamoto.

The day after the link was made between Clear and Nakamoto, another author published their theory. This author, Adam Penenberg, had taken phrases from the Bitcoin whitepaper and googled them, with the idea that the true author of Bitcoin would repeat themselves. This led them to a patent application for a "System and method for providing secure communications," filed just three days before the "bitcoin.org" domain name had been registered. This patent had included the term "computationally impractical to reverse," which it shared with the Bitcoin whitepaper. This author reasoned that the chances of a patent of a cryptographic system being filed three days before Bitcoin’s domain name was registered, sharing a phrase with the Bitcoin whitepaper, and yet being completely unrelated to Bitcoin in any way was pretty slim. The patent was filed by three people: Neal King, Vladimir Oksman, and Charles Bry. The author then goes on to provide evidence they admit is circumstantial to continue linking them to Bitcoin.

While none of this proves that King, Oksman, and Bry are the true creators of Bitcoin, there’s no reason to believe that Satoshi Nakamoto is just one person.

In 1934, a group of French mathematicians met in a Parisian cafe. Their purpose was to describe math from the ground up, describing every modern mathematical concept, including complete proofs. The group chose to publish under the name Nicolas Bourbaki. Though the group’s members weren’t anonymous like those of a possible Satoshi Nakamoto group, there certainly exists a historical precedent for a group of likeminded people to take on a pseudonym with the purpose of accomplishing a goal.

But without any definitive proof linking the three to Bitcoin, the search continued.

In December of 2013, a blogger, who went by the name of Skye Grey, claimed to have linked the writing of Satoshi Nakamoto to that of a researcher named Nick Szabo using stylometric analysis. Stylometry is basically trying to compare the writing style of two people to check if they’re the same, and this blogger claimed that Szabo was the closest match. Later, in April of 2014, a team of forty graduate students in forensic linguistics at Ashton University took a look at it. The leader of the study, Dr. Jack Grieve, stated that "We are pretty confident that out of the list of people regularly referred to as possibilities, Nick Szabo is the main author of the paper, though we can’t rule out the possibility that others contributed." Szabo denies any link, and told one author that "I'm afraid you got it wrong doxing me as Satoshi, but I'm used to it." "Doxxing" is an internet term used to mean publishing someone’s personal information - their "dox" - generally for use by internet vigilantes. In this case, though, he’s using it to mean "accusing."

While Dr. Grieve’s study was still underway, another theory came up. Newsweek, the news magazine, had transitioned to digital-only publishing at the end of 2012. But the company was bought in August of 2013, and announced that they were returning to print on March 7th, 2014. For this triumphant return to print, they decided that their cover story was going to be about Satoshi Nakamoto, titled "The Face Behind Bitcoin." This story, written by Leah Goodman, claimed that the creator of Bitcoin was a man named Satoshi Nakamoto… Dorian Satoshi Nakamoto. Goodman’s theory was that Satoshi Nakamoto couldn’t be a synonym, though the justification for why it wouldn’t be wasn’t quite satisfactory for many. But she went and met Dorian Nakamoto. Dorian, born in 1949 in Japan, moved to California with his mother at age ten. There, he became interested in science and math, later working for Hughes Aircraft on classified defense projects after college. He was a libertarian, and distrusted the government. He also hadn’t had a steady job since 2001, which would give him the time to develop Bitcoin. His family described him as strange, secretive, and paranoid, which seem to fit the Satoshi Nakamoto who created Bitcoin. When Goodman met Satoshi Nakamoto, he said very little: "I am no longer involved in that and I cannot discuss it. It's been turned over to other people. They are in charge of it now. I no longer have any connection." So that’s a pretty solid confirmation, then, right? Well, no. Nakamoto, through his lawyer, denied having ever worked on Bitcoin. And a reply like that is exactly the kind of reply one would give if they had a limited grasp of english and had worked on classified projects in their past. And that still doesn’t answer - why would someone who values their anonymity choose to go by their real name online?

Here’s an interesting tidbit - Dorian Nakamoto lived just blocks from Hal Finney. Had Nakamoto been the person who created Bitcoin, it could be that this is the reason that Finney was the first recipient of a Bitcoin transaction. And if Finney had created Bitcoin, this could be how he came up with the name.

And here’s where we get to Craig S. Wright. Unlike the others, Wright doesn’t deny being Satoshi Nakamoto. In fact, he’s the one who’s claimed to be him - twice. The first time, on December 8th, 2015, Wired Magazine claimed that the true Satoshi Nakamoto was Craig Steven Wright. They discovered this thanks to an "anonymous source close to Wright" who provided them with the evidence. This evidence was, as follows:

  • A blogpost by Wright from August 2008, months before Satoshi Nakamoto’s original announcement, stating that he was working on a, quote, "cryptocurrency paper." A cryptocurrency is the anachronistic term for currencies like Bitcoin. I say "anachronistic" because "cryptocurrency" as a term didn’t exist until years after Bitcoin came along.
  • Another post on the blog stating that users could get in touch with him using a PGP public key linked to Satoshi Nakamoto. A PGP public key is a one-way encryption key - it can encrypt messages, but it can’t decrypt messages. So you can publish your "public key" and keep your private key, and people can send you encrypted messages but only you can decrypt them. This public key was linked to the email address "[email protected]", an address Nakamoto was known to control, and was dated on a public PGP key database as being added October 30th, 2008.
  • A $30m Bitcoin investment by Wright into a trust he operated. They reason that he got these Bitcoins because he was Satoshi Nakamoto, owner of a vast Bitcoin fortune.
  • More "Leaked details" from their "anonymous source"

But it soon came out that most of these details were fabricated. The blog posts had been edited after the fact. The PGP key had been added to the database in 2015 and backdated to 2008.

As for his investment in the trust - well, he didn’t actually "transfer" the Bitcoin to the trust - he just "assigned the rights" to the Bitcoin. Meaning that he didn’t actually have to prove that he had them.

The day after the article was published, Wright had his house raided by the Australian Federal Police over an Australian Tax Office investigation. It seems that his claim that he was the true Satoshi Nakamoto could be involved in several interwoven layers of scams, involving $1.5m dollars that the Australian Tax Office paid out to one of his companies that they’d really like to get back.

Whatever the reason for his claim, if he is Satoshi Nakamoto, he’s going through a lot of work to make it look like he’s trying to lie about it.

His second attempt came earlier this month. On May 2nd, he wrote a blog post claiming - again - to be Satoshi Nakamoto. Then, journalists from The Economist and the BBC claimed to have watched Wright demonstrate that he had the private key associated with the first Bitcoin transaction. This claim was backed up by Gavin Andresen. He then published a blog post claiming that it contained cryptographic proof of his Nakamoto-ness, to which several people - including Bitcoin developers Peter Todd and Jeff Garzik - stated that it contained no proof whatsoever, and that security researcher Dan Kaminsky claimed was "intentional scammery." Wright then claimed that he would provide "a series of foundations for this extraordinary claim," but the next day stated that he "did not have the courage" to publish the proof.

Given that Wright’s proof is either told to us second hand by tech journalists or is falsified, it’s easy to say that he’s not the true Satoshi Nakamoto. But what of the others? Every one of these theories has several reasons why it could be and several reasons why it couldn’t. And when the evidence is as circumstantial as it is either way, it’s hard to make a definitive claim that someone is or isn’t Satoshi Nakamoto (well, other than Wright - we can definitely say he is). The best proof would be for someone to move Satoshi Nakamoto’s coins. That way, we would know that either they are the real Satoshi Nakamoto, or they got ahold of his Bitcoin wallet somehow - and that’s more than anyone else can say. And until that happens? We probably won’t know.