Blockchain: Who is Satoshi Nakamoto?
That is the $147 billion dollar question. Blockchain technology and crypto currency are exploding right now. The biggest name in blockchain is still Bitcoin. A currency with no nation backing it is worth more than $147 billion at the time of this writing. That’s more than the current market capitalization of General Electric.
But Bitcoin and all other crypto currencies trace their roots back to a technology called blockchain. Essentially, new currency can be created or mined by anyone with a computer. Each new piece of currency has a time stamp and piece of the currency mined right before it.
Each coin is logged in a decentralized ledger. So no one entity controls the list of which coins are real and which are fake. As of today, this method does appear to in fact be both secure and functional.
Blockchain is a technology with uses that go beyond crypto currency. The technology can make cross-border transactions or timed payments such as everyday rent more predictable and more secure. “Smart contracts” can include code that is agreed upon by the parties when the contract is signed. It is later entered into the network of computers. Once payment is due, goods have been delivered or rent is due, it is immediately transferred. If the code is entered, there’s no going back unless all the computers on the network agree. This raises some interesting legal questions and possibilities. For instance, could a jury of your computer network peers decide cases in the future? Just be aware that the underlying technology may have other uses, but back to the crypto currencies.
Crypto currencies are bought and sold on exchanges just like stocks. And they are kept in crypto currency wallets. Many major companies are starting to accept them as payment including Microsoft.
But back to the initial question: who is Satoshi Nakamoto? He is the creator of Bitcoin and its blockchain underpinnings. But he has never revealed himself. Many believe the name is an alias for someone else or for a group of people. It has even been suggested that it is an alias for people with less than noble intentions.
Crypto currency is shrouded in mystery. It is generally capable of being spent anonymously. So it is often used for illegal payments over the dark web for ransoms and to buy contraband.
Criminals unquestionably have interest in crypto currencies. But this is no reason to avoid them all together. Criminals are interested in US Dollars, Euros, and British Pounds. That is no reason to eschew those currencies, just to be careful.
First, if buying crypto currency, it is important to go through a reputable exchange and use a reputable wallet. This requires research as the most reputable institutions are often changing.
Second, governments are still not sure how to deal with crypto currencies. So pure investors in particular may face tax consequences. What they are for certain, it is still too early to say.
Third, the world is full of scammers. Crypto currency transactions are often anonymous. Once the money is sent, it is not coming back. So go in with your eyes open. And remember that anything that sounds too good to be true probably is.
Blockchain has changed the financial landscape of the world already. Some financial experts think it is the greatest investment in the world; other equally great experts think it’s a farce and a bubble. Either or neither could be right.
But blockchain has an allure to it similar to gold. Its value is not tied to any country. A gold coin minted by a country that has not existed in 1,000 years is still worth its weight in gold. It will be interesting to see if blockchain follows the same path.