The strange story of Hal Finney and Dorian Nakamoto, Part 1

Aug

The strange story of Hal Finney and Dorian Nakamoto, Part 1

#Bitcoin, #Blockchain, #Crypto, #Cryptocurrency

News

Dorian Satoshi Nakamoto, the man who definitely wasn’t Bitcoin’s creator, lived just a mile away from someone who could have been. Coincidence?

Hal Finney was a giant in the Bitcoin scene. He was a prominent cypherpunk who worked on landmark privacy projects, including PGP and anonymous remailers. He was one of just a handful of people to reply positively to Satoshi Nakamoto’s early posts on the Cryptography Mailing list, announcing his ideas about a truly peer-to-peer electronic currency; most members simply dismissed it without much thought. He corresponded with Satoshi, helped him refine the idea, mined a few bitcoins and then drifted away from the project. He came back later, in 2010, sharing ideas on the bitcointalk forum. By this stage, he was suffering from Lou Gehrig’s disease, and died in 2015.

Could Hal have actually been Satoshi? It sounds possible: he’s one of very few people in the world with the right background, interests and expertise. However, it seems unlikely. He was actually less involved than most people assume. And apart from anything else, Hal specifically said he wasn’t Satoshi. You can read his thoughts about Bitcoin and Satoshi on bitcointalk:

When Satoshi announced Bitcoin on the cryptography mailing list, he got a skeptical reception at best. Cryptographers have seen too many grand schemes by clueless noobs. They tend to have a knee jerk reaction.

I was more positive. I had long been interested in cryptographic payment schemes. Plus I was lucky enough to meet and extensively correspond with both Wei Dai and Nick Szabo, generally acknowledged to have created ideas that would be realized with Bitcoin. I had made an attempt to create my own proof of work based currency, called RPOW. So I found Bitcoin fascinating.

When Satoshi announced the first release of the software, I grabbed it right away. I think I was the first person besides Satoshi to run bitcoin. I mined block 70-something, and I was the recipient of the first bitcoin transaction, when Satoshi sent ten coins to me as a test. I carried on an email conversation with Satoshi over the next few days, mostly me reporting bugs and him fixing them.

Today, Satoshi’s true identity has become a mystery. But at the time, I thought I was dealing with a young man of Japanese ancestry who was very smart and sincere. I’ve had the good fortune to know many brilliant people over the course of my life, so I recognize the signs.

After a few days, bitcoin was running pretty stably, so I left it running. Those were the days when difficulty was 1, and you could find blocks with a CPU, not even a GPU. I mined several blocks over the next days. But I turned it off because it made my computer run hot, and the fan noise bothered me. In retrospect, I wish I had kept it up longer, but on the other hand I was extraordinarily lucky to be there at the beginning. It’s one of those glass half full half empty things.

The next I heard of Bitcoin was late 2010, when I was surprised to find that it was not only still going, bitcoins actually had monetary value. I dusted off my old wallet, and was relieved to discover that my bitcoins were still there. As the price climbed up to real money, I transferred the coins into an offline wallet, where hopefully they’ll be worth something to my heirs.

So what about Dorian?

Hal had a reputation for honesty and integrity, and we have to assume he wasn’t lying – or laying an elaborate trail of false evidence to put people off the fact he was Satoshi. But there’s another curious twist to this tale.

Back in 2014, Newsweek outed a man called Dorian Satoshi Nakamoto as the creator of Bitcoin. Dorian was an unemployed 64-year-old Japanese-American engineer. Leah McGrath Goodman, who had (poorly) researched and written the article, based much of her belief on the fact that he had the right name. The rest was fanciful or ridiculous – like this: ‘[Dorian’s wife] Mitchell suspects Nakamoto’s initial interest in creating a digital currency that could be used anywhere in the world may have stemmed from his frustration with bank fees and high exchange rates when he was sending international wires to England to buy model trains. “He would always complain about that,” she says.’

The story unravelled fast, and Goodman was left looking stupid to say the least. But there was one bizarre coincidence. Dorian lived just two blocks away from Hal Finney. Finney had been involved at the start of Bitcoin. Was that really a coincidence?

CoinTelegraph made much of the fact it was not. ‘A man with such a unique name living so close? I don’t think so.’ A reddit post made an intriguing argument: ‘I think he [Dorian] is the real person after whom the Satoshi persona was named. The coincidence of having a Satoshi Nakamoto living 2 blocks away from Hal Finney’s home is just too improbable to be ignored. Hal and his cypherpunk counterparts intended for this old friendly retired man whose house had been foreclosed by banksters to be the symbolic figure behind the financial renaissance on behalf of all the victims of the modern financial system. Satoshi is Dorian and I think it’s just fine that way.’

It does sound too improbable to be a coincidence. In the second part of this article, though, we’ll explore that idea further – because the reality is, there’s actually a pretty good explanation.