Why has Satoshi Nakamoto remained anonymous?

On January 3, 2009, Nakamoto brought the Bitcoin network into existence by mining the first block of the ledger. Within the first block, he embedded the text: “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.” This is likely an allusion to the troubles that were facing the global economic climate at the time.

Many believe that Bitcoin is an amalgamation of ideas that originate from the cypherpunk movement. Nakamoto had previously published a 500-word essay where he stated: “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.”

The resultant cryptographic asset from the Bitcoin whitepaper suggests that either Nakamoto was adept in both economics and computer programming to create a system as secure and robust as Bitcoin — or it points to a collaborative effort.

It is important to note that there is no record of a programmer by the name of Satoshi Nakamoto before 2008. In addition, both the email address and website that he used were incapable of being tracked to any one source. Thus, it is quite curious why a person who possesses such a wide array of knowledge would choose to remain anonymous and would go to such lengths in order to preserve his privacy. 

Possible reasons for Nakamoto’s anonymity

Due to the fact that Nakamoto was trying to create a decentralized peer-to-peer payment system, it is arguable that he remained anonymous in order to avoid the possibility of him becoming the de facto leader of the system and, thereby, having people place their trust in him as the creator as opposed to the ledger. Moreover, any announcement by Satoshi would likely be regarded as investment advice by those who held the digital currency and may have resulted in price movements. These may have happened whether the creator hoped for such an outcome or not.

This theory of events appears particularly relevant when one considers the circumstances that led to the creator of litecoin, Charlie Lee, deciding to offload most of his LTC holdings. In a Reddit post, Lee explained his resolution saying: “And whenever I tweet about Litecoin price or even just good or bad news, I get accused of doing it for personal benefit. Some people even think I short LTC! So in a sense, it is a conflict of interest for me to hold LTC and tweet about it because I have so much influence.”

It is possible that Nakamoto decided to stay anonymous in order to avoid all possibilities of a conflict of interest?

Avoiding the attention of authorities

Another reason that would explain Nakamoto’s anonymity is the fact that creators of alternative currencies are likely to put themselves in harm’s way.

A resident of Hawaii named Bernard Von NotHaus created a private currency in 1998, which he named the Liberty Dollar. The currency flourished for a while but its minting operation was eventually raided by the FBI and the Secret Service in 2007. Following criminal proceedings in 2009, the currency was shut down with NotHaus found guilty of creating a “private coin or currency systems to compete with the official coinage and currency of the United States.”

Additionally, in 2007, a digital currency named e-Gold was accused of fostering illegal activity because it did not have enough information on its customers. Its owner was sentenced to house arrest and the company was shut down. It is likely that this enthusiasm by government agencies to arrest entrepreneurs in the alternative currency space was a factor in Nakamoto’s resolution.

Lastly, bitcoin is available to all to use. This means that it can be used to pay for both legal and illegal services, as is the case with fiat currency. However, it has been a popular payment method on darknet marketplaces and initially gained notoriety from its use on the now-defunct Silk Road. The creator and operator of the infamous dark web marketplace, Ross Ulbricht, was sentenced to life in prison for his role in facilitating the trade of drugs and other prohibited materials.

Ulbricht appealed his sentence to the United States Supreme Court in December 2017 but remains in federal prison at this time. It is possible to extrapolate that Nakamoto may have faced a similar fate had he revealed his true identity.

Who could he be?

An Australian programmer named Craig Wright claimed to be Satoshi Nakamoto in 2016. He provided certain pieces of evidence which were later found to be inconclusive as they were publicly available from the ledger. He has also been accused of faking announcements and blog posts in order to appear as the real Satoshi. Many people believe his announcement to be a lie. For instance, Ethereum founder Vitalik Buterin recently voiced his opinion calling Wright crazy and accusing him of being a fraud.

Another candidate is Hal Finney. He was a well-known cypherpunk and cryptographer who created the first iteration of a reusable proof-of-work system. He was also the first person to receive bitcoin from Nakamoto in 2009. Moreover, he was the first person to download the Bitcoin client. However, Finney refuted the claims that he was Nakamoto prior to his death in 2014.

Some consider renowned cryptographer Nick Szabo to be a credible candidate. He designed the architecture for a decentralized digital currency which he called Bitgold prior to the launch of bitcoin. Though the architecture was never set to motion, there are similarities to bitcoin’s design. This has led to widespread speculations that Szabo is Nakamoto. However, he has repeatedly denied these allegations.

Others have speculated that Nakamoto may be a group of people who pooled their knowledge in order to create the system. Today, the preference for anonymity has gone by the wayside and most developers of crypto projects are much less secretive about their personnel. This may have a lot to do with the need for transparency as the cryptocurrency space becomes saturated with scams or the need to be seen as a successful entrepreneur to inspire investor confidence when doing an ICO.

While the real identity of Nakamoto may never be definitively uncovered, the important thing is that the technology works without this knowledge. Further, the currency is probably bolstered by the fact that its creator is anonymous as people are able to focus on the technology without the distractions of its creator. 

Source: Read Full Article

Leave a Reply