Getting Up to Speed with Bitcoin: What It Is, Why It Matters, and Why It's in the News

If you follow tech news you likely have seen recent stories reporting that the mysterious creator and patron saint of Bitcoin may have finally been unmasked. This person or entity, who went by the name Satoshi Nakamoto, published the initial versions of the Bitcoin code and made a lot of the design decisions that make Bitcoin what it is today.

What is that, anyway?

Bitcoin is a cryptocurrency that uses a blockchain. In English, this means that Bitcoin is a way to exchange value that relies on having everyone who uses it having their computers do difficult work to prove that a transaction occurred. The records of the transactions are all published in a distributed manner that anyone can view at any time. (Try it. This page lets you see who sent money, and to whom, and how much. This single transaction from a couple of months ago is worth approximately $45 million USD with today's exchange rate.)

Bitcoin has no inherent value or fixed exchange rates. Like anything else, a Bitcoin is worth what somebody else is willing to pay for it, and is effectively a currency in its own right. Initial users of Bitcoin didn't know exactly what an interesting platform they would create (or how valuable Bitcoins would become -- one of the first transactions that really established the value of a Bitcoin involved László Hanyecz paying an acquaintance 10,000 Bitcoins for 2 pizzas. If he had those 10,000 Bitcoins today they'd be worth about $4.5 million.)

The platform has even more intrigue because of the radical nature of some of the design decisions that surround it. Every transaction in Bitcoin happens in public and is logged and audited by other participants in the Bitcoin network. There's no Bitcoin Central Bank - Bitcoin transactions are verified by other participants in Bitcoin agreeing that the transaction followed the rules. No other currency has characteristics like this. Additionally, the Bitcoin protocol is extremely advanced, and supports things like verifying that a document existed at a certain time, or creating transactions that only become fulfilled when certain conditions are met -- and these conditions can be enforced through code rather than legal contracts. The Bitcoin system, for better or for worse (and being the Payment Method Preferred by 9/10 Criminals* certainly isn't doing much to help its reputation) has tons of potential, and people want to know who thought up such a groundbreaking idea.

* BTC fans, this is called a 'joke', where I exaggerate a point for comedic effect. That said, ransomware uses BTC pretty much exclusively nowadays...

Which brings us back to... Satoshi Nakamoto

Satoshi Nakamoto is the pseudonym used by whoever made Bitcoin. They're in the news because Craig Wright, an Australian businessman, recently claimed that he is Satoshi Nakamoto. His website currently says that he totally is Satoshi but can't bring himself to prove it. He first made these claims in late 2015, convincing Wired and Gizmodo that he was (either alone or in concert) Satoshi. However, this story didn't break much further than those outlets because there wasn't convincing evidence that this was the case.

On May 2, Craig Wright posted a public message to his blog where he again claimed to be Satoshi Nakamoto. The 'proof' that was provided for this assertion turned out to be false, and so now we're right back where we started with no concrete evidence about who Satoshi Nakamoto is.

What now?

Bitcoin is fascinating to many because of the intrigue surrounding the ecosystem and because of the potential that a widely-used public blockchain system has. It's also fascinating because its origins are shrouded in such mystery. While it would be trivial for the real Satoshi Nakamoto to stand up, I tend to think that there isn't much reason for him (or her, or them) to. Two reasons: First, Satoshi owns a huge chunk of Bitcoin (generally estimated at 1,000,000 BTC) and claiming ownership of that much money paints a pretty target for criminals. Second, a large feature making Bitcoin so powerful is the community. Parts of the community feel that Satoshi 'coming out' would give whoever is able to prove they're Satoshi too much power to influence the future of Bitcoin. 

Bitcoin is amazing because it provides a fast, secure method of exchange, while also providing a puzzle for the ages surrounding the mystery of who Satoshi is. While there's an easy opportunity for someone to prove ownership of the design, possibly the coolest thing about Bitcoin is that it will continue operating and growing whether anyone ever does or not.