Epic 21st Century Cyberspace Mystery: The Birth of Bitcoin

The year was 2008… the month was October…. “Satoshi Nakamoto”  published a White Paper on The Cryptography Mailing List at metzdowd.com.

That article described the birthchild – bitcoin digital currency. The article’s title was Bitcoin: A Peer-to-Peer (P2P) Electronic Cash System. https://bitcoin.org/bitcoin.pdf

So far, so good… but, who is the inventor of bitcoin, Satoshi Nakamoto, and, why did he create this ingenious new technology, who has earned the generic name: cryptocurrency? As much as we know about the birth of bitcoin, and the genius behind it, what we don’t know is fascinating and mysterious… and reads like a 21st century cyberspace mystery.

According to Nakamoto, he began writing the source code for his P2P electronic cash system in 2007. Satoshi Nakamoto’s bitcoin software, named Sourceforge, Version 01, was compiled using Microsoft Visual Studio.

Shortly after that momentous date when the White Paper was published, Nakamoto released the first bitcoin software – the day was in January 2009, thus launching the network… and the first units of the bitcoin cryptocurrency. Soon the world would come to know this digital currency as: bitcoins.

Instinctively, the inventor of bitcoin knew that, due to its nature, the core design must support a broad range of future transaction types. He therefore implemented a solution – enabling specialized codes and data fields from its inception, via the use of a predicative script.

The White Paper referred to Nakamoto’s newly-created website the world would eventually, and affectionately come to know as: bitcoin.org.  He then continued to collaborate with other developers on the bitcoin software until mid-2010. Nakamoto subsequently relinquished control of the source code repository and network alert key to Gavin Andresen; and, he transferred several related domains to various prominent members of the bitcoin community, thus ending his involvement in the project. Prior to transferring the source code repository, Nakamoto personally performed all source code modifications.

The “inventor” left a text message in the first mined block, which reads “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks”. The text refers to a headline in The Times published on January 3, 2009. This message strongly suggests the first block was mined no earlier than this date.

The genesis block of bitcoin has a timestamp of 18:15:05 GMT on January 3, 2009. This block is unlike all others, in that it makes no reference to any previous blocks.

The first block required the use of a custom code to mine it. Timestamps for subsequent blocks indicate that Nakamoto did not solely try to mine those early blocks, which would have otherwise, effectively created a Ponzi scheme – clearly not the intent.

As the sole, predominant early miner, the inventor awarded himself bitcoin at genesis, and for the next 10 days after its inception. Except for test transactions, these original bitcoins remain unspent, since mid-January 2009!

Public bitcoin transaction logs indicate that Nakamoto’s known addresses contain roughly one million bitcoins. As of May 20, 2017, the original one million bitcoins mined by Nakamoto, et al represent the equivalent of over USD $2 billion! Literally out of thin air, and within 10 days of its inception, Nakamoto created the most disruptive decentralized, publicly-owned digital currency of the 21st century, currently worth billions of dollars, and growing in value, at warp speed, almost daily. The entire world’s financial structure has not been the same since.

Nakamoto disclosed no personal information when discussing technical matters – only commentary on banking and fractional reserve lending, hinting at his intent to forever disrupt the financial-fiat world as we know it, and placing monetary power in the hands of the people.

On his P2P Foundation profile as of 2012, Nakamoto claimed to be a 37-year-old male, who lived in Japan. However, many speculate Nakamoto is unlikely to be Japanese, due, in part, to his use of perfect English, and his bitcoin software not being documented or labelled in Japanese.

Nakamoto’s source code comments and forum postings are written in “Queen’s” English as to spelling and terminology (such as the phrase “bloody hard”), leading many to believe that either he, or at least one individual in the theorized consortium, is of Commonwealth origin.

Attempting to discover Nakamoto’s true identity, Stefan Thomas, a Swiss coder and active community member, graphed the timestamps for each of Nakamoto’s bitcoin forum posts (more than 500); the resulting chart showed a steep decline to almost no posts between the hours of 5 AM and 11 AM, Greenwich Mean Time (GMT). This pattern held true through the weekends, suggesting Nakamoto was asleep during those hours. Assuming conventional sleeping habits, this sleep pattern suggests Nakamoto resided in a region using the UTC−05:00 or UTC−06:00 time offset – which includes the parts of North America that fall within the Eastern Time Zone and Central Time Zone, as well as parts of Central America, the Caribbean and South America.

Gavin Andresen has said of Nakamoto’s code “He was a brilliant coder, but it was quirky.”

The mystery continues: enter Nic Szabo

In December 2013, a blogger named Skye Grey linked Nick Szabo to the bitcoin White Paper, using a stylo-metric analysis. Szabo is a decentralized currency enthusiast, who published a paper on “bit gold”, which is considered a precursor to bitcoin. Szabo is known to have used pseudonyms in the 1990s.

In a May 2011 article, Szabo stated about the bitcoin creator: “Myself, Wei Dai, and Hal Finney were the only people I know of who liked the idea (or in Dai’s case his related idea) enough to pursue it to any significant extent until Nakamoto (assuming Nakamoto is not really Finney or Dai).” Financial author, Dominic Frisby, via extensive research, provides much circumstantial evidence, but, as he admits, he has not unveiled any proof that Satoshi is Szabo.

Speaking on RT’s The Keiser Report, Frisby said I’ve concluded there is only one person in the whole world that has the sheer breadth but also the specificity of knowledge and it is this chap.”

Szabo has consistently denied being Satoshi. In a July 2014 email to Frisby, he said: “Thanks for letting me know. I’m afraid you got it wrong doxing me as Satoshi, but I’m used to it.”

Fostering the belief that Szabo is Nakamoto, Nathaniel Popper wrote in the New York Times that “the most convincing evidence pointed to a reclusive American man of Hungarian descent named Nick Szabo.”

And then came: Dorian Nakamoto

In a high-profile Newsweek article, dated March 6, 2014, journalist, Leah McGrath Goodman, identified Dorian Prentice Satoshi Nakamoto, a Japanese American man living in California – whose birth-name is Satoshi Nakamoto – as the Nakamoto in question. Besides his name, Goodman referred to several facts, circumstantially suggesting he was the bitcoin inventor.

Trained as a physicist, Nakamoto worked as a systems’ engineer on classified defense projects, and computer engineer for technology and financial information services companies. According to his daughter, Nakamoto was laid off twice in the early 1990s, precipitating his adopting a libertarian political philosophy.  He subsequently encouraged his daughter to start her own business, and avoid being under the government’s thumb.”

The most telling piece of evidence confirming Nakamoto’s identity as the founder of bitcoin comes directly from Nakamoto. During Goodman’s brief in-person interview, she asked him about bitcoin…to which he responded: “I am no longer involved in that, and I cannot discuss it. It’s been turned over to other people. They are in-charge of it now. I no longer have any connection.” (This quote was later confirmed by deputies at the Los Angeles County Sheriff’s Department who were present at the time.)

The article’s publication led to a flurry of media interest, including reporters camping out near Dorian Nakamoto’s house, and briefly chasing him by car when he drove to an interview.

In a subsequent full-length interview, Dorian Nakamoto denied all connection to bitcoin. He claimed to never have previously heard of the currency. He further stated he had misinterpreted Goodman’s question as being about his previous work for military contractors, much of which was classified.

Later that day, the pseudonymous Nakamoto’s P2P Foundation account posted its first message in five years, stating: “I am not Dorian Nakamoto.”

What about: Hal Finney?

Adding to the mystery, Hal Finney (May 4, 1956 – August 28, 2014) was a pre-bitcoin cryptographic pioneer and the first person (other than Satoshi himself) to use the software, file bug reports, and make improvements. He also lived a few blocks from Dorian Nakamoto’s family home, according to Forbes journalist, Andy Greenberg.

Greenberg asked the writing analysis consultancy Juola & Associates to compare a sample of Finney’s writing to Satoshi Nakamoto’s. The conclusion was that they found an uncanny resemblance, unseating other suggested potential “inventor” candidates that had been proposed by Newsweek, Fast Company, The New Yorker, Ted Nelson and Skye Grey.

Greenberg theorized that Finney may have been a ghostwriter on behalf of Nakamoto, or that he simply used his neighbor, Dorian’s, identity as a “drop” or “patsy whose personal information is used to hide online exploits.” However, after meeting Finney, seeing the emails between him and Satoshi, his bitcoin wallet’s history including the very first bitcoin transaction (from Satoshi to him, which he forgot to pay back) and hearing his denial, Greenberg concluded Finney was telling the truth.

Juola & Associates also found that Satoshi’s emails to Finney more closely resemble Satoshi’s other writings than Finney’s do. Finney’s fellow extropian, and sometimes co-blogger, Robin Hanson, assigned a subjective probability of “at least” 15% that “Hal was more involved than he’s said”, before further evidence suggested that was not the case.

Craig Steven Wright…hmmmm!

Wired, December 8, 2015 published an article, stating that Craig Steven Wright, an Australian former academic, “either invented bitcoin or is a brilliant hoaxer who very badly wants us to believe he did.” Immediately upon the publication of that article, Craig Wright promptly deleted his Twitter account. Press inquiries of Wright’s ex-wife and of him went unanswered.

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. However, 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.

Coincidentally, on 9 December 2015, only hours after Wired claimed Wright was Nakamoto, Wright’s home in Gordon, New South Wales was raided by at least ten police officers. His business premises in Ryde, New South Wales were also searched by police. Denying any connection to the bitcoin mystery, the Australian Federal Police stated they conducted searches to assist the Australian Taxation Office and that “This matter is unrelated to recent media reporting regarding the digital currency bitcoin.”  Corroborating the police’s story, Gizmodo released a document, alleged to be a transcript of a meeting between Wright and the ATO, revealing he had been involved in a taxation dispute with them for several years.

On a blog post, dated 2 May 2016, Craig Wright publicly claimed to be Satoshi Nakamoto. Validating this claim, in articles released on the same day, journalists from the BBC and The Economist stated they saw Wright signing a message using the private key associated with the first bitcoin transaction.

Wright’s claim was also supported by Jon Matonis (former director of the Bitcoin Foundation) and bitcoin developer Gavin Andresen, both of whom met Wright and witnessed a similar signing demonstration.

However, bitcoin developer Peter Todd said that Wright’s blog post, which appeared to contain cryptographic proof, actually contained nothing of the sort.

The Bitcoin Core Project released a statement on Twitter saying “There is currently no publicly available cryptographic proof that anyone in particular is Bitcoin’s creator.

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”.

On May 4, 2016 Wright made another post on his blog promising to publish “a series of pieces that will lay the foundations for this extraordinary claim.” But the following day, he deleted all his blog posts and replaced them with a notice entitled “I’m Sorry,” which read in part: I believed that I could put the years of anonymity and hiding behind me. But, as the events of this week unfolded and I prepared to publish the proof of access to the earliest keys, I broke. I do not have the courage. I cannot.”

In June 2016, the London Review of Books published a lengthy article by Andrew O’Hagan, discussing events, based on discussions with Wright and many of the other people involved. The article reveals that the Canadian company nTrust was behind Wright’s claim made in May 2016.

Not To Be Outdone…

In a 2011 article in The New Yorker, Joshua Davis claimed to have narrowed down the identity of Nakamoto to a number of possible individuals, including the Finnish economic sociologist Dr. Vili Lehdonvirta and Irish student Michael Clear, then a graduate student in cryptography at Trinity College Dublin. Both Clear and Lehdonvirta strongly denied being Nakamoto.

In October 2011, writing for Fast Company, investigative journalist Adam Penenberg cited circumstantial evidence suggesting Neal King, Vladimir Oksman and Charles Bry could be Nakamoto. King, Oksman and Bry had jointly filed a patent application that contained the phrase “computationally impractical to reverse” in 2008, which was also used in the bitcoin White Paper by Nakamoto.

The domain name bitcoin.org was registered three days after the patent was filed. All three men denied being Nakamoto when contacted by Penenberg.

In May 2013, Ted Nelson speculated that Nakamoto is really Japanese mathematician Shinichi Mochizuki. Later, an article was published in The Age newspaper, claiming Mochizuki denied these speculations, but without attributing a source for the denial.

A 2013 article, in Vice listed Gavin Andresen, Jed McCaleb, or a government agency as possible candidates to be Nakamoto. Dustin D. Trammell, a Texas-based security researcher, was suggested as Nakamoto, but he publicly denied it.

In 2013, two Israeli mathematicians, Dorit Ron and Adi Shamir, published a paper claiming a link between Nakamoto and Ross William Ulbricht. The two based their suspicion on an analysis of the network of bitcoin transactions, but later retracted their claim.

There has been much speculation that Nakamoto might be a team of people. One such person is Dan Kaminsky, a security researcher who read the bitcoin code and said that Nakamoto could either be a “team of people” or a “genius.” Laszlo Hanyecz, a former bitcoin core developer who had emailed Nakamoto, theorized the code was too well designed for one person.

To date, Satoshi Nakamoto’s true identity remains the greatest cyberspace mystery of the 21st century. What is not a mystery is that bitcoin has predominantly taken its place in the world of international finance… in its short 8-years of existence it has already created thousands of millionaires… with no end in sight.

In the end, we may never learn who the real Satoshi Nakamoto is, but we will forever remain grateful for “his” vision and innovation.

We invite you review the content herein, and we hope you will choose to join us — so you can learn as you earn bitcoin for  personal wealth creation… and for your family’s legacy.

To your wealth,

Zaydee Rule

Chief Momentum Officer

Contact Randy Rule

Dislaimer: This is not investing advice, this website is for educational purposes only.

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