Bitcoin’s Mysterious Creator Is Said to Be Identified Even as it has grown into a new type of digital money worth billions of dollars, Bitcoin has always retained an air of mystery. Central to its cachet has been the mythic status of the system’s creator. Its developer went by the name Satoshi Nakamoto, but that is all that Bitcoin’s adopters seemed to know — or wanted to know. After all, Bitcoin was a project dedicated in part to making it easier to avoid the all-seeing gaze of the government and corporate America. But the inventor of the virtual currency may not be quite the international man of mystery that some aficionados imagined him to be. Could he in fact be a model-train fanatic living with his mother in a modest house in Southern California? That, at least, was what Newsweek, with a newly revived print version, reported on Thursday. But the man the magazine claimed to be behind the Bitcoin curtain has a similar name — Dorian Satoshi Nakamoto — which raised questions about why he had not been discovered sooner. Many digital currency aficionados said they doubted the veracity of the report. The Mr. Nakamoto identified in the article denied involvement in Bitcoin on Thursday after a car chase involving a crowd of reporters. He told The Associated Press that he had not heard of the virtual currency until his son told him about being contacted by a reporter three weeks ago. On Thursday evening, an online Bitcoin forum account long believed to belong to the real Satoshi Nakamoto posted a one-sentence denial that he was the man identified in California. It was the account’s first activity in more than three years. If the identification is wrong, it would not be the first time that a reporter had incorrectly determined the identity of Bitcoin’s creator. Yet even if the report proves correct, virtual currency proponents at Bitcoin conferences in Texas and Barbados said that identifying Mr. Nakamoto would be a violation of the privacy the currency was intended to protect. Whatever the conclusion, the furor on Thursday laid bare just how far Bitcoin had moved beyond its humble origins five years ago — and just how much it still relied on the mystique of those beginnings. “In reality, a lot of people didn’t want to know,” said Arianna Simpson, a Bitcoin entrepreneur. “Not knowing and thinking that maybe it had been a community project, again, I think was very well tied to the essence of Bitcoin. To have it exposed in this way I don’t think does anybody a particular service.” For Mr. Nakamoto, Newsweek’s outing was clearly an unwelcome event. On Thursday, a team of journalists was camped outside his house in Temple City, Calif. When a reporter knocked on his front door, an older woman answered, but Mr. Nakamoto quickly came to shut the door, shouting, “No, no, no,” as he did. If Mr. Nakamoto, 64, is Bitcoin’s creator, he is thought to own hundreds of millions of dollars’ worth of the digital money. Because Bitcoin are generally stored on computer hard drives, many Bitcoin users say that Mr. Nakamoto has been made into a target for criminals who might look to steal his coins. Related Links Japan Won’t Impose Banking Laws on Bitcoins The magazine’s report comes at a turning point for the Bitcoin industry. Last week, the virtual currency world was rattled by the collapse of Mt. Gox, once the dominant exchange for buying and selling Bitcoin. The company filed for bankruptcy in Japan last Friday, claiming to have lost about 750,000 customer coins, or nearly $500 million. The bankruptcy sent users scrambling to figure out where their money had gone, and it prompted renewed calls from lawmakers and others to increase government oversight of an industry that has no official regulator. The Newsweek article did not do any immediate damage to the currency itself. The price of a Bitcoin dipped a bit early on Thursday, but it recovered most of the losses, trading at around $650 by evening. Still, Bitcoin watchers said that the creator’s supposed anonymity had played a vital role in the growth of a virtual currency that has become a potent symbol for privacy advocates and critics of government power. “Having this level of mystery allowed people to project their optimism and their hopes onto the currency,” said Richard Peterson, the chief executive of MarketPsych, a research company that has studied virtual currencies. “If it’s true and people start to believe it, it undermines that mystique.” What is known for sure about the creator of Bitcoin is that the person or group of people going by the name Satoshi Nakamoto posted a paper on an obscure mailing list in the fall of 2008 describing a new type of digital money. Bitcoin, as the creator called it, would be run according to a set of rules that would be downloaded on all the computers that joined in. One of the rules determined that only 21 million Bitcoins would ever be created, through a process known as mining. In the months after the system went live, Satoshi Nakamoto emailed with his fellow collaborators but never gave any private details, and he refused to talk on the phone or meet in person. The only information came from a programming website, where a profile described him as a 38-year-old man in Japan. Mike Hearn, who became involved with Bitcoin a few months after it was created, said that initially, Bitcoin was too small and insignificant for the identity of its creator to be a concern. But as it grew, Mr. Hearn went back and looked at his emails with Satoshi Nakamoto and found that they had been sent through an encryption service that obscured their origin. Previous investigations by journalists have suggested that Satoshi Nakamoto might have been, variously, a young British banker, a Finnish programmer and an American law professor. But in each case, the people under suspicion have denied being Bitcoin’s creator. In the absence of any hard evidence, many Bitcoin users have built Satoshi Nakamoto into a sort of hero, imagining him as a selfless genius who created a system that would allow for greater economic freedom. The Mr. Nakamoto in Southern California confirms at least a part of that story. He is a physicist who graduated from California State Polytechnic University. A neighbor, Andrew Kent, said Mr. Nakamoto was “quiet and easygoing” and “clearly smart.” But given the sophistication of the original Bitcoin idea, some experts have doubted it could be the creation of one person, even a genius. At a conference on cryptography in Barbados on Thursday, many attendees discussed the evidence, or lack of evidence, linking Mr. Nakamoto with Bitcoin. “My personal opinion, I don’t think this is the right person,” said Stefano Zanero, assistant professor at the computer engineering department of Politecnico di Milano in Italy. “It just doesn’t add up, and quite honestly, I think that there were a lot of assumptions.” Social networks, meanwhile, compared the polished writing of Bitcoin’s creator with online writings apparently posted by Mr. Nakamoto, some of which were written in imperfect English. “I think it is very clear the writings are not made by the same person,” Roger Ver, a Bitcoin enthusiast and investor, said in an email. “I hope the real Satoshi is never found.” The real Satoshi Nakamoto could prove his or her identity fairly easily by making changes to an original Bitcoin account or by providing the security code that was attached to emails shared with a small group of Bitcoin’s earliest programmers. Proving someone is not Satoshi Nakamoto, however, is tougher. In Texas, at a Bitcoin conference that began on Wednesday, Brian Page, the director of communication for a company called Bitshares, said that initially, he was shocked by the apparent unmasking, but then he reflected. “I have no idea if it’s the guy or not, but it doesn’t matter,” he said. “He created something historic but it doesn’t matter if he is found. Bitcoin is launched and it’s not under his control or anyone’s control.”
Posted on: Fri, 07 Mar 2014 15:26:13 +0000
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