Satoshi Nakamoto’s disappearance was good for Bitcoin

medium_9608461972And so Satoshi Nakamoto, the man who created Bitcoin, has finally been located. That is, of course, if you believe the investigative feature published in Newsweek yesterday, which claims that “Satoshi Nakamoto” is none other than a reclusive 64-year old Japanese-American guy named Satoshi Nakamoto, living in Temple City, California.

For a long time it was assumed that “Satoshi Nakamoto” might be a pseudonym for the person or persons who first presented the world’s most successful cryptocurrency in a nine-page whitepaper back in 2008. But Newsweek’s Leah Goodman begs to differ, claiming that the enigmatic creator of Bitcoin chose instead to hide in ‘plain sight’, using his real name, and living a semi-hermetic lifestyle in the foothills of San Gabriel, near Los Angeles.

Goodman’s claims were rapidly called into question by numerous commentators on the web, and on the Reddit forum. As SiliconANGLE’s Mark Hopkins noted, ““Doxxing” Satoshi is a bit of a bloodsport for those in the Bitcoin community”, and every single ‘report’ that claims to have located the man himself is quickly dismissed. It’s fair to say that those who really believe in Bitcoin don’t even want the guy to be found anyway. “As a whole, the community, while intensely fascinated with his philosophy and motivations, wants his wish for privacy to be respected,” writes Hopkins.

And with good reason too, for Bitcoin is far better off if Satoshi Nakamoto remains an enigma.

Bitcoin doesn’t need Satoshi Nakamoto

 

Had Nakamoto remained as the ‘leader’ of Bitcoin, this would have been a serious liability, one that could easily undermine our confidence in the cryptocurrency. After all, Bitcoin is built on faith – we value Bitcoin only because others place the same value in it too, just like we do with ‘real’ money, and this faith will only exist if the rules that underpin Bitcoin remain stable.

Bitcoin has a lot of rules that govern it, and one of the best known of these is that there can only ever be 21 million Bitcoins created. However, this is only true because the Bitcoin community has agreed to this – the rules could in fact be changed, if everyone agreed, so that more are created. But in order to maintain faith in the currency, people need reassurance that no one is going to change the rules in a way that might undermine its value, and so the community would never agree to this.

When Nakamoto disappeared from view, he nominated Gavin Andresen to be the new leader of the Bitcoin community. Andresen is undoubtedly a very smart and capable guy, but he’ll never command the same respect that Nakamoto did (and still has). Andresen cannot simply change the rules of Bitcoin by himself without facing strong resistance from the rest of the Bitcoin community – but had Nakamoto stayed around things might be different, as he’s the one person in the world that might possess enough influence to make changes to Bitcoin’s rules that could one day harm it.

Nakamoto’s disappearance has removed that threat, and it’s also helped to stave off any attempts to regulate Bitcoin. If he’d stuck around as leader, he’d probably be facing tremendous pressure from government authorities to alter the rules and make Bitcoin easier to regulate. But by vanishing into thin air, the only way to change the rules is if the Bitcoin community as a whole agrees to do so, and that’s almost certainly not going to happen.

With Nakamoto out of the way and Bitcoin totally resistant to any dramatic changes, we have no option but to accommodate Bitcoin on its own terms, and that is exactly what Nakamoto wanted in the first place.

photo credit: btckeychain via photopin cc

About Mike Wheatley

Mike loves to talk about Big Data, the Internet of Things, Hacktivists and hacking, but he also hates Google and can never resist having a quick dig at them should the opportunity arise :) Got a REAL news story or tip? Email Mike@SiliconANGLE.com.