Maya Middlemiss


Opinion: Why it would be bad for Bitcoin to “find Satoshi”

I recently came across a post seeking crowdfunding to unmask the creator of bitcoin, Satoshi Nakamoto. No, I don’t intend to link to it. But when I last looked, the project had raised nearly half of its desired 15m roubles (around €95k). The reasons outlined on the project page by its self-described ‘team of crypto-enthusiasts’ are various, and some seem considerably more valid than others.

There was a certain amount of outright scare-mongering, along the lines of: “Was it really an enthusiast who gave the world an independent currency or was it a group of people pursuing scientific or purely selfish purposes? Or perhaps Bitcoin is an invention of a large company or a IT giant that decided to take a new direction? Can Bitcoin be the state invention, created with the purpose to control all transactions?” (this part of the page appears to have been translated from the initial post in Russian, though the campaign appears to be managed by someone called German Neff who is Estonian).

One perhaps more realistic reason that Neff and indeed others have expressed concern about however is that whoever Nakamoto is or was, s/he holds keys to around 5% of the entire bitcoin supply, over a million of them — a stash estimated to be worth $5bn at today’s prices, but potentially vastly more in the next bull run.

Lots of people watch those wallets very carefully for any sign of activity, but there has been none whatsoever since Satoshi withdrew from publicly communicating in 2010. Naturally, anyone holding any part of the remaining 95% of the bitcoin supply has a keen interest in what could happen if those coins were suddenly dumped on the market.

And the Neff proposition argues that despite the radio silence to date, this position could change at any time — what if Satoshi died and left the private keys to heirs, who decided to start liquidating their position in a hurry? Obviously to do so would affect the value of their asset dramatically, and as such they might decide to hold on to most of it — however the transparency of the block recorder means that if any of those early blocks were transacted, the speculation would be intense… And as such, provoke a real risk of disclosure of the identities of these lucky inheritors. Therefore they might have a powerful motivation to sell as much as they could before the price tanked, and potentially the value of the network collapsed irrevocably.

This is not the first time such a concern has been voiced, but this is the first fundraising I have encountered which conflates this concern with political or state-level motivation. By raising the possibility that Satoshi could have been a front for a corporation or government, and bitcoin have been created with the goal of controlling financial transactions this is playing to a very timely sense of heightened fear on the global front, about interference in everything from cybercrime to the democratic process. Good marketing.

In addition to its financial success to date, the campaign appears to have some plans in place involving detective agencies in the US, Europe/UK and Japan, based on various previous connections or sightings, and a commitment to share results on social media on an ongoing basis (which seems to me to be somewhat misaligned with the way that detective work is typically carried out, but what do I know?)

However, I for one hope they are unsuccessful in their mission. I do not believe that any good can possibly come from it.

Many people have tried over the years to ‘unmask’ Satoshi, some of whom have made life very difficult for ordinary people, and others ending in proven fraud and attempts to take credit where it was not due, even fooling international media organisations — this BBC article from a couple of years ago contains the delightfully revealing footnote: “The original headline and text of this story was changed on the day of publication (2 May 2016). The headline “Bitcoin creator reveals his identity” was amended to read “Australian Craig Wright claims to be Bitcoin creator”.

But the very fact that bitcoin’s origins remain a mystery is what gives it its strength as a protocol, and its potential to emerge as a genuinely decentralised world reserve currency, based on true consensus, and not subject to central governance.

Every other cryptoasset has a known and publicly identified creator, and whatever structures they create for decision-making around it, some degree of personality-driven guru-ism is inevitable. Such a coin can never be truly decentralised. Many great minds are working to change the consensus mechanisms behind Ether, the number two currency by market cap — yet whatever strategic developments they put in place, a single tweet by Vitalik Buterin, creator of the Ethereum network, can send the price ricocheting wildly. Litecoin creator Charlie Lee very publicly sold off most of his holdings in his own currency at the end of last year to deliberately deflect the cult of personality which had arisen around his activities and the effect that was having on the price (Lee being another person who has been publicly alleged to be Satoshi in the past).

Whether Satoshi Nakamoto is male or female or even a single individual, I hope they never get outed publicly. The helpful FindSatoshi team promise that, “At the same time, an important to mention that if Satoshi turns out to be an ordinary person — the genius crypto-enthusiast who is simply afraid of publicity — after the publication of his true name we pledge not to bother him in the future and we pledge to completely preserve the inviolability of his identity” I have no doubt that this promise is greatly reassuring to the interested party, especially combined with the promise to share search details regularly on social media indicated above…

If I were the richest man or woman or team on the planet with a brain that had conceived the bitcoin protocol, I’d probably find a way to outwit the ‘tecs and stay hidden if I chose to do so, and so I don’t think Satoshi Nakamoto needs any luck or good wishes from me personally, nor explanation of the risks to which they would be exposed if this disappearance were undone. Satoshi’s quoted remarks from the days of their public interactions all point to a strong libertarian political bent combined with a powerful need for privacy and independence, and for me this is the most powerful indication that anyone who ever publicly claims the crown, is by definition most unlikely to be the creator of bitcoin anyway.

But I believe that the lack of an identifiable figurehead gives the progenitor of all cryptocurrencies many of its greatest strengths. And long may the mystery remain.

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