Bitcoin
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The respected financial author Nassim Taleb was rather less reserved: ‘Ms Goodman,’ he said to her in a conversation on Twitter, ‘there is something despicable about you and your profession. Voyeurism is not journalism…Your profession of violating people’s privacy for profit? You call that journalism or voyeurism?’
Then something amazing happened. After over three years of silence, Satoshi himself re-appeared.
He posted on the P2P forums, one of the first public forums where he had mentioned Bitcoin five years previously, using the same email address he had used back then. He said, simply, ‘I am not Dorian Nakamoto.’78
Now, of course, there was speculation as to whether this was the real Satoshi acting out of the goodness of his heart to protect Dorian, Dorian himself posing as himself to protect himself or a hacker.
But Dorian, it seems, might still have been dealing with the media at the time of the posting. And P2P stated that Satoshi’s account did not appear to have been hacked. (If it had, why just the one post?)
Was Satoshi watching?
Goodman is by no means the first person to try and track down Satoshi. Joshua Davis of the New Yorker spent four months on the job back in 2011. He was first led to a doctoral student from the University of Dublin called Michael Clear. Then he thought it might be a Finnish economic sociologist named Dr Vili Lehdonvirta.
Professor Adam Penenberg from New York University went on the job for business magazine Fast Company and concluded it was a trio of computer scientists – Neal J King, Charles Bry and Vladimir Oksman.
Andrew Smith spent several months on the job on behalf of the Sunday Times, describing it as the ‘longest and most involving project’ he’d ever worked on – ‘not sure I’ve ever worked harder or longer on a piece…Bitcoin goes way deeper than we’ve realised’.79 The tentative conclusion of his terrific piece was David Chaum, the inventor of Digicash.
All of the above names have failed stylometrics tests – in other words their prose does not match Satoshi’s. None of them have a Cypherpunks background. It’s not clear any of them have the right coding skills. And all of them, except Chaum, have publicly denied any connection. (See Appendix II for more on Chaum.)
Online there have been hundreds of blog posts and discussion groups and many thousands of man hours dedicated to pinning down this man. All have proved inconclusive.
Satoshi’s identity is as bulletproof as his code.
I have ventured on this same journey that is doomed to failure. It has now taken me five months and counting. I’ve pored over the 80,000 words Satoshi wrote in the three years he was active online, looking for clues. What unusual words did he use? Does he make any spelling mistakes? Does he have any quirky grammatical habits? I’ve analysed it in such detail I can tell you where he places brackets, how he uses hyphens, even how many spaces he uses now and used to use after a full stop – all in the hope of finding idiosyncrasies that appear in the writing of other prominent Cypherpunks or academics.
This book is late because of it. Here’s what I’ve found.
My first instinct
Often it’s good to go with your first instinct. For reasons I cannot begin to explain, even after you research something in depth, your first instinct is frequently proved correct.
At first, I thought Satoshi was Hal Finney, the veteran programmer – he of re-usable proof of works. My reasoning was simple.
When Satoshi first announced Bitcoin on the cryptography mailing list, nobody replied. The message was ignored for two days. In the short-attention-span land of the web, two days is a long time to wait for some feedback on something you’ve spent 18 months working on. Two days is a long time to wait when you might have nailed something Cypherpunks have been dreaming about for 20 years.
The first reply came from Finney. Was he replying to himself in order to generate some interest and discussion – to bump his thread? Replying to your own posts is not uncommon in this regard. It is known as ‘sock-puppeting’. I’ve even done it myself.
Satoshi is almost certainly too clever – and too patient – for that. He has his emotions under control. But let us pursue this line of thinking a little further.
Finney was born in 1956 – in that same two-year golden window when the computer-scientist geniuses that would change the world were born – and spent his life working on cryptographic systems. He was number two to Phil Zimmerman, the pioneer in the field, for many years at the Pretty Good Privacy (PGP) Corporation, where they developed the most widely used email encryption software in the world.
Such were his beliefs in privacy, freedom and Cypherpunk, Finney was known to spend many nights writing and developing code for free, just because he believed in the work.
In 1993, he published the paper, ‘Detecting Double-Spending’.80 Solving the double-spending problem was of course the key problem with digital cash. It was what Satoshi was so excited about when he proposed Bitcoin. In 2004, Finney developed the ‘reusable proof-of-work’ (RPOW) system, which coders regarded as a brilliant step forward – but his system never saw any economic use until Bitcoin.
Finney is one of the few people to have the background and expertise to have developed Bitcoin – but he is also an obvious person to take an immediate interest.
In his very first reply to Satoshi’s announcement, he wrote:
As an amusing thought experiment, imagine that Bitcoin is successful and becomes the dominant payment system in use throughout the world. Then the total value of the currency should be equal to the total value of all the wealth in the world. Current estimates of total worldwide household wealth that I have found range from $100 trillion to $300 trillion. With 20 million coins, that gives each coin a value of about $10 million. 81
Of course, that is just an amusing thought experiment. It’s like gold bugs explaining why gold is going to go to $70,000 an ounce because of US debt. But could it also be somebody trying to get others excited?
And, by the way, ‘thought experiment’ is an expression Satoshi himself uses82 – though it is not uncommon in coding circles.
Indeed, the writing of Finney and Satoshi is similar – a similar calm understated tone, similar use of language, similar punctuation habits: two spaces after a full stop, for example (this kind of detective work gets very precise). John Noecker Jr., chief scientific officer at text analysis experts Juola & Associates, compared Finney’s writing with that of Satoshi – along with various other names who have been put forward as possible Satoshis. Noecker tells me that in every single experiment they carried out, Finney – along with one other name who I’ll come to – was always the top performer.
Then I noticed both Finney and Satoshi had ‘@gmx.com’ email addresses. (GMX is a free email provider based in Germany. Many Germans use GMX, while Americans and British tend to gravitate towards Gmail, Hotmail or Yahoo). Was this just coincidence – or was it a clue?
Why did Satoshi disappear?
In December 2010, Satoshi made his final post and then disappeared from the internet.
Why?
Perhaps to protect his anonymity in the face of rising interest from the media and, more significantly, the authorities: to protect his own safety as the WikiLeaks panic began to erupt.
There is also the possibility that he disappeared because he was ill.
In 2009, Finney was diagnosed with Lou Gehrig’s disease – amyotrophic lateral sclerosis – the same disease from which Stephen Hawking suffers. It is, for the most part, fatal and claims its victims within two to five years. ‘My symptoms were mild at first,’ he says, ‘and I continued to work, but fatigue and voice problems forced me to retire in early 2011. Since then the disease has continued its inexorable progression.’83
In March 2013 he said, ‘Today, I am essentially paralyzed. I am fed through a tube, and my breathing is assisted through another tube. I operate the computer using a commercial eye-tracker system. It also has a speech synthesizer, so this is my voice now. I spend all day in my power wheelchai
r. I worked up an interface using an arduino so that I can adjust my wheelchair’s position using my eyes. It has been an adjustment, but my life is not too bad. I can still read, listen to music, and watch TV and movies. I recently discovered that I can even write code. It’s very slow, probably 50 times slower than I was before. But I still love programming and it gives me goals.’84
Could a terrible illness be the reason Satoshi withdrew?
Finney was one of the first to mine bitcoins. What did he do with them?
I mined several blocks over the next days. But I turned it off because it made my computer run hot, and the fan noise bothered me. In retrospect, I wish I had kept it up longer, but on the other hand I was extraordinarily lucky to be there at the beginning. It’s one of those glass half full half empty things.
The next I heard of Bitcoin was late 2010, when I was surprised to find that it was not only still going, bitcoins actually had monetary value. I dusted off my old wallet, and was relieved to discover that my bitcoins were still there. As the price climbed up to real money, I transferred the coins into an offline wallet, where hopefully they’ll be worth something to my heirs. Those discussions about inheriting your bitcoins are of more than academic interest. My bitcoins are stored in our safe deposit box, and my son and daughter are tech savvy. I think they’re safe enough. I’m comfortable with my legacy. 85
Finney, it seems, has since sold many of his bitcoins in order to pay for medical care, many at around $100.86 Satoshi does not appear to have spent his.
Finney – yet another red herring
Finney was a key player in the development of Bitcoin, no doubt. He was one of the first to ask real questions. He managed to understand from the start the inner working of the Bitcoin protocol. He explored the weaknesses in the Bitcoin code – one of them is even named ‘the Finney Attack’.87 He had many exchanges with Satoshi on the Bitcoin forums as they progressed the code and developed new versions. He asked question after question. But these very exchanges show there were two people talking. On January 10th 2009, for example, Finney publicly complained to Satoshi that Bitcoin had crashed when he tried to receive a transaction. If it was his own code, and he was transacting with himself, he would surely have quietly fixed it himself.
Moreover, coders all agree that Finney’s coding style – and the style of the comments written in the code – is different to Satoshi’s. Also, Finney preferred to code in the language C, whereas Bitcoin is coded in C++. This is something Finney himself confirms: ‘I’ve done some changes to the Bitcoin code, and my style is completely different from Satoshi’s. I program in C, which is compatible with C++, but I don’t understand the tricks that Satoshi used.’88
Shortly before the publication of this book, the Forbes journalist Andy Greenberg published an interview with Hal Finney.89 Finney was now too ill to even speak – he could only raise his eyebrows to say yes. His son showed Greenberg fifteen email exchanges between Satoshi and Finney from January 2009. They mainly focused on bugs Finney had found in the code, to which Satoshi replied with fixes (and notes of thanks).
Greenberg was also shown Finney’s bitcoin wallet – with the transfers between Satoshi and Finney made back in 2009.
As Greenberg notes, the wallet evidence and the Gmail timestamps in the emails would have been hard to forge.
Bitcoin could not have happened without the work of Finney.
But Hal Finney is not Satoshi Nakamoto.
Note: On August 28th, 2014, Hal Finney’s life support machine was switched off and he passed away. His body has been cryonically preserved. My deepest and sincerest condolences go out to his family. He was a great man. May his soul rest in peace.
Profiling a genius – some broad brushstrokes
‘I’ve had the good fortune to know many brilliant people over the course of my life,’ said Finney, ‘so I recognize the signs.’90
Satoshi is indeed brilliant.
His brilliance lies in the fact that he has reached such high levels of expertise in so many different fields – so much so that many believe he can’t possibly be one person. He is a polymath. It is not just the breadth and depth of his knowledge, but, more importantly, its specificity that makes him unique.
In order to first conceive a new system of electronic cash, one would have to have an extensive knowledge of monetary history. Money is a subject that has found more interest in the last few years with the emergence of Bitcoin, the bull market in gold, the financial crisis and the growth of libertarianism, but, even so, it does not have broad appeal. In 2007–8, books and academic papers on the subject were few and far between.
How many of those who cared actually had the ability to design a system like this? It is one thing declaring what needs to be done; it is another putting it into practice.
Satoshi must have had expertise in computer coding, mathematics, databases, accounting, peer-to-peer systems, digital ownership, law, smart contracts, cryptography and monetary history.
He had to have had experience in academia. The act of submitting a white paper, its presentation, the impeccable referencing – it all denotes academia, even government.
It’s also easy to infer from the way Bitcoin was launched that Satoshi had experience in open-source tech start-ups.
The resilience of the code suggests he had computer hacking experience. Moreover, his ability to keep his identity hidden, despite the fact that half the internet is trying to figure out who he is, suggests significant practical experience in staying anonymous. It also means he has the trust of those who know him, if anyone does, to keep his secret.
Then there’s the matter of his prose. It is consistent and of such a high standard it seems he must have had experience as a writer – perhaps he was a blogger, an academic or an author. He was also quite humble and dismissive of his ability in this regard. ‘I’m better with code than with words’,91 he said.
It’s clear from his posts that he had the awareness to see the shortcomings of his system, and the patience not to try to do too much too quickly. He had the foresight to perceive problems before they arose and the meticulousness to prepare for them. He appears to have remained calm and measured in the face of difficulty, but also of his own success. He treated those two imposters just the same. Signs of arrogance are hard to find.
Then there’s the way that Bitcoin was introduced to the world. Satoshi seems to have been very adept at PR.
PR, like economics, is not an exact science. Sometimes something gains traction, sometimes it doesn’t – and there’s no explaining why. Bitcoin has been a PR masterstroke. It is still a tiny part of the world of finance, yet the coverage it has received is disproportionate to its size. Bitcoin gets more publicity than gold, which is the oldest form of money there is. Satoshi cannot take all of the credit for this. But he has to take some of it. He understood when to make his ideas known, at what point to release his creation into the open-source world and he had the self-effacement to let go of it for others to develop. He promoted his idea with huge under-statement – but the scheduled deflation of bitcoins (in other words that their value will likely increase) means there would be no shortage of bitcoin-holders to do the promoting for him.
So we can add an understanding of psychology to his list of qualities. His knowledge of how people on the internet, in the open source world and in large institutions work allowed him to progress his creation.
Finally, he has a certain honesty. Despite Bitcoin’s similarities to a pyramid or Ponzi scheme, he never pumped-and-dumped his creation. Tempting though it must have been, he seems to have kept most of the bitcoins he mined (more on this later).
There are not many people like this.
From mathematics to computer programming to economics and monetary history to politics to PR and psychology to cryptography to business acumen and vision to plain old written English – in all of these fields he excelled. To cap it all, he’s probably good-looking too.
It’s too early in history to be drawing
this sort of comparison, I know, but there are many parallels between Satoshi and Isaac Newton. Newton was a brilliant scientist and mathematician, of course. But he was also Master of the Royal Mint. He redesigned England’s monetary system, putting us onto the gold standard on which Britain’s colossal progress during the next 200 years was built.
As I continued my hunt for Satoshi, I started asking myself questions not just about who he could be…but also about why he did what he did?
Why did he not want to reveal his real name?
There are all sorts of possibilities.
Perhaps he thought his name might compromise the project in some way. Perhaps he would have risked his career by being associated with Bitcoin.
No doubt he had seen the persecution, often by government authorities, that had befallen other digital currency innovators, some of whom ended up behind bars. Perhaps he felt anonymity would help him avoid that.
Perhaps he got a thrill from being anonymous – a shadowy figure behind a mystery that would capture the world’s imagination.
Perhaps he did not want the attention that might follow if the project was a success – be it from the media, the authorities or even criminals.
And what would motivate someone with the desire to create an open-source, decentralized form of non-government money?
Of course, personal financial gain is one factor. But if that was the only reason, you would expect Satoshi to have sold a lot more of his bitcoins than he has.
Another possible reason might be the challenge: can I overcome this hitherto unsolved technological problem that has stumped so many?
Plain ambition might have been a factor. The motivation might also have been altruistic – to help those people that are shut out of the current financial system. Or it could have been political and ideological. He may have thought our system of money was broken – it benefited the few at the expense of the many, it was creating economic distortion – and he wanted to fix it.