Money
Bitcoin

The Guardian view on bitcoin: the ghost behind the machine

Burgess COMMENTARY

Peter Burgess

The Guardian view on bitcoin: the ghost behind the machine

Editorial How fitting that the brain behind the phantom currency is still not definitely known

Bitcoins. 'More disruptive than any of the technicalities is the audacity of the basic bitcoin insight – that there is no reason why computers shouldn’t magic up currency from the ether.' Photograph: George Frey/Getty

Bitcoin gets described in terms of digital wallets, encryption keys and cryptographic hash functions. All of this wizardry plays a part in the anarchic dark web economy, which sends taxmen and police authorities into a spin. But more disruptive than any of the technicalities is the audacity of the basic bitcoin insight – that there is no reason why computers shouldn’t magic up currency from the ether, since all money is made up anyway. Satoshi Nakamoto’s elegant nine-page paper set out the blueprint in October 2008, with perfect timing. Just a month after Lehman Brothers had tumbled, it proposed a payment system that could do away with the need to trust in financial intermediaries or, in plainer parlance, banks. So out goes a need for money to be backed by gold or government fiat, and out too goes the need for established financial institutions. Currency is left naked for what it always was – anything that commands social agreement as a way of settling bills, even if that anything is not a tangible thing at all. How fitting, then, that Mr Nakamoto is not a real person, but a ghost among machines. The many names mooted as the brains behind the Nakamoto mask have included a Finnish sociologist and two Israeli mathematicians. This week it briefly appeared as if the mystery was definitively unravelled, when – on the strength of tax office transcripts and leaked emails – two magazines pointed the finger at Craig Wright, an Australian academic. Wired, however, did concede that it could equally be that Mr Wright himself was a dedicated hoaxer, and so the intrigue lingers on. And when police arrived at the home of the possible inventor of a currency that isn’t, an overflowing letterbox looked like a sign of a man who wasn’t there.