After that? Satoshi disappeared into thin air.

What Satoshi said about Bitcoin

The question of the real identity of Bitcoin’s creator is one of the greatest modern mysteries. Who was Satoshi Nakamoto? Why that name? And where did Satoshi go? Beyond having invented an entirely new kind of money that has gone on to achieve a market cap of more than $1 trillion, Satoshi is widely believed to hold more than a million bitcoin, which would be worth tens of billions of dollars in March 2021.

(Note: In some of the early-Bitcoin history portions of this story, we refer to Satoshi as “he” or “him” because the people Satoshi was communicating with at the time presumed Bitcoin’s creator to be a young man. But of course Satoshi’s gender is one of the unknowns. Another is whether Bitcoin’s inventor worked alone; some experts suspect that Satoshi is actually a group of developers.)

If Satoshi left clues, they can be found in the code and messages the crypto inventor wrote between 2008 to 2011. The entire output, numbering just a few hundred total messages that mostly consist of posts to a forum he created called BitcoinTalk in 2009, has been meticulously cataloged like a sacred text. At this point, millions of people have pored over Satoshi’s words, but when they were first written they were mostly read by a few dozen hermetic members of the Cryptography Mailing List — made up of programmers who specialize in inventing techniques for secure communication. Many on the mailing list identified as “cypherpunks” who advocated the use of cryptography to bring about social and political change.

By his own account, Satoshi began coding the first version of Bitcoin in the C++ programming language sometime in the spring of 2007. In 2008, he shared his idea with a couple of fellow cryptographers who had launched the proto-cryptocurrencies b-money and Hashcash. Soon after, he shared his idea more widely via the Cryptography Mailing List.

Bitcoin was initially greeted with a collective yawn. “When Satoshi announced Bitcoin on the cryptography mailing list, he got a skeptical reception at best,” recalled legendary cryptographer Hal Finney, the first person to ever receive bitcoin from Satoshi. “Cryptographers have seen too many grand schemes by clueless noobs. They tend to have a knee-jerk reaction.”

Satoshi’s October 2008 announcement — a whitepaper outlining the mechanics of Bitcoin — didn’t have the bombastic tone you’d expect from someone who understood he was about to change the world. “I’ve been working on a new electronic cash system that’s fully peer-to-peer, with no trusted third party,” Satoshi wrote matter of factly.

But the nine-page, equation-filled treatise did introduce a solution to a knotty problem that had bedevilled the cypherpunk community for years. No prior digital money concept had cracked what Satoshi referred to as “the double-spending problem.”

How can you prevent a currency with no physical form from being duplicated like any other computer file and spent over and over — the way kids shared endless copies of Eminem mp3s via Napster earlier in the 2000s?

“We propose a solution to the double-spending problem using a peer-to-peer network,” Satoshi wrote.

A peer-to-peer system would eliminate the need for any kind of central authority (like a credit card company or a bank) to validate transactions. The need for central authorities, Satoshi reasoned, was the failure point for earlier attempts at digital currencies. “A lot of people automatically dismiss e-currency as a lost cause because of all the companies that failed since the 1990’s,” he wrote. “I hope it’s obvious it was only the centrally controlled nature of those systems that doomed them. I think this is the first time we’re a decentralized, non-trust-based system.”

To accomplish this “trustless” system, Satoshi proposed a publicly available shared ledger that would document every transaction. He called it the “blockchain.” (Read more about how Bitcoin works.)

Bitcoin’s independence from the existing financial system was an idea that must have been particularly appealing at the time, given that Satoshi had just witnessed the global financial system melt down over vastly irresponsible bets made by big investment banks.

“The root problem with conventional currency is all the trust that’s required to make it work,” Satoshi noted. “Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve.”

In the “trust-based model” of internet commerce, third parties like payment processors reap rewards for acting as an intermediary. Bitcoin could make the intermediaries obsolete. And by 2010, the idea had attracted considerable attention outside the insular cryptography scene.

That December,  an article in PC World suggested that Bitcoin might be a tool Wikileaks could use to avoid government interference. Satoshi reacted with uncommon emotion. “It would have been nice to get this attention in any other context,” he noted on the Bitcoin forum. “WikiLeaks has kicked the hornet’s nest, and the swarm is headed towards us.”

Following the breadcrumb trail

Journalists, hackers, and intelligence agencies have all scrutinized the breadcrumbs Satoshi left behind in the hopes of divining the Bitcoin inventor’s identity. Though Satoshi pointedly never shared any personal details in his communications, he did once describe himself (in a profile on a peer-to-peer forum) as a 37-year-old man living in Japan — a fact that pretty much nobody believes. So where was he actually from?

Satoshi left a potential Easter egg in the metadata of the Genesis block — the very first bitcoin ever mined: “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks”. The text comes from a headline in that day’s Times of London. Satoshi also made  liberal use of Britishisms like “favour,” “maths,” “flat” (for his apartment), and the phrase “bloody hard.” All of which would point to the inventor as hailing from or being a resident of the United Kingdom — unless Satoshi had been devising red herrings since his earliest days of conceiving Bitcoin.

Researchers, poring over timestamps from Satoshi’s various online activities, narrowed the Bitcoin creator’s likely time zones to the UK (GMT), US Eastern (EST), or the US Pacific (PST).

There are those who are convinced that Satoshi isn’t in fact one person at all, but rather a team of programmers, perhaps even including someone working inside the NSA. “He’s a world-class programmer, with a deep understanding of the C++ programming language,” Dan Kaminsky, one of the world’s top Internet security researchers, told The New Yorker in 2011. “He understands economics, cryptography, and peer-to-peer networking.”

Kaminsky’s conclusion? “Either there’s a team of people who worked on this or this guy is a genius.”

Unmasking Satoshi

If Satoshi is indeed only one person, he belongs to a very specialized group of programmers that probably numbers in the dozens. Guesses about his identity have abounded. Some have been ridiculous. In 2014, Newsweek announced with great fanfare that the magazine had located Bitcoin’s creator  in Southern California — in the form of a 64-year-old retired physicist named Dorian Satoshi Nakamoto. Judging from his genuine befuddlement upon learning about his alleged creation, this Nakamoto clearly only possessed a similar name. (Satoshi, or someone possessing his login info, reappeared on the Bitcoin forum in 2014 to declare, “I am not Dorian Nakamoto.”)

Naturally, a wide variety of characters have claimed to be Satoshi. There is Jörg Molt, a German ex-DJ with Las Vegas-magician hair who has marketed himself as “cofounder of Bitcoin” to sell, among other things, a Bitcoin-branded sparkling wine. And Australian Craig Steven Wright, who, according to a 2019 Wired article, “either…invented bitcoin, or [is] a brilliant hoaxer who very badly wants us to believe he did.”

Two of the most plausible suspects have both denied the connection. First is cryptographic pioneer Hal Finney (the cypherpunk who was one of Bitcoin’s first users). He died of ALS in 2014, but was adamant even on his deathbed that he neither was Satoshi nor knew the Bitcoin inventor’s actual identity. Late into his ALS, he laboriously responded to a Forbes reporter’s questions via eye-tracking software: “You have records of how I reacted to the announcement of Bitcoin, and I struggled to understand it. I suppose you could retort that I was able to fake it, but I don’t know what I can say to that. I’ve done some changes to the Bitcoin code, and my style is completely different from Satoshi’s. I program in C, which is compatible with C++, but I don’t understand the tricks that Satoshi used.”

Another prominent suspect is computer scientist and cypherpunk Nick Szabo (author of the smart contract concept that powers decentralized finance apps and creator of 1998 Bitcoin precursor Bit Gold), who has consistently denied his involvement. One simple reason to believe him? Szabo has been an active participant in the crypto scene before, during, and after Bitcoin under his own name. Why would he have created a phony identity for this one project?

There’s also the tragic, persistent speculation that Satoshi might have been a wunderkind cryptographer named Len Sassaman, who killed himself in 2011 following a long battle with depression. Indeed, two months before Sassaman’s suicide, in one of Satoshi’s final communications, Bitcoin’s inventor sent a cryptic email to another developer saying that he “probably won’t be around in the future.”

Why Satoshi might want to remain anonymous

If the real Satoshi lives and breathes, there are some compelling reasons to stay hidden. The US government has a well-established track record of prosecuting individuals audacious enough to invent a competitor to the dollar. As The New Yorker reported, the FBI has declared it to be “a violation of federal law for individuals . . . to create private coin or currency systems to compete with the official coinage and currency of the United States.” In fact, federal prosecutors pursued a range of charges against the founders of a startup called e-Gold in 2007, claiming that their outfit didn’t explicitly prevent money laundering or other crimes.

Assuming Bitcoin’s creator is alive, Satoshi could be on track to becoming the richest human being on the planet. But there’s one more fascinating twist. Because the Bitcoin blockchain is open, it’s possible for researchers to plausibly identify much of the bitcoin Satoshi mined in the early days of his invention. After the very beginning, when Satoshi sent a few bitcoin to early testers like Finney, Satoshi’s coins seem to have never been sent or spent or capitalized on in any way. Over more than a decade, as the Bitcoin inventor’s holdings have grown to be worth potentially tens of billions of dollars, the share of money Satoshi quite literally made has sat untouched — a vast cache of so-called “lost coins” that could be in circulation but aren’t.

So who is Satoshi? One of the prime suspects? One of the many other people that have been identified as Bitcoin’s creator over the years? Someone nobody has ever suspected? Is Satoshi alive or dead? A single inventor or a team? As the years have passed it seems increasingly likely that we’ll never know the answers.

What we’re left with is Satoshi’s trillion-dollar creation, a small cache of communications, and maybe one final gift. “Lost coins only make everyone else’s coins worth slightly more,” Satoshi wrote, in response to a 2010 BitcoinTalk thread about users losing access to their wallets. “Think of it as a donation to everyone.”