The folly of the media's hunt to unmask Satoshi
Every business news outlet wants to be the one to unmask the inventor of Bitcoin, who is known by the pseudonym Satoshi Nakamoto. Newsweek tried it in 2014, with disastrous results. A new book about bitcoin by a New York Times writer points to someone else. And now both Wired and Gizmodo are reporting that they’ve identified the real person (or people: Gizmodo suggests it was two men, one of whom is now deceased).
The two publications both point to Craig Steve Wright, an Australian man whose home and office were raided by Australian Federal Police just last night. The evidence is compelling, and they may be right. Or they may be wrong—Vice suggests that some of the “evidence” is problematic and points to a hoax.
The irony of all this sleuthing to reveal Satoshi’s identity is that it doesn’t matter one bit.
It doesn’t matter who invented bitcoin, the controversial but fast-growing digital currency and its underlying technology. It doesn’t matter for the future of the technology, and it doesn’t matter to most of its biggest supporters anymore.
Bitcoin is decentralized, which means it doesn’t need Satoshi to continue. And it is an open-source technology, which means that anyone can suggest tweaks to the code—and over the years, many people have. Those who do not know much about bitcoin as a technology may not even realize that you can view its source code right on GitHub, a public network where developers can work together on open-source projects.
The bitcoin “project” has had nearly 10,000 “commits” (accepted modifications to the code) by nearly 400 different contributors. In fact, the vast majority of the source code on bitcoin’s software is no longer the original code written by Satoshi, who published a paper describing the idea for bitcoin in 2008 and introduced the software in 2009. Estimates vary on how much of the original code remains, but a popular figure is just 20%.
“Satoshi is quite irrelevant at this point,” says Peter Van Valkenburgh, research director at Coin Center, a digital-currency policy organization. “That gets lost too often when we have these news cycles over a new possible Satoshi. But it makes sense that it gets lost, because your average reader who only reads about bitcoin occasionally, they don’t understand open-source software and how that process works.”
There are a lot of complexities to understanding the digital currency. For example, some major companies and banks have recently expressed excitement over the blockchain, the decentralized public ledger where all bitcoin transactions are recorded, while also simultaneously voicing apathy toward bitcoin, the currency. But some people in the bitcoin space have derided that as a trendy sound bite that doesn’t actually make much sense, because bitcoin the currency is needed (miners add transactions to the chain as “blocks”) to power the bitcoin blockchain.
While the identity of Satoshi doesn’t much matter anymore, the actions of the person behind the pseudonym do. Satoshi owns a large number of bitcoins, and if a large supply is moved at once it could trigger a larger selloff. “If those coins started to move to other addresses, the price of bitcoin would likely drop significantly,” says Dan Held, founder of ZeroBlock, a bitcoin trading platform that Blockchain.info acquired in 2013. “Personally, I believe Satoshi destroyed his private keys [Author’s note: cryptographic I.D. cards], as he realized that cashing out his holdings would expose his identity and negatively impact the value of bitcoin.”
In general, bitcoin is an industry with a still-developing reputation, and the reputation continues to be damaged by salacious coverage of bitcoin-related crime. Just last week, the SEC charged two bitcoin mining companies with operating a Ponzi scheme, for example.
Many of the businesspeople and investors that believe in bitcoin like to argue that it doesn’t matter what the Average Joe on the street thinks about bitcoin for it to succeed. But that isn’t completely true: Too many (uninformed) people still think the currency is a scam, and that’s a limit to mass adoption.
Headlines about the identity of Satoshi Nakamoto are arguably neutral and have no positive or negative impact on the reputation of bitcoin. But they are a distraction.