Will the real creator of bitcoin please stand up?

By Chris O’Brien and Andrea Chang

March 6, 2014 6:14 PM PT

The day started with a possible answer to one of the digital era’s greatest mysteries: Who created the bitcoin virtual currency that has become a multibillion-dollar global phenomenon?

From there, with the unlikely revelation by Newsweek magazine that it might be Dorian Satoshi Nakamoto, a 64-year-old Japanese American living in Temple City, the day only got wilder and weirder.

It featured a media frenzy on his front lawn and a semi-comical car chase through multiple cities as Nakamoto rode in a Prius driven by an Associated Press reporter trying to elude other reporters. And then, a denial from Nakamoto — as he climbed into an elevator at the downtown AP offices — that he was the creator of bitcoin.

“I never was involved,” he said to a Times reporter, saying there was only one reason he had agreed to even talk to a reporter. “It was all for a free lunch.”

Really?

Like so many other elements of the day, the off-the-cuff remarks hinted at some finality but in truth only contributed to the murkiness surrounding the true identity of “Satoshi Nakamoto,” the mastermind behind bitcoin. Indeed, the story published by Newsweek on Thursday sparked an angry backlash among members of the bitcoin community, with some vowing retribution against the reporter and others insisting that she had the wrong man.

“He always used non-tracking emails and did everything he could to stay anonymous, so it’s difficult for me to understand why he would use his real name,” said Adam Draper, who runs a start-up that invests in bitcoin-related companies.

In a 2008 memo titled “Bitcoin: A Peer-to-Peer Electronic Cash System,” “Satoshi Nakamoto” laid out the details for a new virtual currency. Rather than relying on banks and other financial middlemen, bitcoins would rely on a cryptographic protocol to ensure its value, security and anonymity.

Users would have to “mine” coins by solving complex mathematical problems. They could then buy and sell them through various exchanges. Initially, it was embraced by hackers and anarchists who loved the idea of a currency free from government or corporate control.

But over time, bitcoins created a frenzy as their value skyrocketed, making many of the original bitcoin members quite wealthy.

They also moved closer to mainstream acceptance as a growing number of businesses began accepting them and entrepreneurs and venture capitalists created an expanding economy of bitcoin-related companies.

Bitcoins have also generated controversy, with U.S. agencies breaking up a notorious online black market in which users used the currency to buy drugs and guns. Last month, one of the largest and oldest bitcoin exchanges announced that hackers had stolen more than $450 million worth of bitcoins, forcing it to file for bankruptcy.

Along the way, Nakamoto never stepped forward to claim credit. And, in fact, a couple years ago, he withdrew from the bitcoin community completely, leaving others to carry on the work of developing the system and wonder about his real identity, which remained shrouded in mystery.

Until Thursday.

Following a trail of clues over several months, Newsweek reporter Leah McGrath Goodman believed she had tracked down the real bitcoin creator. The article said Satoshi Nakamoto was not a fake name, as many had assumed, but his real one — just one of many strange twists.

In part, she said she found him by discovering he had a hobby of collecting model trains,

Fred Hill, the owner of Original Whistle-Stop Trains in Pasadena, said in an interview with The Times on Thursday that Nakamoto has been a regular since Hill bought the business in 1976.

Nakamoto, a skilled machinist who builds all of his train layouts from scratch, is highly sociable and “a lot of fun,” Hill said. Nakamoto will chat extensively about trains, particularly steam engines. In the shop, he always goes by his adopted first name, Dorian.

“He’s not a disheveled, spacey individual at all,” Hill said. “He’s not an eccentric. He’s a very intelligent man.”

The Newsweek story also said he had a career in technology that included some classified work for major corporations and U.S. defense agencies. He has been separated from his wife for more than a decade. And much of what he did for a living over the past decade was unclear. Nakamoto’s modest home surprised the reporter because the real bitcoin creator owns about $400 million in bitcoins.

“I am no longer involved in that and I cannot discuss it,” he says in the article. “It’s been turned over to other people. They are in charge of it now. I no longer have any connection.”

It is a revelation so startling, if true, that even his own family can’t believe it.

“For weeks my family and I have contemplated the validity of it and most of us have made the assumption that it’s false,” his son, Reilly Nakamoto, said in an interview Thursday.

Still, national and foreign media began camping out in front of the two-story house in the middle of the nondescript neighborhood. As neighbors emerged throughout the day, word slowly spread that the quiet, reclusive resident just might be the bitcoin guy.

“I don’t see him too often,” said Stanley Huang, 28, who lives across the street. The one time they interacted, he said, was when Huang parked his car in front of Nakamoto’s house and Nakamoto came out to ask him to move it.

After reporters rang his doorbell, Nakamoto appeared through his metal gate and refused to talk to reporters. He also called the police. Around 9:30 a.m., Nakamoto’s mother emerged from the home and was escorted into a car by a woman, who quickly drove away.

Several hours later, Nakamoto walked out of his house and announced he wasn’t going to talk to anyone until he got some lunch first.

An AP reporter offered to buy him some lunch, and to the dismay of the other media members, the pair climbed into a blue Prius and drove to Mako Sushi in Arcadia.

Rather than letting the scoop slip away, several reporters followed them to Mako’s and tried to join the conversation.

Nakamoto and the AP reporter hopped back into their car and for the next hour or so drove around local streets and highways with at least six other reporters tailing them.

Finally, the Prius pulled into the parking garage in the downtown AP building. A Los Angeles Times reporter followed Nakamoto into the elevator, where he made his impromptu denial. Eventually, she and 19 other reporters and photographers were escorted out of the building.

A few hours later, the Associated Press published an article quoting Nakamoto as saying he had never heard of bitcoin until his son told him he had been contacted by a reporter three weeks ago.

Meanwhile, in Internet forums in places such as Reddit, bitcoin community members argued that the Newsweek story had crossed a line by publishing too much personal information about Nakamoto.

“I’m disappointed Newsweek decided to dox the Nakamoto family, and regret talking to Leah,” wrote Gavin Andresen, who had never met the real Nakamoto in person but was interviewed extensively for the story. “Dox” refers to disclosing personal information.

Some worried about the safety of a man who may possess $400 million worth of bitcoins. And still others wondered whether he shouldn’t just be left alone because he had seemingly been trying to remain out of the spotlight even as bitcoin mania grew.

“I’m a huge supporter of Satoshi, and so glad he exists, but maybe he just wanted to be left in peace,” wrote user SpontaneousLightBulb in a Reddit discussion. “He’s not an active part of that world anymore, and maybe he chose to leave for personal reasons.”

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Times staff reporters Salvador Rodriguez and Frank Shyong contributed to this report.