Sign up FAST! Login

Decoding the Enigma of Satoshi Nakamoto and the Birth of Bitcoin

Decoding the Enigma of Satoshi Nakamoto and the Birth of Bitcoin NYTimes com


Many concepts central to Bitcoin were developed in an online community known as the Cypherpunks, a loosely organized group of digital privacy activists. As part of their mission, they set out to create digital money that would be as anonymous as physical cash. Mr. Szabo was a member, and in 1993, he wrote a message to fellow Cypherpunks describing the diverse motivations of attendees at a group meeting that had just taken place. Some people, he wrote, “are libertarians who want government out of our lives, others are liberals fighting the N.S.A., others find it great fun to ding people in power with cool hacks.”

Mr. Szabo had a libertarian mind-set. He was drawn to those ideas partly, he told me, because of his father, who fought the communists in Hungary in the 1950s before coming to the United States, where Mr. Szabo was born 51 years ago. Reared in Washington State, Mr. Szabo studied computer science at the University of Washington.

Several experiments in digital cash circulated on the Cypherpunk lists in the 1990s. Adam Back, a British researcher, created one called hashcashthat later became a central component of Bitcoin. Another, called b money, was designed by an intensely private computer engineer named Wei Dai.

When these experiments failed to take off, many Cypherpunks lost interest. But not Mr. Szabo. He worked for six months as a consultant for a company called DigiCash, he has written on his blog. In 1998, he sent the outline for his own version of digital money, which he called bit gold, to a small group that was still pursuing the project, including Mr. Dai and Hal Finney, a programmer based in Santa Barbara, Calif., who tried to create a working version of bit gold.

The concept behind bit gold was very similar to Bitcoin: It included a digital token that was scarce, like gold, and could be sent electronically without needing to pass through a central authority like a bank.

This history points to the important role that Mr. Szabo and several others played in developing the building blocks that went into Bitcoin. WhenSatoshi Nakamoto’s paper describing Bitcoin appeared in the fall of 2008, it cited Mr. Back’s hashcash. The first people Satoshi emailed privately were Mr. Back and Mr. Dai, both men have said. And Mr. Finney, who recently died, helped Satoshi improve the Bitcoin software in the fall of 2008, before it was publicly released, according to emails shared with me by Mr. Finney and his family.

It is, though, Mr. Szabo’s activity in 2008, as Bitcoin emerged into the world, that has generated much of the suspicion about his role in the project. That spring, before anyone had ever heard of Satoshi Nakamoto or Bitcoin, Mr. Szabo revived his bit gold idea on his personal blog, and in an online conversation about creating a live version of the virtual currency, he asked his readers: “Anybody want to help me code one up?”

After Bitcoin appeared, Mr. Szabo reposted the item on his blog in a way that changed the date at the top and made it appear as though it was written after Bitcoin’s release, archived versions of the website show.

Stashed in: Libertarian, History of Tech!, Bitcoin

To save this post, select a stash from drop-down menu or type in a new one:

I'm still unclear on why the creator of Bitcoin wanted to remain anonymous.

You May Also Like: