The Anonymous Satoshi Nakamoto & Bitcoin — The Stories Of Decentralization (Part 2)
The name evokes a sense of mystery. With a market cap of $200 billion, Bitcoin and its creator to this day remain anonymous. No one knows who created Bitcoin except the creator. This is unprecedented in human history and is part of the draw for many in the Bitcoin community.
In 2008, a website called bitcoin.org was launched. This was during a troubled time — the 2008 financial crisis saw the birth of the Occupy Wall Street movement and the creation of groups such as Anonymous.Self-proclaimed libertarian ideologies expanded rapidly during a time when financial freedom was seemingly entirely within the hands of the central banks and their decisions. Over nine million Americans lost their jobs during the crisis and the monetary system that had been steady for so long was now in jeopardy. On September 15, 2008, the 158-year-old Wall Street investment bank Lehman Brothers filed for bankruptcy. Online forums that had fallen silent in the early 2000s centered around the idea of creating a global currency outside of the modern-day banking system roared back to life after the financial crisis.
On October 31, 2008, shortly after the bankruptcy was announced, the white paper for Bitcoin was published to a cryptography mailing. The so-called “Satoshi Nakamato” proclaimed the following: “I’ve developed a new open-source P2P e-cash system called Bitcoin. It’s completely decentralized, with no central server or trusted parties, because everything is based on cryptography proof instead of trust.”
What was the inspiration for this innovation? Whoever Satoshi Nakamoto is was clearly inspired by the problems brought to the forefront in 2008.
“The root problem with conventional currency is all the trust that’s required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust. Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve. We have to trust them with our privacy, trust them not to let identity thieves drain our accounts. Their massive overhead costs make micropayments impossible.” — Satoshi Nakamato
From white paper to reality, on January 3, 2009, Satoshi Nakamoto revealed thirty thousand lines of code that were the birth of Bitcoin. The codebase for Bitcoin to this day is publicly visible and hosted on GitHub, using Git software to provide codebase management. January 3, 2009, was the day the Bitcoin blockchain network had its first block (“Block 0”) mined. This was done by Hal Finney, an early fan and developer of Bitcoin, working in conjunction with the mysterious and anonymous Satoshi Nakamoto.
The message inserted into Block 0 that is fittingly embedded into Bitcoin’s ledger forever into perpetuity was as follows: “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks” — a reference to the broken banking system.
Interestingly enough, Hal Finney was one of the few individuals to consistently have message chains with Satoshi. Evidently, Satoshi ignored any questions concerning the identity of who was behind the mask of “Satoshi Nakamoto.”
“I thought I was dealing with a young man of Japanese ancestry who was very smart and sincere. I’ve had the good fortune to know many brilliant people over the course of my life, so I recognize the signs.” — Hal Finney
A small group of merchants made it possible to purchase items using Bitcoin. Laszlo Hanyecz, widely known as the “Bitcoin Pizza Guy” became the first person to use Bitcoin to purchase goods — two pizzas for ten thousand BTC in May 2010. At the all-time high price for Bitcoin, those pizzas would have been worth $200 million. Despite this tragedy, only when digital pioneers such as Laszlo started utilizing Bitcoin for its intended purpose did Bitcoin eventually achieve the high value it holds today.
Hundreds of developers still build on the Bitcoin blockchain to this day. At the very beginning of Bitcoin, Satoshi Nakamoto had 100 percent control of the code base and was the only person capable of proposing and pushing out actual quality-of-life code changes to Bitcoin’s protocol. Gavin Andresen was one of the few hyperactive developers who worked indirectly with Satoshi Nakamoto on the Bitcoin protocol development. In mid-2010, Satoshi Nakamoto updated bitcoin.org and removed his email from the website. This left Gavin Andresen as the only publicly-facing individual whom news organizations, questions, and developers could reach out to.
On April 27, 2011, Gavin Andresen announced he would be attending an emerging technology conference set to be hosted at the CIA headquarters in Langley, Virginia. Four days before Gavin tweeted to the general community concerning this meetup, Satoshi Nakamoto emailed Mike Hearn (a former Google employee and active developer and contributor to Bitcoin) with the following: “I’ve moved on to other things. It’s in good hands with [Andresen] and everyone.” This was Satoshi Nakamoto’s last contact with the Bitcoin project in any capacity. Many speculate Gavin’s contact with the CIA was what pushed Satoshi to completely disappear. Satoshi’s final act was ceding control of the codebase to Gavin, who then shared control with four other well-known developers in the community to carry the torch.
Since Satoshi Nakamoto’s vanishing act, Bitcoin code updates are pushed out by Bitcoin Improvement Proposals (BIPs). Over three hundred BIPs have been proposed, many of which sit in limbo as the community reviews them to make sure they align with the protocol’s original goals as outlined by Satoshi’s white paper. Bitcoin has, to date, over five hundred million transactions. Satoshi’s vision of a decentralized future is steadily being realized. We will only ever be able to imagine who Satoshi is.
“If you don’t believe it or don’t get it, I don’t have the time to try to convince you, sorry.” — Satoshi Nakamoto (online forum post)
In this article series, I share excerpts and stories from my book, Building Confidence In Blockchain — Investing in Cryptocurrency and a Decentralized Future. I hope you enjoyed this post — if you enjoyed it and want to connect you can reach me here via email firstname.lastname@example.org or connect with me on social: (twitter) https://twitter.com/l_woetzel or (LinkedIn) https://www.linkedin.com/in/carter-woetzel-16936b136/ .
Alex Lielacher, “Why Has Satoshi Nakamoto Remained Anonymous?” Brave New Coin, April 15, 2018.
Joanna Walters, “Occupy America: Protests against Wall Street and Inequality Hit 70 Cities,” The Guardian (Guardian News and Media, October 8, 2011).
Tommy Andres, “Divided Decade: How the Financial Crisis Changed Jobs,” Marketplace, April 29, 2019.
David Floyd, “10 Years After Lehman: Bitcoin and Wall Street Are Closer Than Ever,” CoinDesk (CoinDesk, September 13, 2018).
Zoë Bernard, “Everything You Need to Know about Bitcoin, Its Mysterious Origins, and the Many Alleged Identities of Its Creator,” Business Insider, (Business Insider, November 10, 2018).
Satoshi Nakamoto, “Bitcoin Open Source Implementation of P2P Currency: Satoshi Nakamoto Institute,” Bitcoin open source implementation of P2P currency | Satoshi Nakamoto Institute, February 11, 2009.
Sfox, “Bitcoin Governance: What Are BIPs and How Do They Work?,” SFOX Edge, April 16, 2019.
“Bitcoin n-Transactions-Total,” Blockchain.com, 2020.