Satoshi Nakamoto and the Origins of Bitcoin

Who is Satoshi Nakamoto? Satoshi Nakamoto is the pseudonym of the person or group who invented Bitcoin. Satoshi published the whitepaper on Oct 31, 2008, and the network started on Jan 3, 2009. In April 2011 Satoshi disappeared. Who is behind the name is still unknown today. For Bitcoin itself, it no longer matters.

When you buy bitcoin, you trust a system whose inventor nobody knows. At first that sounds unsettling. Who came up with this, and can that person change everything tomorrow? This article tells how Satoshi Nakamoto built Bitcoin, what we know about Satoshi for certain and why the open question of the name does not put your bitcoin at risk. What Bitcoin is in the first place is explained in the beginner's guide What is Bitcoin?.

Who is Satoshi Nakamoto?

All we know for certain is what Satoshi wrote and programmed:

• the whitepaper, nine pages describing Bitcoin,
• the first Bitcoin software, version 0.1 from January 2009,
• hundreds of posts and emails on mailing lists and in the Bitcointalk forum, from 2008 to 2011.

In a profile at the P2P Foundation, Satoshi claimed to be a man from Japan born in 1975. None of it is proven. Satoshi wrote fluent English, often with British spelling, and never in Japanese. Even whether Satoshi was one person or a group is open. For simplicity this article says "he", as Satoshi described himself.

The smallest unit of bitcoin bears Satoshi's name: 1 bitcoin = 100 million satoshis, sats for short. Why that means you don't need a whole bitcoin is explained in Sats explained. Satoshi himself never called them that. The community named them after him later.

The prehistory: digital money before Bitcoin

Satoshi did not invent Bitcoin out of nothing. Cryptographers had been trying to build digital cash since the 1980s. Each attempt solved part of the problem:

The unsolved problem was called double spending: a file can be copied at will. How do you stop someone from spending the same digital coin twice without a bank keeping the books? Every solution before Bitcoin needed a central authority in the end. And central authorities could be shut down, as DigiCash and e-gold showed.

Satoshi recombined the building blocks: computing work as in Hashcash, a public chain of time-stamped blocks, and rules every participant checks for themselves. Hashcash and b-money even appear in the whitepaper's references. How the chain works in detail is explained in Bitcoin mining explained.

The 2008 Bitcoin whitepaper

On Aug 18, 2008, the domain bitcoin.org was registered. On Sep 15, 2008, the US bank Lehman Brothers went bust and the financial crisis reached its peak. On Oct 31, 2008, Satoshi wrote to a mailing list on cryptography:

"I've been working on a new electronic cash system that's fully peer-to-peer, with no trusted third party."

Attached was the link to the whitepaper "Bitcoin: A Peer-to-Peer Electronic Cash System". Its first sentence sums up the whole idea: payments should go directly from one person to another, without a financial institution in between.

The reactions on the list were sceptical. The system wouldn't scale, people said, and governments would ban it. Satoshi replied patiently and wrote in November 2008 that he had worked through the details over the past year and a half while writing the code. On the subject of bans:

"Governments are good at cutting off the heads of a centrally controlled networks like Napster, but pure P2P networks like Gnutella and Tor seem to be holding their own."

That is exactly why Bitcoin has no head. Whether states can ban bitcoin today is examined in Can bitcoin be banned?.

The start: genesis block and first payment

On Jan 3, 2009, Satoshi created the first block, the genesis block. Into it he wrote a headline from the London newspaper The Times of the same day:

"The Times 03/Jan/2009 Chancellor on brink of second bailout for banks"

The line proves that the block cannot have been created before that day. And it shows what Bitcoin was meant to counter. Incidentally, nobody can spend the 50 bitcoin from the genesis block, not even Satoshi. That is due to a quirk in the code.

On Jan 9, 2009, Satoshi released the Bitcoin v0.1 software. One of the first to run it was the cryptographer Hal Finney. On Jan 11 he tweeted just two words: "Running bitcoin". On Jan 12, 2009, Satoshi sent him 10 bitcoin, in block 170. That was the first person-to-person payment in Bitcoin's history.

A month later, Satoshi explained in a forum why he had built Bitcoin:

"The root problem with conventional currency is all the trust that's required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust."

What this trust looks like in today's monetary system is explained in The fiat money system explained simply.

The years with Satoshi: 2009 to 2011

In the first year, Satoshi was almost alone. He mined most of the blocks, answered questions and improved the code. Bitcoin had no price. Those who took part did so out of curiosity. In January 2009 Satoshi wrote that it might make sense to get some coins "in case it catches on".

In October 2009, the site New Liberty Standard published the first price. It derived it from the electricity cost of mining: 1’309.03 bitcoin for one dollar. In May 2010, programmer Laszlo Hanyecz paid for two pizzas with 10’000 bitcoin, about $41 at the time. Bitcoiners still celebrate May 22 as Pizza Day.

In August 2010, someone exploited a bug in the code and created 184 billion bitcoin out of thin air. Satoshi delivered a corrected version within a few hours, the nodes adopted it, and the false chain was discarded. How Bitcoin has protected its cap ever since is in Why there are only 21 million bitcoin.

In late 2010, users wanted WikiLeaks to accept donations in bitcoin after banks and credit card companies had blocked its payments. Satoshi explicitly asked them not to: the young project would not survive the attention. A week later, on Dec 12, 2010, he wrote his last forum post.

Why did Satoshi disappear?

In April 2011, Satoshi wrote to developer Mike Hearn: "I've moved on to other things. It's in good hands with Gavin and everyone." Gavin Andresen had already taken over leadership of the software at the end of 2010. After that, nothing more came from Satoshi.

Nobody knows the reasons. Satoshi never explained them. What is clear is what the disappearance achieved:

• No head to cut off. A known founder can be arrested, blackmailed or sued. With Bitcoin there is no one a state could turn to.
• No authority. Had Satoshi carried on, his word would have carried more weight than any argument in every dispute. As it is, every change has to convince the nodes, not a founder.
• No selling pressure. Satoshi's coins have lain still for over 15 years. An inventor who kept selling would have damaged trust in Bitcoin.

The Satoshi coins: about 1.1 million bitcoin

Who owns the blocks from the early days? In 2013, researcher Sergio Demian Lerner found a pattern in the data of the first blocks, the "Patoshi pattern". According to it, a single miner mined a large share of the blocks in 2009 and 2010, and everything suggests it was Satoshi. The estimate: about 1.1 million bitcoin. These coins have never moved.

What would happen if these coins suddenly moved? In the short term, probably great unrest in the market, because nobody would know whether Satoshi was selling or someone had stolen the keys. Nothing about Bitcoin's rules would change. The coins sit on very old addresses that would be the first to be threatened by a future quantum computer. What that means is explained in Quantum computers and bitcoin.

Who could Satoshi Nakamoto be?

Over the years many names have been put forward. None is proven:

• Hal Finney (1956–2014): cryptographer, first recipient of a bitcoin payment, inventor of RPOW. He denied it until his death. Emails between him and Satoshi point to two different people.
• Nick Szabo: inventor of Bit Gold, which closely resembles Bitcoin. He denies it.
• Adam Back: inventor of Hashcash, one of the first people Satoshi wrote to in 2008. He denies it.
• Dorian Nakamoto: an engineer from California whom the US magazine Newsweek presented as Satoshi in March 2014. He apparently knew hardly anything about Bitcoin. The story is considered debunked.
• Craig Wright: the Australian claimed from 2016 to be Satoshi and sued other developers. In March 2024 the High Court in London ruled that Wright is not the author of the whitepaper. The court found that he had forged documents.
• Peter Todd: a Canadian Bitcoin developer whom an HBO documentary named as Satoshi in October 2024. He rejects this, and there is no evidence.

Honestly: nobody knows. And that is a good thing. If someone used Satoshi's keys tomorrow, we would only know that this person has the keys, not who invented Bitcoin.

What this means for you as a bitcoin holder

Bitcoin works today without Satoshi, and has for over 15 years. The rules are in software that anyone can read, check and run themselves. No Satoshi, no developer and no company can decide alone that there will be more than 21 million bitcoin or that your coins get frozen. If you want to help check, you can run your own Bitcoin node.

You can take three things from Satoshi's story:

1. Trust rules, not people. That was Satoshi's core idea. It applies to your bitcoin too: hold the keys yourself instead of trusting an exchange. How exchanges have failed before is shown in Crypto exchange collapses.
2. Being early is relative. In 2009, one dollar bought over a thousand bitcoin. Today it is about 1’466 sats. That is a start too: Satoshi made bitcoin divisible so that you never have to buy a whole one.
3. With bitcoin, patience pays; haste rarely does. The inventor's coins have lain still since 2010.

How many sats you get for your amount is shown by the sats calculator:

If you want to understand Bitcoin step by step, start with the first stage of the academy: Basics.