Satoshi Nakamoto is the mysterious inventor of the cryptocurrency bitcoin. The name could represent anyone or a group of people, and since bitcoin’s creation in 2008, there have been a lot of theories about who Nakamoto really is. A lot. Most recently, Wired and Gizmodo presented evidence in December that Nakamoto was Australian computer scientist Craig Wright. People raised doubts at the time, but on Monday, BBC News, the Economist, and GQ all published Wright’s own claim that he is in fact Nakamoto. “I have not [come forward] because it is what I wanted,” he told BBC News. “I would rather not do it. … I don’t want fame. I don’t want adoration. I just want to be left alone.” Despite his plea for privacy, Wright published an unconvincing blog post claiming that he will offer definitive proof this week by moving bitcoin from a known Nakamoto wallet. (If you want a refresher on Nakamoto, how bitcoin works, and what the hell a bitcoin wallet is, watch this.) Doubts persist about the connection between Wright and Nakamoto, though.
It’s an enticing mystery, but a distracting one. Bitcoin has changed and evolved in the five years since Nakamoto left the project, and the blockchain technology that Nakamoto pioneered is now being used in diverse applications around the world, like banking and even space research. The whole point of the technologies Nakamoto created is to be transparent and iterative, allowing them to transform beyond their original forms and original creators.
Discussion about Nakamoto’s identity inevitably raises the fiercely debated question of whether his identity matters. Some argue that it’s relevant because Nakamoto holds a large quantity of bitcoin in multiple wallets. Though bitcoin’s anonymity component make it difficult to know for sure exactly how much Nakamoto holds, bitcoin security consultant Sergio Lerner estimated in 2013 that Nakamoto is in control of 1 million bitcoin, currently worth about $450 million. Bitcoin has a built-in limit of 21 million units, which means that Nakamoto would ultimately hold a little less than 5 percent of total bitcoin. So far, 15.5 million bitcoin have been mined, meaning that Nakamoto holds about 6.5 percent right now.
This is a lot of power. If Nakamoto decided to do a fire sale on his bitcoin, the value of the currency could tank. And if even small numbers of bitcoin started to move between or out of wallets thought to be held by Nakamoto, it could create instability by suggesting that something was happening or that Nakamoto was losing faith in the system he created.
This is a widely held concern, and it certainly has merit. A Reddit user wrote last year, “His stash is the reason I don’t hold Bitcoin.” Economist and researcher Travis Patron, who authored The Bitcoin Revolution: An Internet of Money, warned in December on Diginomics that uncovering Nakamoto’s identity is crucial to bitcoin’s survival.
There is evidence, though, that Nakamoto disappeared in 2011 precisely to ensure the stability of bitcoin. One problem with having a lot of money—whether you are a rich person, a bank, or another flush entity—is that people are always trying to steal it, forcing you to invest a lot of resources into defending your wealth. Bitcoin works to mitigate this problem by allowing anonymous transactions and wallets. Users can distribute bitcoin across multiple wallets and obscure the total sum of their holdings, like Nakamoto did. As the creator of bitcoin, though, Nakamoto’s actions and movements on the network are subject to extra scrutiny. For example, we know that it would have been relatively easy for Nakamoto to mine a huge quantity of bitcoin with a small amount of processing power because he started before there was competition. Usually it wouldn’t be possible to have that type of insight into an individual user’s stash. Now whenever people are identified as Nakamoto, whether or not the evidence behind the claim is strong, they are exposed to robbery and extortion attempts.
In a bitcoin forum from December about risks for Nakamoto, one user wrote, “No matter what security you employ … to protect your private keys, if somebody is holding a gun to your head, that security is going to crumble. … Not only could the real Satoshi be at risk, anyone mis-identified as him could be at risk.” Another responded, “As long as nobody knows who Satoshi is, and that still seems to be the case, there’s nothing worry about for him.” But maybe it’s not the case anymore.
Sergio Lerner has pointed out that the way Nakamoto withdrew from mining is evidence that he wasn’t mining for profit. Nakamoto’s mining tapered slowly as more users were starting to get into it, as if Nakamoto were testing the impact of turning off mining machines to make sure it didn’t have a negative effect on the overall bitcoin environment. Lerner told Danny Bradbury, writing on CoinDesk in 2014, that, “This method suggests that Satoshi did not turn each machine off because it was broken, but because he wanted to. … This two-phase disposal method contradicts the hypothesis that Satoshi was mining for profit, and reinforces the idea that Satoshi wanted to let others get the mining rewards.”
A few things could happen with Nakamoto-held bitcoin, and none of them rest on public disclosure of Nakamoto’s identity. One is that Nakamoto could burn his bitcoin stash. This means sending the bitcoin to an address whose private key has been destroyed or is otherwise unknowable, so they can never be accessed/used again. Since there is a finite amount of bitcoin, doing this would make all remaining bitcoin more valuable. People have also speculated that Nakamoto’s trove of bitcoin may already be effectively burned if he or she lost (or destroyed) the private keys. Even if Nakamoto has full access and decides to move or cash out some bitcoin at some point, he could always resurface and begin communicating with the bitcoin community like he did between the invention of bitcoin in 2008 and his disappearance in 2011. In this scenario the community would have less access to Nakamoto, but Nakamoto would also be shielded from intense pressure or danger.
Bitcoin and especially the blockchain database feature that underlies it are brilliant inventions that would normally be championed by a well-known creator. Satoshi Nakamoto’s 2011 decision to withdraw from the bitcoin project and remain anonymous may be unusual, but it should be acceptable. “At the end of the day, knowing the identity of Satoshi is about as important as knowing who created HTTP or HTML,” Jason Weinstein, an attorney who advises the bitcoin company BitFury, wrote in an email. “Every day people communicate, socialize, get information, move money, and transact business over the Internet using these protocols without knowing how they work or who created them. What matters is how this groundbreaking technology is fundamentally changing the way we secure and move assets and the many ways it can be used to improve people’s lives, not who wrote it.”
Of course, Nakamoto would have significant sway among bitcoin enthusiasts, and could potentially offer leadership and guidance to a community that is often embroiled in fierce debate. But the whole purpose of bitcoin is to be distributed and dispersed. In fact, the biggest concern about Nakamoto is that his large troves of bitcoin undermine the goal of a decentralized currency. Forcing Nakamoto to come forward would not achieve what the search party claims.
This article is part of Future Tense, a collaboration among Arizona State University, New America, and Slate. Future Tense explores the ways emerging technologies affect society, policy, and culture. To read more, follow us on Twitter and sign up for our weekly newsletter.
