Something about the new Satoshi isn't Wright

Thursday 10 December 2015

If Craig Wright really is Satoshi Nakamoto - IF - then it matters a lot. But something literally doesn't add up.

On Wednesday, Wired magazine published the results of several weeks of research which have led them to conclude that Satoshi Nakamoto, the creator of bitcoin, is Australian computer scientist and entrepreneur Craig Wright.

Unlike previous claims (not least Newsweek’s cringeworthy ‘revelation’ about Dorian Nakamoto last year), Wired has plenty of evidence to back up their story. You should read the full article, because the pieces are many and varied, and make a pretty compelling case. Not conclusive, as Wired themselves admit, but compelling. As they say, ‘despite a massive trove of evidence, we still can’t say with absolute certainty that the mystery is solved. But two possibilities outweigh all others: Either Wright invented bitcoin, or he’s a brilliant hoaxer who very badly wants us to believe he did.’

There are a few minor holes in the evidence, which again, Wired admits. Stuff like blog posts being changed to include ‘incriminating’ details relatively late in the day. But there’s other stuff like trails left by PGP keys that closely link Wright with Nakamoto’s online life. Much of the evidence comes from a source who leaked emails; other pieces of the puzzle are publicly visible online.

So what are the implications if it’s true?

If Craig Wright is Satoshi Nakamoto - and it’s still a big IF, despite the evidence - then there are at least two reasons it’s a good piece of news.

Firstly, it's a big deal financially

It’s generally accepted that Satoshi mined something in the region of 1 million BTC, back in the days when a CPU was all that was required. I’ve previously speculated that he may not even have kept the keys to those bitcoins - that many may have been mined into throwaway addresses as part of the testing and refining process when bitcoin was still young. 

Now, one of the leaked documents (this one courtesy of a parallel investigation by Gizmodo) references a cool 1.1 million bitcoins that were transferred from Wright to a guy called Dave Kleiman, who worked with him on bitcoin. At the time, these 1,100,111 BTC were worth $100,000. The aim was to form a trust, and that these coins would be returned to Wright on 1 January 2020.

That means that around 1m coins are locked, never to hit the market until 2020. It’s just possible that this news led to the 5% jump in price that broadly coincided with the publication of the article.

But here’s what I don’t like. The blockchain is transparent. We can tell that none of Satoshi’s coins have ever been moved. They’re still sat where they always were. There’s really no one but Satoshi who could own so many; it’s practically unthinkable that two people would have a chance to own that many coins.

Coin age

The coins mined by Satoshi were never moved. So what is the 'transfer' mentioned in the documents?

And the transaction would show up on the blockchain: a series of massive incidences of bitcoin days destroyed. And if it is there on the blockchain, what about these 'Satoshi coins' above that have never been moved?

In which case, what does it even mean that 1.1m coins were ‘transferred’ by Wright and will be ‘transferred’ back? If he simply gave Kleiman the private keys, he retains ownership and control, and those coins were never really sent anywhere. Something is not right here.

Secondly, Wright will be a figurehead

Let’s put that serious issue on ice for a moment. If Wright proves he is Satoshi Nakamoto - which he could easily do with a signed PGP message from one of Nakamoto’s known email accounts - then it’s a big deal for bitcoin.

Bitcoin suffers from the decentralisation that makes it what it is. No one speaks for bitcoin, including (and possibly especially) the Bitcoin Foundation. Consensus has to be reached in other ways, and it’s painful - witness the blocksize debate, for a start.

Wright isn’t involved in development, but it would be very significant if he came out of the woodwork and provided a figurehead for the community to rally around - someone whose authority was recognised, but who did not dictate what bitcoin should be. That would be a great boost to confidence.

But those one million unmoved coins still bother me. Because it means that something here is not what it seems, and we’ve seen enough fake Satoshis to be just a little sceptical. It's not a deal-breaker, but it needs answering before I'm convinced. If you’ve got a good explanation, let’s hear it.

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