Bitcoin

Wired Presents Very Convincing Circumstantial Case They've Identified Bitcoin Creator 'Satoshi Nakamoto' [UPDATED! Let the Debunking Commence!]

Perhaps obscure, unsuspected Australian computer whiz Craig Steven Wright invented the cryptocurrency, controls 1.1 million of them.

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While journalists have been wrong before about unveiling the successfully pseudonymous inventor of Bitcoin, "Satoshi Nakamoto," a detailed and convincing new Wired story thinks he's Australian Craig Stephen Wright.

A very brief excerpt of some evidence, you should if interested read the whole thing:

The first evidence pointing to Wright appeared in mid-November, when an anonymous source close to Wright began leaking documents to Gwern Branwen, a pseudonymous, independent security researcher and dark web analyst. Branwen provided those documents to WIRED, and they immediately led to several direct, publicly visible connections between Nakamoto and Wright:

  • An August 2008 post on Wright's blog, months before the November 2008 introduction of the bitcoin whitepaper on a cryptography mailing list. It mentions his intention to release a "cryptocurrency paper," and references "triple entry accounting," the title of a 2005 paper by financial cryptographer Ian Grigg that outlines several bitcoin-like ideas.
  • A post on the same blog from November, 2008. It includes a request that readers who want to get in touch encrypt their messages to him using a PGP public key apparently linked to Satoshi Nakamoto. A PGP key is a unique string of characters that allows a user of that encryption software to receive encrypted messages. This one, when checked against the database of the MIT server where it was stored, is associated with the email address satoshin@vistomail.com, an email address very similar to the satoshi@vistomail.com address Nakamoto used to send the whitepaper introducing bitcoin to a cryptography mailing list.
  • An archived copy of a now-deleted blog post from Wright dated January 10, 2009, which reads: "The Beta of Bitcoin is live tomorrow. This is decentralized… We try until it works." (The post was dated January 10, 2009, a day after Bitcoin's official launch on January 9th of that year. But if Wright, living in Eastern Australia, posted it after midnight his time on the night of the 9th, that would have still been before bitcoin's launch at 3pm EST on the 9th.) That post was later replaced with the rather cryptic text "Bitcoin – AKA bloody nosey you be…It does always surprise me how at times the best place to hide [is] right in the open." Sometime after October of this year, it was deleted entirely…..

It matters because of how many bitcoin the mystery man controls and the potential effect his dumping them might have on the bitcoin economy:

Another leaked email from Wright to computer forensics analyst David Kleiman, a close friend and confidant…..There's also a PDF authored by Kleiman, who died in April of 2013, in which he agrees to take control of a trust fund, codenamed the "Tulip Trust," containing 1.1 million bitcoins. The PDF is signed with Kleiman's PGP signature, a cryptographic technique that ensures it couldn't have been altered post-signature.

That million-coin trove—The Tulip Trust—is the same size as a mysterious bitcoin fortune that's long been visible on bitcoin's blockchain and widely attributed to Satoshi Nakamoto. No one but Nakamoto is known to have assembled such a massive hoard of the cryptocurrency, and only Nakamoto could have generated so many bitcoins so early in its evolution, when a bitcoin could be "mined" with relatively small amounts of processing power. Only one such bitcoin megapile exists, and the closely-watched coins haven't moved in bitcoin's entire history…..

the million-coin hoard has yet to budge, even after Kleiman's death in 2013. That may be because Wright could be keeping the coins in place as an investment. He could be leveraging the trust in less visible ways, like legally transferring ownership of money to fund his companies while still leaving it at the same bitcoin address. Or he might still be waiting for January 1st, 2020, a countdown to a date that could take the lid off the biggest cryptocurrency fortune in history.

Wired offers the possibility that Wright, if not Nakamoto, might just have been playing a game planting evidence to make you think he is, but the case they present is pretty strong. No obvious disqualifiers.

Another fascinating tidbit for libertarians: Wright apparently took Leonard Read's libertarian classic about the fecundity of free markets and the division of labor "I, Pencil" as a challenge. He's:

an eccentric who wrote on his blog that he once accepted a challenge to create a pencil from scratch and spent years on the problem, going so far as to make his own bricks to build his own kiln in which to mix the pencil's graphite.

Gizmodo was also working the story based on similar leaks, and came out with their detailed account today as well, also convincing, and including this hideous detail about the deceased Kleiman:

Kleiman was confined to a wheelchair after a motorcycle accident in 1995, and became a reclusive computer forensics obsessive thereafter. He died broke and in squalor, after suffering from infected bedsores. His body was found decomposing and surrounded by empty alcohol bottles and a loaded handgun. Bloody feces was tracked along the floor, and a bullet hole was found in his mattress, though no spent shell casings were found on the scene. But documents shared with Gizmodo suggest that Kleiman may have possessed a Bitcoin trust worth hundreds of millions of dollars, and seemed to be deeply involved with the currency and Wright's plans…

UPDATE: Sarah Jeong at Vice Motherboard pulls together a lot of good reasons to believe that fraud is at the heart of the Wright/Satoshi connection. It is starting to appear as if the secondary point that Wired tried to make, and which I summarized above, is the correct one: that if Wright isn't Satoshi he was at least trying to clandestinely make people think he was.

Jeong's article works at a level of technical detail I am frankly not qualified to be your guide through, but the money conclusion: "the Wired [PGP] Key and the Gizmodo Key were likely created using technology that wasn't available on the dates that they were supposedly made."