The Face Behind Bitcoin
Joyce Park stashed this in Tech biz
Took the world 6 years to realize that "Satoshi Nakamoto" is really Satoshi Nakamoto. Go home Internet, you're drunk!
Even his family didn't know!
This has been building for years:
For nearly a year, Andresen corresponded with the founder of Bitcoin a few times a week, often putting in 40-hour weeks refining the Bitcoin code. Throughout their correspondence, Nakamoto's evasiveness was his hallmark, Andresen says.
In fact, he never even heard Nakamoto's voice, because the founder of Bitcoin would not communicate by phone. Their interactions, he says, always took place by "email or private message on the Bitcointalk forum," where enthusiasts meet online.
"He was the kind of person who, if you made an honest mistake, he might call you an idiot and never speak to you again," Andresen says. "Back then, it was not clear that creating Bitcoin might be a legal thing to do. He went to great lengths to protect his anonymity."
Best explanation of why Bitcoin is important:
"The whole reason geeks get excited about Bitcoin is that it is the most efficient way to do financial transactions," says Bitcoin's chief scientist, Gavin Andresen, 47. He acknowledges that Bitcoin's ease of use can also lead to easy theft and that it is safest when stored in a safe-deposit box or on a hard drive that's not connected to the Internet. "For anyone who's tried to wire money overseas, you can see how much easier an international Bitcoin transaction is. It's just as easy as sending an email."
In 2008, just before Bitcoin's official kickoff, a somewhat stiffly written, nine-page proposal found its way onto the Internet bearing the name and email address of Satoshi Nakamoto.
The paper proposed "electronic cash" that "would allow online payments to be sent directly from one party to another without going through a financial institution," with transactions time-stamped and viewable to all.
The masterstroke was replacing the role of banks as the trusted middlemen with Bitcoin users, who would act as sentinels for the integrity of the system, verifying transactions using their computing power in exchange for Bitcoin.
Satoshi doesn't like the system we have today and wanted a different one that would be more equal. He did not like the notion of banks and bankers getting wealthy just because they hold the keys," says Andresen.
Holding the keys has also made early comers to Bitcoin wealthy beyond measure. "I made a small investment in Bitcoin and it is actually enough that I could now retire if I wanted to," Andresen says. "Overall, I've made about $800 per penny I've invested. It's insane."
One of the first people to start working with Bitcoin's founder in 2009 was Martti Malmi, 25, a Helsinki programmer who invested in Bitcoins. "I sold them in 2011 and bought a nice apartment," he says. "Today, I could have bought 100 nice apartments."
Nakamoto, who was laid off twice in the 1990s, according to Mitchell, fell behind on mortgage payments and taxes and their home was foreclosed. That experience, says Nakamoto's oldest daughter, Ilene Mitchell, 26, may have informed her father's attitude toward banks and the government.
A libertarian, Nakamoto encouraged his daughter to be independent, start her own business and "not be under the government's thumb," she says. "He was very wary of the government, taxes and people in charge."
Nakamoto has $400 million in Bitcoins that he cannot cash out:
Of course, none of this puts to rest the biggest question of all - the one that only Satoshi Nakamoto himself can answer: What has kept him from spending his hundreds of millions of dollars of Bitcoin, which he reaped when he launched the currency years ago? According to his family both he - and they - could really use the money.
Andresen says if Nakamoto is as concerned about maintaining his anonymity as he remembers the answer might be simple: He does not want to participate in the Bitcoin madness. "If you come out as the leader of Bitcoin, now you have to make appearances and presentations and comments to the press and that didn't really fit with Satoshi's personality," he says. "He didn't really want to lead it anymore. He was pretty intolerant to incompetence. And he also realized the project would go on without him."
On the other hand, it is possible Nakamoto simply lost the private security keys to unlock his Bitcoin and cash in on his riches. Andresen, however, says he doubts it. "He was too disciplined," he says.
If Nakamoto ever sells his Bitcoin fortune, he would likely have to do so at a legitimate Bitcoin bank or exchange, which would not only give away his identity but alert everyone from the IRS to the FBI of his movements. While Bitcoin lets its users conduct transactions anonymously, all transactions can be viewed transparently online - and everyone is watching Nakamoto's Bitcoin to see if he spends it, says Andresen.
For his part, Andresen says he is inclined to respect Nakamoto's anonymity. "When programmers get together, we don't talk about who Satoshi Nakamoto is," he says. "We talk about how we should have invested in more Bitcoin. I mean, we're curious about it, but honestly, we really don't care."
My fear of bitcoin is that it is part of a cyber war framework.
If you create a currency other than cash that is used by hackers and dealers, and believe it is beyond government reach, you could get sloppy.
Then it gets destabilized and destroyed with stolen coin, false stories, suicides...
One good snowden leak if true or not, and it all falls apart.
As I said, from 1996 that just started to go over financial webs
This is the priciple theory on risk assets by the mega bond firm.
As you see repos then short term treasuries (associated money market funds) need to "hold the center" for capital markets to function. On the positive side the more stable the center the more risk you can take. On the negative side if the center fails the outside regions of risk collapse.
If you went one level deeper into the center you would get currency.
What if you start creating currencies? What if that destabilizes the center as some would have?
Bitcoin only has real value because it could be converted. If the system fails, bitcoin or near money fails as well.
But beyond that, policy over the last 20 years has pushed savings (of those that have any) into equities and real estate. The policy has been to move out the risk curve because of zero return on savings. Pensions, 401, 529, Roths, all homes .....what if the circle collapses on itself ?
When a crypto currency becomes in vogue we are off the chart.
When anonymous people or networks can create a 10 billion dollar equivalent and looking for who that is brings death threats, we are off the rails.
I am a simple yogi, out of the system but with Econ degrees. I don't care so much. However, I care about people in general. I care about Leah GM personally. She is a a friend.
This is fucking crazy from start to finish.
That is the story, the reaction, not the creation.
I understand the appeal of anarchy. Maybe we create a better system but the transaction costs would threaten humanity as a whole.