FACE VALUE
Has the man behind Bitcoin been unmasked
BITCOIN, perhaps the biggest unimportant business story of the past few years, is causing waves around the world for all the wrong reasons.
The virtual currency has been all the rage in the business press for months, sparking fears of a “Bitcoin bubble” as the value soared to giddying levels.
On South Africa’s Cape Townbased Bitcoin exchange, BitX, the digital currency can now be bought for around R7 050 a coin, a spectacular rise from the R140 it was trading at early last year.
When it launched in 2009, Bitcoins could be bought for just a few cents, but now it is estimated that Bitcoins worth about R70-billion are in “circulation” and are accepted to buy goods from many digital merchants, as well as a few “real world” shops.
However, Bitcoin has also found itself mired in scandals. The anonymity of the digital currency means it can be used to facilitate money laundering and payments for drug trafficking.
Since the start, journalists, bloggers and others have tried to identify the computer coder who wrote the initial paper on Bitcoin’s framework and created the software that serves as its backbone. The initial document carried the name of Satoshi Nakamoto, and since the author chose to remain anonymous it was assumed this name was a pseudonym.
This week, US-based magazine Newsweek, in its first printed edition after two years of publishing online, claimed to have identified the creator of the currency, a 64-year-old Japanese American physicist.
But the man, whose real name is Dorian Prentice Satoshi Nakamoto, denied this, telling reporters outside his modest Los Angeles home: “I’m not involved in Bitcoin.”
He told Associated Press that the first time he heard of Bitcoin was when his son told him he had been contacted by a Newsweek reporter.
Nakamoto said he then phoned police when the magazine’s reporter knocked on his door. While acknowledging that some of the biographical details in the Newsweek report were true, Nakamoto denied its claim that he was “the face behind Bitcoin”.
Newsweek said it stood by its story. The Bitcoin Foundation, which supports the development of the currency, would not confirm the report. Newsweek said Nakamoto was born in Japan in 1949, and migrated to the US when he was 10. He studied physics at California State Polytechnic University, and worked for a number of companies, but had apparently not held a steady job since 2002.
Newsweek said he spent much of his time on his model train hobby, and had apparently not tapped into the millions of dollars of Bitcoin wealth that Newsweek said came from authoring the code behind it.
His family said they had no knowledge of his alleged link to Bitcoin.
“He’s a brilliant man,” said his brother Arthur Nakamoto. “You name it, he can do it.” The family said he was intensely private and distrustful of the government and banks.
The 2008 Bitcoin manifesto stressed the need for an online, electronic cash system that did not go through a financial institution, which required both trust in the institution and payment for its role as an intermediary.
Analysts have called the structure brilliant in the way it issued Bitcoins without a central bank authority.
Gavin Andresen, chief scientist of the Bitcoin Foundation, said he corresponded online with a man called Satoshi Nakamoto from June 2010 to April 2011 as they refined the code.
But they never spoke on the telephone, and Andresen did not learn anything about his personal life. — AFP and Bloomberg