Most inventions are associated with their creators, but not so with Bitcoin, the digital currency that bypasses the international banking system. Now, an investigative journalist from Newsweek magazine may have tracked down the mystery man behind the radical currency.
Sixty-four year old Satoshi Nakamoto has been “outed” as the founder, five years ago, of this new form of paying for things. He lives in the outskirts of Los Angeles. Satoshi Nakamoto was up until now presumed to be a pseudonym. His invention, if indeed he did invent it, now has $7 billion worth of Bitcoin in the global marketplace.
Newsweek was not able to get direct confirmation from Mr. Nakamoto that he was responsible. From his home in Temple City, California, the elderly Nakamoto instead “tacitly” acknowledged that he was associated by saying he “no longer had a role” with Bitcoin, and was not prepared to discuss it. The journalist, Leah McGrath Goodman, found that he had a history of covert dealings. He had worked on classified cases for the US Government and for major corporations. Despite all this, he is now found living a simple and humble life in a suburb of the San Bernardino foothills.
Nakomoto is said to have $400 million worth of Bitcoin stock of his own. Why would he be effectively hiding out in anonymity? When McGrath Goodman knocked on his door, his first response was to call the cops. He kept them there as witnesses throughout the interview.
“It’s been turned over to over people,” he said of the Bitcoin operation, and “They are in charge of it now.” When he refused to say more, the police officers signaled that the interview was terminated.
Most people studying the Bitcoin phenomena had assumed that Satoshi Nakamoto was a cipher, some screen for a young Japanese cyber-geek – that was the popular myth. That he turns out to be, possibly, an elderly and reclusive Californian is a twist to the tale. The journalist had tracked him down, excluding the possibilities of other individuals with the same name, as their profiles did not fit. This included a Satoshi Nakamoto from Japan whose LinkedIn page proclaims him to be the creator of Bitcoin. She adopted the technique of striking up a correspondence about model steam trains, for which he has a passion. His responses dried up when she switched to asking him about Bitcoin.
“He’ll never admit to starting Bitcoin,” said Arthur Nakamoto, the younger brother. Arthur is the director of quality assurance at a company called Wavestream Corp. He said his elder sibling was a “brilliant man” and that “You name it, he can do it.” He also warned that his brother’s life was a blank slate and untraceable, and that he would “deny everything.” Apparently the two are not close.
Because Bitcoin is only virtual, and lives purely in code, it is quite easily lost or stolen. This is its major disadvantage, as users have discovered to their cost when hard drives crash or passwords are unlocked. However, it also eradicated bank charges and transfer fees. Britain’s first Bitcoin ATM opened in a London pub last week, and certain crisis, like the Silk Road fiasco, do not seem to have halted its spread. ATMs have been popping up all over America and Canada. The chair of the Federal Reserve, Ben Bernanke, has said that virtual currency may hold “long-term promise.”
Fears that it could be used for money laundering purposes have alerted many authorities. The FBI, who seized the $3.5 million from the Silk Road black market operation, now hold one of the largest stockpiles. It has recently been subject to hacking, causing its Tokyo exchange to have to file for bankruptcy. Despite all this, Bitcoin prevails, and many major businesses are beginning to accept it.
The engineer and chief scientist at Bitcoin, Gavin Andresen, says that he worked alongside the “person” Satoshi Nakamoto between June 2010 and April 2011 when they were developing the Bitcoin, but that he never once heard his voice. On 40-hour weeks as they went over the complicated code, there was never any contact by phone. At this stage, it was still very uncertain as to whether creating this currency was legal or not, and Nakamoto wished to protect his anonymity at all costs. He would only correspond over the Bitcointalk forum.
Andresen also said that he never found out any personal details about his elusive collaborator, or even whether his name was real. “He was never chatty” said Andresen. “All we talked about was code.” Andresen was not too worried about the risk he may or may not have been taking at that time. “I am a geek,” he confessed, and “ideas stand on their own.” Andresen gets paid in Bitcoins.
Bitcoin was launched at the start of 2009 in the wake of the worldwide financial meltdown when confidence in traditional banking was at an all time low. It could not have been better timed. It is designed to be inflation proof and when it reaches a peak in 2140 it will cease to proliferate. It is a counterpoint to the old system where bankers get mega-wealthy and is an attempt to spread equality, This has led to early users already becoming fabulously rich. As Andresen describes it, it was to be a “just-plain-better, more efficient, less-subject-to-political-whims-money.” He never heard back from Nakamoto after he told him he was going to speak to the CIA to reassure them on this, and that it was not black market, pirated money intended to overthrow the system.
Nakamoto is the son of a Buddhist priest and is a descendant of Samurai. He was born in Japan, but emigrated with his mother and two other brothers in 1959. His mother, Akiko, 93, still lives with him. He is father to six children from two marriages, both terminated.
In the 1990s he had financial difficulties after being laid off and he fell into mortgage arrears. This may have been when his attitude to traditional banking got soured. He lost his home. His daughter, Ilene Mitchell, readily concedes her father could have “done something brilliant” and not wished to take any credit for it.
Other family members have mixed feelings. His second wife Grace has compared the way Nakamoto writes, veering between American and English spellings to the spellings and punctuation in the Bitcoin proposal and says it is just like his. She has never been able to get him to speak about Bitcoin to her. Eldest son, Eric, says his father denies being the founder. Brother Tokuo does not think the truth about “Dorian” as he now calls himself, will ever come out.
In a curious circumstance, this means, if Nakamoto is determined to stay out of the spotlight, he will never be able to capitalize on his fortune. He would only be able to sell on a Bitcoin exchange and this would blow his cover. It would also alert the authorities such as the IRS and the FBI. So he is doomed to remain in his humble obscurity.
As the ultimate mystery man, despite his Bitcoin fortune, this is likely the way Satoshi Nakamoto likes to remain.
By Kate Henderson