The mystery of Satoshi Nakamoto’s identity has had all the hallmarks of a classic thriller. A secretive genius develops a technology that changes the world, develops a cult-like following and becomes fabulously wealthy in the process, without a soul knowing who he, or she, is. Bitcoin, unveiled by the pseudonymous Nakamoto (more commonly known as Satoshi) to an obscure internet mailing list eight years ago, now fascinates the world. An independent, decentralised virtual currency, practically impervious to fraud or theft and with no transaction fees, it promised to liberate money in the same way that the world wide web made information free. The technology is widely accepted as brilliant: the value of all the bitcoins in circulation now totals almost £5bn, and the blockchain technology that backs it up is being studied by every major bank. Since Bitcoin truly entered the popular consciousness three years ago, thousands of hours have been put into unmasking its creator, with several false reckonings. The frenzy peaked in 2014, when Newsweek’s claim to have outed a 64-year-old Japanese American man, Dorian Nakamoto, as Satoshi culminated in a high-speed car chase along a California motorway, with the exposé’s unsuspecting subject fleeing a media scrum. From Bitcoin’s earliest days, whoever created the technology clearly had no intention of becoming a public figure: despite the promise of instant fame and recognition, the last we heard from Satoshi was an internet post back in 2011. That is unless you believe the word of an Australian computer scientist named Craig Wright, who last week came forward claiming he was Satoshi. Wright presented his apparent proof to the BBC, The Economist and GQ, and to two experts – the Bitcoin Foundation’s chief scientist Gavin Andresen and Jon Matonis, a founding director.
For a few minutes, Wright’s story seemed plausible, but almost immediately it began to unravel. His rockstar unveiling, stage-managed with the help of the PR firm The Outside Organisation (other clients include The Who and David Beckham), raised a few eyebrows, especially since Wright said he wasn’t seeking publicity and simply wanted to set the record straight. His “proof” – a cryptographic signature supposedly linked to Satoshi – was then shown to be nothing of the sort; enough to convince a handful of reporters to publish a story too good to ignore, but quickly torn to shreds by the zealous online community of Bitcoin fanatics. In response, Wright promised to provide new evidence, but a day later, he backtracked. He replaced his website with a short message headlined “I’m Sorry”, and while maintaining that he was Bitcoin’s inventor, said he would not be coming forward with any proof. “I know now that I am not strong enough for this,” his sign-off said, although Wright curiously omitted any explanation for his U-turn. By the end of last week, it seemed like the only person who believed Craig Wright invented Bitcoin was Craig Wright. Even those who had initially supported his claims appeared to backtrack. When Satoshi has previously been falsely unmasked, the prospective candidate has quietly faded away. The same may happen to now happen to Wright.
The curious thing about the cult of Satoshi is this: idol worship is utterly counter to the principles of Bitcoin. The currency is dependent on the activity of people using it, and its technical code requires a consensus among its users to change. It can’t be controlled or exploited by one person; in fact this is precisely part of Bitcoin’s appeal. We are fascinated by Satoshi Nakamoto because of the layers of intrigue around his identity and the currency’s genesis, not what it would mean for Bitcoin’s future. While the £300m Bitcoin fortune owned by Satoshi could swing the currency’s value, that is pretty much the extent of his hard power, even if he were to come forward. As for Bitcoin, it could do with a leader. Before Wright came along, the community was consumed by a stand-off that threatened to destroy it, one that Wright’s intervention has done little to resolve. Put simply, Bitcoin is getting too big for the network Satoshi designed. As it grows, many of the exchanges that process Bitcoin payments are seeing transactions delayed, with the network’s building blocks filling up with data. A floated solution is to increase the network’s capacity, but purists argue that this would centralise power: Since Bitcoin relies on users’ computers to keep it afloat, increasing capacity would mean a network run by a smaller group of computers that are capable of keeping up with it.
The debate over this has been rumbling along for months with few signs of a conclusion. Vested interests have prevented much real progress, and it is unclear that Satoshi – should Bitcoin’s near-mythical creator ever really be revealed – would actually hold much sway. The impasse saw Mike Hearn, a prominent Bitcoin developer, declare it a “failed project” earlier this year. Meanwhile, central banks and financial giants are picking some of the Bitcoin’s best parts and copying them for their own systems. The Bank of England has helped design RSCoin – a rival based on the Bitcoin technology – while Nasdaq is piloting the underlying technology to record share transactions. Satoshi Nakamoto, whoever they are, has changed the financial order, but perhaps not in the way that was intended.