An anonymous blogger believes former economics professor Nick Szabo is the mysterious Satoshi Nakamoto - creator of bitcoin.

Bitcoin creator Satoshi Nakamoto is Nick Szabo
An anonymous blogger believes the creator of crypto-currency, bitcoin, known as Satoshi Nakamoto, is in fact Nick Szabo (Reuters)

Bitcoin is one of the most talked-about phenomena of 2013. This year we have seen the decentralised, digital currency rise in value by over 4,000% percent, with one bitcoin last month passing the $1,000 mark as well as surpassing the price of an ounce of gold.

Governments are scrambling to figure out how to deal with the anonymous currency, the preferred method of payment for cyber-criminals and drug dealers on the deep web, but also seen as Gold 2.0 by the Winklevoss twins, who have heavily invested in it.

However despite its growing popularity, one question remains unanswered:

Who created bitcoin?

The whitepaper published in 2008 which described in detail how the crypto-currency would work, was authored by someone called Satoshi Nakamoto, who described himself as a male in his late 30s or early 40s and living in Japan.

This was met almost immediately with skepticism due to the use of English in the whitepaper, and the bitcoin software containing absolutely no Japanese.

Therefore for the past five years, there have been a number of people in the frame as the mysterious Nakamoto, with US sociologist Ted Nelson claiming in May that it was Japanese mathematician and Kyoto University lecturer Shinichi Mochizuki who was behind bitcoin.

A new contender

That claim was rejected by the bitcoin community, but now we have a new contender, and one with a background in crypto-currencies and all the credentials to make a viable Satoshi Nakmoto.

A blog entitled LikeInAMirror was published on Sunday by an anonymous author who claims to have identified Nick Szabo as the most likely person behind the bitcoin phenomenon.

The author's main tool in identifying Szabo was "reverse textual analysis" where they took the whitepaper published in 2008 and analysed the language and phraseology used in that against writings on the internet, particularly "places which you would expect a cryptography researcher to contribute to."

This led him to the blogs of Nick Szabo, a person with a long history in the development of decentralised currency and a former law and economics professor at George Washington University.

Szabo also holds a degree in computer science from the University of Washington.

Szabo, who writes on his Enumerated blog, has been interested in this area since 1998, which initially manifested itself in bit gold, a precursor and apparently a major influence on bitcoin's development.

Collaboration

The anonymous author strongly believes that Szabo is behind bitcoin, but assumes he was joined by a technically-minded collaborator (or a number of them) to finally get his dream of a decentralised currency off the ground.

Another possibility is that Szabo was contacted by an engineer who hit upon a better solution than bit gold, and together they wrote the whitepaper, though this is a less-likely situation according to the author.

Along with the textual analysis, the anonymous author points out several other anomalies which could indicate that Szabo is Nakamoto:

  • No reaction - Szabo had been hugely involved and influential in the whole crypto-currency movement for a decade prior to the launch of bitcoin yet around the time it was gaining momentum he remained virtually silent in public about the developments.
  • No citation - The precursor to bitcoin was bit gold, created by Szabo, yet there is absolutely no mention of it within the whitepaper, despite its obvious influences on bit coin's creations. Other less influential crypto-currencies such as hashcash and b-money are however mentioned.
  • Call for help - In April 2008, just months before the whitepaper was published, Szabo was publicly looking for collaborators on the bit gold project. "[bit gold] would greatly benefit from a demonstration, an experimental market (with e.g. a trusted third party substituted for the complex security that would be needed for a real system). Anybody want to help me code one up?" he wrote on his blog.

Who is Nick Szabo?

There is very little information about Szabo available on the internet, except for his two blogs, where he writes in depth on issues as diverse as history, law and economics.

The complete lack of details about his professional career, particularly about his time as a law and economics professor at George Washington University, is odd in this day and age - but it could just be that Szabo values his privacy.

On a Reddit thread, some people have pointed out flaws in the blogger's theory, including the fact the approach used has not been validated on an dataset.

The fact the author of this theory also wants to remain anonymous adds a further level of mystery to the bitcoin enigma, as well as possibly weakening the credibility of the thesis.

It seems unlikely that whoever Satoshi Nakamoto is will ever reveal themselves officially, so for now we will have to continue to speculate.