BITCOIN CREATOR SATOSHI NAKAMOTO UNMASKED?

Satoshi Nakamoto stands at the end of his sunbaked driveway looking timorous. And annoyed.

He's wearing a rumpled T-shirt, old blue jeans and white gym socks, without shoes, like he has left the house in a hurry. His hair is unkempt, and he has the thousand-mile stare of someone who has gone weeks without sleep.

He stands not with defiance, but with the slackness of a person who has waged battle for a long time and now faces a grave loss.

Two police officers from the Temple City, Calif., sheriff's department flank him, looking puzzled. "So, what is it you want to ask this man about?" one of them asks me. "He thinks if he talks to you he's going to get into trouble."

"I don't think he's in any trouble," I say. "I would like to ask him about Bitcoin. This man is Satoshi Nakamoto."

"What?" The police officer balks. "This is the guy who created Bitcoin? It looks like he's living a pretty humble life."

I'd come here to try to find out more about Nakamoto and his humble life. It seemed ludicrous that the man credited with inventing Bitcoin - the world's most wildly successful digital currency, with transactions of nearly $500 million a day at its peak - would retreat to Los Angeles's San Gabriel foothills, hole up in the family home and leave his estimated $400 million of Bitcoin riches untouched. It seemed similarly implausible that Nakamoto's first response to my knocking at his door would be to call the cops. Now face to face, with two police officers as witnesses, Nakamoto's responses to my questions about Bitcoin were careful but revealing.

Tacitly acknowledging his role in the Bitcoin project, he looks down, staring at the pavement and categorically refuses to answer questions.

"I am no longer involved in that and I cannot discuss it," he says, dismissing all further queries with a swat of his left hand. "It's been turned over to other people. They are in charge of it now. I no longer have any connection."

Nakamoto refused to say any more, and the police made it clear our conversation was over.

But a two-month investigation and interviews with those closest to Nakamoto and the developers who worked most frequently with him on the out-of-nowhere global phenomenon that is Bitcoin reveal the myths surrounding the world's most famous crypto-currency are largely just that - myths - and the facts are much stranger than the well-established fiction.

Far from leading to a Tokyo-based whiz kid using the name "Satoshi Nakamoto" as a cipher or pseudonym (a story repeated by everyone from Bitcoin's rabid fans to The New Yorker), the trail followed by Newsweek led to a 64-year-old Japanese-American man whose name really is Satoshi Nakamoto. He is someone with a penchant for collecting model trains and a career shrouded in secrecy, having done classified work for major corporations and the U.S. military.

Standing before me, eyes downcast, appeared to be the father of Bitcoin.

Not even his family knew.

Bitcoin is a currency that lives in the world of computer code and can be sent anywhere in the world without racking up bank or exchange fees, and is then stored on a cellphone or hard drive until used again. Because the currency resides in code, it can also be lost when a hard drive crashes, or stolen if someone else accesses the keys to the code.

"The whole reason geeks get excited about Bitcoin is that it is the most efficient way to do financial transactions," says Bitcoin's chief scientist, Gavin Andresen, 47. He acknowledges that Bitcoin's ease of use can also lead to easy theft and that it is safest when stored in a safe-deposit box or on a hard drive that's not connected to the Internet. "For anyone who's tried to wire money overseas, you can see how much easier an international Bitcoin transaction is. It's just as easy as sending an email."

In 2008, just before Bitcoin's official kickoff, a somewhat stiffly written, nine-page proposal found its way onto the Internet bearing the name and email address of Satoshi Nakamoto.

The paper proposed "electronic cash" that "would allow online payments to be sent directly from one party to another without going through a financial institution," with transactions time-stamped and viewable to all.

The masterstroke was replacing the role of banks as the trusted middlemen with Bitcoin users, who would act as sentinels for the integrity of the system, verifying transactions using their computing power in exchange for Bitcoin.

Bitcoin production is designed to move at a carefully calibrated pace to boost value and scarcity and remain inflation proof, halving its quantity every four years, and is designed to stop proliferating when Bitcoins reach a total of 21 million in 2140. (Bitcoins can be divided by up to eight decimal places, with the smallest units called "satoshis.")

Nakamoto's family describe him as extremely intelligent, moody and obsessively private, a man of few words who screens his phone calls, anonymizes his emails and, for most of his life, has been preoccupied with the two things for which Bitcoin has now become known: money and secrecy.

For the past 40 years, Satoshi Nakamoto has not used his birth name in his daily life. At the age of 23, after graduating from California State Polytechnic University, he changed his name to "Dorian Prentice Satoshi Nakamoto," according to records filed with the U.S. District Court of Los Angeles in 1973. Since then, he has not used the name Satoshi but instead signs his name "Dorian S. Nakamoto."

Dorian S. Nakamoto's use of English, she says, was likely influenced by his lifelong interest in collecting model trains, many of which he imported from England as a teenager while he was still learning English.

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.

To read the complete article, see: The Face Behind Bitcoin (mag.newsweek.com/2014/03/14/bitcoin-satoshi-nakamoto.html)

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