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Will the real creator of bitcoin please stand up?

"I never was involved," Dorian Satoshi Nakamoto insists. Journalists were camped out in front of his Temple City home amid a frenzy of speculation he is the man behind bitcoin.

March 06, 2014|By Chris O'Brien and Andrea Chang
  • Journalists surround Dorian Satoshi Nakamoto as he emerges from his Temple City house amid a frenzy of speculation that he is the creator of the virtual currency.
Journalists surround Dorian Satoshi Nakamoto as he emerges from his Temple… (Allen J. Schaben, Los Angeles…)

The day started with a possible answer to one of the digital era's greatest mysteries: Who created the bitcoin virtual currency that has become a multibillion-dollar global phenomenon?

From there, with the unlikely revelation by Newsweek magazine that it might be Dorian Satoshi Nakamoto, a 64-year-old Japanese American living in Temple City, the day only got wilder and weirder.

It featured a media frenzy on his front lawn and a semi-comical car chase through multiple cities as Nakamoto rode in a Prius driven by an Associated Press reporter trying to elude other reporters. And then, a denial from Nakamoto — as he climbed into an elevator at the downtown AP offices — that he was the creator of bitcoin.

"I never was involved," he said to a Times reporter, saying there was only one reason he had agreed to even talk to a reporter. "It was all for a free lunch."

Really?

Like so many other elements of the day, the off-the-cuff remarks hinted at some finality but in truth only contributed to the murkiness surrounding the true identity of "Satoshi Nakamoto," the mastermind behind bitcoin. Indeed, the story published by Newsweek on Thursday sparked an angry backlash among members of the bitcoin community, with some vowing retribution against the reporter and others insisting that she had the wrong man.

"He always used non-tracking emails and did everything he could to stay anonymous, so it's difficult for me to understand why he would use his real name," said Adam Draper, who runs a start-up that invests in bitcoin-related companies.

In a 2008 memo titled "Bitcoin: A Peer-to-Peer Electronic Cash System," "Satoshi Nakamoto" laid out the details for a new virtual currency. Rather than relying on banks and other financial middlemen, bitcoins would rely on a cryptographic protocol to ensure its value, security and anonymity.

Users would have to "mine" coins by solving complex mathematical problems. They could then buy and sell them through various exchanges. Initially, it was embraced by hackers and anarchists who loved the idea of a currency free from government or corporate control.

But over time, bitcoins created a frenzy as their value skyrocketed, making many of the original bitcoin members quite wealthy.

They also moved closer to mainstream acceptance as a growing number of businesses began accepting them and entrepreneurs and venture capitalists created an expanding economy of bitcoin-related companies.

Bitcoins have also generated controversy, with U.S. agencies breaking up a notorious online black market in which users used the currency to buy drugs and guns. Last month, one of the largest and oldest bitcoin exchanges announced that hackers had stolen more than $450 million worth of bitcoins, forcing it to file for bankruptcy.

Along the way, Nakamoto never stepped forward to claim credit. And, in fact, a couple years ago, he withdrew from the bitcoin community completely, leaving others to carry on the work of developing the system and wonder about his real identity, which remained shrouded in mystery.

Until Thursday.

Following a trail of clues over several months, Newsweek reporter Leah McGrath Goodman believed she had tracked down the real bitcoin creator. The article said Satoshi Nakamoto was not a fake name, as many had assumed, but his real one — just one of many strange twists.

In part, she said she found him by discovering he had a hobby of collecting model trains,

Fred Hill, the owner of Original Whistle-Stop Trains in Pasadena, said in an interview with The Times on Thursday that Nakamoto has been a regular since Hill bought the business in 1976.

Nakamoto, a skilled machinist who builds all of his train layouts from scratch, is highly sociable and "a lot of fun," Hill said. Nakamoto will chat extensively about trains, particularly steam engines. In the shop, he always goes by his adopted first name, Dorian.

"He's not a disheveled, spacey individual at all," Hill said. "He's not an eccentric. He's a very intelligent man."

The Newsweek story also said he had a career in technology that included some classified work for major corporations and U.S. defense agencies. He has been separated from his wife for more than a decade. And much of what he did for a living over the past decade was unclear. Nakamoto's modest home surprised the reporter because the real bitcoin creator owns about $400 million in bitcoins.

"I am no longer involved in that and I cannot discuss it," he says in the article. "It's been turned over to other people. They are in charge of it now. I no longer have any connection."

It is a revelation so startling, if true, that even his own family can't believe it.

"For weeks my family and I have contemplated the validity of it and most of us have made the assumption that it's false," his son, Reilly Nakamoto, said in an interview Thursday.

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