A recent, detailed article in Newsweek laid bare the actual identity of Satoshi Nakamoto, the developer and creator behind the concept of Bitcoin, who as a result launched the entire cryptocurrency industry. This article will offer a brief study of that expose, and will analyze what effects, if any, this news will have on the digital currency markets.
It is being treated as if they unmasked Batman at high noon in Gotham City's town square: Satoshi Nakamoto, the architect behind the creation of Bitcoin—and as a result, the cryptocurrency industry in general—has been tracked down and identified.
Nakamoto wrote the white paper defining the principles of Bitcoin back in 2008, and the currency itself was released to the public a year later. Basically, that is all that has been known about the person or persons behind Bitcoin—and for the better part of five years, it was assumed that “Satoshi Nakamoto” was an assumed name or pseudonym hiding the identity of one or more people.
With that assumption in place, it has caught more than a few industry insiders by surprise that Satoshi Nakamoto is actually none other than...well, Satoshi Nakamoto. It turns out that is his real name, although he changed it to Dorian Prentice Satoshi Nakamoto, and signed his name “Dorian S. Nakamoto.”
The news broke with the March 6, 2014 issue of Newsweek, and the author of the expose, Leah McGrath Goodman, presents it as if it were almost a cloak-and-dagger mystery worthy of Sam Spade. Goodman obtained Nakamoto's email by doing a little sleuthing; she finally got it through a company that had been selling him model steam train parts. It turned out that was a hobby of his.
As long as the conversation stayed within the boundaries of that topic, Nakamoto was forthcoming and open; however, when Goodman breached the subject of Bitcoin, he went quiet in a hurry. Goodman continued her investigative reporting in the meantime, and found enough corroborating information to conclude she had the right person. Nakamoto's family and colleagues essentially told Goodman that yes, she had found the Satoshi, but warned her she would get little to no information from the man himself.
The Newsweek article reaches its anticlimax when Goodman travels to Nakamoto's relatively modest home in Temple City, California. One might think the creator of a multibillion dollar financial industry might live in a mansion on the hill, but it would appear that is not his style. Also, he told Goodman, “I am no longer involved in that [Bitcoin] and I cannot discuss it...It's been turned over to other people. They are in charge of it now. I no longer have any connection.” And that was all he really had to say to her directly—and only when there were police standing nearby.
The Newsweek expose has been tightly encapsulated here due to space limitations, but readers can follow the link cited above for the entire article. Reaction to Goodman's investigation within the Bitcoin community has been swift, and somewhat harsh. Essentially, they are saying: The man asked repeatedly to be left alone. So, leave him alone.
Forbes Magazine quickly published an article to that effect. Michael Goldstein, founder of the Satoshi Nakamoto Institute, called the expose “upsetting,” and went on to say, “If someone was telling you they don’t want to be known, and you report a story about that person’s life and put up a picture of him and his home, that’s a bit f–ked up.” Gavin Andresen, a scientist for the Bitcoin Foundation, agreed: “I’m disappointed Newsweek decided to dox the Nakamoto family.” (“Dox,” in this context, means the public revelation of private information, such as Nakamoto's identity and street address.) For the most part, user comments on digital currency forums have followed in the same vein.
Ultimately, what effect will all this information have on Bitcoin itself? It is too early in the game yet to be sure, but its is likely to be minimal. The Newsweek article makes it a point to highlight Nakamoto's libertarian political leanings, but that is hardly a major revelation; digital currency in general has appealed to many people who profess a general distrust in governmental agencies and regulation. While it is big news that Nakamoto himself has been revealed—and that his name wasn't a pseudonym after all—insiders doubt that the expose will affect the Bitcoin markets, or those of any other cryptocurrencies. Gavin Andresen summed it up in a quote to Newsweek's Goodman: “I don't care if the idea came from a good person or an evil person. Ideas stand on their own.”
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