Weekend Economists Waiting for Godot March 7-9, 2014

[Demeter]

46. The Satoshi Paradox: Newsweek out on a wire with a Bitcoin blockbuster By Felix Salmon

IS HE THE BITCOIN INVENTOR, OR ISN'T HE?

http://www.cjr.org/the_audit/the_satoshi_paradox.php

Newsweek wanted a scoop for its relaunch cover story, and boy did it deliver: it uncovered the identity of Satoshi Nakamoto, the inventor of bitcoin. Who then promptly came out and denied everything. Which means that one of the two is wrong: either Nakamoto is lying through his teeth, or Newsweek has made what is probably the biggest and most embarrassing blunder in its 81-year history.

But before we try to work out what the answer is, it’s important to separate out the various different questions:

Is Dorian Nakamoto the inventor of bitcoin, Satoshi Nakamoto?
Do we, and/or Newsweek, have enough evidence to conclude, with certainty, that Dorian Nakamoto is the inventor of bitcoin?
Is it reasonable to believe that Dorian Nakamoto is the inventor of bitcoin?


My tentative answers to the three questions are “we don’t know”; no; and yes.

One way to look at this problem is to try to calculate probabilities, and do some kind of Bayesian analysis of the question, given that either Dorian is Satoshi, or he isn’t. (To make matters even more complicated, Dorian’s given name is, actually, Satoshi. But you know what I mean.) But here’s the problem: if you believe either of the two possibilities, you have to believe in a reasonably long series of improbable propositions. Call it the Satoshi Paradox: the probability that Dorian is Satoshi would seem to be very small, and the the probability that Dorian is not Satoshi would seem to be just as small — and yet, somehow, when you add the two probabilities together, the total needs to come to something close to 100%.

HE GOES ON. SEE LINK