The Elusive Genius: Mr. Satoshi Nakamoto

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For years, the genius mathematician responsible for the creation of Bitcoin—the first ever digital cryptocurrency—remained unknown. Choosing to stay in the shadows, Bitcoin’s creator went by the pseudonym Satoshi Nakamoto, never once revealing to the public his true identity.

Since he first released Bitcoin’s code on 9 January 2009, Nakamoto’s ingenious digital currency has grown from a nerd novelty to a kind of economic miracle. As the first independent decentralized virtual currency that is also practically impervious to fraud or theft and with no transaction fees, it holds the promise to liberate money in the same way the World Wide Web made information free.

The technology that underlies the Bitcoin currency—known as the blockchain—is widely accepted as brilliant. A publicly accessible and decentralized ledger, the blockchain records and verifies transactions by network nodes, which uses Bitcoins as its unit of account. This ledger contains every transaction ever processed, allowing any user’s computer to verify the validity of each transaction.

The authenticity of each transaction is protected by digital signatures corresponding to the sending addresses, allowing all users to have full control over sending Bitcoins from their own Bitcoin addresses. Moreover, anyone can process transactions using the computing power of specialized hardware and earn a reward in Bitcoins for this service. This is known as “mining”, and it is the activity of “miners” that keeps the blockchain running.

From a regular user’s perspective, Bitcoin is much simpler. It is simply nothing more than a mobile application or a computer program that provides a personal Bitcoin wallet and allows a user to send and receive Bitcoins through it. This is how Bitcoin works for most users who are not miners.

Besides being obtained by mining, Bitcoins can be exchanged for other currencies, products, and services. The key difference between Bitcoin and any other currency is that there are no control over the value of the currency. It is a new form of money that uses cryptography* to control its creation and transactions, rather than a central authority.

People see value in a currency free from government control and the fees banks charge, as well as transparency and protection from fraud because anyone can use the blockchain to verify transactions, and no sensitive information is shared, which means fewer risks for merchants.

Since Bitcoin’s release eight years ago, it has been adopted for everything from international money transfers to online shopping and services. The list of businesses accepting Bitcoin as a method of payment keeps growing each year and with it grows the network of individuals using it.

Global computing giant Microsoft added Bitcoin as a payment option for a variety of digital content across its online platforms in December 2014. Dell, the multinational computer technology specialist, followed in July 2015. Other major online retailers such as Overstock, Newegg, Showroomprive, and TigerDirect have also joined the list of Bitcoin dealing merchants, as well as some popular online services such as Namecheap, WordPress, and Reddit.

While Bitcoin remains a relatively new phenomenon, it is growing fast; the total value of all Bitcoins has grown to nearly USD 7 billion. That Mr. Nakamoto has not basked in the glory of his creation suggests an overwhelming desire for privacy; nor does he seem to be motivated by fortune. The public Bitcoin transaction log shows that Nakamoto’s known addresses contain roughly one million Bitcoins; as of 19 June 2016, this is equivalent USD 758 million.

After Mr. Nakamoto released his invention, he continued to collaborate with other developers on the Bitcoin software until mid−2010. Around this time, he handed over control of the source code repository and network alert key to his collaborator Gavin Andresen, transferred several related domains to various prominent members of the Bitcoin community, and stopped his involvement in the project, stating he is “moving on to other things”.

Mr. Nakamoto’s reclusiveness has given rise to a cult of Satoshi−Hunters; much effort has been made to try and unmask his identity, but to no avail. Nobody, not even his closest collaborators, ever met Mr. Nakamoto in person. They communicated with him only electronically, and ever since he handed over his creation, they have not heard from him again.

Many candidates were assumed to be him, some even claimed that they were, but all turned out to be hackers or imposters seeking false fame. But the true Mr. Satoshi Nakamoto seeks no fame or glory; as his creation grows way beyond his persona, his identity will remain a cipher for now.

*Cryptography is the practice and study of techniques for secure communication in the presence of third parties.

References
bitcoin.org
economist.com
telegraph.co.uk

*Published in SCIplanet, Autumn 2016 Issue "The Invisible People of Science".

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