What Are The Odds? Dorian Nakamoto And Hal Finney

In a recent article exploring whether Hal Finney was Bitcoin creator Satoshi Nakamono, we noted the theory that Finney's geographical proximity to Dorian Nakamoto (the engineer falsely outed by Newsweek as Bitcoin's creator in 2014) suggested there must be a link between the two.

When Forbes journalist Andy Greenberg followed up on the Dorian Nakamoto story, he mentions an email he received from a contact in the cryptography community (titled "What are the odds?") drawing attention to the improbability that the two men should live so close together:

“What are the odds in a country as large as ours, or as large as California is, or even as large as the general LA area is, that [Dorian Satoshi Nakamoto] and Hal Finney both live(d) in Temple City at the same time, about 1.6 miles from each other?” my contact wrote. “Did they know each other socially, through some club? Did one help the other?”

This was picked up and further developed by elements of the crypto community.

Already, the theory was percolating through the Texas Bitcoin Conference I was attending that day in Austin, where one Bitcoin podcaster independently rehearsed a more extreme version of the same theory for me over drinks: Had Finney invented Bitcoin himself and simply used his neighbor’s name as a pseudonym? On Reddit, a user traced Finney’s IP address and found that he was in the Los Angeles area. “Dorian [Nakamoto] probably could’ve been a drop,” wrote a user called Ikinoki, using the hacker jargon “drop,” a patsy whose personal information is used to hide online exploits.

While Dorian Nakamoto clearly has no link to Bitcoin, and Hal Finney is most likely to be an active contributor rather than Satoshi himself (absent certain mental gymnastics that raise more questions than they answer), that coincidence still stands. Is there any way to explain it?

May The Odds Be In Your Favor

In fact, with a little digging, the proximity of those two key (for very different reasons) figures in Bitcoin's history is not such a coincidence at all. Exact figures are hard to find, but stand by for a little napkin math.

The name "Satoshi" is fairly common in Japan, and overall there are over 250,000 people with this name in the world. "Nakamoto" is also relatively common in Japan, where there are almost 51,000 people of that surname, or roughly one in every 2,500 people.

How many people living in America are actually called "Satoshi Nakamoto", though? In her Newsweek article, Leah McGrath Goodman writes, "There are several Satoshi Nakamotos living in North America and beyond - both dead and alive - including a Ralph Lauren menswear designer in New York and another who died in Honolulu in 2008, according to the Social Security Index's Death Master File." Unfortunately this isn't an exhaustive list, so we'll resort to some statistical games.

According to the 2010 United States Census, Nakamoto is the 16,295th most common surname in the US, belonging to at least 1,770 individuals and possibly almost 2,000. Meanwhile there are an estimated 799 people named Satoshi in the US.

There are around 130 million Japanese in the world (though only around 4 million outside of Japan), and 250,000 Satoshis among them. Of course, Satoshi is a male name, so the odds of any given Nakamoto being a Satoshi are 250,000/65 million, or around 0.4%. TL;DR out of those almost 2,000 recorded American Nakamotos, we might expect to mine 7 or 8 Satoshis. (A public records search turns up at least 6, and there are probably more, especially when Satoshi as a middle name is included.)

So let's assume, for the sake of argument, that there are 8 Satoshi Nakamotos living in the US. It feels like a lot, but on the other hand, we're not taking into account those with Satoshi as a second or third name (like Dorian Prentice Satoshi Nakamoto), which we know qualifies them for hounding by the likes of Newsweek.

Scattered around a country as big as the US, it would indeed be unlikely for any of these Satoshis to live anywhere close to Hal Finney—but they wouldn't be scattered.

The Japanese population in the US is disproportionately concentrated in California, with almost half a million Japanese living in the state (a result of 19th century immigration policy). There are 177,000 Japanese in LA, which has the second-largest metropolitan Japanese population, after Honolulu.

If you're Japanese, and you live in the US, there's a very good chance you live in California, and a pretty good chance you live in LA. In fact, it would be weird if at least one of those eight Satoshi Nakamotos didn't live in LA, let alone in California.

Living in the same city as Hal Finney, which has an area of 4 square miles and a population of 40,000? That's more of a stretch. However...

Any Cypherpunk Will Do

It didn't have to be Hal Finney. The only reason he features in this discussion in the first place is because he happens to live relatively close to someone called [Dorian] Satoshi Nakamoto. If it had turned out that John Gilmore, Timothy C. May, Eric Hughes, or any other well-known cypherpunk lived close to Dorian, the same questions would be asked about him (or her, though that is something that's statistically far less likely).

For that matter, if it had been any early Bitcoin adopter or developer, that "coincidence" would raise the same issue. Or perhaps just a decent C programmer with libertarian leanings.

Moreover, what distance qualifies as "suspiciously" close? Dorian and Hal lived within two miles of each other. If it had been three miles, or even five miles, that would probably have been noteworthy too. In a densely populated area, a lot of people live inside a five-mile radius (think 5,000 people per square mile).

It's relevant that 94% of California's population live in such urban areas. "The 2020 Census reveals California to have both the highest urban population density and the highest urbanization share of total population among the states."

Cypherpunks happen to be concentrated in California, around the tech scene. Japanese people are also concentrated there, for historical reasons. What are the odds that at least one prominent cypherpunk or early Bitcoin adopter lives within five (or even two) miles of someone called Satoshi Nakamoto, or some variant thereof? Is it more likely than not? Quite probably.

All of this conveniently ignores the fact that Hal Finney is unlikely to have chosen a name as distinctive as "Satoshi Nakamoto" when "John Smith" would be far harder to track.

But that doesn't make a good story.

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