The true identity of the person who goes by the pseudonym Satoshi Nakamoto and published the revolutionary Bitcoin white paper has been a mystery for over a decade. Now that the creator of cryptocurrency as we know it has stepped forward. Here is a list of the most interesting facts about the real Satoshi Nakamoto.
1. Why Was Bitcoin Created?
The creation of Bitcoin was the culmination of a few factors, including Satoshi Nakamoto’s personal experience with the banking system, seeing the greed and corruption of the financial system, wanting to help the common man, and the avoidable Great Recession that was taking place at the time.
Denied a Personal Bank Account
In 2005, Satoshi attempted to open up a banking account but was repeatedly denied because of his lack of a permanent address in the UK.
“I felt like a failure and was humiliated by the banks so I made it my mission to invent something that would enable a common layperson to access money without involving the big banks.”
Unfortunately, this isn’t a problem that has plagued only Satoshi. According to Forbes, in 2017 1.7 billion adults worldwide do not have access to a bank account. Many banks have a long list of requirements to set up an account, such as a minimum opening deposit, a minimum balance, direct deposit, two forms of identification, proof of address, and a phone number.
Along with the inability of many people to meet these banking standards, US News & World Report noted large fees, not having enough money, and distrust in banks as the most common reasons for people to not have a bank account in 2019.
Satoshi is among billions across the world who have experienced the hardship and humiliation of not having a bank account. Without a bank account, it becomes impossible to participate in today’s formal financial system and therefore complicates day-to-day living.
“Bitcoin would be convenient for people who don’t have a credit card.”– Satoshi Nakamoto in 2010
Empower the Common Man
After seeing first-hand the control of banks and how they utilized other people’s money, Satoshi wanted to attempt to change the system. He saw an opportunity to disrupt the financial system that oppresses the poor.
“I’ve been working on a new electronic cash system that’s fully peer-to-peer, with no trusted third party.”– Satoshi Nakamoto in 2008.
He wanted to create something that was accessible as the people’s money – the people’s bank with no boundaries, no nationalities, and no discrimination – where nothing was controlled by the government and where no one dictated and destroyed people for the sake of misplaced politics.
He was driven to create something that would change finance and the banking world forever and would give people the power, taking away the central banks’ control. He steadfastly believed in the freedom and liberations of the common man and still does.
A Distrust of Central Banks and Government
“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.”– Satoshi Nakamoto
It is clear that Satoshi created Bitcoin, the first decentralized digital currency, because of his distrust for central banks and governments.
“With e-currency based on cryptographic proof, without the need to trust a third party middleman, money can be secure and transactions effortless.”
The architecture of Bitcoin was created with the core principle to never trust third parties like banks or governments.
The Great Recession
At the time Bitcoin was being developed, the 2008 economic collapse was taking place and the world was facing a Great Recession. For Satoshi, it was another example of what happens when there is third-party trust. In 2009, when the first block in the blockchain was mined – the Genesis Block – Satoshi used that as an opportunity to log a powerful message that would remain there for the remainder of Bitcoin’s existence.
The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.– Bitcoin Blockchain
The economic collapse was caused, in part, by central banks. In the Genesis Block, Satoshi made it clear the aim of Bitcoin was to eliminate the power of third parties to influence currency.
The Great Recession was avoidable. Actions like the U.S. Federal Reserve pushing interest rates to their lowest levels since 2001 – 2004, combined with federal policy to encourage homeownership, is what caused the housing bubble.
“There is nobody to act as central bank or federal reserve to adjust the money supply as the population of users grows.”
2. Why the Anonymity?
“The possibility of being anonymous or pseudonymous relies on you not revealing any identifying information about yourself. If you post your Bitcoin address on the web, you’re associating that address and any transactions with it with the name you posted under. If you posted under a handle that you haven’t associated with your real identity, then you’re still pseudonymous.”-Satoshi Nakamoto
From the beginning, Satoshi understood the importance of anonymity when creating a decentralized digital currency. He did not want to be connected with something that some governments declare illegal and he also didn’t want to seem like a centralized head of a currency.
He created an alias and multiple emails and was always careful never to leave a trail behind. Even when he interacted with other developers who were involved in the initial stages, he separated tasks so that they never knew the full picture and so he never revealed too much to any one person.
Not even Hal Finney, Satoshi’s closest ally, knew much about him.
When dealing with computer engineers in 2009 to help fix bugs and take his early vision to its end, Satoshi continued to protect his identity by taking great care in sharing knowledge with other developers only on a need-to-know basis.
3. Where are the 980,000 Bitcoins?
That’s the million-dollar, actually 10.6 billion-dollar question that everyone in the cryptocurrency world always asks. The Bitcoin community clings to these coins and waits every day for Satoshi to magically cash them in as prices have increased by a multiple of more than 10,000 times what they were about 10 years ago.
In the early Bitcoin days, Satoshi mined 980,000 bitcoins using a remote computer and laptop.
“Those were the days when difficulty was 1, and you could find blocks with a CPU, not even a GPU.”– Hal Finney
It was no secret that Satoshi took advantage of the ability to mine bitcoins when far less power was needed.
“It might make sense just to get some in case it catches on. If enough people think the same way, that becomes a self fulfilling prophecy. Once it gets bootstrapped, there are so many applications. You could effortlessly pay a few cents to a website as easily as dropping coins in a vending machine.”– Satoshi Nakamoto
From 2009 to late 2010, Satoshi continued to mine for Bitcoin up until a devastating error.
In Satoshi Nakamoto’s “My Reveal” he explains his process of not leaving his wallet.dat file or private keys in backup hard drives while continually transferring them between his Fujitsu Lifebook laptop and his refurbished Acer Aspire laptop. He wiped data each time, being careful never to leave anything recoverable on any remote PC or laptop, knowing that the files could be traced through recovery software.
Satoshi goes on to explain how one morning in 2010, he woke up and his Acer had a blank screen. Because of the laptop being under warranty and it having military-grade encryption, he decided to let the tech support take care of the problem.
Devastatingly, they threw out the hard drive and replaced it with a new one and sent the laptop on its way back. As you can imagine, everything was in that hard drive.
With the military-grade encryption and password protection, he was overly confident that the techie guys could not have access to his HDD data. So he left the HDD inside the laptop and didn’t take it out. The laptop came back by courier a few days later and it contained a new HDD and, of course, the bitcoins weren’t there.
“Sigh… why delete a wallet instead of moving it aside and keeping the old copy just in case? You should never delete a wallet.”-Satoshi Nakamoto on Bitcointalk in October 2010
People wonder why Satoshi hasn’t cashed in his bitcoins, but it is really quite simple. They are gone. I don’t think it is humanly possible to sit on more than $10 billion dollars worth of Bitcoin for years and not sell as much as one Satoshi.
4. Why Satoshi Stepped Away from Bitcoin in 2011
The idea that the founder of Bitcoin could make such a mistake as losing all his bitcoins was devastating for Satoshi.
At the time, the bitcoins he lost were valued around $100,000 and while still life-changing, they were nowhere near the value they are now. What was even worse, was that Bitcoin had taken a turn for the worse and was beginning to be associated with criminal activity.
Silk Road had emerged as an online black market, becoming best known as a platform for selling illegal drugs and was using Bitcoin as a primary payment method. Also, WikiLeaks had begun to attract unfavorable attention to Bitcoin by accepting donations in Bitcoin since they had been removed from all other payment platforms.
“It would have been nice to get this attention in any other context. WikiLeaks has kicked the hornet’s nest, and the swarm is headed towards us.”– Satoshi Nakamoto
According to Satoshi, the last straw was in 2011 when Gavin Andresen, one of the prominent early software developers of Bitcoin, decided to talk to the CIA.
The creation of Bitcoin was meant for positive change and with it being hijacked for illicit means, Satoshi made the decision to create distance between his creation and himself and become no longer involved.
“The illicit usage of Bitcoin was not something I wanted to be associated with. It was no longer important for me to invest my energies into this as a venture as it was not yielding any financial gains for me.”-Satoshi Nakamoto
It took many years for Satoshi to gain the confidence and courage needed to come back and fight for his original vision of Bitcoin. Visit the Satoshi Nakamoto website to read more about James Bilal Khalid Caan’s declaration of “I am Satoshi Nakamoto” and other interesting facts about the creator of Bitcoin.