CSW = Satoshi Nakamoto
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- Craig Wright is an Australian computer businessman. He claimed in 2016 to be Satoshi Nakamoto. He didn’t move a bitcoin from the Satoshi stash or successfully sign a message using a known Satoshi Nakamoto key – instead, he did absolutely everything else except those things, in ways that didn’t check out and which others immediately spotted the problems in.151
- Wright’s LinkedIn page152 (since deleted) at the end of 2015 listed multiple master’s degrees, a doctorate in theology from an unnamed university and a doctorate in computer science from Charles Sturt University earned during his five years as an unpaid adjunct lecturer (along with three more master’s in that time). This second doctorate turns out not to have yet been awarded, CSU saying that the doctoral thesis was still being considered.153 (It was finally accepted in February 2017.154) The text of the profile was peppered with typographical and grammatical errors. At the top of the work history, it stated: “July 2015 – Present (6 months): Writing papers, Research, Managing change. Nothing but security and blockchain.”
- Wright had been active on the Cypherpunks mailing list in 1996,155 so he may have been aware of the ongoing currency discussions. In February 2011, he blogged that central banks had “devalued all our savings and capital investments” through “printing money”, leading to a resurgence of interest in the gold standard.156 He then proposed a PayPal-like system backed with gold. In the comments he emphasised “The sole basis is in a currency that cannot be printed like paper.” Imagine someone writing this if they had invented Bitcoin two years before.
- The first time Wright is known to have spoken of Bitcoin was in the comments of his August 2011 post on The Conversation, “LulzSec, Anonymous … freedom fighters or the new face of evil?” in which he wrote of “Bit Coin” as a solution to WikiLeaks’ problems receiving donations.157
- Wright started buying bitcoins on Mt. Gox in April 2013, including 17.24 BTC at the peak of the bubble in November for $1198 each.158 Some time in 2013, he posted backdated entries to his personal blog with references to Bitcoin and Bitcoin-related concepts:
- A post dated August 2008 mentions he will be releasing a “cryptocurrency paper” and references “Triple Entry Accounting,”159 a 2005 paper by financial cryptographer Ian Grigg.
- One post dated November 2008 includes a PGP key owned by email@example.com – one letter different from firstname.lastname@example.org, an address the real Nakamoto had been known to use. This PGP key used a cipher suite not used in PGP at the time, and wasn’t on the public key servers in 2011, which suggests the key had also been backdated.160
- Finally, dated 10 January 2009 (it would have been 9 January in the US), there was this post:
- Well, e-gold is down the toilet. Good idea, but again centralised authority.
- The Beta of Bitcoin is live tomorrow. This is decentralized … We try until it works.
- Some good coders on this. The paper rocks. http://www.bitcoin.org/bitcoin.pdf
- Wright established the company Hotwire PE in 2013 with the stated purpose of research and development work using e-learning and e-payment software. Hotwire bought the software from Wright’s own Wright Family Trust. Hotwire was capitalised by Wright with AUD$30 million in bitcoins. (It’s not clear if these existed; this would have been 1.5% of all bitcoins at the time.) AUD$29 million of this was paid (still in bitcoins) to Wright’s trust to buy software. This incurred sales tax (GST). Hotwire then claimed a GST refund of AUD$3.1 million on this R&D expense – which would have been received from the Australian Tax Office in actual dollars.
- The ATO was unimpressed with these arrangements and withheld the refund pending investigation,161 eventually assessing a AUD$1.7 million penalty. The mid-2014 administrator’s report for Hotwire PE noted the company was capitalised only with bitcoins, with its only assets being anticipated tax rebates, and blamed the company’s failure on the collapse of Mt. Gox.
- Wright had also applied for an R&D incentive scheme, where a company could receive its tax rebate in advance. His company DeMorgan claimed in 2015 that it was eligible for up to AUD$54 million for a supercomputer “dedicated to Cryptocurrency and smart contract research”.162
- In June 2015, Wright got his former colleague Stefan Matthews to put him in touch with Robert MacGregor of Canadian money transmitter nTrust. Matthews told MacGregor that Wright was almost certainly Satoshi Nakamoto. MacGregor was working with Canadian gambling billionaire Calvin Ayre, who Matthews had also previously worked for.
- On 29 June 2015, MacGregor and Ayre signed a deal to buy Wright’s companies and his claimed blockchain patents and clear his debts, legal fees and employees’ back wages, and form a research unit led by Wright that they could sell to a larger company. They also set out to market “Satoshi Nakamoto”’s life story, and commissioned novelist and journalist Andrew O’Hagan to write a biography. O’Hagan didn’t take their money and refused to sign a nondisclosure agreement, but instead pursued the story as an embedded but independent journalist. He eventually published a book-length article on Wright in the London Review of Books.163
- (Matthews told O’Hagan that Wright had shown him the 2008 Bitcoin white paper before publication, though Wright’s February 2011 blog post makes it seem startlingly unlikely that Wright had heard of Bitcoin that early. Wright had also told Matthews he had met with Ross Ulbricht of the Silk Road in Sydney. O’Hagan notes: “MacGregor later told me he was convinced because Wright had shown Matthews the draft Satoshi white paper. ‘I always had that,’ MacGregor said.”)
- In November 2015, an anonymous source began sending documents about Wright and Bitcoin to Gwern Branwen. Branwen provided the documents to Andy Greenberg at Wired.164 A similar document stash was sent to journalists at Gizmodo. “I hacked Satoshi Naklamoto [sic]. These files are all from his business account. The person is Dr Craig Wright.”165 Document drops had been sent to others, including the New York Times and Nathaniel Popper, author of Bitcoin history Digital Gold; none considered the story sufficiently credible to pursue. Leah McGrath Goodman at Newsweek noted that “it was being shopped around fairly aggressively this autumn.”166
- Gizmodo speculated that Wright and Dave Kleiman – a computer security and forensics expert and author who had died in April 2013 – had together been “Satoshi”. Wright had co-authored some of Kleiman’s security study guides and claimed he had been a close friend.
- As well as pointers to the earlier backdated blog entries, the “leaked” documents included:
- a scanned PDF of an unsigned document with Kleiman’s name on it, dated 6 September 2011, purporting to set up a trust, the Tulip Trust, backed by 1,100,111 BTC, controlled by Kleiman and locked until 2020. (The Satoshi stash being locked in a trust answered MacGregor’s question “why isn’t he sitting on an island surrounded by piles of gold?”) The document includes the note “The amount not included will be used to show the ‘lies and fraud perpetuated by Adam Westwood of the Australian Tax Office against Dr Wright’”.167
- an unverified transcript of interviews between Wright and his lawyer and the Australian Tax Office, including claims that Wright had been mining bitcoins since 2009, and how he had “1.1 million Bitcoins. There was a point in time, when he had around 10% of all the Bitcoins out there. Mr Kleiman would have had a similar amount.”168
- emails purportedly from 2009 discussing cryptocurrency-related ideas with Kleiman.
- a letter from supercomputer vendor SGI to Wright’s company Cloudcroft saying it would be assisting in the development of “hyper-density machines” (whatever those are; the term appears only to be used by or around Wright).169
- The documents and claims were greeted with widespread skepticism, particularly given the backdated blog posts and the technical details that failed to check out. News site Fusion went so far as to assert outright that Wright had likely sent the “leak” himself.170 SGI said it had never had any contact with Cloudcroft or Wright.171 Cloudcroft’s C01N had been No. 17 on the November 2015 Top500 list of the world’s most powerful computers, although it has since been removed from that month’s list;172 Top500 declined to detail how they’d verified this entry.
- A few hours after the Wired and Gizmodo stories became worldwide news, Wright’s house and office were raided by police on behalf of the ATO, though they stated the raid was “unrelated to recent mass media reporting”.173 Wright and his wife had moved out the day before; Wright told O’Hagan of skipping the country just in time to evade the police. The ATO continued investigating through the next few months; they firmly believed “Wright is not the creator of Bitcoin and that he may have created the hoax to distract from his tax issues.”174
- Wright deleted his online social media presence and did not respond to media queries. Nothing more was heard from him for a few months; he was in the London office of nCrypt, the subsidiary nTrust had created for him, working on blockchain-related patents.
- He spoke at length to O’Hagan at this time about his life and work; O’Hagan noted that Wright “had a habit of dissembling, of now and then lying about small things in a way that cast shade on larger things”:
- Wright told me that around this time he was in correspondence with Wei Dai, with Gavin Andresen, who would go on to lead the development of bitcoin, and Mike Hearn, a Google engineer who had ideas about the direction bitcoin should take. Yet when I asked for copies of the emails between Satoshi and these men he said they had been wiped when he was running from the ATO. It seemed odd, and still does, that some emails were lost while others were not.
- Allen Pedersen, who worked for Wright both in Australia and at nCrypt, told O’Hagan:
- He’s sold his soul … They can’t just sign all these papers and think it’s going to be all right, that they’ll sort something out. It doesn’t work that way. They now have to go to the end and live with it. But they’re doing it on first class. When this Satoshi thing comes out I can see a lot of bad things happening, and they are not geared up for this, any of them … There’s not really a happy ending here … in Australia you could say he was in control. He’s learned absolutely nothing. He’s now in this box, he can’t move, he can’t do anything, and this box is getting smaller and smaller.
- Gavin Andresen had taken over as lead Bitcoin developer when Nakamoto abandoned the project. He had communicated at length with Nakamoto in the early days. Wright convinced him he might be Nakamoto by writing emails in his usual style, and then the same content in Nakamoto’s style.
- Andresen went to London to meet with Wright. Wright cryptographically signed a message as Satoshi Nakamoto on his own computer and verified it. Andresen wanted to check it on his computer, saying he had to be able to say that he’d checked it independently. Wright suddenly balked, not trusting Andresen’s hardware. A new laptop was obtained and unwrapped and Wright installed the Bitcoin Electrum wallet software.175 Wright opened the claimed Satoshi Nakamoto Bitcoin wallet on the new laptop and seemed to verify that he held a Satoshi Nakamoto private key.176 Wright performed a similar demonstration for Jon Matonis from the Bitcoin Foundation.177 None of this evidence was released for public review; Andresen said “I was not allowed to keep the message or laptop (fear it would leak before Official Announcement).”178
- The PR team secured the BBC, The Economist and GQ; the journalists signed non-disclosure agreements and embargoes, and in late April Wright demonstrated use of the Satoshi key to each. O’Hagan noted how oddly convoluted all this was, given that everyone knew that all Wright had to do was send an email signed with a Satoshi PGP key or move a bitcoin from the Satoshi stash and the entire Internet would light up. “I felt distinctly that there was something missing and something wrong.”
- On Monday 2 May 2016 at 8:00am, Wright posted to his blog a Jean-Paul Sartre speech claimed to be signed with a Satoshi PGP key, and Andresen posted that he believed Wright was Satoshi. Rory Cellan-Jones from the BBC, Calvin Ayre and The Economist tweeted. A segment from Cellan-Jones aired on the BBC Radio 4 Today programme, the most important current affairs radio show in the UK. The story blanketed the media.
- By midday, the Internet had analysed the evidence and was not impressed. Wright’s blog post was not signed with a Satoshi key – it was clearly faked: an old signature from the blockchain had been copied and pasted onto the message.179 Wright’s name became a punchline.
- Nobody could work out what was up with Wright – he had considerable supporting evidence of being Satoshi Nakamoto, except the cryptographic evidence that would nail the proof; and the real Satoshi would know very well that that was the only thing that would nail the proof.
- The money men were not pleased, but worked on how to recover the situation. “This is what we’re going to do, because he knew the next move was pack your toothbrush and get on a plane and good luck in Australia,” MacGregor told O’Hagan.
- On Tuesday 3 May, Wright posted to his blog that he would move a bitcoin from the Satoshi stash. On Wednesday 4 May, the nCrypt team organised for Wright to send bitcoins from the Satoshi stash to Andresen and Cellan-Jones at the BBC. Wright said to Andresen that he was worried about a security flaw in the early blockchain that would expose him to theft if he moved an early bitcoin; Andresen said the problem had been fixed, but Wright continued to worry.
- On Thursday, Wright sent around an email link to a news story from SiliconAngle: “Craig Wright faces criminal charges and serious jail time in UK” – that he would be arrested as the creator of Bitcoin for enabling terrorism. “I am the source of terrorist funds as bitcoin creator or I am a fraud to the world. At least a fraud is able to see his family. There is nothing I can do.” He closed his blog and posted a final goodbye message, apologising for disappointing everyone.
- The news story turned out to be a fake, posted on an impostor site but with the design from the SiliconAngle site.180 The fake quickly disappeared; nobody knows the source.
- Many noted that Wright’s story would all make sense if Dave Kleiman had been the main technical “Satoshi Nakamoto,” and Wright had started by stretching his own involvement in the creation of Bitcoin and got in over his head. But, though Kleiman, as a security expert, was familiar with cryptography, there was no evidence during his life that he had any interest in cryptocurrency or C++ programming, let alone Bitcoin – every word of such came via Wright, sources close to Wright or the Wired/Gizmodo “leaker.”
- Wright disappeared from the public eye, though he did file various blockchain-related patents.181 182 He emerged again in early 2017 with nChain183 (the new name for nCrypt, originally EITC), with Robert MacGregor, Allen Pedersen184 and Jon Matonis185 in tow.
- In late June 2017 he spoke at the Future of Bitcoin Conference (where he was introduced as “Bitcoin Dundee”) and threatened legal action against those who had called him a “fraud;”186 this led to a burst of people, including Bitcoin core developer Peter Todd,187 calling him a fraud. He refused to be drawn on his previous claims to be Satoshi.
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