Determining the identity of Satoshi Nakamoto isn’t as simple as solving the paternity of a brilliant child, in which a DNA test would solve the issue quickly. Bitcoin, from its foundation, has never been so simple.
Craig Steven Wright, a 45-year-old Australian inventor and computer scientist, now claims he, in fact, is Nakamoto after denying it in December when he was first “outed.” Wright, according to a blog posted today, now says he is Nakamoto and has cryptographic proof of it.
The Economist, in partnership with GQ Magazine and the BBC, spoke to Wright prior to the blog post and reviewed the documents he provided. The interviewers also spoke to bitcoin insiders who have spoken with Nakamoto in the past and had access to the same documents. The conclusion of all three media sources is that Wright could be Nakamoto, although questions remain.
Will It Be Possible?
“Indeed, it may never be possible to establish beyond reasonable doubt who really created bitcoin,” The Economist noted.
Wright stopped participating in bitcoin a few years back. His successors have written more code than he did. But Nakamoto’s identity still matters. Bitcoin has in recent months suffered what some call a “civil war” in the bitcoin community concerning the block size. One side wants to keep bitcoin small while the other wants rapid growth, even if it means turning bitcoin into a more conventional payment system.
Nakamoto, if his identity could be accepted, could change the dynamics of this debate.
Who Is Nakamoto?
No one has met Nakamoto in person. People have communicated with him electronically. In addition to writing the bitcoin white paper, Nakamoto wrote the first bitcoin software and worked with other developers to improve it. Nakamoto stopped participating in 2011. He has not been heard from since, other than for a few messages that are considered to be hoaxes.
Nakamoto clearly has chosen to remain private. He does not seem to be motivated by fortune. He reportedly holds about 1 million bitcoin, worth about $450 million at current rates, out of a total $7 billion.
An industry of Nakamoto hunters has emerged in his silence. Books on bitcoin include chapters on his identity. There are different theories based on the same sources. Some say he is in Britain due to his use of “Britishisms.” Others say he is in the Eastern Americas.
Nakamoto hunters have pegged him as a Finnish sociologist, an Irish student and a Japanese mathematician.
He has been identified as Hal Finney and Nick Szabo, a pair of American cryptographers. Szabo denies he is Nakamoto while Finney died in 2014.
Some say the bitcoin code is too good to have been written by one person.
Newsweek in 2014 claimed a man in California named Dorian Satoshi was Nakamoto, but this proved to be false.
The December Outing
In December 2015, hackers who broke into Wright’s computer sent documents to Gizmodo and Wired, both of which published articles about Wright being Nakamoto.
There were problems with the Gizmodo and Wired articles. Academic degrees on Wright’s LinkedIn page could not be confirmed. SGI, a supercomputer maker, denied ever having done business with Cloudcroft, one of Wright’s companies.
Researchers found that cryptographic keys in the leaked documents, as well as some of Wright’s blog posts, had been changed or backdated.
Australian tax officials raided Wright’s home in Sydney, leading many to believe the Wired and Gizmodo stories were based on a hoax that Wright staged. Wright remained silent on the matter and moved to London, where one of his companies has an office.
Wright said he is not seeking publicity, but wants to set the record straight. He said his silence does not confirm what he calls misinformation about him. He said the issue impacts his work, his family, his staff and “everything else.”
Why He Comes Forward Now
Wright said he also wants to end negative myths and fears about the blockchain and bitcoin. He said he does not wish to cash in his bitcoin, but will spend the money on research – slowly, so as not to erode the bitcoin price.
Asked why he went silent to begin with, Wright said he wanted to escape what was a media storm at the time.
He said he took the name “Nakamoto” from a 17th-century Japanese merchant and philosopher, Tominaga Nakamoto. This person was critical of normative thought of his time and favored free trade. Wright did not wish to say why he chose the name, “Satoshi.”
Wright has a ways to go to convince people he is Nakamoto, seeing that he was outed once, unconvincingly. Factual evidence is needed. He will have to show he holds the cryptographic keys that Nakamoto should have. He will have to address holes in the story that came to light in December. He will also need to show the technical knowledge that would allow him to develop the system.
He will also have to fit the image that people have of Nakamoto. People will want to know what the software developers who collaborated with Nakamoto over time think of Wright’s claim.
How Can He Prove It?
For Wright to cryptographically prove he is Nakamoto, the basics that are at the heart of encryption schemes like Pretty Good Privacy (PGP) have to be kept in mind. PGP uses two keys, one private and one public. Both keys are mathematically related. The holder of the private key encrypts a message with it, and it can be decrypted with the public one. This would establish the identity of the sender of an encrypted message, assuming the private key was not stolen.
Whenever a message is sent by someone claiming to be Nakamoto appears online, it is dismissed as a hoax since none has been signed by a private PGP key considered to belong to Nakamoto. The private key is connected to a public key linked to bitcoin.org, which Nakamoto registered in 2008 and used to publish his white paper.
The earliest verifiable date is Feb. 28, 2011, so it could have been placed there later than 2008. Nakamoto’s last public posting dates from Dec. 12, 2010. He has never signed any message with the corresponding private key.
Jerry Brito, the executive director of the Bitcoin Center, said if someone successfully signed with the Satoshi PGP key, it would not prove he is Satoshi Nakamoto.
Wright’s Cryptographic Proof
Wright agrees with this and says he has the private PGP key, but that using it will not prove anything. Instead, he offers a different cryptographic proof. Bitcoin uses a different type of public key cryptography. The public key, called a bitcoin address, is similar to the number of a bitcoin bank account. The private key is like a PIN or signature on a check allowing the holder to transfer money. The analogy is not without flaw since bitcoin holders can have different accounts, each linked to a private key and a separate address.
Bitcoin addresses can also link to blocks. Because Nakamoto must have been the only bitcoin miner in the early days of bitcoin, he should hold the corresponding private keys. Nakamoto was also the first to send bitcoin, money he earned on the ninth block. Hal Finney, when he was alive, confirmed this transaction.
Should Wright prove he has the private key corresponding to the bitcoin address of the miner of block 9, he would have strong evidence that he is Nakamoto. If he performed the same cryptographic trick with keys linked to earlier blocks, his case would be even stronger.
Wright, in his blog, said he does control the key to block 9 and offers an explanation for how to prove this. He said he signed a text with his private key – the 1964 speech whereby Jean-Paul Sartre refused to accept the Nobel prize for literature.
Wright has published this on his website with a detailed explanation for how to verify he possesses the private key.
Convincing The Economist?
Wright has also demonstrated his proof in person to The Economist. Not just for block 9, but for block 1. The demonstrations can be staged. The information needed to go through the verification process independently was not available soon enough. Nevertheless, the publication believes Wright has the keys, at least for block 9.
Two bitcoin insiders who witnessed the same demonstration – Gavin Andresen, Nakamoto’s successor as the software’s lead developer, and Jon Matonis, a bitcoin consultant and former director of the Bitcoin Foundation – share The Economist’s assessment.
Questions remain. Wright does not wish to show proof for block 1, saying block 9 has the only bitcoin address clearly linked to Nakamoto. To repeat the other blocks’ procedure would not add more certainty. He further noted he cannot send bitcoin since a trust now owns the bitcoin.
Wright rejected having The Economist send him another text to sign as proof he has the private keys, rather than just being the first to publish proof generated at some point by someone else.
He said people either believe him now or they don’t.
Wright’s position will create doubts.
Why Questions Remain
His efforts have alleviated some doubts more than others.
Questions about his academic degrees rose when he listed so many on his LinkedIn profile that has since been deleted. Wright now says the profile was a joke to keep people from bothering him.
The current documents Wright’s public relations agency released include about a dozen industry certifications. They include a master’s degree in statistics from the University of Newcastle in Australia, a master’s in law from Northumbria University in Britain, and several master’s degrees in management and IT from Australia’s Charles Sturt University. The curriculum vitae also notes Wright has submitted a doctoral thesis in computer science and listed a doctorate in theology. He also says he is enrolled at the University of London in a master’s of science in finance program.
Wright has given support material for these degrees.
To prove the existence of his supercomputer mentioned in the December story, he provided a letter that a local SGI director signed stating the firm was pleased to work the Cloudcroft, one of Wright’s firms. SGI, based in Silicon Valley. SGI has no record of selling a supercomputer to Cloudcroft, but said it could have been bought on the grey market.
SGI distanced itself from Wright because he combined the company’s equipment with that of a competitor, Supermicro, according to Wright. He said the computing power has been used to test his ideas on improving bitcoin.
As for the backdated keys revealed in December, Wright provides a First Response report stating the keys could have been created by an older version of the software. He said he has lost control of many of the online accounts, which could explain the changed blog posts.
Australian Tax Issues?
Concerning the Australian tax raid, Wright said he was not trying to evade taxes. He said his actions were related to correctly taxing bitcoin, a matter the Australian Taxation Office did not wish to comment on. Wright denies any wrongdoing and said he did not leave Australia because of the tax investigation.
When Wright was outed in December, some observers called his writings unremarkable and that it was not likely he is the author of the original white paper. Juola & Associates, which uses a technique called “stylometry” to identify authors, conducted a study comparing texts written by Wright and those written by Nakamoto and concluded they were not written by the same person.
Wright said the while he wrote the white paper, he was helped by Dave Kleiman, an American computer forensics expert who died in 2013. Wright also said he has many different writing styles.
Wright has written extensively. His public relations agency released a list of 100 papers, books, chapters and conference presentations.
Wright said bits of research that helped him create bitcoin can be found in his publications. He also said he has written several papers on bitcoin, which are undergoing peer review soon.
Interviewed in person, he was often hard to follow, but he demonstrated knowledge of his topic. He said the blockchain will become so big it could keep track of every Visa transaction, each stock exchange transaction, every bank account and more.
The Most Subjective Test
The most subjective test is his appearance. No one has met Nakamoto and no video or photo exists.
Wright does fit the expectation that he is private, libertarian and nerdy.
He said he regrets he will no longer be able to attend conferences unrecognized.
He does appear to seek recognition. He emphasized to The Economist the number of papers he has authored. He said he wrote more than Szabo.
Rather than dwelling on libertarian ideology, he stressed his love of learning.
People who have exchanged emails with Wright believe his personality overlaps with what is known about Nakamoto. Matonis, who met Wright in 2015 prior to the outing, said he felt on meeting Wright that he was Nakamoto.
Andresen said he is convinced Wright is Nakamoto.
Doubts Still Remain
The Economist remains unsure about Wright’s new claim. He provided credible answers to questions. He has the expertise to develop a complex cryptographic system like bitcoin. But there are doubts.
The Economist is unsure why Wright does not allow them to send him a message to sign.
He could have used his supercomputer to calculate the signature of the Sartre text in what is called a “brute-force attack.”
Wright’s motive for stepping forward also is cause for concern. Before being outed six months ago, he approached Andrew O’Hagan, who wrote the unauthorized biography of Julian Assange. O’Hagan, who believes Wright’s claim, is now writing an article for The London Review of books on Wright.
This indicates Wright was considering going public before being outed.
What It Means For Bitcoin Now
Wright’s outing will benefit those in the current bitcoin civil war who want to expand the block size quickly. He said if he could reinvent bitcoin, he would seek a steady block size increase. He plans to publish mathematical proof there is no tradeoff between the mass adoption of bitcoin and its staying decentralized.
Simulations indicate the block size could be as large as 340 gigabytes in a specialized bitcoin network.
Wright is trying to undermine the credibility of those who want bitcoin to grow more slowly. He criticized Gregory Maxwell, a bitcoin developer who claimed the cryptographic keys in Wright’s leaked account were backdated. Wright said even experts have agendas, and the only way to ensure valid trust is to hold experts to a higher level of scrutiny.
Wright does not appear to have a clear idea what his role should be. After he proves his identity, he wishes to disappear again. But he appears to plan to impact bitcoin’s evolution.
He plans to release research no improving the inner workings of the bitcoin system.
Wright said he has no wish to become bitcoin’s benevolent dictator like Linus Torvalds, who oversees the development of Linux. Instead, he said he wishes to dispel myths and help unleash bitcoin’s full potential.