This week on Planet Bitcoin - 6 May 2016

Friday 06 May 2016

TL;DR nothing to see, move along.

It has been a pretty monumental week in Bitcoinland, but we’re more or less back where we started. After the crash down from around $470 to $440 towards the end of last week, bitcoin has been trading between around $440 and $455.

Chart

The middle of the week saw a fall of around $10, before recovering to oscillate around the $450 mark. That drop coincided with the news that Australian computer scientist Craig Wright had outed himself as bitcoin’s creator, Satoshi Nakamoto, with proof given to a series of media outlets and high level bitcoiners. All in all, it was barely more than a blink for bitcoin.

That lack of concern reflects the market’s disinterest in Wright’s revelation, which might be considered strange given that he claimed to be in control of some 1 million-plus BTC, mined during the early days of bitcoin.

But the market was right. Wright’s initial ‘proof’ was pulled to shreds within hours. The media outlets that initially backed him - including the BBC - swiftly rewrote their articles to appear more circumspect. Wright promised further and convincing proof, including a commitment to move some coins from a very early block. Then on 5 May, he abruptly deleted his website, leaving only an apology and a claim that he lacked the courage to publish the evidence he claimed to possess. The message he left simply read:

 

I’m Sorry

I believed that I could do this. I believed that I could put the years of anonymity and hiding behind me. But, as the events of this week unfolded and I prepared to publish the proof of access to the earliest keys, I broke. I do not have the courage. I cannot.

When the rumors began, my qualifications and character were attacked. When those allegations were proven false, new allegations have already begun. I know now that I am not strong enough for this.

I know that this weakness will cause great damage to those that have supported me, and particularly to Jon Matonis and Gavin Andresen. I can only hope that their honour and credibility is not irreparably tainted by my actions. They were not deceived, but I know that the world will never believe that now. I can only say I’m sorry.

And goodbye.

 

This particular storm in a teacup lasted just three days. The only after-effects are some loss of reputation for the influential members of the community who backed Wright; we still do not know how his closed-door ‘proofs’ fooled them. This was Wright’s second attempt to convince the world he was Satoshi. His third, assuming he ever surfaces again, will doubtless be given even shorter shrift. Further leaked documents suggest that he has privately been claiming to be Satoshi for much longer than six months. The lies may finally have caught up with him, with various tax and fraud issues coming his way in the coming weeks.

That excitement didn’t have much effect on the bitcoin markets, but Ethereum has had a fairly turbulent week - rising 50% from 0.016 BTC to almost 0.024 before retracing back to 0.02 and maintaining significant volatility. That action may be a function of bitcoin’s temporary stagnation. With the halving of block rewards coming in two months, many traders are expecting a steady rise in bitcoin price. Alts are likely to suffer across the board as a result, more than they already have done.


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