This week on Planet Bitcoin - 11 December 2015

Friday 11 December 2015

A bump in the markets coincided with ‘Satoshi’ coming out of hiding. One is more convincing that the other.

Once again, the picture has been a healthy upward move in the bitcoin markets, from around $360 this time last week to more than $50 higher now. The first part of the week saw the price struggling to break through the psychologically-important $400 mark. For a while, it seemed that it would be a medium-term ceiling, but that was decisively broken on Wednesday with a sharp $20 jump in price.


Since hitting that one-month high, bitcoin bounced between around $410 and $420, before breaking higher once again to well over $430. Best of all, it shows no immediate signs of sinking below $400 again - the ceiling becoming the floor, as is so often the case in these situations (technical analysts are wont to talk about support and resistance; suffice to say that if a lot of people have been buying and selling at a particular level, and the price then moves above or below that, the same level is likely to remain of interest to traders since it was a popular entry/exit point).

So it’s been quite a rally, and as we noted last week - barring the spike to $500 - the overall picture of the last 2 months has been one of fairly steady upward movement.

Around the bitworld

The big news of this week was Wired magazine’s revelation that they had likely discovered the identity of Satoshi Nakamoto, creator of bitcoin. Wired (and Gizmodo, who were running a parallel investigation) finger Craig Wright, an Australian computer scientist and entrepreneur. The news roughly coincided with the $20 increase in price, though could have been for any number of reasons connected with the story or otherwise.

The significance of this would be huge, not least because apparently leaked documents suggest that Satoshi’s 1 million bitcoins are held in trust - and therefore off the market - until 2020. Unfortunately, there are some inconsistencies with the whole story that make it look more than a little suspect. One is the fact that the leaked contract suggests that 1,100,111 bitcoins were ‘transferred’ to another party, but no such transfer appears on the blockchain - meaning that Wright/Nakamoto could not have given up control of them in any meaningful sense. Then there’s the question of whether the emails were really hacked or leaked, or whether Wright himself was responsible - raising major issues of motive. Faked and backdated PGP key data is another nail in the coffin. At this point, the Wright=Satoshi case starts to look like a hoax, at best - and given that delayed ownership of $500 million in bitcoin features in the story, perhaps something else. Coincidentally, or not, Wright’s Sidney home was raided by police in connection with a tax dispute just hours after Wired dropped its bombshell. 

There have been several other big pieces of crypto-related news this week, which have been all but overlooked in the light of the Craig Wright story. Briefly:

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