Wolfgang Münchau is a columnist for DL News. He is co-founder and director of Eurointelligence, and writes a column on European affairs for the New Statesman. Opinions are his own.
One of the defining events for journalists of my generation was the Watergate scandal. Bob Woodward called his source Deep Throat, a man whose identity remained hidden until shortly before his death in 2008 at the age of 95.
Deep Throat was Mark Felt, Associate Director of the FBI. It was in many ways an obvious source. Which other organisation in the US would have had as much incriminating information on President Nixon and his entourage? And who within the FBI would have access to all this information?
If Satoshi Nakamoto’s identity is ever revealed, we will probably have a similarly anti-climactic reaction as we did with Felt. We will be wondering why we did not guess correctly in the first place.
I am not offering any new names to the long list of Satoshi candidates, but instead prefer to employ Sherlock Holmes’ method of subtracting the implausible first.
What we know is that the most effective insurrectionists are usually not outsiders, but insiders with an axe to grind. I am particularly interested in Satoshi’s comments in emails he wrote to one of his most important collaborators, to Martti Malmi, who is also known as Sirius-m. It was Malmi who revealed his email exchange with Satoshi during a criminal trial in the UK earlier this year.
Nakamoto’s economic views were both radical and nuanced. He had a deep understanding of the history of money, and the history of monetary debasement.
He understood the reasons why the financial system was broken. To me, this did not read like somebody who was banging on the door from the outside. But someone from the inside, who decided to do something about it.
In other words, someone like Felt.
Nakamoto famously engraved the message: “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks” in the genesis block. The Times was one of the three national newspapers I worked for in my lifetime – though not at the time when Nakamoto wrote those words. There used to be a joke about the readership of UK newspapers:
“The Financial Times is read by people who own the country. The Times is read by people who run the country.”
I felt that statement was broadly correct, though perhaps this is no longer the case today. When I worked there, most of the correspondence I had were with senior civil servants, retired colonels, and members of the House of Lords. I did not recall that this was a paper read by anyone from the tech scene at the time.
The UK media was, and to a large extent still is, on the Luddite side of the spectrum.
By the time of the global financial crisis, newspapers had lost much of their shine. It was the time when the financial and economic bloggers had entered the scene. There were quite a few people, myself included, who expressed doubt about the sustainability of the current global financial system.
Most interlocutors at the time thought the system could be fixed. I focused mostly on the political consequences.
The subsequent rise of the far-right in Europe, and Brexit in the UK, were all a legacy of the global financial crisis, and the economic policy mismanagement that followed.
In one of his emails, Nakamoto made revealing comments about his economic views. This is, by the way, the main reason I think he is a single individual, not a group.
No group I have ever met would agree on any economic issue as complex as this one, let alone formulate an original view.
Nakamoto’s contempt for fiat money was balanced only by his contempt for gold. When an anti-state activist offered their services, Nakamoto called them “Neanderthal,” adding that “they are so used to being anti-fiat-money that anything short of gold isn’t good enough.”
There are many definitions of money. My own preferred one also happens to be his — the idea of money as a social contract. That is also not common in the financial sector, or its groupies in the financial media.
“The root problem with conventional currency is all the trust that’s required to make it work,” Satoshi writes. “The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust.”
Economic history is a subject that is not taught much in school. It did not play a big role in the education of economists at the time. I noted back then that anthropologists often had a better take on money than economists.
For example, the anthropologist David Graeber wrote a noted book “Debt: the First 5000 Years,” published in 2011. Economists hated it.
But some of its themes gelled with Nakamoto’s own analysis.
If I had to place him into an academic discipline — aside from computer science — it would be close to anthropology or economic history.
I was struck by the following comment.
“Banks must be trusted to hold our money and transfer it electronically,” Nakamoto writes, “but they lend it out in waves of credit bubbles with barely a fraction in reserve. We have to trust them with our privacy, trust them not to let identity thieves drain our accounts.”
Only a small fraction of commentators I know understand the meaning of “fractional” in the expression of “fractional reserve banking” — if they know the expression at all. Nakamoto certainly does.
And then there is this:
“Historically, people have taken up scarce commodities as money, if necessary taking up whatever is at hand, such as shells or stones. Each has a kernel of usefulness that helped bootstrap the process, but the monetary value ends up being much more than the functional value alone.
Most of the value comes from the value that others place in it. Gold, for instance, is pretty, non-corrosive and easily malleable, but most of its value is clearly not from that. Brass is shiny and similar in colour.”
He said of himself that he was better at coding than writing. This may be a case of classic British understatement. I cannot, of course, deduce from his writing that he is British.
But not many people outside the UK would read The Times. And frankly, not many people inside the UK do so either.
So this leads to my own Satoshi profile: private-school educated, with a broad-based education, received before he turned himself into what he later became. Definitely not straight from university. Also not someone who worked in finance. Not a tech entrepreneur. And not someone motivated by getting rich — even though this is where he ended up.
Even Felt eventually wanted the world to know that it was him. He needed to keep up his anonymity to protect himself against prosecution and persecution.
Most people eventually, if only posthumously, want their identities revealed. Total anonymity is rare.
This leads me to my final observation that the speculation I have seen so far seems implausible to me.