Craig Wright's Iffy Claim to Be Bitcoin Founder Satoshi Nakamoto May Suggest Coup

Bad evidence that he is founder Satoshi Nakamoto has led to governance fears. 


Craig Wright, a relatively obscure Australian academic and entrepreneur, officially claimed on Monday morning that he is Satoshi Nakamoto, the pseudonym used by the creator of cryptocurrency Bitcoin. Long the subject of much dispute within the Bitcoin community and the public at large, Nakamoto’s identity became even more obscure after he disappeared shortly following the currency’s introduction in 2009. Some prominent members of Bitcoin, including Gavin Andresen, chief scientist at the Bitcoin Foundation, and Jon Matonis, founding director of the Bitcoin Foundation, have publicly backed Wright’s claim, but, importantly, the public evidence does not definitively establish Wright’s status as Nakamoto.

As proof, Wright released the private key to a very early Bitcoin transaction known to have been completed by Nakamoto. While he allegedly provided greater details to Andresen in person and to media outlets he spoke with as part of the announcement, the key Wright released was already available publicly in the blockchain that encodes all of Bitcoin’s transactions. The discrepancy raises serious questions over whether Wright is the Bitcoin founder, particularly because the real Nakamoto would be able to release the private key of the so-called “Genesis block,” the first Bitcoin block ever mined, as definitive proof.

The failure to provide definitive evidence has led to confusion and even genuine fear that something is amiss with this announcement. Some are speculating that Andresen and Matonis may have been hacked, and some of Andresen’s administrative capabilities have been temporarily suspended pending further assessment of the situation. Of course, there will always be skepticism of any claim of this nature, but Wright’s attempts to convince the public by reaching out to the BBC, The Economist, and GQ with sketchy information struck many as unbefitting Nakamoto’s perceived genius.

Wright has previously been identified as the possible founder of Bitcoin when Wired wrote an article suggesting that he either was Nakamoto or had access to hacked information. Nakamoto is widely believed to have been the subject of several hacks, though, so the possibility that he was trying to manipulate the site resonated with the community. Wright also does claim that he invented Bitcoin along with his friend Dave Kleiman, who is now deceased. But if Kleiman was actually the lead in the design and creation of Bitcoin, it could explain why Wright has provided such circumstantial proof.

It is not hard to imagine someone, especially an obscure academic and entrepreneur, wanting to be known as the founder of Bitcoin. While it would not confer any particular advantage over the Bitcoin system itself, and so even those who are skeptical of Wright’s identity do not predict substantial turbulence in the digital system itself, Nakamoto is suspected to possess Bitcoins worth close to $1 billion. Wright, on the other hand, is known to have major problems with Australian tax authorities, and his home was raided by police in December.

Andresen and Matonis will have to provide details on why they believe Wright if they hope to win back the Bitcoin community. The lack of substantial proof has already led some to suspect the Bitcoin developers of trying to leverage Wright’s identity into greater control over the Bitcoin Foundation as well as the currency at large. Bitcoins worldwide are worth close to $10 billion, but as mining slows down due to the logarithmic nature of the algorithm underlying the currency, their scarcity is only increasing.

If Wright hopes to be believed, then he will have to supply the public with more information about his identity. The sprawling community of Bitcoin developers and users are hardly going to take the word of major media outlets and even those personally invested in the system as definitive proof. Whatever Wright is trying to achieve by linking himself to Nakamoto will also require greater evidence. The current ambiguity casts doubt on Wright and much of the leadership structure of the decentralized community.

The curious case of Satoshi Nakamoto remains unsolved, but now it’s getting interesting.