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The investigation of Newsweek about the 64-year-old American Satoshi Nakamoto, who is considered the “father of Bitcoin”

On March 6, Newsweek magazine  published a long article investigating the identity of the mysterious Satoshi Nakamoto, getting closer to the clue most closely. Due to excessive detail, other journalists were able to extract Nakamoto’s home address and after a few hours showed up to his doors with cameras, and when he tried to hide, continued the pursuit of cars. Later, Newsweek made changes to the material, snapping photos and cutting out a part of the text with details about the life of Nakamoto.

And this is only the beginning of the changes in the world of crypto-currencies and the lives of Satoshi Nakamoto, which brought the article Newsweek.  publishes a full translation of the original article.

Satoshi Nakamoto stands on the driveway near his house and looks disgusted. And vexed.

He wears a crumpled T-shirt, old blue jeans and white socks, without shoes, as if he ran out of the house in a hurry. His hair is disheveled, and his eyes are like a man who has not slept for weeks.

In his pose there is no call, only the impotence of a man who has waged a long struggle, and now suffers a heavy defeat.

Two policemen from the sheriff of Temple City, California, stand next to him and are perplexed. “So what are you going to ask this person about?”, One of them asks me a question. “He believes that talking to you will turn into problems for him.”

“I doubt that he has problems,” I say. “I want to ask him about the bitcoins. This person is Satoshi Nakamoto. “

“What?”, – the policeman is surprised. “Is this the guy who created bitcoin?” It seems that he leads a modest life. “

That’s why I came here – to find out more about Nakamoto and his humble life. It seemed absurd that the person who was credited with the invention of the bitcoins – the electronic currency that won the greatest world recognition, with transactions amounting to $ 500 million on the best days – would be in San Bernardino near Los Angeles, in a family home, and leave its state intact , earned on bitcoins, which is estimated at $ 400 million.

Equally ridiculous, it seemed that Nakamoto’s first reaction to my knocking at his door was a call to the police. And now, in a personal meeting, witnessed by two policemen, Nakamoto’s answers to my questions were cautious, but frank.

Silent acknowledgment of his role in the Bitcoin project was his glance down to the ground, and a categorical refusal to answer questions.

“I no longer participate in this and can not discuss anything,” he says, dismissing all further questions with a wave of his left hand. “The project was transferred to other people. And now they are responsible for it. I no longer have anything to do with him. “

Nakamoto refused to say anything else, and the police made it clear that the conversation was over.

But a two-month investigation and interviews with people close to Nakamoto, and with the developers who worked the most with him over the global phenomenon Bitcoin, appeared as if from nowhere, debunk the myths surrounding the world’s most famous crypto currency, and prove that it is – it’s just myths, and the facts seem even more strange than the qualitative fiction.

The investigation of Newsweek did not lead to the child prodigy from Tokyo with the pseudonym “Satoshi Nakamoto” (this is the story of every beatcoin fan for The New Yorker), but to a 64-year-old American of Japanese origin, whose real name is Satoshi Nakamoto. It is a collector of model trains, whose work biography is covered in secrecy – he led secret activities in large corporations and the US Army.

The man in front of me, looking at his feet, seems to be the founder of Bitcoin.

Even his family did not know about it.

Satoshi Nakamoto

In North America and beyond, there were several Satoshi Nakamoto – both living and dead – including the designer of men’s clothing Ralph Lauren and one who died in Honolulu in 2008, according to the Index of the Deceased Ministry of Social Security. There is even a profile on LinkedIn, whose owner claims that it was he who founded Bitcoin, and lives in Japan. But none of these descriptions correspond to other known details, and the investigations have not brought evidence. Certainly, Satoshi Nakamoto may turn out to be a pseudonym, but the question arises – why someone who wants to remain anonymous chose such a sonorous name. And only when studying the database of naturalized citizens of the United States was able to find Satoshi Nakamoto, information about which revealed certain coincidences. But the picture cleared up only after that,

Two weeks before our meeting in Temple City, I started an electronic correspondence with Satoshi Nakamoto, mainly discussing the models of locomotives and their modifications that interest him by means of computer design technologies. I got the email address of Nakamoto in the company where he buys model trains.

He bought spare parts for trains in Japan and England since he was a teenager, he said: “I myself am engaged in machining – a hand-held machine, rolling, surface grinding.”

This process involves a fair amount of mathematics, and in this Nakamoto, like his entire family, has quite succeeded. As the eldest of the three brothers who work in the field of engineering and technology, Nakamoto received a degree in physics from the Polytechnic University of California in Pomona. But unlike the brothers, it is not easy to trace the tangled path of his career growth.

Nakamoto stopped responding to my messages as soon as I started asking about bitcoins. It was at the end of February. Before that, I also asked questions about his professional experience, about which there is very little data in public access. His answers were evasive. When he asked about my experience, I offered to talk on the phone. He did not answer. Then I asked his eldest son, 31-year-old Erik Nakamoto, to find out from his father whether he agreed to talk about bitcoins. I was refused. Attempts to get in touch through other family members also failed.

After that Nakamoto ignored my requests to talk on the phone and did not call back. The day I arrived at his modest family home in southern California, his silver Toyota Corolla CE was parked on the driveway, but no one opened the door.

For a moment he appeared, lifting the blinds on the front door, and our eyes crossed. Then he closed them again. This was the only time when I saw him without the presence of police officers.

“Do you want to know about my amazing physics brother?”, Asks Arthur Nakamoto, the younger brother of Satoshi Nakamoto, director of quality at Wavestream Corp., a manufacturer of radio-frequency amplifiers in San Dimas, California.

“He is an outstanding man. And I’m just an ordinary engineer. He is very focused and versatile in his knowledge. Intelligent, intelligent, mathematician, engineer, computer scientist. Whatever you call it, it can. “

But he also warned me.

“My brother is that other type. You hardly know that he worked with all sorts of secret things. For a while his life was completely hidden. Hardly you will manage to get to it. He will deny everything. He never admits that he founded bitcoin. “

And when he said this, Brother Nakamoto hung up.

His words gave reason to believe that I was on the right track, but this was not enough. Although his brother assumed that Nakamoto was quite capable of building bitcoin, I was not absolutely sure that he knew this for sure. He said that they did not get on very well and did not communicate very often.

I obviously needed to talk with Satoshi Nakamoto personally.

Why everyone is delighted with bitcoins

Bitcoins are a currency that exists in the world of computer code and can be sent anywhere in the world, without bank and exchange commissions, and then stored in a mobile phone or on a hard disk until it is reused. Since the currency exists in the form of a code, it can be lost if a hard drive crashes or is stolen if someone else finds out the key to the code.

“The main reason that people are enthusiastic about bitcoin: this is the most effective way to conduct financial transactions,” says Gevin Andresen, 47, the head of the Bitcoin protocol development. He admits that ease of use can lead to simplification of theft, and considers it to be safest to store in a safe or on a hard drive that does not have an Internet connection. “Anyone who has faced the need to transfer money abroad understands how much easier it is to conduct an international transaction of bitcoins. It’s as simple as sending an e-mail. “

Nevertheless, bitcoins suffer from mass thefts, fraud and scandals, which already led to a decrease in the cost of bitcoins from $ 1,200 last year to a modest $ 130 for bitcoin at the end of February.

The currency attracted the attention of the US Senate, the Ministry of Internal Security, the Federal Reserve System, the Federal Tax Service, the Treasury Department for Combating Financial Crimes, the Securities and Exchange Commission and the Federal Bureau of Investigation, which in October  shut down the black SilkRoad Internet market and arrested Bitcoins on the amount of 3.5 million dollars. “The FBI is now one of the largest owners of bitcoins in the world,” Andresen says.

Over the past few weeks, a  new version of SilkRoad , as well as one of the largest bitcoin exchanges,  Mt.Gox in Tokyo , closed and filed for bankruptcy after the hacker attacks that cost them millions of dollars.

Andresen, who escaped from the Silicon Valley in Amherst, Massachusetts, says he worked closely in the development of bitcoin with a human “or object”, known as Satoshi Nakamoto, between June 2010 and April 2011. This was before the rise of the multibillion-dollar bitcoin economy , provoked by the unexpected, albeit cautious, approval of the outgoing head of the Federal Reserve, Ben Bernanke, who said that digital currencies “will be able to contain long-term promises.”

Since then, bitcoin-ATM machines have appeared throughout North America (one of the first – in Vancouver, British Columbia, Boston, and Albuquerque, New Mexico). At the same time, the reception of bitcoins began in companies from completely different industries – Tesla, OkCupid, Reddit, Overstock.com and Virgin Galactic, the airline Richard Branson, who  said that he would send to space anyone who can fork out a sufficient number of bitcoins.

“Working on the main code bitcoin is really scary, because if you do something wrong – you can destroy the entire 8-billion project,” says Andresen. “And this has already happened. We have already destroyed it. “

How Nakamoto disappeared

For about a year Andresen corresponded with the founder bitcoin several times a week, often working on improving the code bitcoin for 40 hours a week. Andresen says that evasiveness was characteristic of Nakamoto during their entire exchange of messages.

In fact, he never even heard Nakamoto’s voice, because the founder of Bitcoin preferred not to communicate over the phone. Their interaction, he says, has always been through e-mail or personal messages at the Bitcointalk forum  devoted to the bitcoins.

“He was such a man that if you would admit a simple mistake, he would call you an idiot and would never speak to you again,” Andresen says. “At that time it was still unclear whether bitcoin would become a legal occupation. And he did a lot to ensure his anonymity. “

Nakamoto also ignored all of Andresen’s questions about where he came from, what his professional experience was, what other projects he worked on and whether he had a real name or a pseudonym (many beatcoin fans use pseudonyms). “He was never talkative,” Andresen says, “we only talked about code.”

Andresen, an Australian who received a bachelor’s degree in computer technology from Princeton University, eventually became a contact for Nakamoto in a growing international development team and programmers who voluntarily worked on improving the bitcoin code after launch in January 2009.

Andresen first heard about bitcoins for the next year from the blog, which was signed. He wrote Nakamato to an e-mail address that can not be tracked, and offered his help. His first message to the founder of Bitcoin was: “Bitcoins are a brilliant idea, and I want to help. What you need?”

Andresen says he did not think much about what works for an anonymous inventor. “I’m a geek,” he says. “I do not care who the author of the idea is – a good person or a bad one. Ideas in themselves. “

Other developers have attracted their own “enlightened egoism,” profit or personal beliefs, he says. But almost everyone was intrigued by the promise of a digital currency, which will be accessible to everyone in the world, bypassing central banks – and this at a time when the world financial system was far from in the best condition. In this respect, it is simply not possible to imagine a more suitable time for running the bitcoins.

In 2008, shortly before the official launch of bitcoins, a 9-page sentence written in a dry language appeared on the Internet  , and it had the name and email address of Satoshi Nakamoto.

The document offered “electronic money”, which “will allow online payments directly between the parties, without the participation of financial institutions,” while the time of the transaction is noted and is in public access.

It was a clever move to replace the role of banks as trusted intermediaries with bitcoins who must maintain the integrity of the system by checking transactions using computing power in exchange for bitcoins.

The emission of bitcoins is designed in such a way that it takes place at a strictly set pace to maintain cost and deficit and provide protection against inflation – the quantity is halved every four years, and when 21 million bitcoins are reached by 2140, their emission should be discontinued. (Bitcoins can be divided up to the eighth character after the decimal point, while the smallest units are called “satoshi”).

“I got the impression that Satoshi really did it for political reasons,” says Andresen, who receives a bitcoin salary (along with half a dozen other key bitlock developers working all over the Silicon Valley to Switzerland) from the  Bitcoin Foundation , a non-profit organization whose work is directed on the standardization of currency. “He does not like the system we have today, and he wanted to do another, with a more even distribution. He did not like the very concept of banks and bankers making a fortune only on the fact that they hold the keys, “Andresen says.

This “key holding” made the first bitcoin owners super-rich. “I made a small investment in bitcoin, and now that’s enough for me to quit if I wanted to,” Andresen says. “In general, I earned about 800 dollars for each invested cent. It’s something incredible. “

One of the first to work with the founder of bitcoin in 2009 was Martti Malmi, a 25-year-old programmer from Helsinki who made an investment in bitcoin. “I sold them in 2011 and bought a good apartment,” he says. “Today I could already buy 100 good apartments.”

Communication with the founder of the bitcoins became more and more rare in early 2011. Nakamoto stopped making changes to the bitcoin code and ignored discussions on the bitcoin-forum.

Nevertheless, Andresen was not ready for Satoshi Nakamoto’s reaction to their correspondence on April 26, 2011.

“I would not want you to continue to talk about me as a mysterious dark person,” Nakamoto Andresen wrote. “The press uses this as another sign of the pirate currency. Perhaps, on the contrary, make the project open source and trust the developers more, this will help them to motivate. “

Andresen answered: “Yes, I also do not like this tone -” stupid pirate money “”.

Then he wrote to Nakamoto that he accepted an invitation to a meeting at the headquarters of the Central Intelligence Agency. “I hope that having talked to them directly and, more importantly, having listened to their questions and concerns, it will be possible to convince them that I’m thinking about bitcoin – it’s just-more-good, more effective, less-influenced-influence- currency policy, “he said. “Not a powerful tool of the black market, which will be used by anarchists to overthrow the system.”

Since that time, Satoshi Nakamoto has stopped responding to emails and has disappeared.

Nakamoto House

The personal life of the creator Bitcoin

The Nakamoto family describes him as a very intelligent person with a changeable mood, overly secretive, laconic. He always hides his data on phone calls, sends emails anonymously, and most of his life was troubled by two things, because of which bitcoin won his fame: money and secrecy.

Over the past 40 years, Satoshi Nakamoto has not used his real name in everyday life. At the age of 23, after graduating from the Polytechnic University of California, he changed his name to “Dorian Prentice Satoshi Nakamoto,” according to the 1973 documents in the Los Angeles District Court. Since then, he did not use the name Satoshi, and instead signed “Dorian S. Nakamoto.”

Son of a Buddhist monk from the Samurai family, Nakamoto was born in 1949 in the city of Beppu, Japan. There his mother, Akiko, brought him up in poverty in Buddhist traditions. In 1959, after a divorce and remarriage, she immigrated to California, taking with her three sons. Now, at 93, she lives with Nakamoto in Temple City.

“Nakamoto did not get along well with his stepfather, and his inclinations to mathematics and science were obvious at an early age,” says Arthur, and notes: “He is changeable, and he has very strange passions.”

Immediately after graduating from college, Nakamoto went to work for Hughes Aircraft in southern California and dealt with defense and electronic communications. “It was just the beginning,” says Arthur, who also worked for Hughes. “He’s the only person I’ve ever known, who came to the interview and told the employer that he’s an idiot, and then proved it.”

Nakamoto has six children. The first – the son of the first marriage in the 80’s – Eric Nakamoto, animator and 3D-designer, lives in Philadelphia. The other five children are from his second wife, Grace Mitchell. She is now 56 years old, she lives in Audubon, New Jersey, and tells that she met Nakamoto at the Unitarian Church in Cherry Hill, New Jersey, in the mid-80s. She recalls that he came to the East Coast after he left Hughes Aircraft (now with Raytheon), he was 20 and started working as a systems engineer at Radio Corporation of America in Camden, New Jersey.

“We worked on electronic means of defense and communications for military, government aircraft and warships, but it was classified and I can not talk about it,” confirms David Micha, president of the company, now called L-3 Communications.

Mitchell says her husband “rarely spoke about his work” and sometimes engaged in military projects in addition to working for RCA. In 1987, the couple returned to California, where Nakamoto worked as a systems engineer for communications and technology companies in the suburbs of Los Angeles, including the financial information service Quotron Systems Inc., sold in 1994 to Reuters, and Nortel Networks.

Nakamoto was twice fired in the 90s, according to Mitchell, he could not pay for the mortgage and taxes, and they were deprived of the right to use the house. This experience, says Nakamoto’s eldest daughter, 26-year-old Ilan Mitchell, could affect her father’s attitude toward banks and the government.

The libertarian Nakamoto urged his daughter to be independent, to start a business and “not to be under the hood of the government,” she says. “He was wary of the government, taxes and people in the posts.”

She also describes her father as a man who worked around the clock – started earlier than the family woke up, and worked until late at night. “His office was always closed, and we would be horrified if we touched his computer,” she recalls. “He constantly talked about politics and current events. He liked old and modern technology. He made his own computers and was very proud of them. “

Around 2000, Nakamoto and Grace broke up, although they did not divorce. They returned to New Jersey with five children, and Nakamoto worked as a software engineer at the Federal Aviation Administration in New Jersey on the eve of the Sept. 11 attacks, engaged in security and communications issues, Mitchell said.

“It was top-secret,” she says. “He left that job in 2001 and I think he has not had a permanent job since then.”

When the contract with the Federal Aviation Administration ended, Nakamoto returned to Temple City, and until the end of that decade, it was completely unclear what he was doing.

Circumstantial evidence

Since bitcoin got famous, the real hunt for the real Satoshi Nakamoto began. Did he work alone or-on the government? Bitcoin was associated with everything from the National Security Agency to the International Monetary Fund.

In a world where almost every major innovation in the Silicon Valley turns into litigation over who invented it first, the founder of Bitcoin eloquently remains silent for the past five years.

“I can fully imagine that my father is doing something incredible and does not take the resulting effect,” says Ilene Mitchell, who works for Partnerships for Student Achievement in Beaverton, Oregon. “But I can not imagine that he will honestly tell about it. Any normal person would tell without end. But he is definitely not a normal person. “

Nakamoto’s middle brother, Tokuo Nakamoto, who lives near his brother and mother, in Duarte, California, agrees. “He is very scrupulous about everything he does, but he is very afraid to open up to the media, so you’ll have to excuse him,” he says.

The characteristics of Satoshi Nakamoto, the founder of bitcoin, which coincide with the characteristics of Dorian S. Nakamoto, are very numerous. Those who most closely communicated with the founder of bitcoin, note: he seemed older than other developers. And he worked alone.

“He did not seem to be a young man, and he felt the influence of many people from the Silicon Valley,” says Nakamoto, the Finnish protege, Martti Malmi. Andresen agrees: “The style of writing Satoshi’s code was old-fashioned. He used things like a reverse, non-skewed recording. “

In addition, the code was not always absolutely accurate – another sign that Nakamoto did not work in the team, because otherwise the other developers would clean up the code and bring it to perfection.

“Everyone who saw his code was pretty sure that it was one person,” Andresen says. “We rewrote almost 70 percent of the initial code. Interfaces were not very. It was like one big hair ball. On the lower levels, it was incredibly well-written code, but where the functions converged, everything was pretty confusing. “

The 2008 proposal of Satoshi Nakamoto also gives hints of his age: incomprehensible references to “disk space”, which has ceased to be a problem in the new millennium, and references to studies of “contemporaries”, dated 1957.

The bitcoin code is based on a network protocol that has existed for decades. Its charm is not so much in the code itself, says Andresen, but in a design that combines functions to achieve different goals. The punctuation in the sentence is also consistent with how Dorian S. Nakamoto writes – with double spaces after the point and other formatted quirks.

There is also debate about whether Nakamoto is writing a freakish “flawless English” for a Japanese, or – others assure – no matter what name he writes, he confuses capital and capital letters, full spelling and abbreviations, artistic English and slang.

In correspondence and written documents, it has been repeatedly observed that Satoshi Nakamoto uses both the British and American writing methods – and, depending on the audience, opts for abbreviations or a more formal, polished style. Grace Mitchell says her husband does exactly the same.

The use of English by Dorian S. Nakamoto, she says, was apparently influenced by his fascination with collecting train models, many of which he ordered in England as a teenager studying English.

Mitchell believes that Nakamoto’s initial interest in creating a digital currency that can be used around the world appeared because of his dissatisfaction with the bank charges and the high exchange rates he faced, making an international transfer of funds to England for the purchase of train models. “He constantly complained about it,” she says. “I would not say that he has perfect English. He picks up the words and confuses the spelling. “

Eric, the eldest son of Nakamoto from his first marriage, says that he is still not sure whether his father is the founder of Bitcoin. He notes that the latter’s reports are more “laconic” and “refined” than his father’s.

Perhaps the most important parallel between the two Nakamoto is their professional experience and career milestones. Andresen says that Nakamoto told him how much time was spent working on bitcoin – a gap that just fits into the troubled unemployed period of Dorian S. Nakamoto in 2001. “Satoshi said that he worked on bitcoin for several years before launching it,” Andresen says. “I saw the source code, the writing of which clearly took at least two years. He had an insight – he decided what no one had before could not decide. “

The three-year silence of Satoshi Nakamoto also coincides with Dorian S. Nakamoto’s medical problems in the last few years, according to his family. “It was tough, he suffered a stroke a few months ago, before he had prostate cancer,” says his wife, who works as a nurse in the Intensive Care Unit in New Jersey. “He has not even seen children for several years.”

She could not convince Nakamoto to talk to her about whether he founded bitcoin. Eric Nakamoto also says that his father refused to talk. Tokuo and Arthur Nakamoto are confident that their brother will leave the truth in secret.

“Dorian can be paranoid,” says Tokuo. “I can not get through to him. I do not think he will answer honestly to his family about all these questions. “

Of course, there was no answer to the biggest question, one that Satoshi Nakamoto himself can answer: why did not he spend the hundreds of millions of dollars he earned after the launch of the bitcoins several years ago? According to his family, both he and the family really needed money.

Andresen says that the reason for the preservation of Nakamoto’s anonymity can be very simple: he does not want to participate in the general madness around the bitcoins. “If you appear as the leader of Bitcoin, you will have to endlessly make presentations and give comments to the press, and this does not fit into the type of Satoshi’s personality.” “He really did not want to lead it any more. He was very intolerant of incompetence. And he understood that the project would be developed without it. “

On the other hand, perhaps Nakamoto simply lost his security keys to cash his wealth. Andresen, however, strongly doubts this. “To do this, he was too disciplined,” he says.

If Nakamoto ever decides to sell his state of bitcoins, he will have to do it through a functioning bitcoin-bank or an exchanger that will not only disclose his identity, but also inform everyone, from the CIA to the FBI, about his actions. While bitcoin allows its users to conduct transactions anonymously, all transactions exist in public access – and everyone follows Nakamoto’s bitcoins to see if he has spent them, says Andresen.

In turn, Andresen says he respects Nakamoto’s right to anonymity. “When programmers get together, we do not discuss who Satoshi Nakamoto is. We’re talking about what else we can do for bitcoin. That is, we are, of course, interested, but, by and large, we do not care. “

Reflecting on the fact that her father could have been the founder of the “miracle” of the bekos, Ilene Mitchell says that she is not surprised that her father chose to stay in the shadows, especially given the health problems.

“He is generally very concerned about government interference,” she says. “When I was little, we often played one game. He said: “Imagine that government agents are following you.” And I was hiding in the closet. “

This material is a translation of Leah Goodman’s original article ” The Face Behind Bitcoin ” in the journal Newsweek.

 

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