Nakamoto has become a household name in technology circles, due mainly to the increasing popularity of Bitcoin. Although he's generally believed to be the father of the cryptocurrency, he has never actually revealed himself. What's worse, Satoshi Nakamoto is a somewhat common name, according to Newsweek, further complicating matters of identification.
Even so, as Newsweek continued to investigate this man in California, the more the puzzle pieces seemed to fall into place. Nakamoto is known as a genius among family members -- all of whom had no idea he might have been involved in the creation of Bitcoin -- and seems to have the requisite skills to develop the cryptocurrency, graduating from California State Polytechnic University with a degree in physics. He also worked in security and communications for the Federal Aviation Administration.
Still, the Newsweek piece makes clear that the man identified in California may not in fact be the person behind Bitcoin. There are, after all, people who have claimed to be the real Nakamoto in Japan. There's also the possibility that Satoshi Nakamoto is not the real name of Bitcoin's founder.
So, what's the true story? At the end of the day, no one knows. But it appears possible that the Nakamoto in California is the Nakamoto who started Bitcoin.
Satoshi Nakamoto (中本 哲史) designed the Bitcoin protocol and reference software, Bitcoin-Qt. In 2008, Nakamoto published a paper on The Cryptography Mailing list at metzdowd.com describing the Bitcoin digital currency. In 2009, he released the first Bitcoin software that launched the network and the first units of the Bitcoin currency.
Nakamoto continued to contribute to his Bitcoin software release with other developers until contact with his team and the community gradually began to fade in mid-2010. Near this time, he handed over control of the source code repository and alert key functions of the software to Gavin Andresen. Also around this same time, he handed over control of the Bitcoin.org domain and several other domains to various prominent members of the Bitcoin community.
Like other bitcoin evangelists, Ken Shishido is ready to write off the money he lost in the bankruptcy of Tokyo-based virtual currency exchange Mt. Gox as the price of revolutionising global finance.
Shishido, who lives in Tokyo, was one of about 1,000 investors in Japan who became creditors in Mt. Gox's bankruptcy when the company capped a tumultuous period of weeks by filing for bankruptcy on Friday.
He lost about a tenth of his investment in bitcoin in Mt. Gox, he said, and expected none of that money to come back.
Early enthusiasts for the five-year-old crypto-currency were drawn to its revolutionary ideals of transparency and a lack of central or official control. There was also a heady mix of geek chic - the currency is "mined" through a process involving complex computer math - and laissez-faire Austrian economics.
But a two-month investigation and interviews with those closest to Nakamoto and the developers who worked most frequently with him on the out-of-nowhere global phenomenon that is Bitcoin reveal the myths surrounding the world's most famous crypto-currency are largely just that - myths - and the facts are much stranger than the well-established fiction.
Far from leading to a Tokyo-based whiz kid using the name "Satoshi Nakamoto" as a cipher or pseudonym (a story repeated by everyone from Bitcoin's rabid fans to The New Yorker), the trail followed by Newsweek led to a 64-year-old Japanese-American man whose name really is Satoshi Nakamoto. He is someone with a penchant for collecting model trains and a career shrouded in secrecy, having done classified work for major corporations and the U.S. military.
Characteristics of Satoshi Nakamoto, the Bitcoin founder, that dovetail with Dorian S. Nakamoto, the computer engineer, are numerous. Those working most closely with Bitcoin's founder noticed several things: he seemed to be older than the other Bitcoin developers. And he worked alone.
"He didn't seem like a young person and he seemed to be influenced by a lot of people in Silicon Valley," says Nakamoto's Finnish protégé, Martti Malmi. Andresen concurs: "Satoshi's style of writing code was old-school. He used things like reverse Polish notation."
In addition, the code was not always terribly neat, another sign that Nakamoto was not working with a team that would have cleaned up the code and streamlined it.
Perhaps the most compelling parallel between the two Nakamotos are their professional skill sets and career timeframes. Andresen says Satoshi Nakamoto told him about how long it took him to develop Bitcoin - a span that falls squarely into Dorian S. Nakamoto's job lapse starting in 2001. "Satoshi said he'd been working on Bitcoin for years before he launched it," Andresen says. "I could see the original code taking at least two years to write. He had a revelation that he had solved something no one had solved before."
Here’s why ‘Satoshi Nakamoto’ cut ties with Bitcoin
Why would Dorian Satoshi Nakamoto want to distance himself from Bitcoin?
Nakamoto's possible involvement with Bitcoin has become a juicy thread for media elites after it was reported by Newsweek. Nakamoto quickly denied his connection with the currency, which has only increased the media's interest. Journalists love a good mystery. A car chase makes it all the better. And Bitcoin is a newsy topic, which means more clicks.
But journalists are not normal. In face-to-face conversations, normal people keep asking me one thing: Why all the denials? Why does Nakamoto refuse to be identified with Bitcoin?
Media stakeouts can be tough. So it's reasonable that Newsweek's Nakamoto would rather not associate himself with Bitcoin and avoid unwanted attention.
But that doesn't answer why the creator of Bitcoin — whoever it is — would go so far to hide his or her identity in the first place. The creator, who is known online as Satoshi Nakamoto, chose engineer Gavin Andresen to continue developing Bitcoin's code years ago. That person then vanished from the project altogether sometime in early 2011. The online account has rarely, if ever, come out of hiding since, except to say on Thursday night that "I am not Dorian Nakamoto." The denial has set off guesses and counter-guesses as to whether the cyber-Nakamoto is telling the truth, or if it's just one more bit of subterfuge.
Whatever the answer, there are good reasons — both current and historical — for the Nakamoto identified by Newsweek to want to stay out of the limelight. One is that Bitcoin's virtually untraceable nature makes it easy to use for nefarious purposes, like buying black-market drugs or weapons. It's a lot like cash in that respect, but being a technological innovation, Bitcoin has drawn the ire of some very powerful people, including lawmakers like Sen. Joe Manchin and the governments of China and Russia. If I were in Nakamoto's shoes — and no, I'm not him, either — I would be pretty leery of making those kinds of enemies.
Another is that Bitcoin has arguably benefited from being a leaderless phenomenon. Since all bitcoins are based on computer code, a simple change to that underlying system would dramatically alter how the currency works. If he'd stayed on, Nakamoto could have been the Bitcoin dictator, with the power to change the value of people's holdings overnight. Instead, he chose to delegate — a move that increased confidence in the neutrality of the system as more people got on board. Now anyone who chose to singlehandedly alter the code would face a major backlash from the countless Bitcoin users around the world.
Then there's the question about Bitcoin's long-term viability. Despite the fact that in the United States entrepreneurs are working to integrate it more closely with the financial system, the currency still has a lot of skeptics. If Bitcoin doesn't pan out, it would certainly be much better for someone to continue life not as the person who failed at creating a strong currency.