When anyone enters the world of Bitcoin, its pseudonymous creator inevitably comes up as a point of discussion. Everyone wants to know: Who is Satoshi Nakamoto? The identity of Bitcoin’s creator seemed of the utmost importance to me when I first encountered Bitcoin while going down a rabbit hole on Reddit in early 2013. Clicking thread after thread it felt like I had walked into Narnia with words, memes, and names I had never heard of before.
A pseudonymous Satoshi Nakamoto created a digital currency that defied its predecessors and not only was trading at hundreds of U.S. dollars but was in use in commerce all around the globe. Somehow this digital currency also provided a solution to this complicated math problem called The Byzantine Generals Problem. I was enamored.
Who was this mysterious Satoshi Nakamoto? What made Bitcoin different from the other electronic currencies that preceded it?
I quickly realized that I had not entered Narnia at all, but instead was in the midst of something out of The Lord of the Flies. Satoshi removed himself from the project in late 2010, and now a bunch of developers who were still learning the system became in charge of it.
As far back as 2013, when I found Bitcoin, everyone was arguing about scaling Bitcoin. I became engrossed with the search for Satoshi because I felt it was imperative to know how Satoshi would have felt about this scaling debate. It didn’t take long to understand that he had a completely different view from the Bitcoin Core developers who told us Bitcoin was an un-scalable system:
“The existing Visa credit card network processes about 15 million Internet purchases per day worldwide. Bitcoin can already scale much larger than that with existing hardware for a fraction of the cost. It never really hits a scale ceiling.” – Satoshi Nakamoto to Mike Hearn, April 2009
I was convinced in 2013 that Bitcoin would get over this scaling drama and increase the block size within a year. I never could have imagined it would take 4 years until this would become a reality.
By 2017, I was pretty disillusioned with Bitcoin:
-Satoshi told us that he designed Bitcoin to support complex transaction types, but Bitcoin had little more than multisig (and it didn’t even use the original scripting language to do so).
– Satoshi told us that nodes were miners, but self-proclaimed Bitcoin experts had convinced everyone that any basement dweller could be a node.
– Satoshi told us that Bitcoin could have instant transactions, but the Bitcoin Core experts told us zero confirmation transactions weren’t safe.
– Satoshi told us that Bitcoin enabled microtransactions and that transaction fees were always meant to be low (or nonexistent). By the end of 2017 Bitcoin users were paying over $50 to make a single transaction.
– Satoshi told us that Simplified Payment Verification allows validation of transactions without running nodes, and the Bitcoin Core experts told us SPV was broken.
– Most importantly, Satoshi understood that the economics of the system he created dictated that as the block subsidy decreased, the system would have to transition to transaction fees as the main source of revenue for miners.
Where was Satoshi?
“In a few decades when the reward gets too small, the transaction fee will become the main compensation for nodes. I’m sure that in 20 years there will either be very large transaction volume or no volume.” – Satoshi Nakamoto, February 2010
Why wasn’t the system’s creator concerned that this Bitcoin experiment was stagnating?
We have to back up to fill in the “Who is Satoshi Nakamoto?” timeline. In 2014, Satoshi had briefly poked his head out to tell the world that he was not Dorian Nakamoto. The next time we would hear about Satoshi was towards the end of 2015 when Wired publicly doxed Craig Wright as the creator of Bitcoin. In the coming months Craig Wright made it clear repeatedly that he had no interest in coming out as Satoshi, but that others were forcing his hand and “making [his] life very difficult” which gave him no choice.
“I don’t think that I should have to be out there. There’s nothing owed to the world where I have to come out and say ‘I am X, I am Y.’ I mean, no one needs to do that. It is my right not to say I did something. If I released a paper that actually benefits people, why do I have to actually take credit for it?” – Craig Wright, May 2017
At this point, little was known about Wright, but there were two videos from 2014 and 2015 where he talks about a grand vision for Bitcoin, imagining the world’s internet traffic routing through Bitcoin transactions and expressing how the Bitcoin scripting language is Turing complete and allows for smart contracts. Somehow, very few people took him seriously.
In 2016 Craig Wright famously made a blog post where he backed away from using Satoshi’s private keys in a public demonstration:
“If I sign Craig Wright, it is not the same as if I sign Craig Wright, Satoshi.” – Craig Wright, 2016
Craig Wright disappeared back into obscurity, and despite all of the available public evidence that seemed to point to Wright’s involvement in the creation of the digital currency, the cryptocurrency world moved on. No one knew what to make of it all, and if Satoshi was to reappear and help get Bitcoin back on the path to achieve the “very large transaction volume” he sought by 2030, it would have to wait.
A new hope
Back to 2017, a number of Bitcoin enthusiasts have fragmented into multiple cryptocurrencies, but a group of on-chain scaling proponents kept Satoshi’s dream of a global Bitcoin a reality. All of these sane individuals in Bitcoin were convening in Arnhem to discuss scaling Bitcoin. During a time slot allocated to Jon Matonis, he elected to forego his speaking time and to introduce Satoshi Nakamoto himself in his place. Over the next hour and twenty minutes, I almost couldn’t believe what I was hearing. The first slide of this awkward and abrasive Australian’s presentation calls out Bitcoin’s stagnation due to the block size limit and the limitation of Bitcoin’s potential with the restriction of the Bitcoin scripting language. His next slide was straight and to the point:
“We NEED to scale or Bitcoin will not survive.” – Craig Wright, June 2017
The presentation continues with Craig Wright telling the audience that nodes are miners, Bitcoin is a Total Turing Machine designed to handle complex transaction types, SPV works, Bitcoin’s network structure, and every other possible thing you would want to hear from a pissed off Satoshi re-entering the Bitcoin space. I liken it to Odysseus’ return to Ithaca to confront Penelope’s suitors.
All of a sudden I was hopeful about Bitcoin.
But Bitcoin didn’t have hope because a mythical Satoshi Nakamoto had returned. It had hope because for the first time in years, I and many others were starting to learn and understand what Bitcoin was all about.
Craig concluded his presentation:
“There is no fucking king. There is no glorious leader… I am here to kill off Satoshi… There is not going to be some great leader standing above… There is not going to be one person that we come and answer to. It will be the best ideas, the best solutions. Not because you think it’s the best, but because the market does. And the market votes with their dollars. And, eventually, the market is going to vote with their bloody bitcoins.” – Craig Wright, June 2017
Don’t trust, verify
I began frantically researching and studying the things I was hearing. I studied physics in college because I was always fascinated by realizing the inherent truth about the physical reality around me. For the first time it felt like someone had given me the puzzle pieces to begin to learn why this Bitcoin thing actually worked unlike the failed attempts at digital cash by Satoshi’s predecessors.
I began interacting with Craig in a public Slack channel under a pseudonym. I enjoyed this relationship, as the pseudonym afforded me the opportunity to ask questions and provoke responses out of Craig without taking the personal responsibility for what I was saying. As I’ve become more public, I’ve empathized with how much easier it must have been to stay as Satoshi. When you don’t allow someone the opportunity to attack the person, they are forced to confront your ideas.
I sought to verify Craig’s claim that Bitcoin was a small-world network, and I was pointed to a textbook written in 2007 titled Complex Social Networks. Three hundred pages and countless mathematics problems (that challenged even my undergraduate physics degree) later and it became clear why the economic incentives inherent to Bitcoin create one of the most robust and efficient networks ever created. This became so self-evident to me that I realized we can explain the Bitcoin network graph through logical principles, and I began to wonder why it took Craig revealing this to the world for people to notice.
“The idea of a ‘chain of digital signatures’ was first written about in 2001. Bitcoin’s innovation is not this. It is the use of economics to ensure security.” – Craig Wright
I validated the above quote myself when I researched a 2003 book Policing Online Games written by Peter Wayner. Craig cited the book explaining why “blockchain” based digital money wasn’t Bitcoin’s innovation, but the economics was. In fact Peter explicitly defines how to create a digital signature-based currency for use in online gaming. Peter’s solution had a central authority issuing and validating the transactions on the network. What we learn studying Peter’s blockchain money is that Bitcoin introduced economics to remove the necessity for a single trusted authority. Bitcoin uses economic incentives to provide a solution to the Byzantine Generals Problem. If we remove or alter the economics, we are at risk of losing this solution.
The entire “cryptocurrency” industry is built on the premise that Bitcoin introduced this concept of blockchain-based money, but other superior byzantine fault tolerance mechanisms can be used to fix what are seen as Bitcoin’s deficiencies. When we study what Satoshi wrote, we come to realize that the solutions to all of these “deficiencies” were there from the very beginning, and when Craig Wright publicly returned to Bitcoin, he helped to teach this to all of us.
By late 2017, Bitcoin had continued in the form of Bitcoin Cash and Satoshi was proven correct that Bitcoin could scale to larger blocks without issue. I became frustrated because it felt like there was a large knowledge gap between the entire cryptocurrency industry and the things that I was reading and researching about Bitcoin. In an attempt to fill this knowledge gap, my friend and I started a podcast and just began recording the conversations we would have about Bitcoin. We had fun doing it, and I had no idea that our hard work would provide me the platform and opportunities that have arisen since.
In April of 2018, Vitalik Buterin, the creator of Ethereum, made headlines when he confronted Craig Wright at the Deconomy conference in Seoul and questioned why the conference organizers allowed him to speak at the conference. Buterin was met with heaps of applause from the rest of the cryptocurrency industry as everyone called to censor Wright’s voice. I couldn’t believe what I was seeing. I had spent so much time researching and validating so many of the things Craig had been saying, and I couldn’t believe that others couldn’t see how novel and exciting the ideas he was putting forth were. In an attempt to express this frustration, we recorded a podcast which we provocatively titled “Satoshi Nakamoto is Dead: Separating Ideas from Individuals”, and we were proud of it. We expressed that Craig Wright had ideas that stood on their own merit, and that it didn’t matter who Satoshi Nakamoto was – it only mattered whether the things an individual says are valid and true. The podcast earned us some blocks on Twitter from Emin Gun Sirer and Vitalik Buterin which I thought were accomplishments.
A few days later I received a Twitter DM from the @ProfFaustus handle. This handle is a reference to the play Doctor Faustus in which Faustus strikes a deal with Lucifer in exchange for knowledge and magic. Craig Wright chose this handle as he empathized with the idea that vast knowledge comes at the cost of great sacrifices. He thanked us for the sentiments we expressed in the podcast, but he seemed more thankful that we had taken the time to actually research the things he was talking about. This communication was the beginning of many more conversations I’ve gotten to have with Craig, many of which I’ve recorded for others to see. What has always amazed me about Craig is his willingness to go out of his way to help you learn something, and as his notoriety has grown that willingness doesn’t appear to fade.
Like Satoshi, Craig is all business. I know very little about his personal life, and he’s never asked about mine. When I’ve had the pleasure of interacting with him face to face, the conversation almost always tends to turn into him talking about the different ways Bitcoin can be used to solve problems you haven’t even thought of, and it usually requires me to make a hundred mental notes of things to research later.
I recently took the liberty to surprise Craig with a bunch of quotes by Satoshi and let him address them. Not surprisingly, he lines up quite well with everything Satoshi ever wrote. It was in the middle of this conversation that I understood why he originally wrote the piece about Jean-Paul Sartre:
“If I sign myself Jean-Paul Sartre it is not the same thing as if I sign myself Jean-Paul Sartre, Nobel Prizewinner.” –Jean-Paul Sartre, 1964
Satoshi Nakamoto was a nobody. You weren’t meant to trust that Bitcoin worked because an authoritative subject matter expert told you that it did. Researchers have had to study Bitcoin and evaluate the network on its merits. Bitcoin could never be discredited because of its author, and as a result it has been hard for Bitcoin doubters to actually discredit the system. Academics have tried (and failed) to poke holes in the Bitcoin security model, and regardless if Satoshi was a janitor or Nobel Prize winner, the system stood on its own.
This is what Craig wanted for the system. In order for Bitcoin to become what Satoshi wanted it to be, we must understand why Satoshi designed Bitcoin the way he did, and in that understanding realize that who Satoshi is ultimately means nothing to the project.
“Bitcoin with a stable protocol takes away power. If no one can change the protocol – not me, not God – there’s no power in money. Money is all about power… and Bitcoin will remove that power.” – Craig Wright, 2019
When I had the opportunity to travel to Colombia to speak at the same conference as Craig, I found myself tagging along on a trip to the Council of Bogota where he was officially recognized by the Columbian government as Satoshi Nakamoto. After passing through metal detectors and finger print scanners, I was waiting in the hallway for the rest of the entourage to get through security. Craig walked up to me and out of nowhere asked if I had ever read Andrew Carnegie’s autobiography. After telling him I hadn’t, he began to explain his alignment with Carnegie’s philosophies. Carnegie, like Craig, was Wesleyan and was committed to working as hard as he could during his lifetime to accumulate wealth so that he could give it away at the end of his life. Craig particularly admired Carnegie’s determination to establish as many libraries as he could in America towards the end of his life to contribute to the education of humanity. To anyone who didn’t know who they were speaking to, this conversation would have seemed inconspicuous. I found myself in deep thought as he tried (through translators) to explain this affinity for Carnegie to the roomful of Colombian officials that had welcomed Satoshi Nakamoto to their capitol, as they saw the potential for Satoshi’s creation to bring prosperity to the world.
We are fortunate that one of the most prolific inventors in modern history cares enough about his creation to spend hours of his weeks to explain it to people like me. While we don’t need Satoshi for Bitcoin to succeed, we should not take for granted the opportunity to learn about this complex and innovative system from its creator.
In February we have the Bitcoin SV node software releasing the Genesis upgrade to restore the original Bitcoin protocol, and therefore the original economic model of the system. Satoshi Nakamoto made a deliberate design decision when he released Bitcoin, and it is those design decisions that allow the system to work and scale for global usage. In the end, while it is obvious that we are lucky enough to have the creator of Bitcoin teaching us again, it ultimately doesn’t matter who Satoshi is. If it did, and if there was a king, then what is the point of all of this anyways?
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