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The Bitcoin Community

The Disappearance of Satoshi

The History of Bitcoin's Creation

The Disappearance of Satoshi

  • The Challenge to the Founder's Status
  • The WikiLeaks Affair
  • The Abrupt Departure of Satoshi
  • The Handover of Access and Last Emails
  • The CIA, WikiLeaks, and the EFF
  • The Satoshi Mystery
We saw how Bitcoin took flight following the publication of the text on Slashdot in July 2010. With various advancements in software, mining, and the economy in the fall, the project was finally on the right track. That's why this period coincided with Satoshi Nakamoto's gradual withdrawal.
The departure of Bitcoin's creator was precipitated by two reasons: on one hand, a growing challenge to his status, calling for more decentralized and consensual management; on the other hand, his almost paranoid fear of state authorities. This latter motivation was notably expressed in December 2010 in the context of the financial blockade of WikiLeaks, which could no longer receive funds through traditional means and for whom Bitcoin provided a relevant alternative means. In this chapter, we will describe in detail the unfolding of this disappearance.

The Challenge to the Founder's Status

From the second half of 2010, the development community gathered on the #bitcoin-dev channel, whose logs are published on Christian Decker's site, Bitcoin Stats. This channel was the ideal place for those most comfortable with the technical aspects to exchange details about Bitcoin and discuss in a more informal manner. It brought together specialized miners (such as ArtForz, Diablo-D3, knightmb, or Nils Schneider), developers interested in the protocol (such as Gavin Andresen, Jeff Garzik, or Wladimir van der Laan), or people maintaining services on Bitcoin (like Jed McCaleb, Michael Marquardt, or nanotube).
Satoshi Nakamoto, however, was never connected to it, so speech there was more liberated than on the forum. It often happened that Satoshi's development decisions were questioned or even that his status in relation to Bitcoin was criticized. Satoshi is indeed the designated leader of the project, what is known in the open-source software world as a "Benevolent Dictator for Life." His role is to ensure the stability of open development by making decisions for everyone, which limits the risk of rebellion and division. As explained by Gavin Andresen, he is the "gatekeeper": "all code goes through him."
However, the source code of Bitcoin remains free, so anyone can copy and modify it, which prevents the evolution of the protocol from being completely arbitrary. As expressed by Jeff Garzik on November 19:
"Satoshi came up with magic numbers out of thin air, and we collectively support that direction. [...] The minute Satoshi does something crazy that is not supported by the community is the moment the protocol/codebase is truly forked."
Thus, Satoshi's leadership role does not prevent criticism from occurring. This is why tensions gradually appear in the community starting in July. For example, protests emerge on the occasion of the deployment of the alert system in August or the modification of Momchil's getwork function in November. Frustration with this dictatorial decision-making is sometimes expressed much more openly on IRC.
Gavin, who is close to Satoshi but also discusses with other developers, clearly sees the problem posed by this situation. On September 27, 2010, on IRC, Gavin declares that he would like "to be able to convince [Satoshi] to switch to a more collaborative development model." (original: "I just wish I could convince him to switch to a more collaborative development model.") In October, Gavin obtains write access to the SourceForge repository, improving things. In December, the problem was resolved with Satoshi's sudden withdrawal following the explosion of the WikiLeaks affair.

The WikiLeaks Affair

The triggering event for Satoshi's departure is the WikiLeaks affair. WikiLeaks is a non-governmental organization founded by cypherpunk Julian Assange in 2006, aiming to give a voice to whistleblowers and information leaks while protecting their sources. During the year 2010, the confidential documents revealed by the NGO were relayed by major media and caused a stir in public opinion. These concerns, in particular, the excessive actions of the American military, such as civilian casualties and acts of torture committed, in Afghanistan (Afghan War Diary) and Iraq (Iraq War Logs).
WikiLeaks' funding relies essentially on public donations, so the organization depends on payment processors to receive online payments. However, following these revelations, pressure is put on these third parties who fear the regulator's reaction. This is why the online payment company Moneybookers freezes the NGO's account on October 14.
This situation opens a royal path for using Bitcoin, which does not rely on any trusted third party and would resist financial censorship much better. In November, Amir Taaki, a 22-year-old British-Iranian using the pseudonym genjix, opened the hypothesis on the forum.
Amir Taaki in December 2012 in Bratislava (source: Mitch Altman)
Hacker, anarchist, and poker player, he recently learned about Satoshi Nakamoto's model. He sees in WikiLeaks' situation an opportunity to demonstrate the utility of Bitcoin. On November 10, he writes the following message on the forum:
"I wanted to send a letter to Wikileaks about Bitcoin since unfortunately they've had several incidents where their funds have been seized in the past. [...] Anyone know where to send a message to them?"
The reactions to this proposal are mixed. According to one user (ShadowOfHarbringer), "this may be good for wikileaks, but not necessarily good for Bitcoin." Another (creighto) writes that "the later the better. The longer that governments wait to act, the stronger the bitcoin network grows, and the harder it becomes to harm it."
A few weeks later, on December 3, PayPal decides to freeze WikiLeaks' account and publishes a statement overnight. The next morning, developer Wladimir van der Laan relays this news on the forum:
"Paypal just blocked them, and they're trying to get other US banks to do the same. This would be a great moment to open bitcoin donations." This evolution of the situation intensifies the debate. One individual is particularly in favor of WikiLeaks' acceptance of Bitcoin: Robert S. Horning, a computer engineer living in Utah, who is a blogger and contributor to Wikipedia, and who discovered Bitcoin following the slashdotting in July. On that day, he wrote a lengthy text explaining that supporting WikiLeaks is morally right and that the state will hear about Bitcoin sooner or later anyway. He concludes: "Basically, bring it on. Let's encourage Wikileaks to use Bitcoins and I'm willing to face any risk or fallout from that act."

The Abrupt Departure of Satoshi

Satoshi does not share Robert Horning's view and opposes promoting Bitcoin to WikiLeaks. As his words and actions attest, he exercises great caution concerning state authorities, sometimes bordering on paranoia. Consequently, on December 5th, he reacts to this fervor by responding sharply to the main promoter:
"No, don't 'bring it on'. The project needs to grow gradually so the software can be strengthened along the way. I make this appeal to WikiLeaks not to try to use Bitcoin. Bitcoin is a small beta community in its infancy. You would not stand to get more than pocket change, and the heat you would bring would likely destroy us at this stage."
In the days that follow, a real financial blockade is organized against WikiLeaks, involving Mastercard and Visa, but also Western Union, Bank of America, and other actors, which jeopardizes the financial survival of the NGO. This offensive makes accepting bitcoin even more relevant, and the idea naturally spreads.
On December 11, an article highlighting the possibility of Bitcoin being used by WikiLeaks was published on PC World, one of the largest American websites dedicated to computing. This text, written by journalist Keir Thomas, is titled "Could the Wikileaks Scandal Lead to New Virtual Currency?". Pandora's box is opened: the PC World article will be read by many people, including likely the officials of WikiLeaks, pushing the NGO to consider this means of payment. The article is quickly mentioned on the forum, and the reaction of Bitcoin's creator is unequivocal. He writes:
"It would have been nice to get this attention in any other context. WikiLeaks has kicked the hornet's nest, and the swarm is headed towards us."
The next day, Satoshi publishes his last public message on the forum, announcing the release of a new version of the software (v0.3.19) that notably improves the management of denial-of-service attacks. Then, he withdraws from the limelight, only communicating privately with his closest collaborators.
In the days that followed, the article published on PC World had its effect. On December 14, Satoshi's invention is mentioned by the Electronic Frontier Foundation in a text regarding the censorship of WikiLeaks (later, the organization will describe Bitcoin as a "censorship-resistant digital currency"). On the 23rd, the cryptocurrency is mentioned on the Keiser Report, a financial show hosted by Max Keiser and Stacy Herbert on the Russian channel RT, again in the context of WikiLeaks. This media coverage significantly increases the attention paid to Bitcoin, confirming Satoshi's fears.

The Handover of Access and Last Emails

From the beginning of December, Satoshi began organizing his succession. Since he planned to leave, or at least step back, he needed to transfer various responsibilities to people he trusted, specifically Martti Malmi and Gavin Andresen. However, he never explicitly stated his intention to them.
First, he wanted to add their email addresses to the contact page of the site. On December 7, he sent an email to Martti asking if he could "add him to the list of project developers on the contact page," a request the young Finn accepted. The creator of Bitcoin made the same request to Gavin, who also accepted. Satoshi added their addresses to the page and removed his own. Gavin would say a few years later:
"[Satoshi] ended up pulling a fast one on me by asking if he could put my email address on the bitcoin homepage, and I said yes, not realizing that when he put my email address there, he'd take his away."
But that wasn't all. Satoshi also wanted to transfer his control over the software to Gavin Andresen. Gavin, who had already been granted write access to the repository on SourceForge in October, became the main maintainer of the repository. On December 19, he created the repository on GitHub, likely feeling more comfortable with Git. On the same day, he wrote a lengthy message on the forum explaining that he would become more involved in development. He announced:
"With Satoshi's blessing, and with great reluctance, I'm going to start doing more active project management for bitcoin."
Satoshi transferred control of the website, forum, and wiki to Martti, who was already co-managing these elements. Then, in the spring of 2011, he definitively vanished. Among the last people to communicate with Satoshi was also Mike Hearn, the Google engineer who had approached him two years earlier. Hearn re-established contact with the creator of Bitcoin in December 2010 to ask him more technical questions. He was working on a "Java implementation of simplified payment verification, with an eye to building a client that runs on Android phones." (original: "I have been working on a Java implementation of the simplified payment verification, with an eye to building a client that runs on Android phones.") The two men exchanged messages until April 23. In his last email to Mike Hearn, Satoshi declared that he had "moved on to other things" and that Bitcoin was "in good hands with Gavin and the others." (original: "I've moved on to other things. It's in good hands with Gavin and everyone.").
On April 26, 2011, Satoshi sent a final message via email to Gavin, in which he wrote:
"I wish you wouldn't keep talking about me as a mysterious shadowy figure, the press just turns that into a pirate currency angle. Maybe instead make it about the open source project and give more credit to your dev contributors; it helps motivate them."
Here, Satoshi was referring to an article by Andy Greenberg published on Forbes' website a few days earlier, in which he was presented as "a mysterious, privacy-obsessed figure" (original: "a mysterious, privacy-obsessed figure") and where Bitcoin was highlighted as a means of procuring illegal drugs (indeed, this was the period when the Silk Road platform began to gain success). In his email to Gavin, Satoshi also attached the alert key, which could be used to warn the network of technical issues.
Finally, in early May, he also said his goodbyes to Martti. His last words to his first right-hand man were:
"I've moved to other things and probably won't be around in the future." Digital Gold p. 81

The CIA, WikiLeaks, and the EFF

On April 26, 2011, Gavin Andresen sent a final email to Satoshi Nakamoto, which the latter did not respond to. In this email, he indicated that he had been invited by In-Q-Tel, an American venture capital fund managed by the CIA, to present Bitcoin. He was very aware of the type of reaction this visit would generate, but decided to go anyway. He justified his decision by writing to Satoshi:
"I hope that by talking directly to 'them' and, more importantly, listening to their questions/concerns, they will think of Bitcoin the way I do– as a just-plain-better, more efficient, less-subject-to-political-whims money. Not as an all-powerful black-market tool that will be used by anarchists to overthrow The System."
The next day, Gavin announced the news on the forum in full transparency. He specified that he had been paid $3,000 for this trip. However, this did not move the community, which understood his approach, even if mistrust was warranted. Gavin's visit to the CIA headquarters took place on June 14.
Symbolically, June 14 is also the date WikiLeaks began accepting bitcoin donations. This news was reported on the Forbes website.
Paradoxically, this news partially pushed back the existing adoption of an organization: the Electronic Frontier Foundation. On June 20, the EFF announced indeed abandoning bitcoin donations, due to the legal complexities this acceptance entailed. It returned the received bitcoins to Gavin Andresen's bitcoin faucet. Thus, Bitcoin gained one organization at the expense of another.

The Satoshi Mystery

Thus, Satoshi's disappearance occurred abruptly following the community's growth after the slashdotting and, most importantly, due to the WikiLeaks affair. The creator of Bitcoin handed over the reins of the project to Martti Malmi and Gavin Andresen, the two men who supported him in his development and communication efforts.
What became of him afterwards remains unknown. A few messages have emerged from his various accounts (P2P Foundation, Vistomail), but these accounts were likely hacked. Therefore, Satoshi Nakamoto's identity remains unknown, having managed to maintain his anonymity through Tor and privacy-respecting services.
Over the years, clues about him have been provided, and names of well-known personalities such as Nick Szabo, Hal Finney, Adam Back, or Len Sassaman have been mentioned. In 2014, it was even believed that he had been found in the person of Dorian Prentice Satoshi Nakamoto, a telecommunications engineer, a naturalized American citizen of Japanese origin, living with his mother in Temple City in the suburbs of Los Angeles. However, Satoshi remains a mystery.
This mysterious aspect surrounding the creator of Bitcoin was well summarized by Hal Finney in June 2013, who, in one of his last messages on the forum before he died in 2014, shared a quote from the newly released Man of Steel movie:
"How do you find someone who has spent a lifetime covering his tracks? For some, he was a guardian angel. For others, [an enigma,] a ghost, always somewhat apart. What does the S stand for?"
Quiz
Quiz1/5
Who suggested contacting the organization WikiLeaks to encourage them to accept bitcoin in November 2010?