Why it would have been a relief to know who’s behind bitcoin

Many bitcoin owners may have breathed a sigh of relief on Monday knowing the inventor of bitcoin had finally been revealed.


News broke that Australian businessman Craig Steven Wright is Satoshi Nakamoto earlier this week.
(Image via the Wall Street Journal)

Finally, we know the inventor of bitcoin! Wait, maybe not so fast. Actually, we don’t know anything at all.

This Monday, news broke that Australian businessman Craig Steven Wright is “Satoshi Nakamoto,” the known pseudonym of the digital currency’s creator. The news was out for less than a day when an update spread indicating that this might have been a scam. Specifically, the way Wright used to prove that he possesses the crypto key used for one the first bitcoin transactions wasn’t correct and didn’t prove that Craig Wright was the brains behind bitcoin. Now, Wright has announced he will deliver additional proof.

But why is this important? Why is the Internet going crazy with speculations about bitcoin’s creator?

Many bitcoin owners may have breathed a sigh of relief on Monday knowing the inventor of bitcoin had finally been revealed.

Why? First off, it’s a huge mystery who might have created a successful payment system and digital currency from scratch. Is it a single person or a virtual identity of a group? Satoshi Nakamoto handed the development of bitcoin to the bitcoin community in 2010 and signs hint that he is gone for good. Why did he do it? Did he want to protect himself or the project?

Another reason is that Satoshi Nakamoto is believed to possess about 1 million BTC, which equates to  about 450 million USD using the current exchange rate. There are currently 15.5 million bitcoins mined, which means that if the claims about Satoshi is true, he would own 6% of the whole market. There is a limit to the maximum number of bitcoins to be mined which is approximately 21 million bitcoins. In that case, he would still own slightly less than 5% of the total amount. The question is if Satoshi is still in control of those bitcoins. Weren’t the wallets just testing accounts? Can he really cash out 450 million USD with all consequences that it could potentially have?

We would love to know the answers  to these questions and many more, and that’s the real reason why people keep looking for bitcoin’s creator. If it turns out to be true – that Craig Wright is indeed the creator of bitcoin – we could get the answers. Now we know that his proof was fake. There have been several accounts of people who have more or less successfully claimed that they are Satoshi. So far, none of them were able to provide sufficient proof to solidify their claims.

Bitcoin users aren’t just among the tech-savvy; they may also be cybercriminals.

Bitcoin is a digital currency that has spread across the Internet since 2009. Traditional currencies like the U.S. dollar or Euro can be converted into bitcoins, after which the digital money can be used for online transactions.

Bitcoin is popular among many consumers. Thanks to its ease of use, online transactions can run quickly and smoothly. Additionally, it’s possible to send and receive money without revealing any personal data, which gives users a heightened perception of security.  

Unfortunately, that same sense of privacy and anonymity is also appreciated by the bad guys. When you see ransomware coverage, you will notice that ransomware authors demand ransoms to be paid in bitcoins. Also, it’s the preferred currency on the dark web, allowing people to buy and sell just about anything — weapons, drugs, malware, even cyber espionage — via bitcoins to maintain invisibility from law enforcement authorities. This shouldn’t come as a surprise. Technological advancements have historically been used for the good and abused by the bad.

As long as the identity of the bitcoin founder remains a mystery, we can only stay curious and continue to follow along as this real-life novel unfolds — and hope that it doesn’t end in fraud.

Author: Michal Salát, 4 May 2016

Posted in Uncategorised.