Satoshi Nakamoto is arguably the biggest pioneer of cryptocurrency. Satoshi Nakamoto is the name used by the unknown person or persons who designed bitcoin and created its original reference implementation. As part of the implementation, they also devised the first blockchain database. In the process they were the first to solve the double-spending problem for digital currency. They were active in the development of bitcoin up until December 2010.
Nakamoto has claimed to be a man living in Japan, born on 5 April 1975. However, speculation about the true identity of Nakamoto has mostly focused on a number of cryptography and computer science experts of non-Japanese descent, living in the United States and Europe
Satoshi Nakamoto is considered the most enigmatic character in cryptocurrency. To date it is unclear if he or she is a single person, or if the name is a moniker used by a group.
In October 2008, Nakamoto published a paper on The Cryptography Mailing list at metzdowd.com describing the bitcoin digital currency. It was titled Bitcoin: A Peer-to-Peer Electronic Cash System. In January 2009, Nakamoto released the first bitcoin software that launched the network and the first units of the bitcoin cryptocurrency, called bitcoins. Satoshi Nakamoto released the Version 0.1 of Bitcoin software on Sourceforge on 9 January 2009.
Nakamoto claimed that work on the writing of the code began in 2007. The inventor of bitcoin knew that due to its nature the core design would have to be able to support a broad range of transaction types. The implemented solution enabled specialised codes and data fields from the start through the use of a predicative script.
Nakamoto created a website with the domain name bitcoin.org and continued to collaborate with other developers on the bitcoin software until mid-2010. Around this time, he handed over control of the source code repository and network alert key to Gavin Andresen, transferred several related domains to various prominent members of the bitcoin community, and stopped his involvement in the project. Until shortly before his absence and handover, Nakamoto made all modifications to the source code himself.
The inventor left a text message in the first mined block which reads ‘The Times 3 January 2009 Chancellor on brink of second bailout for banks’. The text refers to a headline in The Times published on 3 January 2009. It is a strong indication that the first block was mined no earlier than this date. The genesis block has a timestamp of 18:15:05 GMT on 3 January 2009. This block is unlike all other blocks in that it doesn’t have a previous block to reference. This required the use of custom code to mine it. Timestamps for subsequent blocks indicate that Nakamoto did not try to mine all the early blocks solely for himself.
The paper, “Bitcoin: A Peer-to-Peer Electronic Cash System”, described the use of a peer-to-peer network as a solution to the problem of double-spending. The problem – that a digital currency or token can used in more than one transaction – is not found in physical currencies since a physical bill or coin can, by its nature, only exist in one place at a single time. Since a digital currency does not exist in the physical space, using it in a transaction does not remove it from someone’s possession, at least not immediately.
Solutions to combating the double-spend problem had historically involved the use of trusted, third-party intermediaries that would verify whether a digital currency had already been spent by its holder. In most cases, third parties, such as banks, can effectively handle transactions without adding significant risk. However, this trust-based model still results in uncertainty. Removing the third-party could only be accomplished by building cryptography into transactions.
Nakamoto proposed a decentralized approach to transactions, ultimately culminating in the creation of blockchains. In a blockchain, timestamps for a transaction are added to the end of previous timestamps based on proof-of-work, creating a historical record that cannot be changed. As the blockchain increases in size as the number of transactions increase, it becomes more difficult for attackers to disrupt it. The blockchain records are kept secure because the amount of computational power required to reverse them discourages small scale attacks.
Satoshi Nakamoto was involved in the early days of bitcoin, working on the first version of the software in 2009. Communication to and from Nakamoto was conducted electronically, and the lack of personal and background details meant that it was impossible to find out the actual identity of Nakamoto. Nakamoto’s involvement with bitcoin tapered off in 2011.
The inability to put a face to the name has led to significant speculation as to Nakamoto’s identity, especially as cryptocurrencies increased in number, popularity, and notoriety. While his identity has not been uncovered, it is estimated that as of 24 May 2017, Nakamoto is believed to own up to roughly one million bitcoins, with a value estimated at approximately $6 billion USD as of September 2017.