The identity of the pseudonymous inventor of Bitcoin, Satoshi Nakamoto, has somehow managed to remain a secret during the ten years during which his experimental digital currency skyrocketed to worldwide attention. Theories abound that have identified Nakamoto-san as one or several people living here, there or anywhere. If there is some consensus that the fictitious Nakamoto is a male individual whose native language is English, there are nonetheless those who maintain that there is a real Japanese individual named Satoshi Nakamoto who lives somewhere in his native country.
There is a reason for his anonymity, and a reason he’s been able to maintain it. (For reasons soon to become apparent, I’m going with the male native English-speaker hypothesis.)
Bitcoin was conceived to be decentralized, and ruled through the consensus of a network of nodes operating independently from each other. A Father of Bitcoin would inevitably possess centralizing powers and, just as inevitably, end up running the show. For the decentralized blockchain scheme to work, the creator of the currency had to retreat into the shadows once the currency was launched. That is precisely what Nakamoto-san did – despite rumors of the existence of a treasure trove of billions of dollars’ worth of bitcoin that he cannot claim without unmasking himself.
Nakamoto-san stepped back very shortly after the launch of the currency, and relinquished the keys to the kingdom to a foundation charged with ensuring that bitcoin code remain law (bitcoin.org). That explains his continuing ability to maintain his anonymity. The longer he stayed in what had become a public picture, the more likely his identity would have been revealed. He thus chose to evaporate into the shadows in which he remains to this day.
You can’t ghost write a book on Bitcoin (as I have) without asking yourself who, exactly, this Satoshi character might be. As Word Handler handles words, I first took the obvious step of running the letters of satoshi nakamoto through an anagrammer. Of the numerous possibilities generated, the one that seemed the most potentially useful was:
Saskatoon Ahi Tom
That allowed me to hazard a guess that Satoshi Nakamoto is a man named Thomas who likes sushi and who lives in the freezing cold of the largest city in Canada’s central province.
I have a mathematician friend who fact-checks the more mathematical portions of my work on cryptocurrency. As he said he’d rather I not use his name, we’ll just call him by the first seven terms of the SHA-256 hash of his name. So we’ll call him a909627, short for:
In any event, one night, after a few drinks and a couple cigars, a909627 revealed his theory that Satoshi Nakamoto was in reality a gentleman by the name of Jerry Solinas, a cryptography expert who has been in the employ of the NSA for several decades.
When I wrote my introduction to hashing functions and digital signatures, I failed to mention that both SHA-256 and ECDSA, like many cryptographic tools, are the product of NSA research. The Agency has very big computers and very smart mathematicians, and the government has a need for encrypting sensitive information. Therefore they’re the industry leader, the Coca-Cola of the cryptography business. Some of the NSA’s cryptographic innovations are then made available at what amounts to retail. That’s how Bitcoin got its digital hands on the crypto- that makes its money, not –nite, but –currency.
Because he works for the NSA, some degree of mystery surrounds Jerry Solinas. We do know that he and the SHA-256 hashing function operated under the same roof. We also know that Solinas played a major role in the selection of the elliptic curves that underlie the cryptographic signature protocol that was taken up by Bitcoin.
Since there is an extremely large infinite number of elliptic curves, somebody had to decide which curves would be used for the NSA’s elliptic curve cryptography.
That somebody just happens to be Jerry Solinas, who therefore possesses the mathematical ken to have created Bitcoin.
As do a lot of other people, of course.
Solinas, however, was also one of three people (the others being Laurie Law and Susan Sabett) who were responsible for a 1996 paper entitled “How to Make a Mint: The Cryptography of Anonymous Electronic Cash.”
To quote from the paper’s introduction:
The type of electronic payment system focused on in this paper is electronic cash. As the name implies, electronic cash is an attempt to construct an electronic payment system modeled after our paper cash system.
If that doesn’t sound familiar, I refer you to my post on David Chaum’s work on the subject.
Solinas and his colleagues continue:
Electronic cash is defined to be an electronic payment system that provides…the properties of user anonymity and payment untraceability.
Then it really starts to get interesting:
In general, electronic cash schemes achieve these security goals via digital signatures. They can be considered the digital analog to a handwritten signature. Digital signatures are based on public key cryptography. In such a cryptosystem, each user has a secret key and a public key. The secret key is used to create a digital signature and the public key is needed to verify the digital signature.
And what is the mechanism that will make these digital signatures a reality?
The Elliptic Curve Digital Signature Algorithm. Which, by no coincidence at all, was developed by Jerry Solinas.
Solinas’ 1996 paper goes on to acknowledge that:
These schemes are far less satisfactory, however, from a law enforcement point of view. In particular, the dangers of money laundering and counterfeiting are potentially far more serious than with paper cash. These problems exist in any electronic payment system, but they are made much worse by the presence of anonymity. Indeed, the widespread use of electronic cash would increase the vulnerability of the national financial system to Information Warfare attacks. We discuss measures to manage these risks; these steps, however, would have the effect of limiting the users’ anonymity.
The problem of money laundering is one of the biggest issues facing the cryptocurrency world today, and it was anticipated thirty years ago, long before anyone had heard of Satoshi Nakamoto. As was the tension between eliminating money laundering and anonymity. There is a further comment to be made on the last-quoted passage: it prescribes that “we” (which I take to mean the NSA) be responsible for figuring out some means of policing this brave new monetary world.
To recap, Jerry Solinas wrote a paper outlining many of the tenets of Bitcoin, 12 years before the fact. He developed a signature algorithm that he just happens to be the one used by Bitcoin. He worked in the department of the NSA that developed the SHA-256 hashing function. He even foresaw the dangers anonymous electronic cash would pose in terms of crime and money laundering.
All of which strongly suggests that Jerry Solinas and Satoshi Nakamoto are one and the same.
There is a potential flaw in my theory. As the somewhat ominous statement that a governmental “we” take steps to prevent the electronic cash from being used for criminal purposes suggests, one critical aspect of Bitcoin is absent from the Solinas paper: decentralization. The Solinas concept of electronic cash is based on a government bank. Bitcoin, as I’ve explained, is exactly the opposite of that.
On the other hand, twelve years is a long time, during which our candidate for being Satoshi Nakamoto had ample time, not only to think up the refinements in cryptography that play a role in Bitcoin, but also to throw out his central bank idea and replace it with the idea of the blockchain.
If Solinas is Satoshi, a big why presents itself. I can see two explanations, one of them considerably more disturbing than the other.
The disturbing one is that extrication of electronic cash from a governmental banking system was an intentional move on the NSA’s part. Thus a nominally decentralized cryptocurrency designed to operate free of governmental constraint and international borders would be in reality the product of the United States government, making the decentralization of Bitcoin illusory to say the least.
My post on David Chaum mentions the crypto-anarchist movement and its mission to employ cryptography as a means of foiling the government’s intrusion into the citizenry’s privacy. A Crypto-Anarchist would be reduced to apoplexy at the thought of a cryptocurrency being a tool of that snooping government. Of course, such a Crypto-Anarchist would also aver that such a situation would serve Bitcoin right for having NSA parts under its hood in the first place.
The second hypothesis I can advance with regard to a putatively NSA-employed Satoshi Nakamoto having invented a decentralized cryptocurrency is that Bitcoin was invented to operate outside of the NSA’s control – whence the need for a pseudonymous inventor. It’s an interesting theory, although, if Nakamoto-san is indeed Mr. Solinas, one would expect that the latter would have been smart enough to disguise himself better than he did. The connection between Nakamoto and Solinas is too poorly concealed for one to be able to believe that Bitcoin is the product of an NSA employee gone rogue.
On the other hand, there’s rogue and there’s rogue, and while Bitcoin is subversive, I don’t believe it was ever intended to subvert the United States government’s monetary system. I don’t believe it was ever intended to become as big as it has, either. As it is now being used as a store of value and an investment instrument, it is even less likely to subvert the dollar’s practical spending aspects. If Bitcoin was invented by an NSA employee working outside of the Agency, it was probably intended as nothing more than an amusement whipped up in a garage on a series of Sundays.
In that light, a poorly disguised Solinas could indeed be Satoshi Nakamoto without endangering his government pension. (If so, he must be very amused at the way his day-off amusement mushroomed into what it is today.)
I am not alone in holding to the Jerry Solinas hypothesis. Still, I’d be almost disappointed where he to fully unmasked when the real Satoshi Nakamoto is told to stand up. And don’t forget that there is no shortage of alternativie hypotheses: remember Saskatoon Ahi Tom.
Nevertheless, Jerry Solinas did possess the means, motive and opportunity for concocting Bitcoin.
At least that’s what a909627 thinks. 735a4ab is inclined to agree.