Spreading the wealth.

Photographer: Leon Neal/AFP/Getty Images

Bitcoin's Creator Is Human. Get Over It.

Leonid Bershidsky is a Bloomberg View columnist. He was the founding editor of the Russian business daily Vedomosti and founded the opinion website Slon.ru.
Read More.
a | A

Craig Wright, a compulsive degree collector from Australia, has officially laid claim to the name of Satoshi Nakamoto, the pseudonym used by the mysterious inventor of bitcoin. His motives are unclear, but the technical proof he has presented and the willingness of Gavin Andresen, Nakamoto's successor as the head developer of bitcoin, to accept him as genuine, are convincing.

QuickTake Bitcoin and the Blockchain

If Wright is Satoshi, extreme libertarians weren't just early adopters of the cryptocurrency -- one of them was its creator, and the idea came about for ideological reasons. Though Nakamoto's bitcoin manifesto studiously avoided political and philosophical statements, Wright doesn't. 

Five months after two tech publications, Wired and Gizmodo, first claimed that Wright was Nakamoto based on some leaked e-mails, he contacted three news organizations -- the BBC, the Economist and GQ -- to say he was ready to present proof that he had founded the cryptocurrency. Wright proved that he held the private cryptographic key used to sign the first bitcoin transfer -- from Nakamoto to Hal Finney. 

The BBC accepted his proof. GQ promised to publish its interview with Wright in its next issue. The Economist made the most serious attempt to verify Wright's claim, inviting Andresen and Jan Matonis, the former director of the Bitcoin Foundation, to witness Wright's demonstration and spelling out the technical aspects of the "paternity test" that would be necessary to establish Nakamoto's identity beyond any doubt. 

Matonis and Andresen both agreed that Wright had shown that he had the key to the first bitcoin transfer, which, presumably, only Nakamoto could hold because he was the only person to "mine" bitcoin. That's not quite 100 percent proof -- who knows how Wright might have come by the key? Wright refused to provide any further evidence or, as he put it to the Economist, jump through any more hoops. 

Andresen, nevertheless, came away convinced that he had seen "the brilliant, opinionated, focused, generous -- and privacy-seeking -- person" he remembers from bitcoin's inception.

The Economist qualified its acceptance of Wright's evidence: "As far as we can tell he indeed seems to be in possession of the keys, at least for block 9" -- the account from which the transfer to Finney was made.

The social networks and other publications to which Wright didn't hand the scoop still express doubt, however. All they have seen is a post on Wright's blog in which he explains how a bitcoin key can be verified. Reddit users took it for Wright's proof itself, and generated a number of threads to discuss Wright's self-outing as a scam. That skepticism seeped into the mainstream media. To me, it is misplaced. The goal of the post was to describe the key verification procedure using a publicly available example. It doesn't contain, or profess to contain, the keys that Wright demonstrated to the three publications, and to Matonis and Andresen.

Doubt persists for two reasons:The bitcoin community recently splintered. Some of the developers, including Andresen, would like to double the size of the blocks, or transaction records entered into the blockchain, the public register that is the most valuable part of the bitcoin technology. That would make it possible to register more transactions per second. Others are against the increase.  There are suspicions that Andersen could have a hidden agenda in confirming Nakamoto's identity.

In addition, Wright doesn't appear to measure up to the demigod persona that Nakamoto has taken on for bitcoin enthusiasts and geeks in general. Apparently, he can't supply proof that he has received the many degrees in engineering, law, finance and theology that he's claimed. He makes typos and grammatical errors in his blog posts (Nakamoto's bitcoin manifesto was meticulously copy-edited). He is temperamental and sometimes incoherent. The Australian authorities are investigating him for tax evasion. As Andresen wrote,

"We love to create heroes -- but also seem to love hating them if they don’t live up to some unattainable ideal. It would be better if Satoshi Nakamoto was the codename for an NSA project, or an artificial intelligence sent from the future to advance our primitive money. He is not, he is an imperfect human being just like the rest of us."

Yet, for all his imperfections, Wright is ideologically pure. And to me, that provides a missing piece of the puzzle. Nakamoto's manifesto gave no explanation for the creation of bitcoin, except as a nifty engineering exercise that would remove some of the limitations of conventional finance. Wright's pronouncements show him to be an anarcho-capitalist of strong convictions. He has railed against governments and "hacktivists." He has stated that "there is more than enough help for ppl available. They just need to get off their butts and work." He has expressed an extreme belief in the free market without intervention, arguing that the 17th-century tulip bubble was the result of meddling with market forces. According to The Economist, he says he chose the pseudonym Nakamoto to honor a pro-free-trade 17th century philosopher and merchant.

In his blog post on key verification, Wright quoted Jean-Paul Sartre's explanation for refusing the Nobel Prize: "If I sign myself Jean-Paul Sartre it is not the same thing as if I sign myself Jean-Paul Sartre, Nobel Prizewinner." Sartre explained that the title would subject his readers to undesirable pressure. The analogy is clear: Wright as Nakamoto is not the same as just Wright. 

I'm not sure it works that way: Enthusiasts' doubts show that they can't quite match the personality to the achievement. Sartre could refuse the prize because he felt bigger than the distinction it conferred; Nakamoto's shoes, by contrast, appear to be too big for Wright. Yet, given  bitcoin's turbulent history of rises, falls, scams, court cases, pyramid schemes, scorn and growing mainstream acceptance, the product fits its supposed creator's character perfectly.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

To contact the author of this story:
Leonid Bershidsky at lbershidsky@bloomberg.net

To contact the editor responsible for this story:
Max Berley at mberley@bloomberg.net