The Crypto-Currency: Bitcoin and its mysterious inventor

2011 New Yorker article with descriptions of early Bitcoin people and mining, and the author’s search for Satoshi Nakamoto
cryptography, Bitcoin
by: Joshua Davis 2013-04-182013-05-07 finished certainty: log importance: 5

Dept. Of Tech­nol­ogy about [sic] and its mys­te­ri­ous cre­ator. There are lots of ways to make mon­ey: You can earn it, find it, coun­ter­feit it, steal it. Or, if you’re , you can in­vent it. That’s what he did on the evening of Jan­u­ary 3, 2009, when he pressed a but­ton on his key­board and cre­ated a new cur­rency called Bit­coin. It was all bit, and no coin. There was no pa­per, cop­per, or sil­ver-just thir­ty-one thou­sand lines of code and an an­nounce­ment on the In­ter­net. Nakamoto wanted to cre­ate a cur­rency im­mune to the pre­da­tions of bankers and politi­cians. The cur­rency was con­trolled en­tirely by soft­ware. Every ten min­utes or so, coins would be dis­trib­uted through a process that re­sem­bled a lot­tery. This way, the bit­coin soft­ware would re­lease a to­tal of twen­ty-one mil­lion bit­coins, most all of them over the next twenty years. In­ter­est in Nakamo­to’s in­ven­tion built steadi­ly. More and more peo­ple ded­i­cated their com­put­ers to the lot­tery, and forty-four ex­changes popped up, al­low­ing any­one with bit­coins to trade them for dol­lars, eu­ros, or other cur­ren­cies. At first, a sin­gle bit­coin was val­ued at less than a pen­ny. But mer­chants grad­u­ally be­gan to ac­cept bit­coin, and at the end of 2010 the value be­gan to ap­pre­ci­ate rapid­ly. By June of 2011, a bit­coin was worth more than twen­ty-nine dol­lars. Mar­ket gy­ra­tions fol­lowed, and by Sep­tem­ber the ex­change rate had fallen to five dol­lars. Still, with more than seven mil­lion bit­coins in cir­cu­la­tion, Nakamoto had cre­ated thir­ty-five mil­lion dol­lars of val­ue. And yet Nakamoto was a ci­pher. There was no trace of any coder with that name be­fore the début of bit­coin. He used an e-mail ad­dress and Web site that were un­trace­able. In 2009 and 2010, he wrote hun­dreds of posts in flaw­less Eng­lish, in­vited other soft­ware de­vel­op­ers to help him im­prove the code. Then, in April, 2011, he sent a note to a de­vel­oper say­ing that he had “moved on to other things.” He has not been heard from since. Tells about failed at­tempts to hack the bit­coin en­cryp­tion code. Writer tries to de­duce Nakamo­to’s true iden­tity from clues in his posts and his code. De­scribes the 2011 con­fer­ence of cryp­tog­ra­phers, where the writer went look­ing for Nakamo­to. Writer speaks with two pos­si­ble can­di­dates, Michael Clear and Vili Lehdon­vir­ta, both of whom deny that they are Nakamo­to. Also tells about Kevin Gro­ce, who runs a bit­coin-min­ing op­er­a­tion in Ken­tucky. Over the sum­mer, hack­ers tar­geted bit­coin, and though they were un­able to break Nakamo­to’s code, they were able to dis­rupt the ex­changes and de­stroy Web sites that helped users store bit­coins. The num­ber of trans­ac­tions de­creased and the ex­change rate plum­met­ed. Com­men­ta­tors pre­dicted the end of the cur­ren­cy. In Sep­tem­ber, how­ev­er, vol­ume be­gan to in­crease again, and the price sta­bi­lized, at least tem­porar­i­ly.

One of the first in­-depth ar­ti­cles on Bit­coin, and par­tic­u­larly one of the first to re­ally delve into Satoshi Nakamo­to, was “The Cryp­to-Cur­ren­cy: Bit­coin and its mys­te­ri­ous in­ven­tor” by Joshua Davis (2011-10-11), pub­lished in pg 62-70 (re­pub­lished in The Best Amer­i­can Sci­ence and Na­ture Writ­ing 2012, ed. Ariely & Fol­ger)

This tran­script has been pre­pared from a PDF on cryp­; all links, an­no­ta­tions, and foot­notes are my own in­ser­tion.

“The Crypto-Currency”

by Joshua Davis



[Im­age cap­tion, left top: “It’s not clear if bit­coin is legal, but there is no com­pany in con­trol and no one to ar­rest.”]

There are lots of ways to make mon­ey: You can earn it, find it, coun­ter­feit it, steal it. Or, if you’re Satoshi Nakamo­to, a preter­nat­u­rally tal­ented com­puter coder, you can in­vent it. That’s what he did on the evening of Jan­u­ary 3, 2009, when he pressed a but­ton on his key­board and cre­ated a new cur­rency called bit­coin. It was all bit and no coin. There was no pa­per, cop­per, or sil­ver - just thir­ty-one thou­sand lines of code and an an­nounce­ment on the In­ter­net.

Nakamo­to, who claimed to be a thir­ty-six-year-old Japan­ese man, said he had spent more than a year writ­ing the soft­ware, dri­ven in part by anger over the re­cent fi­nan­cial cri­sis. He wanted to cre­ate a cur­rency that was im­per­vi­ous to un­pre­dictable mon­e­tary poli­cies as well as to the pre­da­tions of bankers and politi­cians. Nakamo­to’s in­ven­tion was con­trolled en­tirely by soft­ware, which would re­lease a to­tal of twen­ty-one mil­lion bit­coins, al­most all of them over the next twenty years. Every ten min­utes or so, coins would be dis­trib­uted through a process that re­sem­bled a lot­tery. Min­ers - peo­ple seek­ing the coins - would play the lot­tery again and again; the fastest com­puter would win the most mon­ey.

In­ter­est in Nakamo­to’s in­ven­tion built steadi­ly. More and more peo­ple ded­i­cated their com­put­ers to the lot­tery, and forty-four ex­changes popped up, al­low­ing any­one with bit­coins to trade them for offi­cial cur­ren­cies like dol­lars or eu­ros. Cre­ative com­puter en­gi­neers could mine for bit­coins; any­one could buy them. At first, a sin­gle bit­coin was val­ued at less than a pen­ny. But mer­chants grad­u­ally be­gan to ac­cept bit­coins, and at the end of 2010 their value be­gan to ap­pre­ci­ate rapid­ly. By June of 2011, a bit­coin was worth more than twen­ty-nine dol­lars. Mar­ket gy­ra­tions fol­lowed, and by Sep­tem­ber the ex­change rate had fallen to five dol­lars. Still, with more than seven mil­lion bit­coins in cir­cu­la­tion, Nakamoto had cre­ated thir­ty-five mil­lion dol­lars of val­ue.

And yet Nakamoto him­self was a ci­pher. Be­fore the de­but of bit­coin, there was no record of any coder with that name. He used an e-mail ad­dress and a Web site that were un­trace­able. In 2009 and 2010, he wrote hun­dreds of posts in flaw­less Eng­lish, and though he in­vited other soft­ware de­vel­op­ers to help him im­prove the code, and cor­re­sponded with them, he never re­vealed a per­sonal de­tail. Then, in April, 2011, he sent a note to a de­vel­oper say­ing that he had “moved on to other things”. He has not been heard from since.


When Nakamoto dis­ap­peared, hun­dreds of peo­ple posted the­o­ries about his iden­tity and where­abouts. Some wanted to know if he could be trust­ed. Might he have cre­ated the cur­rency in or­der to hoard coins and cash out? “We can effec­tively think of ‘Satoshi Nakamoto’ as be­ing on top of a ”, George Ou, a blog­ger and tech­nol­ogy com­men­ta­tor, wrote.

It ap­peared, though, that Nakamoto was mo­ti­vated by pol­i­tics, not crime. He had in­tro­duced the cur­rency just a few months after the col­lapse of the global bank­ing sec­tor, and pub­lished a five-hun­dred-word es­say about tra­di­tional . “The root prob­lem with con­ven­tional cur­rency is all the trust that’s re­quired to make it work”, he wrote. “The must be trusted not to de­base the cur­ren­cy, but the his­tory of fiat cur­ren­cies is full of breaches of that trust. Banks must be trusted to hold our money and trans­fer it elec­tron­i­cal­ly, but they lend it out in waves of credit bub­bles with barely a .”

Banks, how­ev­er, do much more than lend money to overzeal­ous home­buy­ers. They al­so, for ex­am­ple, mon­i­tor pay­ments


so that no one can . Cash is im­mune to this prob­lem: you can’t give two peo­ple the same bill. But with dig­i­tal cur­rency there is the dan­ger that some­one can spend the same money any num­ber of times.

Nakamoto solved this prob­lem us­ing in­no­v­a­tive cryp­tog­ra­phy. The bit­coin soft­ware en­crypts each trans­ac­tion - the sender and the re­ceiver are iden­ti­fied only by a string of num­bers - but a pub­lic record of every coin’s move­ment is pub­lished across the en­tire net­work. Buy­ers and sell­ers re­main anony­mous, but every­one can see that a coin has moved from A to B, and Nakamo­to’s code can pre­vent A from spend­ing the coin a sec­ond time.

Nakamo­to’s soft­ware would al­low peo­ple to send money di­rectly to each oth­er, with­out an in­ter­me­di­ary, and no out­side party could cre­ate bit­coins. Cen­tral banks and gov­ern­ments played no role. If Nakamoto ran the world, he would have just fired , closed the , and shut down . “Every­thing is based on crypto proof in­stead of trust”, Nakamoto wrote in his 2009 es­say.


Bit­coin, how­ev­er, was doomed if the code was un­re­li­able. Ear­lier this year [2011], , a lead­ing In­ter­net-se­cu­rity re­searcher, in­ves­ti­gated the cur­rency and was sure he would find ma­jor weak­ness­es. Kamin­sky is fa­mous among hack­ers for dis­cov­er­ing, in 2008, in the In­ter­net which would have al­lowed a skilled coder to take over any Web site or even to shut down the In­ter­net. Kamin­sky alerted the De­part­ment of Home­land Se­cu­rity and ex­ec­u­tives at Mi­crosoft and Cisco to the prob­lem and worked with them to patch it. He is one of the most adept prac­ti­tion­ers of “”, the art of com­pro­mis­ing the se­cu­rity of com­puter sys­tems at the be­hest of own­ers who want to know their vul­ner­a­bil­i­ties. Bit­coin, he felt, was an easy tar­get.

“When I first looked at the code, I was sure I was go­ing to be able to break it”, Kamin­sky said, not­ing that the pro­gram­ming style was dense and in­scrutable. “The way the whole thing was for­mat­ted was in­sane. Only the most para­noid, painstak­ing coder in the world could avoid mak­ing mis­takes.”

Kamin­sky lives in Seat­tle, but, while vis­it­ing fam­ily in San Fran­cisco in Ju­ly, he re­treated to the base­ment of his moth­er’s house to work on his bit­coin at­tacks. In a win­dow­less room jammed with com­put­ers, Kamin­sky paced around talk­ing to him­self, try­ing to build a men­tal pic­ture of the bit­coin net­work. He quickly iden­ti­fied nine ways to com­pro­mise the sys­tem and scoured Nakamo­to’s code for an in­ser­tion point for his first at­tack. But when he found the right spot, there was a mes­sage wait­ing for him. “At­tack Re­moved”, it said1. The same thing hap­pened over and over, in­fu­ri­at­ing Kamin­sky. “I came up with beau­ti­ful bugs”, he said. “But every time I went after the code there was a line that ad­dressed the prob­lem.”

He was like a bur­glar who was cer­tain that he could break into a bank by dig­ging a tun­nel, drilling through a wall, or climb­ing down a vent, and on each at­tempt he dis­cov­ered a freshly poured ce­ment bar­rier with a sign telling him to go home. “I’ve never seen any­thing like it”, Kamin­sky said, still in awe.

Kamin­sky ticked off the skills Nakamoto would need to pull it off. “He’s a world-class pro­gram­mer, with a deep un­der­stand­ing of the ”, he said. “He un­der­stands eco­nom­ics, cryp­tog­ra­phy, and peer-to-peer net­work­ing.”

“Ei­ther there’s a team of peo­ple who worked on this”, Kamin­sky said, “or this guy is a ge­nius.”

Kamin­sky2 was­n’t alone in this as­sess­ment. Soon after cre­at­ing the cur­ren­cy, Nakamoto posted a de­scrib­ing how bit­coin would func­tion. That doc­u­ment in­cluded three ref­er­ences3 to the work of Stu­art Haber, a re­searcher at H.P. Labs, in Prince­ton. Haber is a di­rec­tor of the and knew all about bit­coin. “Who­ever did this had a deep un­der­stand­ing of cryp­tog­ra­phy”, Haber said when I called. “They’ve read the aca­d­e­mic pa­pers, they have a keen in­tel­li­gence, and they’re com­bin­ing the con­cepts in a gen­uinely new way.”

Haber noted that the com­mu­nity of cryp­tog­ra­phers is very small: about three hun­dred peo­ple a year at­tend the most im­por­tant con­fer­ence, the an­nual gath­er­ing in Santa Bar­bara. In all like­li­hood, Nakamoto be­longed to this


in­su­lar world. If I wanted to find him, the Crypto 2011 con­fer­ence would be the place to start.


“Here we go, team!” a cheer­leader shouted be­fore two burly guys heaved her into the air.

It was a foggy Mon­day morn­ing in mid-Au­gust, and dozens of col­lege cheer­lead­ers had gath­ered in the ath­letic fields of the Uni­ver­sity of Cal­i­for­nia at Santa Bar­bara for a three­-day train­ing camp. Their hol­ler­ing could be heard on the steps of a nearby lec­ture hall, where a group of bleary-eyed cryp­tog­ra­phers, dressed in shorts and rum­pled T-shirts, mut­tered about sym­met­ric-key ci­phers over steam­ing cups of coffee.

This was Crypto 2011, and the list of at­ten­dees in­cluded rep­re­sen­ta­tives from the Na­tional Se­cu­rity Agen­cy, the U.S. mil­i­tary, and an as­sort­ment of for­eign gov­ern­ments. Cryp­tog­ra­phers are lit­tle known out­side this her­metic com­mu­ni­ty, but our dig­i­tal safety de­pends on them. They write the al­go­rithms that con­ceal bank files, mil­i­tary plans, and your e-mail.

I ap­proached [home­page], the con­fer­ence’s pro­gram chair. He is a friend­ly, diminu­tive man who is a pro­fes­sor of cryp­tog­ra­phy at the Uni­ver­sity of Cal­i­for­nia at Davis and who has also taught at , in Thai­land. He bowed when he shook my hand, and I ex­plained that I was try­ing to learn more about what it would take to cre­ate bit­coin. “The peo­ple who know how to do that are here”, Ro­g­away said. “It’s likely I ei­ther know the per­son or know their work.” He offered to in­tro­duce me to some of the at­ten­dees.

Nakamoto had good rea­son to hide: peo­ple who ex­per­i­ment with cur­rency tend to end up in trou­ble. In 1998, a Hawai­ian res­i­dent named be­gan fab­ri­cat­ing sil­ver and gold coins that he dubbed . Nine years lat­er, the U.S. gov­ern­ment charged NotHaus with “con­spir­acy against the United States”. He was found guilty and is await­ing sen­tenc­ing. “It is a vi­o­la­tion of fed­eral law for in­di­vid­u­al­s…to cre­ate pri­vate coin or cur­rency sys­tems to com­pete with the offi­cial coinage and cur­rency of the United States”, the F.B.I an­nounced at the end of the tri­al.

On­line cur­ren­cies aren’t ex­empt. In 2007, the fed­eral gov­ern­ment filed charges against , a com­pany that sold a dig­i­tal cur­rency re­deemable for gold. The gov­ern­ment ar­gued that the project en­abled money laun­der­ing and child pornog­ra­phy, since users did not have to pro­vide thor­ough iden­ti­fi­ca­tion. The com­pa­ny’s own­ers were found guilty of op­er­at­ing an un­li­censed mon­ey-trans­mit­ting busi­ness and the C.E.O was sen­tenced to months of house ar­rest. The com­pany was effec­tively shut down.

Nakamoto seemed to be do­ing the same thing as these other cur­rency de­vel­op­ers who ran afoul of au­thor­i­ties. he was com­pet­ing with the dol­lar and he in­sured the anonymity of users, which made bit­coin at­trac­tive for crim­i­nals. This win­ter, a Web site was launched called [], which al­lowed users to buy and sell hero­in, LSD, and mar­i­juana as long as they paid in bit­coin.

Still, Lewis Solomon, a pro­fes­sor emer­i­tus at George Wash­ing­ton Uni­ver­sity Law School, who has writ­ten about al­ter­na­tive cur­ren­cies, ar­gues that cre­at­ing bit­coin might be le­gal. “Bit­coin is in a gray area, in part be­cause we don’t know whether it should be treated as a cur­ren­cy, a com­mod­ity like gold, or pos­si­bly even a se­cu­rity”, he says.

Gray ar­eas, how­ev­er, are dan­ger­ous, which may be why Nakamoto con­structed bit­coin in se­cret. It may also ex­plain why he built the code with the same peer-to-peer tech­nol­ogy that fa­cil­i­tates the ex­change of pi­rated movies and mu­sic: users con­nect with each other in­stead of with a cen­tral serv­er. There is no com­pany in con­trol, no office to raid, and no­body to ar­rest.


To­day, bit­coins can be used on­line to pur­chase beef jerky and socks made from al­paca wool. Some com­puter re­tail­ers ac­cept them, and you can use them to buy falafel from a restau­rant in . In late Au­gust, I learned that bit­coins could also get me a room at a Howard John­son ho­tel in Fuller­ton, Cal­i­for­nia, ten min­utes from Dis­ney­land. I booked a reser­va­tion for my four-year-old daugh­ter and me and re­ceived an e-mail from the ho­tel re­quest­ing a pay­ment of 10.305 bit­coins.

By this time, it would have been point­less for me to play the bit­coin lot­tery, which is set up so that the diffi­culty of win­ning in­creases the more peo­ple play it. When bit­coin launched, my lap­top would have had a rea­son­able chance of win­ning from time to time. Now, how­ev­er, the com­put­ing power ded­i­cated to play­ing the bit­coin lot­tery ex­ceeds that of the world’s most pow­er­ful su­per­com­put­er. So I set up an ac­count


with , the lead­ing bit­coin ex­change, and trans­ferred a hun­dred and twenty dol­lars. A few days lat­er, I bought 10.305 bit­coins with the press of a but­ton and just as eas­ily sent them to the Howard John­son4.

It was a sim­ple trans­ac­tion that masked a com­plex cal­cu­lus. In 1971, that U.S. dol­lars could no longer be re­deemed for gold. Ever since, the value of the dol­lar has been based on our faith in it. We trust that dol­lars will be valu­able to­mor­row, so we ac­cept pay­ment in dol­lars to­day. Bit­coin is sim­i­lar: you have to trust that the sys­tem won’t get hacked, and that Nakamoto won’t sud­denly emerge to some­how plun­der it all. Once you be­lieve in it, the ac­tual cost of a bit­coin - five dol­lars or thir­ty? - de­pends on fac­tors such as how many mer­chants are us­ing it, how many might use it in the fu­ture, and whether or not gov­ern­ments ban it.5

My daugh­ter and I ar­rived at the Howard John­son on a hot Fri­day after­noon and were met in the lobby by Jeffer­son Kim, the hotel’s cheru­bic twen­ty-eight-year-old gen­eral man­ag­er. “You’re the first per­son who’s ever paid in bit­coin”, he said, shak­ing my hand en­thu­si­as­ti­cal­ly.

Kim ex­plained that he had started min­ing bit­coins two months ear­li­er. He liked that the cur­rency was gov­erned by a set of log­i­cal rules, rather than the mys­te­ri­ous machi­na­tions of the Fed­eral Re­serve. A dol­lar to­day, he pointed out, buys you what a nickel bought a cen­tury ago, largely be­cause so much money has been print­ed. And, he asked, why trust a cur­rency backed by a gov­ern­ment that is four­teen tril­lion dol­lars in debt?

Kim had also fig­ured that bit­coin min­ing would be a way to make up the twelve hun­dred dol­lars he’d spent on a high­-per­for­mance gam­ing com­put­er. So far, he’d made only four hun­dred dol­lars, but it was fun to be a pi­o­neer. He wanted bit­coin to suc­ceed, and in or­der for that to hap­pen busi­nesses needed to start ac­cept­ing it.

The truth is that most peo­ple don’t spend the bit­coins they buy; they hoard them, hop­ing they will ap­pre­ci­ate. Busi­nesses are afraid to ac­cept them, be­cause they’re new and weird - and be­cause the value can fluc­tu­ate wild­ly. (Kim im­me­di­ately ex­changed the bit­coins I sent him for dol­lars to avoid just that risk.) Still, the cur­rency is young and has sev­eral at­trib­utes that ap­peal to mer­chants. Robert Schwarz, the owner of a com­put­er-re­pair busi­ness in Kla­math Falls, Ore­gon, be­gan sell­ing com­put­ers for bit­coin to side­step steep cred­it-card fees, which he es­ti­mates cost him three per cent on every trans­ac­tion. “One bank called me say­ing they had the low­est fees”, Schwarz said. “I said, ‘No, you don’t. Bit­coin does.’” Be­cause bit­coin trans­fers can’t be re­versed, mer­chants also don’t have to deal with cred­it-card charge-backs from dis­sat­is­fied cus­tomers. Like cash, it’s gone once you part with it.

At the Howard John­son, Kim led us to the check­-in counter. The lobby fea­tured im­i­ta­tion-crys­tal chan­de­liers, or­nately framed oil paint­ings of Venice, and, in­ex­plic­a­bly, a pair of faux ele­phant tusks painted gold. Kim ex­plained that he had­n’t told his moth­er, who owned the place, that her ho­tel was ac­cept­ing bit­coins: “It would be too hard to ex­plain what a bit­coin is.” He said he had ac­ti­vated the track­ing pro­gram on his moth­er’s Droid, and she was cur­rently about six miles away. To­day, at least, there was no dan­ger of her find­ing out about her hotel’s fi­nan­cial in­no­va­tion. The re­cep­tion­ist handed me a room card, and Kim shook my hand. “So just en­joy your stay”, he said.


Nakamo­to’s ex­ten­sive on­line post­ings have some dis­tinc­tive char­ac­ter­is­tics. First of all, there is the flaw­less Eng­lish. Over the course of two years, he dashed off about eighty thou­sand words - the ap­prox­i­mate length of a novel - and made only a few ty­pos. He cov­ered top­ics rang­ing from the the­o­ries of the to the his­tory of com­mod­ity mar­kets. Per­haps most in­ter­est­ing­ly, when he cre­ated the first fifty bit­coins, now known as the “gen­e­sis block”, he per­ma­nently em­bed­ded a brief line of text into the data: “The Times 03/Jan/2009 Chan­cel­lor on brink of sec­ond bailout for banks”.

This is a ref­er­ence to a Times of Lon­don ar­ti­cle that in­di­cated that the British gov­ern­ment had failed to stim­u­late the econ­omy [see ap­pen­dices –Ed­i­tor]. Nakamoto ap­peared to be say­ing that it was time to try some­thing new. The text, hid­den amid a jum­ble of code, was a sort of dig­i­tal bat­tle cry. It also in­di­cated that Nakamoto read a British news­pa­per. He used British spelling (“favour”, “colour”, “grey”, “mod­ernised”) and at one point de­scribed some­thing as be­ing “bloody hard”. An apart­ment was a “flat”, math was “maths,” and his com­ments tended to ap­pear after nor­mal busi­ness hours ended in the United King­dom. In an ini­tial post an­nounc­ing bit­coin, he em­ployed Amer­i­can-style spelling. But after that a British style ap­peared to flow nat­u­ral­ly.

I had this in mind when I started to at­tend the lec­tures at the Crypto 2011 con­fer­ence, in­clud­ing ones with ti­tles such as “Left­over Hash Lem­ma, Re­vis­ited” and “Time-Lock Puz­zles in the Ran­dom Or­a­cle Model” [see also –Ed­i­tor]. In the back of a dark­ened au­di­to­ri­um, I stared at the at­tendee list. A French­man on­stage was talk­ing about test­ing the se­cu­rity of en­cryp­tion sys­tems. The most effec­tive method, he said, is to at­tack the sys­tem and see if it fails6. I ran my fin­ger past dozens of names and ad­dress­es, cir­cling res­i­dents of the United King­dom and Ire­land. There were nine.

I soon dis­cov­ered that six were from the Uni­ver­sity of Bris­tol, and they were all to­gether at one of the con­fer­ence’s cock­tail par­ties. They were happy to chat but en­tirely dis­mis­sive of bit­coin, and none had worked with peer-to-peer tech­nol­o­gy. “It’s not at all in­ter­est­ing to us”, one of them said. The two other cryp­tog­ra­phers from Britain had no his­tory with large soft­ware pro­jects. Then I started look­ing into a man named Michael Clear.

Clear was a young grad­u­ate stu­dent in cryp­tog­ra­phy at Trin­ity Col­lege in Dublin. Many of the other re­search stu­dents at Trin­ity posted pro­file pic­tures and phone num­bers, but Clear’s page just had an e-mail ad­dress. A Web search turned up three in­ter­est­ing de­tails. In 2008, Clear was named the top com­put­er-science un­der­grad­u­ate at Trin­i­ty. The net year, he was hired by to im­prove its cur­ren­t-trad­ing soft­ware, and he co-au­thored an aca­d­e­mic pa­per on peer-to-peer tech­nol­ogy. The pa­per em­ployed British spelling. Clear was well versed in eco­nom­ics, cryp­tog­ra­phy, and peer-to-peer net­works.


I e-mailed him, and we agreed to meet the next morn­ing on the steps out­side the lec­ture hall. Shortly after the ap­pointed time, a long-haired, square-jawed young man in beige sweater walked up to me, look­ing like an ear­ly- . With a pro­nounced brogue, he in­tro­duced him­self. “I like to keep a low pro­file”, he said. “I’m cu­ri­ous to know how you found me.”

I told him I had read about his work for Al­lied Irish, as well as his pa­per on peer-to-peer tech­nol­o­gy, and was in­ter­ested be­cause I was re­search­ing bit­coin. I said that his work gave him a unique in­sight into the sub­ject. He was wear­ing rec­tan­gu­lar Ar­mani glasses and squinted so much I could­n’t see his eyes.

“My area of fo­cus right now is ”, he said. “I haven’t been fol­low­ing bit­coin late­ly.”

He re­sponded calmly to my ques­tions. He was twen­ty-three years old and stud­ied the­o­ret­i­cal cryp­tog­ra­phy by him­self in Dublin - there aren’t any other cryp­tog­ra­phers at Trin­i­ty. But he had been pro­gram­ming com­put­ers since he was ten and he could code in a va­ri­ety of lan­guages, in­clud­ing C++, the lan­guage of bit­coin. Given that he was work­ing in the bank­ing in­dus­try dur­ing tu­mul­tuous times, I asked how he felt about the on­go­ing eco­nomic cri­sis. “It could have been averted”, he said flat­ly.

He did­n’t want to say whether or not the new cur­rency could pre­vent fu­ture bank­ing crises. “It needs to prove it­self”, he said. “But it’s an in­trigu­ing idea.”

I told him I had been look­ing for Nakamoto and thought that he might be here at the Crypto 2011 con­fer­ence. He said noth­ing. Fi­nal­ly, I asked, “Are you Satoshi?”

He laughed, but did­n’t re­spond. There was an awk­ward si­lence.

“If you’d like, I’d be happy to re­view the de­sign for you”, he offered in­stead. “I could let you know what I think.”

“Sure”, I said hes­i­tant­ly. “Do you need me to send you a link to the code?”

“I think I can find it”, he said.


Soon after I met Clear, I trav­elled to Glas­gow, Ken­tucky, to see what bit­coin min­ing look­ing like. As I drove into the town of four­teen thou­sand, I passed shut­tered fac­to­ries and a cen­tral square lined with empty store­fronts. On Howdy 106.5, a lo­cal ra­dio sta­tion, a man tried to sell his bed, his tele­vi­sion, and his bas­set hound - all for a hun­dred and ten dol­lars.

I had come to visit Kevin Groce, a forty-t­wo-year-old bit­coin min­er. His un­cles had a garbage-haul­ing busi­ness and had let him set up his op­er­a­tion at their fa­cil­i­ty. The dirt park­ing lot was jammed with garbage trucks, which reeked in the sum­mer sun.

“I like to call it the new moon­shin­ing”, Groce said, in a smooth Ken­tucky drawl, as he led me into a dark­ened room. One wall was lined with four-foot-tall home­-made com­put­ers with blink­ing green and red lights. The proces­sors in­side were work­ing so hard that their tem­per­a­tures had risen to a hun­dred and sev­enty de­grees, and heat ra­di­ated into the room. Each sys­tem was a jum­ble of wires and hacked-to­gether parts, with a fan from Wal­mart duc­t-taped to the top. Groce had built them three months ear­lier, for four thou­sand dol­lars. Ever since, they had gen­er­ated a steady flow of bit­coins, which Groce ex­changed for dol­lars, av­er­ag­ing about a thou­sand per month so far. He fig­ured his in­vest­ment was go­ing to pay off.

Groce was wiry, with wisps of gray in his hair, and he split his time be­tween work­ing on his dad’s farm, re­pair­ing lap­tops at a lo­cal com­puter store, and min­ing bit­coin. Gro­ce’s fa­ther did­n’t un­der­stand Kev­in’s en­thu­si­asm for the new cur­rency and ex­pected him to take over the farm. “If it’s not at­tached to a cow, my dad does­n’t think much of it”, Groce said.

Groce was en­gaged to be mar­ried, and planned to use some of his bit­coin earn­ings to pay for a wed­ding in Las Ve­gas later in the year. He had tried to ex­plain to his fi­ancee how they could afford it, but she doubted the fi­nan­cial pru­dence of fill­ing a room with bit­coin-min­ing rigs. “She gets to cussing every time we talk about it”, Groce con­fid­ed. Still, he was proud of the pow­er­ful com­put­ing cen­ter he had con­struct­ed. The ma­chines ran non-stop, and he could con­trol them re­motely from his iPhone. The arrange­ment al­lowed him to cut to­bacco with his fa­ther and mon­i­tor his bit­coin op­er­a­tion at the same time.

Nakamoto knew that com­pe­ti­tion for bit­coins would even­tu­ally lead peo­ple to build these kinds of pow­er­ful com­put­ing clus­ters. Rather than let that effort go to waste, he de­signed soft­ware that uses the


pro­cess­ing power of the lot­tery play­ers to con­firm and ver­ify trans­ac­tions. As peo­ple like Groce try to win bit­coins, their com­put­ers are har­nessed to an­a­lyze trans­ac­tions and in­sure that no one spends money twice. In other words, Gro­ce’s back­woods op­er­a­tion func­tioned as a kind of bank.

Gro­ce, how­ev­er, did­n’t look like a guy Wells Fargo would hire. He liked to stay up late at the garbage-haul­ing cen­ter and thrash through Black Sab­bath tunes on his gui­tar. He gave all his com­put­ers pet names, like Top­per and the Daz­zler, and, be­tween gui­tar solos, tended to them as if they were prize an­i­mals. “I grew up milk­ing cows”, Groce said. “Now I’m just milk­ing these things.”


A week after the Crypto 2011 con­fer­ence, I re­ceived an e-mail from Clear. He said that he would send me his thoughts on bit­coin in a day. He added, “I also think I can iden­tify Satoshi.”

The next morn­ing, Clear sent a lengthy e-mail. “It is ap­par­ent that the per­son­(s) be­hind the Satoshi name ac­cu­mu­lated a not in­signifi­cant knowl­edge of ap­plied cryp­tog­ra­phy”, he wrote, adding that the de­sign was “el­e­gant” and re­quired “con­sid­er­able effort and ded­i­ca­tion, and pro­gram­ming pro­fi­ciency”. But Clear also de­scribed some of bit­coin’s weak­ness­es. He pointed out that users were ex­pected to down­load their own en­cryp­tion soft­ware to se­cure their vir­tual wal­lets. Clear felt that the bit­coin soft­ware should au­to­mat­i­cally pro­vide such se­cu­ri­ty.7 He also wor­ried about the sys­tem’s abil­ity to grow and the fact that early adopters re­ceived an out­sized share of bit­coins.

“As far as the iden­tity of the au­thor, it would be un­fair to pub­lish an iden­tity when the per­son or per­sons has/have taken ma­jor steps to re­main anony­mous”, he wrote. “But you may wish to talk to a cer­tain in­di­vid­ual who matches the pro­file of the au­thor on many lev­els.”

He then gave me a name.


For a few sec­onds, all I could hear on the other end of the line was laugh­ter.

“I would love to say that I’m Satoshi, be­cause bit­coin is very clever”, Vili Lehdon­virta said, fi­nal­ly. “But it’s not me.”

Lehdon­virta is a thir­ty-one-year-old Finnish re­searcher at the Helsinki In­sti­tute for In­for­ma­tion Tech­nol­o­gy. Clear had dis­cov­ered that Lehdon­virta used to be a video-game pro­gram­mer and now stud­ies vir­tual cur­ren­cies. Clear sug­gested that he was a solid fit for Nakamo­to.

Lehdon­vir­ta, how­ev­er, pointed out that he has no back­ground in cryp­tog­ra­phy and lim­ited C++ pro­gram­ming skills. “You need to be a crypto ex­pert to build some­thing as so­phis­ti­cated as bit­coin”, Lehdon­virta said. “There aren’t many of those peo­ple, and I’m defi­nitely not one of them.”

Still, Lehdon­virta had re­searched bit­coin and was wor­ried about it. “The only peo­ple who need cash in large de­nom­i­na­tions right now are crim­i­nals”, he said, point­ing out that cash is hard to move around and store. Bit­coin re­moves those ob­sta­cles while pre­serv­ing the anonymity of cash. Lehdon­virta is one the ad­vi­sory board of Elec­tronic Fron­tier Fin­land, an or­ga­ni­za­tion that ad­vo­cates for on­line pri­va­cy, among other things. Nonethe­less, he be­lieves that bit­coin takes pri­vacy too far. “Only an­ar­chists want ab­solute, un­break­able fi­nan­cial pri­vacy”, he said. “We need to have a back door so that law en­force­ment can in­ter­cede.”

But Lehdon­virta ad­mit­ted that it’s hard to stop new tech­nol­o­gy, par­tic­u­larly when it has a com­pelling sto­ry. And part of what at­tracts peo­ple to bit­coin, he said, is the mys­tery of Nakamo­to’s true iden­ti­ty. “Hav­ing a myth­i­cal back­ground is an ex­cel­lent mar­ket­ing trick”, Lehdon­virta said.

A few days lat­er, I spoke with Clear again. “Did you find Satoshi?” he asked cheer­ful­ly.

I told him that Lehdon­virta had made a con­vinc­ing de­nial, and that every other lead I’d been work­ing on had gone nowhere. I then took one more op­por­tu­nity to ques­tion him and to ex­plain all the rea­sons that I sus­pected his in­volve­ment. Clear re­sponded that his work for Al­lied Irish Banks was brief and of “no im­por­tance”. He ad­mit­ted that he was a good pro­gram­mer, un­der­stood cryp­tog­ra­phy, and ap­pre­ci­ated the bit­coin de­sign. But, he said, eco­nom­ics had never been a par­tic­u­lar in­ter­est of his. “I’m not Satoshi”, Clear said. “But even if I was I would­n’t tell you.”

The point, Clear con­tin­ued, is that Nakamo­to’s iden­tity should­n’t mat­ter. The sys­tem was built so that we don’t have to trust an in­di­vid­u­al, a com­pa­ny, or a gov­ern­ment. Any­body can re­view the code, and the net­work is­n’t con­trolled by any one en­ti­ty. That’s what in­spires con­fi­dence in the sys­tem. Bit­coin, in other words, sur­vives be­cause of what you can see and what you can’t. Users are hid­den, but trans­ac­tions are ex­posed. The code is vis­i­ble to all, but its ori­gins are mys­te­ri­ous. The cur­rency is both real and elu­sive - just like its founder.

“You can’t kill it”, Clear said, with a touch of brava­do. “Bit­coin would sur­vive a nu­clear at­tack.”


Over the sum­mer, bit­coin ac­tu­ally ex­pe­ri­enced a sort of nu­clear at­tack. Hack­ers tar­geted the bur­geon­ing cur­ren­cy, and though they could­n’t break Nakamo­to’s code, they were able to dis­rupt the ex­changes and de­stroy Web sites that helped users store bit­coins. The rate of trans­ac­tions de­creased and the ex­change rate plum­met­ed. Com­men­ta­tors pre­dicted the end of bit­coin. In Sep­tem­ber, how­ev­er, vol­ume be­gan to in­crease again, and the price sta­bi­lized, at least tem­porar­i­ly.

Mean­while, in Ken­tucky, Kevin Groce added two sys­tems to his bit­coin-min­ing op­er­a­tion at the garbage de­pot and planned to build a dozen more. Ricky Wells, his un­cle and a co-owner of the garbage busi­ness, had offered to in­vest thirty thou­sand dol­lars, even though he did­n’t un­der­stand how bit­coin worked. “I’m just a risk-tak­ing son of a bitch and I know this thing’s mak­ing money”, Wells said. “Plus, these things are so damn hot they’ll heat the whole build­ing this win­ter.”

To Gro­ce, bit­coin was an in­evitable evo­lu­tion in mon­ey. Peo­ple use printed money less and less as it is, he said. Con­sumers need some­thing like bit­coin to take its place. “It’s like eight-tracks go­ing to cas­settes to CDs and now MP3s”, he said.

Even though his friends and most of his rel­a­tives ques­tioned his en­thu­si­asm, Groce did­n’t hide his con­fi­dence. He liked to wear a T-shirt he de­signed that had the words “Bit­coin Mil­lion­aire” em­bla­zoned in gold on the chest. He ad­mit­ted that peo­ple made fun of him for it. “My fi­ancee keeps say­ing she’d rather I was just a reg­u­lar old mil­lion­aire”, he said. “But maybe I will be some­day, if these rigs keep work­ing for me.”



“Four years and $100 mil­lion lat­er, Bit­coin’s mys­te­ri­ous cre­ator re­mains anony­mous: We still don’t know who in­vented Bit­coin. But we do know he’s rich”, The Verge:

“I’m as cu­ri­ous as I was back then, prob­a­bly even more cu­ri­ous,” said Joshua Davis, who spent four months try­ing to find Nakamoto for a piece in The New Yorker in Oc­to­ber 2011. “Every time I see a news post about the rise of the value of the Bit­coin, I won­der if Satoshi is see­ing that too. What’s he think­ing? Is he proud? Is he think­ing that, at some point, some day, he’ll fi­nally re­veal him­self? Imag­ine 15, 20 years down the line. The world has now re­ally adopted Bit­coin. It is a vi­able cur­ren­cy. At that point will Satoshi, on his death bed, say, ‘It was me’?”


Both Times ar­ti­cles be­low were sourced from ; the first ar­ti­cle was for­merly avail­able on­line.

“Chancellor on brink of second bailout for banks”

“Chan­cel­lor on brink of sec­ond bailout for banks; Bil­lions may be needed as lend­ing squeeze tight­ens. Chan­cel­lor on brink of a sec­ond bailout for banks”; Jan­u­ary 3, 2009 Sat­ur­day Edi­tion 3; pho­to­graph

by Fran­cis El­liott; Gary Dun­can


LENGTH: 729 words

Al­is­tair Dar­ling has been forced to con­sider a sec­ond bailout for banks as the lend­ing drought wors­ens.

The Chan­cel­lor will de­cide within weeks whether to pump bil­lions more into the econ­omy as ev­i­dence mounts that the £37 bil­lion part-na­tion­al­i­sa­tion last year has failed to keep credit flow­ing. Op­tions in­clude cash in­jec­tions, offer­ing banks cheaper state guar­an­tees to raise money pri­vately or buy­ing up “toxic as­sets”, The Times has learnt.

The Bank of Eng­land re­vealed yes­ter­day that, de­spite in­tense pres­sure, the banks curbed lend­ing in the fi­nal quar­ter of last year and plan even tighter re­stric­tions in the com­ing months. Its find­ings will alarm the Trea­sury.

The Bank is ex­pected to take yet more ag­gres­sive ac­tion this week by cut­ting the base rate from its cur­rent level of 2 per cent. Do­ing so would re­duce the cost of bor­row­ing but have lit­tle effect on the avail­abil­ity of loans.

White­hall sources said that min­is­ters planned to “keep the banks on the boil” but ac­cepted that they need more help to re­store lend­ing lev­els. For­mal­ly, the Trea­sury plans to fo­cus on state-backed guar­an­tees to en­cour­age pri­vate fi­nance, but a num­ber of in­ter­ven­tions are on the table, in­clud­ing fur­ther in­jec­tions of tax­pay­ers’ cash.

Un­der one op­tion, a “bad bank” would be cre­ated to dis­pose of bad debts. The Trea­sury would take bad loans off the hands of trou­bled banks, per­haps swap­ping them for gov­ern­ment bonds. The toxic as­sets, blamed for poi­son­ing the fi­nan­cial sys­tem, would be parked in a state ve­hi­cle or “bad bank” that would man­age them and at­tempt to dis­pose of them while “detox­i­fy­ing” the main­stream bank­ing sys­tem.

The idea would mir­ror the ini­tial pro­posal by Henry Paulson, the US Trea­sury Sec­re­tary, to un­der­pin the Amer­i­can bank­ing sys­tem by buy­ing up toxic as­sets. The idea was aban­doned, iron­i­cal­ly, when Mr Paul­son de­cided to fol­low Britain’s plan of in­ject­ing cash di­rectly into trou­bled banks.

Mr Dar­ling, Gor­don Brown and Lord Man­del­son, the Busi­ness Sec­re­tary, are ex­pected to take the fi­nal de­ci­sion on what ex­tra help to give the banks by the end of the month.

The banks have taken much of the heat for the econ­o­my’s woes. But min­is­ters are said in­creas­ingly to ac­cept that at­tack­ing the banks will not by it­self trans­form a sit­u­a­tion that is jeop­ar­dis­ing Britain’s eco­nomic prospects.

In­sid­ers point out that Mr Dar­ling’s crit­i­cism of mort­gage lenders has soft­ened in re­cent weeks. After the Bank of Eng­land’s rad­i­cal cuts in in­ter­est rates over the past two months, the fo­cus at the Trea­sury has shifted away from mort­gage lend­ing to the pres­sure be­ing put on busi­nesses by the scarcity of loans, which is emerg­ing as the big­ger eco­nomic dan­ger.

Richard Lam­bert, the Di­rec­tor-Gen­eral of the CBI, said yes­ter­day: “The Gov­ern­ment is go­ing to have to do more to re­store credit flows across the econ­o­my.”

He said that the car in­dus­try was es­pe­cially vul­ner­a­ble: “With­out ac­cess to credit or loan guar­an­tees on com­mer­cial terms, this vi­tal part of the econ­omy will in­cur last­ing dam­age.”

The scale of the lend­ing drought was high­lighted as sep­a­rate Bank fig­ures showed that the num­ber of new home loans ap­proved plunged to a record low in No­vem­ber. Only 27,000 mort­gages for house pur­chase were ap­proved by banks and build­ing so­ci­eties, down from a re­vised 31,000 in Oc­to­ber. It is the low­est level since the Bank be­gan col­lect­ing data in 1999. The Bank’s quar­terly credit con­di­tions sur­vey showed that banks re­stricted ac­cess to loans of all kinds by com­pa­nies and con­sumers in the past quar­ter, and that they plan to tighten the screws more in this quar­ter .

Hal­i­fax re­ported that the price of the av­er­age house fell by more than £100 a day last year. Its quar­terly fig­ures showed that the av­er­age house ended the year down in price by £37,178, or 16.2 per cent.

Press­ing their point

“The sin­gle most press­ing chal­lenge to eco­nomic pol­icy is to get the bank­ing sys­tem to get lend­ing in any nor­mal sense”

Mervyn King, Gov­er­nor of the Bank of Eng­land, Nov 26

“They are close to cut­ting off their noses to spite their faces”

Lord Man­del­son, Busi­ness Sec­re­tary, ac­cuses the banks of be­ing too con­ser­v­a­tive, Nov 30

“The banks have to un­der­stand that we have put sub­stan­tial sums of pub­lic money in to sup­port them. They, in turn, need to play their part”

Al­is­tair Dar­ling, Dec 10

“Quite clearly a lot more needs to be done”

Al­is­tair Dar­ling, Dec 15

“Virtual Currency”


LENGTH: 590 words

April 6, 2013 Sat­ur­day, Edi­tion 2; Na­tional Edi­tion

Bit­coin shows the en­dur­ing propen­sity of hu­man be­ings to cre­ate fi­nan­cial bub­bles In 2010 some­body bought a pizza at a value which, if they bought it now, would now make that pizza worth not far short of a mil­lion pounds. The cur­rency they bought this pizza in was called Bit­coin. This news­pa­per had an in­ad­ver­tent hand in its cre­ation.

On Jan­u­ary 3, 2009, The Times car­ried the head­line “Chan­cel­lor on brink of sec­ond bailout for banks”. Some en­ter­pris­ing per­son us­ing the pseu­do­nym Satoshi Nakamoto took that head­line, and via some ex­tra­or­di­nary math­e­mat­i­cal al­go­rithm that hardly any­body com­pre­hends, turned it into the first ever Bit­coin com­puter code.

For any­one fa­mil­iar only with mere pounds ster­ling, Bit­coin is a digi­tised cryp­to-cur­ren­cy. It is a way of trad­ing on­line, a kind of in­ter­net mon­ey. Its pur­pose is to do, in effect, what file shar­ing did to the mu­sic in­dus­try, which is to re­move the power from the body cor­po­rate and place it in the hands of in­di­vid­u­als. Bit­coins are bought and sold on­line, like a vir­tual ver­sion of gold or cash.

If this sounds like an old edi­tion of To­mor­row’s World, that would be mis­lead­ing. Bit­coin might turn out to be the pre­serve of geeks but it might not. The ex­is­tence of an on­line cur­rency makes trans­fers the­o­ret­i­cally pos­si­ble even where a gov­ern­ment, like those of Cyprus or Zim­bab­we, are try­ing to stop it. It is ob­vi­ous how the abil­ity to shield money from the au­thor­i­ties could turn into a Swiss bank ac­count in every com­put­er.

This may be the early days of a pro­found change. It is not hard to imag­ine banks fad­ing in im­por­tance, just as other in­for­ma­tion bro­kers have. That does not mean, how­ev­er, that the days of con­ven­tional cur­ren­cies are nec­es­sar­ily num­bered.

The res­o­lu­tion of dis­putes and en­sur­ing safety is all made more diffi­cult in a cur­rency in­vented and ad­min­is­tered in an an­ar­chis­tic spir­it. None of this fu­tur­ol­o­gy, how­ev­er, ex­plains the as­ton­ish­ing boom in Bit­coins over the past month. In No­vem­ber, elec­tronic Bit­coins were chang­ing hands for $12$102013 each. This week the price topped $175$1402013, valu­ing the en­tire ex­ist­ing stock of Bit­coins at about $1.87$1.52013 bil­lion. It is pos­si­ble that the raid by the Cypriot Gov­ern­ment on bank de­posits sig­nalled that a cur­rency free from the de­signs of a state was an at­trac­tive idea.

That meant that Bit­coin, which may have a fu­ture as a method of pay­ment, is be­ing used as some­thing for which it was never de­signed - an in­vest­ment. At­tracted by the fact that the sup­ply of Bit­coins is fixed at 21 mil­lion by 2140 (there are about 11 mil­lion in cir­cu­la­tion to­day), in­vestors are chas­ing the price up.

The cur­rent fas­ci­na­tion is a clas­sic bub­ble. It is the lat­est ex­am­ple of the hu­man in­abil­ity to see that the top of the cy­cle is on its way. The hard-to-fathom na­ture of Bit­coin re­calls the in­vi­ta­tion that was is­sued to in­vestors in 1720 to buy shares in a com­pany “for car­ry­ing on an un­der­tak­ing of great ad­van­tage, but no­body to know what it is”. Mostly ig­no­rant of what they were do­ing, in­vestors piled into shares which soared and then col­lapsed to a frac­tion of their orig­i­nal val­ue. This has been known ever since as the South Sea Bub­ble.

This is not even the first Bit­coin boom. It has surged be­fore, when it was re­vealed to be the cur­rency of choice on drug-deal­ing web­sites. A hack at­tack burst that bub­ble. Some­thing else will burst this one, but Bit­coin is an in­trigu­ing idea that will not go away. Most of the profits will, how­ev­er, just as they did in every spec­u­la­tive frenzy from Dutch Tulip­ma­nia in the 1630s to the fi­nan­cial bub­ble.

  1. Kamin­sky seems to be speak­ing metaphor­i­cally here. Grep­ping the source code in the his­tor­i­cal Sub­ver­sion repos­i­tory and the mod­ern GitHub repos­i­tory, I can­not find any oc­cur­rences of this string in the source code. An­other Bit­coiner like­wise failed. –Ed­i­tor↩︎

  2. For more com­ments by Kamin­sky, see his pre­sen­ta­tion slides on Bit­coin & “I Tried Hack­ing Bit­coin And I Failed”. –Ed­i­tor↩︎

  3. Specifi­cal­ly:

    I should note that this does not nec­es­sar­ily prove Nakamoto drew on Haber & Stor­net­ta’s work; Wei Dai’s b-money is the first ci­ta­tion in the white pa­per, yet Dai be­lieves Nakamoto did not know of it be­fore be­ing told and Adam Back claims to have been the one who told Nakamoto about it (see /Bit­coin is Worse is Bet­ter). –Ed­i­tor↩︎

  4. This seems to be ac­cu­rate, that Davis sent the bit­coins straight from Mt Gox to the hotel’s ad­dress: the listed amount is a nearly unique trans­ac­tion amount, and search­ing blockchain sites, we find that on 2011-10-25, there was an ad­dress that re­ceived ₿10.305, from 3 ad­dresses with to­tal re­ceipts of ₿312.4, ₿328.2, and ₿16,433.0 bit­coins (all vol­umes one as­so­ciates with a large ex­change such as Mt Gox). The ho­tel ap­pears to have im­me­di­ately trans­ferred to an ex­change and pre­sum­ably then sold the bit­coins, as Davis states lat­er. –Ed­i­tor↩︎

  5. I es­ti­mated in 2011 that it was more likely than not that a gov­ern­ment would ban Bit­coin. This does not seem to have hap­pened, and in March 2013 the U.S. gov­ern­ment is­sued new guide­lines which were widely in­ter­preted as fa­vor­ing Bit­coin and not con­sti­tut­ing a ban or even par­tic­u­larly bur­den­some reg­u­la­tion. –Ed­i­tor↩︎

  6. This claim is so ob­vi­ous that I in­fer the French­man must have meant some­thing more in­ter­est­ing and than that; this may be a case of what was dis­cussing when he wrote in , of Socrates and , that:

    A stu­pid man’s re­port of what a clever man says is never ac­cu­rate, be­cause he un­con­sciously trans­lates what he hears into some­thing that he can un­der­stand. I would rather be re­ported by my bit­ter­est en­emy among philoso­phers than by a friend in­no­cent of phi­los­o­phy.


  7. Wal­let en­cryp­tion was added to the offi­cial Bit­coin client with the 0.4.0 re­lease in 2011-09-23; for other op­tions, see Se­cur­ing your wal­let. –Ed­i­tor↩︎