Get Our NewsletterWIRED’s bitcoin magazine pdf stories delivered to your inbox. In November 1, 2008, a man named Satoshi Nakamoto posted a research paper to an obscure cryptography listserv describing his design for a new digital currency that he called bitcoin. None of the list’s veterans had heard of him, and what little information could be gleaned was murky and contradictory.
In an online profile, he said he lived in Japan. His email address was from a free German service. One of the core challenges of designing a digital currency involves something called the double-spending problem. If a digital dollar is just information, free from the corporeal strictures of paper and metal, what’s to prevent people from copying and pasting it as easily as a chunk of text, “spending” it as many times as they want? Bitcoin did away with the third party by publicly distributing the ledger, what Nakamoto called the “block chain.
Users willing to devote CPU power to running a special piece of software would be called miners and would form a network to maintain the block chain collectively. In the process, they would also generate new currency. When Nakamoto’s paper came out in 2008, trust in the ability of governments and banks to manage the economy and the money supply was at its nadir. The US government was throwing dollars at Wall Street and the Detroit car companies. The Federal Reserve was introducing “quantitative easing,” essentially printing money in order to stimulate the economy.
The price of gold was rising. Bitcoin’s chief proselytizer, Bruce Wagner, at one of the few New York City restaurants that accept the currency. Nakamoto himself mined the first 50 bitcoins—which came to be called the genesis block—on January 3, 2009. For a year or so, his creation remained the province of a tiny group of early adopters.
But slowly, word of bitcoin spread beyond the insular world of cryptography. It has won accolades from some of digital currency’s greatest minds. The small band of early bitcoiners all shared the communitarian spirit of an open source software project. 50 and created a site called the Bitcoin Faucet, where he gave them away for the hell of it. Laszlo Hanyecz, a Florida programmer, conducted what bitcoiners think of as the first real-world bitcoin transaction, paying 10,000 bitcoins to get two pizzas delivered from Papa John’s. When they weren’t busy mining, the faithful tried to solve the mystery of the man they called simply Satoshi. On a bitcoin IRC channel, someone noted portentously that in Japanese Satoshi means “wise.
Someone else wondered whether the name might be a sly portmanteau of four tech companies: SAmsung, TOSHIba, NAKAmichi, and MOTOrola. It seemed doubtful that Nakamoto was even Japanese. His English had the flawless, idiomatic ring of a native speaker. Perhaps, it was suggested, Nakamoto wasn’t one man but a mysterious group with an inscrutable purpose—a team at Google, maybe, or the National Security Agency. I exchanged some emails with whoever Satoshi supposedly is,” says Hanyecz, who was on bitcoin’s core developer team for a time. I always got the impression it almost wasn’t a real person. I’d get replies maybe every two weeks, as if someone would check it once in a while.
Nakamoto revealed little about himself, limiting his online utterances to technical discussion of his source code. On December 5, 2010, after bitcoiners started to call for Wikileaks to accept bitcoin donations, the normally terse and all-business Nakamoto weighed in with uncharacteristic vehemence. No, don’t ‘bring it on,'” he wrote in a post to the bitcoin forum. The project needs to grow gradually so the software can be strengthened along the way. Then, as unexpectedly as he had appeared, Nakamoto vanished.