Alleged Bitcoin Millionaire Nakamoto Gets $28,000 Donations

Photographer: Jonathan Alcorn/Bloomberg

Dorian S. Nakamoto, identified by Newsweek magazine as the founder of Bitcoin, center, exits his home surrounded by members of the media in Temple City, California on March 6, 2014. Close

Dorian S. Nakamoto, identified by Newsweek magazine as the founder of Bitcoin, center,... Read More

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Photographer: Jonathan Alcorn/Bloomberg

Dorian S. Nakamoto, identified by Newsweek magazine as the founder of Bitcoin, center, exits his home surrounded by members of the media in Temple City, California on March 6, 2014.

Bitcoin enthusiasts donated about $28,000 to Dorian S. Nakamoto, a 64-year-old physicist who denied a report last week by Newsweek magazine that identified him as the digital currency’s creator.

A wallet address set up by Andreas Antonopoulos, chief security officer for Blockchain.info, received more than 1,800 payments, amounting to about 44 bitcoins, according to data on his company’s website. That compares with about 1 million coins that the founder of the system owns, worth over $1 billion when the price peaked in December, according to Jered Kenna, a San Francisco-based Bitcoin investor.

The naming of Dorian Nakamoto drew media attention that resulted in the former defense industry and government employee being chased by reporters through Los Angeles. Bitcoin supporters expressed outrage at what they saw as a violation of his privacy and further evidence of news media bias against the nascent digital currency that last month suffered the collapse of one of its largest exchanges.

“If this person is not Satoshi, then these funds will serve as a ‘sorry for what happened to you’,” Antonopoulos wrote in a post on the Reddit social media website on March 8. “It serves to soften the damage caused by irresponsible journalism and to demonstrate the generosity and empathy of the community.”

Cryptographic Origins

Bitcoin’s cryptographic origins resulted in anonymity being built into the payment protocol and a community that prizes privacy. These same features prompted regulators worldwide to express concern the digital currency may be used for money-laundering and illicit sales, such as the online Silk Road website where customers used coins to buy and sell drugs.

The virtual currency was in the spotlight again last month when Tokyo-based Mt. Gox, once the biggest exchange for the digital currency, filed for bankruptcy protection after coins valued at more than $500 million went missing. U.S. federal prosecutors are probing possible criminal violations tied to the shutdown, two people familiar with the matter said Feb. 26.

Satoshi Nakamoto has been thought to be a pseudonym for a programmer or group of programmers who wrote the paper and the initial source code for Bitcoin. The code has since been handed off to a loose group of experts affiliated with the Bitcoin Foundation, a Seattle-based advocacy group.

Gavin Andresen, the foundation’s chief scientist who had been one of the few people to communicate with Satoshi Nakamoto, didn’t immediately indicate whether he could identify Dorian Nakamoto as Bitcoin’s creator. Andresen said in a message on Twitter that he was disappointed that Newsweek decided to “dox,” or document, the Nakamoto family.

Donations will be converted to U.S. dollars at the end of March and will be offered to Nakamoto, or his charity of choice, Antonopoulos said in the post. If rejected, the funds will go to Electronic Frontier Foundation, a San Francisco-based civil liberties advocacy group, he said.

To contact the reporter on this story: Pavel Alpeyev in Tokyo at palpeyev@bloomberg.net

To contact the editors responsible for this story: Garfield Reynolds at greynolds1@bloomberg.net Russell Ward

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