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Nakamoto Named as Bitcoin Creator Denies Involvement

By James Nash, Carter Dougherty and Olga Kharif
March 07, 2014 12:59 PM EST 36 Comments
According to Newsweek reporter Leah McGrath Goodman, when Dorian Nakamoto was confronted at his home before publication and asked about Bitcoin, he responded, “I am no longer involved in that and cannot discuss it. It’s been turned over to other people.”
Photographer: Thomas Trutschel/Photothek via Getty Images
According to Newsweek reporter Leah McGrath Goodman, when Dorian Nakamoto was confronted at his home before publication and asked about Bitcoin, he responded, “I am no longer involved in that and cannot discuss it. It’s been turned over to other people.”

A 64-year-old physicist, identified by Newsweek magazine as Bitcoin’s creator, was chased by reporters through Los Angeles and denied any role in the digital currency, saying he first heard of it three weeks ago.

Hours after Newsweek published a profile of Dorian S. Nakamoto, the former defense industry and government employee emerged from his home in a Temple City neighborhood, briefly telling journalists “I’m not involved in Bitcoin.” The group trailed him in a multivehicle car chase yesterday as he fled to an Associated Press bureau. The AP later wrote that he insisted during a two-hour interview that he first heard of Bitcoin when a reporter contacted his son last month.

Journalists, bloggers and others have sought for years to identify the mysterious computer coder who wrote a paper on Bitcoin’s framework and created the software that serves as its backbone. The initial document carried the name of Satoshi Nakamoto, and since the author or authors otherwise chose to remain private and anonymous, it had been widely assumed the name was a pseudonym.

Publications such as the New Yorker have attempted to solve the mystery, examining possible Bitcoin founders that included a former cryptography student, a former programmer and economists.

The Nakamoto living in Temple City used to be named Satoshi and adopted the first name Dorian in 1973, Newsweek reported in its cover story. He was born in Japan, attended California State Polytechnic University, worked for defense contractors on classified military projects and eventually the Federal Aviation Administration, the magazine wrote.

‘Not Involved’

According to Newsweek reporter Leah McGrath Goodman, when Dorian Nakamoto was confronted at his home before publication and asked about Bitcoin, he responded, “I am no longer involved in that and cannot discuss it. It’s been turned over to other people.”

He told the AP that he was misunderstood.

“It sounded like I was involved before with Bitcoin and looked like I’m not involved now,” it quoted him as saying. “That’s not what I meant. I want to clarify that.”

Newsweek magazine defended Goodman’s reporting.

“Ms. Goodman’s research was conducted under the same high editorial and ethical standards that have guided Newsweek for more than 80 years,” the magazine said on its website today. “Newsweek stands strongly behind Ms. Goodman and her article.”

Seeking Lunch

Emerging from his home after the article was published, Dorian Nakamoto told reporters he would go to lunch with one of them. He picked an AP reporter, and they got in a blue Toyota Prius and headed for Mako Sushi in nearby Arcadia. Other reporters drove after them, and as Nakamoto saw he wasn’t going to be left alone at the restaurant, he bolted again.

He and the reporter got back into the car and headed to the AP bureau in downtown Los Angeles. By mid-afternoon, a gaggle of non-AP reporters were standing outside the office waiting for him to come out.

The episode followed a day in which Bitcoin enthusiasts reacted to Newsweek’s article with a mixture of resignation and disbelief, with some debating Dorian Nakamoto’s possible role or whether he should have been left alone.

“Fascinating,” Martti Malmi, a Finnish programmer who worked with Nakamoto on the Bitcoin code, wrote on Twitter. “Satoshi seems not much different than how I imagined him.”

Loose Group

Gavin Andresen, the chief scientist of the Bitcoin Foundation who had been one of the few people to communicate with Satoshi Nakamoto, didn’t immediately indicate whether he could identify Dorian Nakamoto as Bitcoin’s creator. Andresen said in a message on Twitter that he regrets talking to the magazine about Nakamoto. He said he was disappointed that Newsweek decided to “dox,” or document, the Nakamoto family.

Satoshi Nakamoto has been thought to be a pseudonym for a programmer or group of programmers who wrote the paper and the initial source code for Bitcoin. The code has since been handed off to a loose group of experts affiliated with the foundation, a Seattle-based advocacy group.

The paper, first published in 2008, offered a proof of the basic concept of Bitcoin, which uses a public ledger and a network of voluntary computers, known as “miners,” to validate transactions that are signed with encrypted signatures. After the initial source code created the first batches of Bitcoin, it grew from an obsession of specialists into a global phenomenon.

Mt. Gox

Merchants around the world now accept Bitcoin for everything from kitchen appliances on Overstock.com to luxury goods listed on BitPremier, a website. It also trades for traditional currencies, and was priced at $651.14 at 4 p.m. Hong Kong time today, according to the CoinDesk Bitcoin Price Index.

Bitcoin attracted media attention last week when Tokyo-based Mt. Gox, once the biggest exchange for the digital currency, filed for bankruptcy protection after coins valued at more than $500 million went missing. Following lawmaker calls for regulation, Japan’s government said today that Bitcoin isn’t a currency.

Some Bitcoin enthusiasts said they were skeptical that Newsweek had found the right person. Others said they were furious that the news media would try to violate his privacy.

“I would have thought every Satoshi Nakamoto on planet Earth had already been contacted and ruled out,” Stephen Pair, the chief technical officer at Atlanta-based BitPay, a payment processor. “If this person is the real Satoshi, it would be easy to for him to prove it if he wanted to.”

Jeff Garzik, one of the core developers on the Bitcoin software protocol and an employee of BitPay, said “the ‘real’ Satoshi” can prove his identity only through cryptography.

Digital Signatures

“We will know Satoshi by his digital signatures,” Garzik said in an e-mail, adding that the founder could either sign a message using his unique encryption key or make use of the Bitcoins that the creator is known to have kept.

Analysts who looked at the Bitcoin ledger have concluded that the creator of the system owns about 1 million coins, worth over $600 million at current prices, said Jered Kenna, a San Francisco Bitcoin investor. If the owner pledged never to sell or trade them, it would help add stability to what has been a volatile market, Kenna said.

Adam Draper, the chief executive officer of Boost, a San Mateo, California, company that incubates Bitcoin startups, called the Newsweek article “intrusive” and said he’s unconvinced.

“If Satoshi Nakamoto wanted to be anonymous the whole time, why would he use his real name on the paper?” Draper said. “He always used non-tracking e-mails and did everything he could to stay anonymous, so it’s difficult for me to understand why he would use his real name.”

Identifying Bitcoin’s founder won’t affect the current network, said Gregory Maxwell, one of the core developers on the project. The code is now out of Satoshi Nakamoto’s hands, and can’t be changed except by broad consensus among the users of the network.

“There has been extensive rewriting and reorganization since the time when the creator of the system ended his involvement,” Maxwell said in an e-mail.

To contact the reporters on this story: Carter Dougherty in Washington at cdougherty6@bloomberg.net; Olga Kharif in Portland at okharif@bloomberg.net; James Nash in Los Angeles at jnash24@bloomberg.net

To contact the editors responsible for this story: Maura Reynolds at mreynolds34@bloomberg.net; Sarah Rabil at srabil@bloomberg.net; Stephen Merelman at smerelman@bloomberg.net David Scheer, Reed Stevenson, Lawrence Roberts

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