One of the most alluring things about bitcoin is that no one knows who created it.
All we have to go on is the pseudonym, Satoshi Nakamoto.
This has led to countless conspiracy theories, false prophets and fake claims over who the real Satoshi Nakamoto is.
What we do know is Nakamoto was a member of the 90s cypherpunk movement.
If you’re not familiar with the cypherpunks, here’s a good description from Wikipedia:
A cypherpunk is any activist advocating widespread use of strong cryptography and privacy-enhancing technologies as a route to social and political change. Originally communicating through the Cypherpunks electronic mailing list, informal groups aimed to achieve privacy and security through proactive use of cryptography.
That mailing list was started in 1992, and by 1997 it was estimated to have around 2,000 members. Nakamoto was one of them.
In 1993, prominent cypherpunk Eric Hughes published A Cypher Punk’s manifesto.
To be honest, it’s not terribly coherent or well written. He could have expressed his arguments much more simply. However, it did contain ideas that would go on to form the foundations of bitcoin.
Here is the most pertinent part (emphasis mine):
We must defend our own privacy if we expect to have any. We must come together and create systems which allow anonymous transactions to take place. People have been defending their own privacy for centuries with whispers, darkness, envelopes, closed doors, secret handshakes, and couriers. The technologies of the past did not allow for strong privacy, but electronic technologies do.
We the Cypherpunks are dedicated to building anonymous systems. We are defending our privacy with cryptography, with anonymous mail forwarding systems, with digital signatures, and with electronic money.
Fast forward 15 years and Satoshi Nakamoto publishes the bitcoin white paper, laying out how bitcoin will change the face of money on 18 August 2008.
Who is Satoshi Nakamoto, really?
Many people believe that Satoshi Nakamoto was, in fact, the man who received the first bitcoin transaction, Hal Finney.
Finney was a prominent cypherpunk and worked as a programmer for a privacy software company.
He also lived very close to Dorian Nakamoto, a man who Newsweek claimed was the real Satoshi Nakamoto in 2014.
Dorian denied being Satoshi, and was subsequently turned into a meme.
Dorian Nakamoto wasn’t Satoshi Nakamoto in 2014 and yet, to all intents and purposes, that’s effectively what he’s become. Being identified as the creator of bitcoin, despite the scrutiny it invites, can also be lucrative, as Craig Wright, “the other Satoshi” can attest. Despite Wright’s claims to have invented bitcoin being disproved, the Australian seems to have had no trouble securing funding since then for his work on blockchain scaling.
Few would begrudge Dorian Nakamoto, “the original Satoshi”, a chance to cash in on his e-fame and have a little fun in the process. Even without the elderly man’s say-so, he’s become the face of bitcoin, his “Nope” reaction face having been memed hard and purposed for everything from Telegram stickers to t-shirts.
We’ll talk about Craig Wright in a minute. But to get back to Finney. In late 2009 he announced he had been diagnosed with ALS, or “Lou Gehrig’s disease”. ALS is incurable, and in 2014, Finney died.
If Finney really was Satoshi Nakamoto, the timeline fits. As his health deteriorated, he stopped posting online.
This would explain why Satoshi Nakamoto also went dark. Satoshi stopped posting on bitcointalk.org in 2010.
And what’s more, the bitcoin in Nakamoto’s genesis wallet have never moved. If Finney really was Satoshi Nakamoto they never will.
Although it seems highly likely that Finney was Satoshi, that hasn’t stopped other people claiming to be him and cashing in.
Enter “fake Satoshi” Craig Wright
You’ll see in the quote above, a man called Craig Wright is mentioned. And right now, Wright is pretty much enemy number one in cryptoland.
In fact, many people blame him for the latest mega-crash we’ve seen over the last month or so.
Why? I’ll explain, but first some background on his claims.
On 8 December 2015, Wired wrote that Craig Steven Wright, an Australian academic, “either invented bitcoin or is a brilliant hoaxer who very badly wants us to believe he did”.
Craig Wright took down his Twitter account and neither he nor his ex-wife responded to press inquiries. The same day, Gizmodo published a story with evidence obtained by a hacker who supposedly broke into Wright’s email accounts, claiming that Satoshi Nakamoto was a joint pseudonym for Craig Steven Wright and computer forensics analyst David Kleiman, who died in 2013.
Wright’s claim was supported by Jon Matonis (former director of the Bitcoin Foundation) & bitcoin developer Gavin Andresen as well as cryptographer Ian Grigg.
A number of prominent bitcoin promoters remained unconvinced by the reports. Subsequent reports also raised the possibility that the evidence provided was an elaborate hoax, which Wired acknowledged “cast doubt” on their suggestion that Wright was Nakamoto.
Bitcoin developer Peter Todd said that Wright’s blog post, which appeared to contain cryptographic proof, actually contained nothing of the sort. Bitcoin developer Jeff Garzik agreed that evidence publicly provided by Wright does not prove anything, and security researcher Dan Kaminsky concluded Wright’s claim was “intentional scammery”.
The thing about Wright’s claims, if he really was Nakamoto, is that it would be easy for him to prove he is in a way that left no doubt. For example moving some bitcoin from that genesis wallet.
What is far more likely is that he was an early adopter or bitcoin, made a lot of money through bitcoin in the process, and now wants to make even more money.
Why is all this important?
Because right now Craig Wright and Roger Ver (aka “Bitcoin Jesus”) are locked in a death spiral to prove their vision of bitcoin is the correct one.
The way they have done this is by forking Bitcoin Cash (which itself is already merely a lesser fork of bitcoin) into two lesser forks: Bitcoin ABC and Bitcoin SV.
The names of these forks are as ridiculous as the two men’s visions.
They are essentially just cash grabs by two egotistical maniacs (watch the “Roger Ver bcash” video to get the make of his character).
And hopefully both these projects will fall into deserved obsolescence within a few months.
Hopefully. But given this is crypto they could just as easily rise to prominence. And in the meantime, these men and their teams are wreaking havoc.
I covered this story in Exponential Investor back in November. But to reap:
The two opposing sides reportedly not only tried to make their new coin “win” by devoting all their money and computing power into securing their fork. But they also actively attacked their competitor’s fork.
I’ve even seen reports that each side began liquidating their own bitcoin holdings in order to fund this computer-power war (or hashwar, as it’s called).
And some believe that’s why we are seeing such a huge crash in crypto prices right now.
So, that’s the background. If Wright could prove he really was Satoshi Nakamoto, it would lend huge weight to his fork of a fork crypto, Bitcoin SV.
And his means of this “proof” reached new and pathetic levels at the end of November.
On 29 November Satoshi Nakamoto’s account on the P2P foundation became active for the first time since 2010.
The account posted one word: nour.
The most likely reason for this is it was a random spam posting. The domain that hosted Satoshi Nakamoto’s email address went down years ago and was taken over by different people.
The people who now control this domain can create a new email address with the same details as Satoshi Nakamoto’s original and get into his by using “lost password” recovery forms.
So, you can’t really trust any of Satoshi Nakamoto’s accounts to be genuine. However, even if you could, the way Wright tried to play this situation still wouldn’t have fooled anyone.
In Arabic the word nour means light.
Seven hours after this post, Wright tweeted about light in Arabic.
If he really did control the Satoshi Nakamoto account, he would have tweeted that BEFORE Satoshi Nakamoto made that post. Not seven hours after.
It’s just amazing that a man as smart as Wright – there is no doubt he is intelligent, it’s his character that is questionable – would do something like this.
It’s more like what you’d expect a lying high school kid to do to try and make their gullible friends believe them.
Still, the whole episode provided a lot of entertainment. And the actual post from Satoshi Nakamoto – even if it was just random spam from a long-ago hacked account – has added to the mythology.
Since this incident, there have been claims Satoshi Nakamoto will reveal a news via a new P2P foundation account on New Year’s Day 2019.
I’m not holding my breath, but it sure would be interesting if he did.
It’s more likely someone has bought that account on the darkweb and is using it to gain publicity for an as yet unnamed project.
It wouldn’t surprise me if it was Craig Wright himself that bought it. He certainly has enough money at his disposal. Or at least he did before the whole Bitcoin Cash fork of a fork fiasco.
No matter what happens to crypto prices over the course of 2019, we can be sure the Satoshi Nakamoto mythology will provide us with entertainment value at least.
And if you like my crypto stories and insights, you can get much more in-depth ones by subscribing to my Crypto Wire service through Frontier Tech Investor here.
Until next time,
Editor, Exponential Investor