The Father of Bitcoin
The concept of an anonymous hero with a secret identity has always captivated our imagination. It has been a recurring theme in literature and popular culture, from the Scarlet Pimpernel to iconic figures like Batman and the enigmatic street artist Banksy. Each of these heroes has their motivations for embracing anonymity.
In the world of finance, this phenomenon emerged with the arrival of Satoshi Nakamoto, the mysterious figure credited as the creator of Bitcoin. Nakamoto emerged seemingly out of nowhere in 2008, introducing the concept of cryptocurrency to the world. However, just as abruptly as he appeared, Nakamoto vanished three years later. In an email sent to a fellow Bitcoin developer on April 23, 2011, he bid farewell and expressed confidence in the future of Bitcoin, stating that it was “in good hands.” Since then, Nakamoto has remained silent and his whereabouts remain unknown.
The enigmatic nature of Satoshi Nakamoto adds to the intrigue surrounding the origins of Bitcoin. His decision to maintain anonymity has sparked endless speculation and curiosity within the cryptocurrency community and beyond. Despite his absence, Nakamoto’s creation continues to thrive and shape the world of digital finance.
As of today, the value of Bitcoin has reached an impressive $325 billion. While the true identity of Nakamoto remains a subject of speculation, it holds significant importance for many. It is believed that Nakamoto owns more than 1 million bitcoins, which accounts for approximately 5 percent of the total circulating supply. Despite the significant drop in Bitcoin’s price in 2022, with a decline of over 66 percent since the beginning of the year, Nakamoto’s Bitcoin holdings would still be valued at over $16.2 billion. During the peak of the cryptocurrency market in November of the previous year, Nakamoto’s bitcoins would have been worth more than $67 billion.
The potential impact of Nakamoto deciding to sell even a portion of their holdings cannot be underestimated. Such a transaction would have a profound effect on the cryptocurrency market. Coinbase, a prominent cryptocurrency trading platform that went public on the Nasdaq in April 2021, acknowledged the potential risk associated with the revelation of Nakamoto’s identity and the movement of their Bitcoin holdings in its IPO filing with the Securities and Exchange Commission (SEC). Coinbase went as far as sending a copy of the filing to the last known email address associated with Nakamoto.
This incident serves as a stark reminder of the significant impact that an individual or entity can have on the entire cryptocurrency industry. In early November, FTX, a prominent cryptocurrency exchange valued at $32 billion, faced a major crisis following the release of leaked documents. These documents, reported by Coindesk, indicated that FTX was on the verge of insolvency and raised concerns about the potential lack of one-to-one backing of user funds. The leaked information revealed a deep financial connection between FTX, its CEO Sam Bankman-Fried’s hedge fund Alameda Research, and raised doubts about the security of user funds held by the Bahamas-based FTX.
Following the series of events, FTX faced a severe financial crisis that ultimately led to bankruptcy. John Jay Ray III, who took over as the CEO of FTX after Sam Bankman-Fried’s resignation, expressed his astonishment at the “complete failure of corporate control” that unfolded during this period, as reported by the New York Times. The situation highlighted the magnitude of the challenges faced by the company and the need for effective corporate governance to prevent such catastrophic outcomes.
In recent times, major players in the financial services industry, such as BlackRock, JPMorgan, and BNY Mellon, have started offering cryptocurrency services to their customers. This move has brought a sense of legitimacy to an asset class that was once criticized by individuals like Charlie Munger of Berkshire Hathaway, who deemed it “contrary to the interests of civilization.” The impact of FTX’s downfall on the cryptocurrency industry as a whole remains uncertain. However, it has further compounded what has already been a challenging year for cryptocurrencies. Prices have been on a downward trend since late 2021, with the past month being particularly harsh. Notably, FTT, the native token of FTX, has experienced a significant decline of 95 percent since the beginning of November, according to Crypto.com. During the same period, Bitcoin’s value has also dropped by over 17 percent, while Ethereum, the second-largest cryptocurrency, has fallen by nearly 19 percent.
The maximum supply of Bitcoin is set at 21 million coins. This limit was established in the original design of Bitcoin by its creator, Satoshi Nakamoto. This scarcity is one of the key features of Bitcoin and contributes to its value proposition as a decentralized digital currency. As the number of bitcoins in circulation approaches this limit, the rate at which new coins are created through the mining process decreases, ensuring a controlled and predictable supply.
Bitcoin was created by Nakamoto to decentralize currency control and empower individuals. The first-ever Bitcoin transaction took place when Nakamoto sent 10 bitcoins to Hal Finney, a renowned developer who had downloaded the Bitcoin software shortly after its release in early 2009. The first recorded commercial transaction using Bitcoin occurred in 2010 when a programmer named Laszlo Hanyecz purchased two Papa John’s pizzas for 10,000 bitcoins. With Bitcoin’s current value of nearly $60,000 per coin, those pizzas turned out to be quite costly.
One of the remarkable aspects of Bitcoin is its open-source nature. This means that the design and code of Bitcoin are publicly available for anyone to access and review. Bitcoin operates on a decentralized network, where no single individual or entity has complete ownership or control. Instead, Bitcoin’s development became a collaborative effort, with users and developers actively participating in forums and contributing code to enhance the system. Ultimately, the authority within the Bitcoin network lies with the users who run the Bitcoin software.
Many programmers and developers have contributed to the code of Bitcoin, but Gavin Andresen stood out as one of the most passionate individuals. In 2010, he reached out to Nakamoto and became a trusted ally to the founder. When Nakamoto decided to step back from the public eye, he entrusted Bitcoin to Andresen. However, even Andresen has become more private over time. He no longer holds the position of “core maintainer” of Bitcoin’s code, and there are plans to decentralize this role, aligning with the decentralized nature of the cryptocurrency itself.
Over the years, there have been ongoing efforts to uncover the true identity of Nakamoto. Speculation and rumors have run wild in cryptocurrency forums, suggesting that Nakamoto could be a member of the Yakuza, part of a secretive group of developers, involved in money laundering, or even a woman.
In 2014, a reporter from Newsweek claimed to have found the real Satoshi Nakamoto in the form of a 70-year-old engineer named Dorian Nakamoto, who lived in Los Angeles. Despite his impressive engineering career, Dorian Nakamoto vehemently denied any connection to Bitcoin. Interestingly, the day after Dorian Nakamoto released a public statement denying involvement, the real Satoshi Nakamoto resurfaced briefly on an online forum. He posted a simple message stating, “I am not Dorian Nakamoto,” before disappearing once again.
In 2016, an Australian named Craig Wright made a bold claim that he was Nakamoto, the creator of Bitcoin. To support his claim, Bitcoin developer Andresen expressed his belief, stating that he was “98 percent sure” that Wright was indeed Satoshi. However, the cryptocurrency community was skeptical and did not accept Wright’s claim. As a result, Wright eventually withdrew his assertion.
Another individual who came under suspicion was Nick Szabo, a secretive expert in the field of cryptocurrency. Szabo had made significant contributions to the development of Bitcoin. Linguistic researchers analyzed Szabo’s writing style and compared it to the writings of other suspected Satoshis. These researchers claimed to have found definitive similarities between Szabo’s writings and those of Satoshi Nakamoto. The New York Times even went as far as to suggest that Szabo was the mysterious Nakamoto. However, Szabo vehemently denied these claims.
As of now, Satoshi Nakamoto remains an enigma, an anonymous figure with a massive fortune in Bitcoin. The reasons for Nakamoto’s anonymity are clear and understandable. With a wealth estimated at $60 billion, personal security becomes a paramount concern. Additionally, considering Bitcoin’s potential to challenge traditional fiat currencies, Nakamoto may have concerns about potential legal actions or other forms of government repercussions.
Undoubtedly, the quest to unveil the true identity of Satoshi Nakamoto will persist. The impact he has had on the cryptocurrency market is significant, and the mystery surrounding his identity is undeniably captivating. In a world where maintaining anonymity is increasingly challenging, Satoshi Nakamoto has achieved an extraordinary feat in safeguarding his secrets.
