ANOTHER Satoshi has bitten the dust. On May 2nd Craig Wright, an Australian entrepreneur, published on his blog what he claimed was proof that he is Satoshi Nakamoto, the mysterious creator of bitcoin, a cryptocurrency. Within 90 minutes the post had been debunked on Reddit, an online forum.

He then said that he would present “extraordinary proof” that he is indeed Mr Nakamoto by moving some bitcoin from accounts thought to be under control of the currency’s creator. But on May 5th he wrote on his blog that he did not have the strength to continue trying to prove his identity, prompting most to add his name to the long list of false leads in the hunt for Mr Nakamoto.


The invention that underlies the currency, called the “blockchain”, is widely considered brilliant. That Mr Nakamoto has not basked in its glory suggests an overwhelming desire for privacy. Nor does Mr Nakamoto seem to be motivated by fortune: all bitcoin in circulation are now worth about $7 billion. Mr Nakamoto is thought to hold more than 1m bitcoin, worth about $450m at current rates (the currency’s value has recovered a bit after a steep fall—see chart).

Mr Nakamoto’s reclusiveness has given rise to a cottage industry of Satoshi-hunters. In 2014 Newsweek, an American magazine, identified a man called Dorian Satoshi Nakamoto as the real Satoshi, but he turned out not to be. In December 2015 it was Mr Wright’s turn to be outed: hackers leaked some of his e-mails and documents. But holes soon started to appear in that story, too. SGI, a maker of supercomputers, for instance, denied that it had ever done business with one of his firms, Cloudcroft. After a raid by Australian tax officials on his house in Sydney, many came to believe that the entire story was an elaborate hoax, perhaps one staged by Mr Wright himself.

Soon afterwards Mr Wright moved to London, where one of his companies has an office, but kept silent—until late March, when his public-relations agency contacted three media outlets, including The Economist, saying that Mr Wright wanted to refute claims that he had made the story up and to offer cryptographic proof that he is indeed Mr Nakamoto. Although he gave us a demonstration that seemed to show that he is in possession of cryptographic keys which only Mr Nakamoto should have, important questions remained. In particular, Mr Wright was unwilling to use his keys to sign digitally a message provided by us, which would have been stronger, although not absolutely watertight, evidence that he is Mr Nakamoto.

Others were convinced by his claim, however. Gavin Andresen, Mr Nakamoto’s successor as the leading developer of bitcoin’s software, confirmed in an interview that he had met Mr Wright and thought his proof was valid—an endorsement that lent credence to his claim.


This week Mr Wright published a blog post which he had promised would not only describe the proof in detail, but also provide data to allow it to be independently verified. But the post turned out to be an exercise in obfuscation: he laid out a very complicated way of proving his identity and provided as cryptographic proof a string of numbers that is publicly available.

This bungled self-outing provoked head-shaking among bitcoin gurus: if Mr Wright was indeed Mr Nakamoto, surely he could provide more convincing evidence? Mr Andresen, too, was flabbergasted by the blog post and later said that it was a mistake to endorse Mr Wright’s claim before reading it.

Faced with much ridicule, Mr Wright backed out. “I believed that I could do this,” he wrote in a new post. “I believed that I could put the years of anonymity and hiding behind me. But, as the events this week unfolded and I prepared to publish the proof of access to the earliest keys, I broke.”

The most obvious explanation for Mr Wright’s erratic behaviour is that he is indeed an imposter—and does not have the access to Mr Nakamoto’s keys. But things may be more complicated. One theory holds that Mr Wright was only one of a group of inventors of bitcoin. Ian Grigg, another bitcoin expert, recently wrote: “It is true that Craig is the larger part of the genius behind the team, but he could not have done it alone.” Two possible members of that team, Hal Finney and Dave Kleiman, have died.

In other words, the Satoshi saga will go on. In the meantime the bitcoin community remains divided into two competing camps with different views about how the currency should evolve. One side wants to keep it smallish and pure; the other is pushing for it to grow rapidly, even if this means turning it into something more like a conventional payment system. The controversy has dragged on for months because bitcoin lacks institutions to reach and impose a decision.

The “civil war”, as some call it, has already slowed bitcoin down, says Jeff Garzik, another influential developer and co-founder of Bloq, a bitcoin startup. If the strife continues, another cryptocurrency may well supersede bitcoin—in which case the effort to establish Satoshi’s true identity will become academic.


– By : The Economist Date : 7-May-2016

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