Internet, Calm Down. It Doesn’t Matter Who Invented Bitcoin.

Newsweek’s story may agitate privacy zealots, but it does little to change the trajectory of digital currencies.

James MacWhyte, a member of bitcoin trading club poses with bitcoin medals at the club's meeting in Tokyo on February 27, 2014.
National Journal
Dustin Volz
March 6, 2014, 9:24 a.m.

First, New­s­week “ex­posed” the cre­at­or of bit­coin. Then the In­ter­net lost its mind.

The magazine pub­lished its in­vest­ig­at­ive fea­ture Thursday, claim­ing that it had, thanks to some in­trep­id sleuth­ing, loc­ated Satoshi Na­kamoto, the mys­ter­i­ous Ja­pan­ese-Amer­ic­an who pur­portedly in­ven­ted the crypto­cur­rency.

“Satoshi Na­kamoto” had long been thought to be a pseud­onym for a per­son or group of pro­gram­mers who in 2008 launched the di­git­al-cur­rency craze with a nine-page pa­per out­lining a “purely peer-to-peer ver­sion of elec­tron­ic cash,” which was in­tro­duced shortly there­after.

New­s­week‘s yarn, which por­trays a terse, her­met­ic man who has chosen to sit on hun­dreds of mil­lions of dol­lars in bit­coin in­stead of cash­ing in, is fas­cin­at­ing, if for noth­ing else but a case study in how to awaken the angry, tech-savvy corner of the In­ter­net.

But wheth­er the fath­er of bit­coin is an un­as­sum­ing liber­tari­an resid­ing in Los Angeles’s San Bern­ardino foot­hills or some geni­us kid hack­er based in Tokyo likely does little to change the reg­u­lat­ory tra­ject­ory of bit­coin and oth­er volat­ile vir­tu­al cur­ren­cies. Reg­u­lat­ors still have to fig­ure out how to over­see the bur­geon­ing in­dustry, the IRS still has to fig­ure out how to tax it, and law­makers still need to fig­ure out how they feel about it.

“There’s noth­ing more, there’s noth­ing dif­fer­ent, they’re still say­ing they have to find a way to reg­u­late it, etc., etc.,” said Bar­rie Van­Brackle, a part­ner at Man­att, Phelps & Phil­lips who spe­cial­izes in pay­ments sys­tems.

Know­ing Satoshi Na­kamoto’s real iden­tity also doesn’t change the ba­sic reg­u­lat­ory chal­lenge in over­see­ing the cur­rency — there is no cent­ral is­suer of bit­coin, which is “mined” by com­puters as they solve com­plex math prob­lems, and the cur­rency lacks a net­work op­er­at­or, as Fed­er­al Re­serve Chair Janet Yel­len ex­plained last month.

But that didn’t stop Red­dit, the on­line com­munity, from pre­dict­ably poun­cing on the story. Users, many of them self-de­scribed bit­coin de­votees, swiftly ques­tioned the story’s vera­city and the in­teg­rity of journ­al­ist Leah Mc­Grath Good­man, with one thread rack­ing up more than 1,500 com­ments.

“Here you know a guy has a way to se­curely and semi-an­onym­ously trans­fer hun­dreds of mil­lions of dol­lars AND you have the loc­a­tion and names of all his chil­dren,” user ca­du­cus wrote. “Do you think that maybe you’ve just made them a tar­get for kid­nap­ping? When someone has made every ef­fort to re­main 100% un­known this sort of cal­lous dis­reg­ard for their safety and pri­vacy just blows my mind.”

An­oth­er user, pe­gasaur, chimed in: “Shame that they didn’t both­er to re­spect his pri­vacy at all. This art­icle re­veals so much about him that he’s now easy to find. In just a few minutes on Google, you can get the house up on Google Maps.”

To be fair, the con­cerns shouted from the bowels of the In­ter­net are not so much about the fu­ture of bit­coin but about the po­ten­tial eth­ic­al and pri­vacy vi­ol­a­tions wrought by a pub­lic­a­tion at­tempt­ing to re­vive it­self.

But wheth­er New­s­week “doxxed” bit­coin’s fath­er or not, his gift to al­tern­at­ive-cur­rency zealots re­mains in­tact. And one in­vest­ig­at­ive story isn’t about to change that.

UP­DATE: Ap­par­ently, the ad­vice to “calm down” was not heeded by journ­al­ists, who de­cided to en­gage in a fren­zied car chase of Na­kamoto around the Los Angeles area. 

AN­OTH­ER UP­DATE: In an in­ter­view with the As­so­ci­ated Press, Satoshi Na­kamoto denied hav­ing any­thing to do with the cre­ation of bit­coin. The saga con­tin­ues.

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