It would have made a plausible plot to an espionage thriller. Our story opens with a mysterious person calling him or herself by the alias Satoshi Nakamoto, who inhabits the anonymous and encrypted corners of the internet, sometimes collectively called Darknet. This mysterious individual publishes a paper and sample code for a new type of anonymous crypto-currency that would eventually be called Bitcoin. The true identity of the developer and his or her motivation to keep their identity secret has remained a mystery. Throw in the location of a secret treasure or the location of a nuclear bomb in the heart of an American city and you’d have the makings of a decent suspense thriller.
Bitcoins are a type of digital currency that combines encryption technology with the ability to exchange money in a secure, anonymous environment. Right now when you want to send money to another person the transaction has to go from your bank to their bank, which is slow and sometimes incurs fees. But Bitcoin doesn’t need a bank or financial institution in the mix. Using private encryption keys, individuals can exchange bitcoins directly. The private encryption key of the owner is matched up with a specific bitcoin in what’s called the Blockchain, a central record of Bitcoin transactions. In simple terms the owner unlocks a bitcoin and the new owner signs the transaction with his or her private encryption key and ownership is transferred and the new owner is written into the Blockchain. A record of that transaction is kept in a software program on the user’s device called a wallet. But just like a real wallet or purse, anyone getting access to your digital wallet can make off with all your bitcoins, and if they’re stolen getting them back can be extremely difficult. This lack of safeguards is one reason some are skeptical of the new medium of exchange. To convert your bitcoins to government currency, you sell them on an exchange and trade the digital currency for dollars, yen, yuan or any other currency you choose. Today each bitcoin is trading for approximately $440 US dollars.
The mystery may be solved, though it may take a while to establish the truth. When it comes to solving the mystery of the real Bitcoin developer, even the evidence takes time to analyze. In this post an Australian businessman named Craig Wright claims to be the mysterious Satoshi Nakamoto.
Not Our First Time to this Rodeo
The first reaction to anyone familiar with the history of Bitcoin will be skepticism. There have been other people supposedly outed as Satoshi Nakamoto. In March 2014 Newsweek identified a man they believed to be Nakamoto only to retract the story later. Bizarrely, even Mr. Wright himself was previously named by hackers as being the mysterious Nakamoto and, at the time, the claim was disputed as Mr. Wright couldn’t (wouldn’t?) answer some fairly basic questions that the developer of the technology should have been able to provide. To cap it off Australian tax officials raided his home and many believed the claim was merely a ruse to deflect from his legal troubles.
A Bold Claim
Despite the skepticism there are reasons to believe Mr. Wright’s story. He claims to be able to provide the encryption keys to the famous Block 9, which was used to send another researcher one of the first Bitcoin exchanges. He even claims to be able to produce the private encryption key of Satoshi Nakamoto, a bold boast all by itself. The claims seem compelling, and though no one is considered definitive proof in and of itself, collectively they give weight to his contention. Then there’s the fact that the downside to falsely making such a claim for someone in the cryptographic and tech security business would be spectacular and likely career-ending.
How Bitcoin Works
Just like Bitcoin itself, simply claiming to be the original developer is causing conflict. Some say the case for Wright is compelling, others dispute it, insisting the evidence supplied just isn’t persuasive. Another significant fact is that Mr. Wright stands to gains very little even if he is eventually identified as the virtual currency developer. The project and source code is open source, which means no single person or company can claim ownership. The core Bitcoin code is maintained by a collection of coders, developers and cryptologists, most of whom are not being paid for their efforts.
In many ways the dispute over Bitcoin’s past mirrors the disagreement about its future. Key developers have quit and lost faith in the system’s integrity and future. The exchange medium has also been tainted by connections to the drug trade and money laundering, not to mention the allegations that ISIS uses it to move funds. Yet loyal Bitcoin adherents love it for its frictionless transfer of currency across national boundaries, even though some of those transfers might be between terrorists.
Regardless of who invented the technology or who might be using it, it’s certain that Bitcoin is here to stay.