Bitcoin may be one of the most disruptive technologies of the 21st century – and that is quite an accomplishment in the era of self-driving vehicles, space tourism, and virtual/augmented reality. The cryptocurrency launched in 2009 with very little fanfare. However, since then, the value of a single Bitcoin has rocketed to astonishing heights of $60,000 or more.
True, Bitcoin’s price is volatile, and investors are on a constant roller coaster. However, it appears that Bitcoin is gaining mainstream acceptance. That prevents its value from dropping too far and periodically pushes the price to new all-time highs.
Bitcoin’s origin story has a mythical ring to it. It begins with a mysterious figure – Satoshi Nakamoto. The name is a pseudonym that references one or more people who developed Bitcoin, created the first blockchain database, and ultimately inspired thousands of unique cryptocurrencies.
Who is the brilliant mind or minds behind Bitcoin? Will Satoshi Nakamoto, Bitcoin founder, be unmasked? Internet sleuths from around the globe have tried to solve the mystery, and now Charles Hoskinson thinks he has the answer. Is he right? Is Adam Back Satoshi Nakamoto’s true identity?
How Does Bitcoin Work?
Cryptocurrency, also referred to as digital currency, does something extraordinary. It takes control of financial transactions out of the hands of governments and financial institutions and transfers that power to users. It is a decentralized currency, which means it has no relationship with standard government-issued currencies like the American Dollar, the European Union’s Euro, or the Japanese Yen.
The concept behind cryptocurrency is simple, though the technical aspects of generating Bitcoin and documenting transactions might be a bit difficult for the less technically savvy. Essentially, Bitcoin transactions are made directly between buyers and sellers – a system known as peer-to-peer. There is a public ledger that tracks each user’s balance and verifies the authenticity of transactions.
The volunteers who do the work of verifying Bitcoin transactions to ensure authenticity are referred to as “miners”. They are rewarded for their work with the release of new Bitcoin, and they receive payment from fees charged to users making transactions with Bitcoin.
One of the most interesting aspects of Bitcoin – and one of the reasons it is expected to hold value – is scarcity. The system is set up so only 21 million Bitcoin can be mined. As of mid-2021, 18 million of the 21 million have already been released.
Who is Satoshi Nakamoto?
The name Satoshi Nakamoto was introduced in 2008 when a white paper was published listing Satoshi Nakamoto as the author. The paper, which is titled Bitcoin: A Peer-to-Peer Electronic Cash System, offers a blueprint for the creation of digital currency.
The first Bitcoin was mined on January 3, 2009, and the second was mined on January 9, 2009. Since then, millions have participated in mining activities worldwide, generating billions in income. In January 2021 alone, miners earned more than $1.1 billion combined.
Throughout all of this activity – and Bitcoin’s entry into the mainstream economy – Satoshi Nakamoto’s true identity has remained hidden. However, there are countless theories as to who might be behind the world’s most successful cryptocurrency.
Nakamoto stays out of the spotlight and limits the sharing of personal information. At one time, Nakamoto professed to be a Japanese man in his 30s. Few believe that particular claim for several reasons. The most compelling is Nakamoto’s use of British English with native fluency.
Most of the individuals or groups suspected of being Nakamoto – or claiming to be Nakamoto – are not of Japanese descent. They tend to be English-speakers with expertise in computer science and/or cryptography.
In some cases, reporters, investigators, or industry experts have put together persuasive evidence that an individual or group is responsible for developing Bitcoin, only to have their evidence debunked by others attempting to solve the mystery. To date, no one has successfully proven Satoshi Nakamoto’s identity beyond all doubt, but one man is certain he has the answer.
Is Satoshi Nakamoto’s True Identity Adam Back?
Charles Hoskinson is absolutely certain that Satoshi Nakamoto’s true identity is Adam Back – and he is not alone. Over the past decade, Back’s name has often been suggested as Bitcoin’s founder, either on his own or in partnership with others.
Hoskinson doesn’t necessarily have inside information about Back that proves his theory. Instead, he says that Back is the most likely candidate because he has all of the characteristics that logically fit Nakamoto’s profile. Hoskinson says this:
If you look at the preponderance of the evidence, Occam’s razor applies and the most likely answer usually is, and there’s no mystique or magic there but he just fits the profile.
For example, Back is the right age, and he has the right knowledge, skills, education, and experience. His speech and writing patterns fit that of Nakamoto, and most importantly, Back has a long history with blockchain and cryptocurrency.
In 1997, Back developed Hashcash, which is a proof-of-work system that – at the time – was intended to reduce unwanted email and increase defenses against certain types of cyber-attacks. Back wrote a formal paper on Hashcash in 2002, and the system was later integrated into Bitcoin mining algorithms. Today, Back is CEO of Blockstream, which he founded with a partner in 2014.
Back has vehemently denied that he and Nakamoto are one and the same, and without his confirmation, there is no way to know if Hoskinson is correct.
Will Satoshi Nakamoto, Bitcoin founder, ever be unmasked? Perhaps not. Back, if he is Nakamoto, has several excellent reasons to keep his identity under wraps.
Satoshi Nakamoto: Bitcoin Founder Unmasked
The simplest reason Satoshi Nakamoto might want to stay incognito is that he, she, or they are thought to have done most of the Bitcoin mining in the cryptocurrency’s early days. Those assets would be worth billions now, and there are all sorts of benefits to keeping that sort of wealth hidden.
The true Nakamoto may also be concerned with the government response should Bitcoin’s inventor ever be identified. After all, cryptocurrency takes financial power out of the hands of the government and puts it into the hands of users. That could put government officials in some nations on edge.
Whether Adam Back is Satoshi Nakamoto or not, the fact remains that cryptocurrency is rapidly taking on an important role in the world economy. Some major organizations are investing a portion of their cash in Bitcoin, and many individual investors are adding Bitcoin to their portfolios in an effort to further diversify their assets.
The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.