Origins of Bitcoin

The massive economic crisis of 2008/2009 had large scale effects all over the world, and in many different economic sectors (though it still doesn’t come close to 2020). But out of this time came the creation of not only the first Cryptocurrency, but also the first blockchain platform for trading it. First gaining exposure in January 2009 at $0 a coin; Bitcoin would go on to gain not only a worldwide following but much more value. As of January 21, 2021, Bitcoin is the most valued crypto currencies with one single “coin” costing around around $36,000. The big question surrounding Bitcoin however, aside from where the price is going, is who really created it? As far as the public knows the whole thing was thought up by a man or group called “Satoshi Nakamoto” and released January 3, 2009. But that’s quite literally, all anyone knows.

Many theories surround the origins; however, a fair few are more conspiracy theories. For instance, the very creator/s Satoshi Nakamoto when translated means “Central intelligence”. This caused many to believe a government agency of made this, with many fingers being pointed at the NSA (US National Security Agency). This theory is supported only by the fact that this method of trading gained a lot of traction on the “Silk Road” (the dark web for criminal transactions). So, if it really was created by a government association such as the NSA, it would allow the government to watch transactions much closer and take away the anonymity of cash payments. However; that theory has a flaw proved by countless criminals. Members of the Silk Road where able to utilize privacy techniques such as the Tor network (free and open-source software for enabling anonymous communication by directing Internet traffic through a free, worldwide, volunteer overlay network consisting of more than seven thousand relays in order to conceal a user's location and usage from anyone conducting network surveillance or traffic analysis) to be able to transact in drugs, hacked passwords, illegal data, and other contraband without any digital footprint. The Silk Road was only recently shut down as well, when in late 2013 the FBI (Federal Bureau of investigation) in collaboration with the DOJ (Department of Justice) gained access and seized more than $100 Million in bitcoin as well as found and arrested the creator Ross William Ulbricht. This brings forward the question “If this was a government made currency, why was the silk road online from 2011 to 2013?” You’d think that this would’ve been an easier and less time-consuming process to find and shut it down. And why did government officials decide only then to “expand the reach of its surveillance of cryptocurrencies.” In fact, it wasn’t until late 2020 that a proposal was offered up to make currency platforms collect data about how much its users buy and who they transfer to. This proposal, was announced only 2 months after the DOJ released a “Cryptocurrency Enforcement Framework” which made it abundantly clear that the DOJ wants to undermine the ability of cryptocurrency users to transact anonymously (16 years after cryptocurrencies were created?)

Simply put, I’m not sold on it being a government made currency; for a few reasons. First of all, the currency is decentralized. Meaning unless you admit to buying/owning it while filing your taxes, you can’t be taxed on how much you buy/own by anyone other than the small fees applied by the blockchain platform used. I personally don’t believe any government would enjoy there being a currency that they can’t benefit from the creation of and use of trade within its own country’s lines. Secondly, as I stated before, this currency emerged in the midst of a massive economic crisis, which would explain the idea of a currency platform that is decentralized and valued based on volume of coins in circulation as well as volume of trades its used in. It would rule out the ability to have a crash based on any other economic factor other than (essentially) itself. So, at that point we’d have they why, but the who is still a mystery. While the whole world was affected in 2008, different countries were affected more or less than others. Interestingly, Japan was one of the top least affected countries, and while the name Satoshi Nakamoto is Japanese. I think it’s more tangible that this currency would come from a country that had been impacted much more heavily.

My hypothesis then, is that it was all created by a small/medium sized anonymous group located in Russia (7th most affected by the economic crisis). While it is true that its name is singular. The translation of it can be construed as a plural, for instance “central intelligence” means there is one intelligence. However, the very thought that it was created by an intelligence agency within a government implies that there where many parts put into a central intelligence. In addition, the currency itself wasn’t the only the only thing created. In essence a completely digital “bank” was made to facilitate transactions as well as maintain accounts to hold your crypto currency in that you can choose to keep in a platform such as a “digital wallet.” Or as you can now do, keep your currencies on a special “hardware wallet” like a secured USB device or encrypted hard drive. All the while making all of this accessible from any location/on any device capable in the world. This in no way was a small task, so the idea that one singular person could’ve created all of this in a relatively small amount of time isn’t feasible. Then of course one would ask why the anonymity is necessary at all. Well, that’s where the Russian part comes in. Since moving away from the command economy in 1991, Russia has what could be considered today as a “mixed economy,” somewhere in-between a market and a command economy. Meaning the federal semi-presidential it would make sense that in an economic crisis most if no all of those assets would lose value and lower the overall GDP of the nation. So, in addition to the need of decentralized assets, Science and technology in Russia have developed rapidly since the Age of Enlightenment, when Peter the Great founded the Russian Academy of Sciences and Saint Petersburg State University and polymath Mikhail Lomonosov founded the Moscow State University, establishing a strong native tradition in learning and innovation in technology. Meaning if this were the case and republic of Russia owns a great deal of national assets. Which makes me especially me, believe that “Sato Nakamoto” is an extremely well thought out alias for a small/medium Russian Tech group that wanted to break away from a system that could so easily be affected by many different economic factors, including those from other nations.

As the technology and infrastructure of bitcoin improves, I could only hope that the creator/s reveal themselves. But curiosity alone could cause a third party to discover and reveal that to the public. But due to the circumstances of the world at the moment I feel it might be some time before any more than speculation can be attributed to the actual identity of Sato Nakamoto. It was most likely not know to Sato Nakamoto how far we’d evolve the economics of crypto, from the volume of coins in circulation, to the very method of buying and holding them. But it would certainly be something to be proud of and take ownership of as the mind/s behind the creation.