Bitcoin creator Satoshi Nakamoto’s true identity could be unmasked at Florida trial


Bitcoin — Courtesy: Shutterstock — tungtaechit

A run-of-the-mill trial is currently playing out in Florida. The family of a deceased man is suing his former business partner over control of their partnership’s assets.

In this case, however, the assets in question are a stash of one million bitcoins, equivalent to nearly $64 billion today, which belong to bitcoin’s creator, the pseudonymous Satoshi Nakamoto. The family of the dead individual says that he and his business partner together were Nakamoto, therefore the family is entitled to half of the fortune.

The true identity of Satoshi Nakamoto has been one of the financial world’s most enduring mysteries. Does the name belong to one single person or to several? Why has he or she not touched their own fortune?

All of the answers to these questions are now at the center of bitcoin and the Florida dispute. Bitcoin has transformed into a trillion-dollar market, with tens of millions of investors involved. It has challenged several governments and has even been endorsed by some, yet its creator and purpose have remained a mystery.

Now, a Florida jury will try to tackle the case. The family of David Kleiman is suing his former business partner, Craig Wright, who is a 51-year-old Australian programmer living in London. Mr. Wright has argued since 2016 that he created bitcoin, a claim dismissed by those in the bitcoin community. Mr. Kleiman’s family argues that the two worked together on creating and mining bitcoin, entitling Mr. Kleiman’s family to half a million bitcoins.

“We believe the evidence will show there was a partnership to create and mine over one million bitcoin,” said Vel Freedman, a lawyer for the Kleiman family.

The plaintiff’s plan is to put together evidence showing that both individuals were involved in bitcoin’s inception and worked on it together.

“It is about two friends who had a partnership, and about how one of them tried to take everything for himself after the other died,” said Tibor Nagy, a lawyer who has been observing the trial.

The defense said it has evidence that will show Mr. Wright is the creator of bitcoin and never included Mr. Kleiman. “We believe the court will find there’s nothing to indicate or record that they were in a partnership,” said Andrés Rivero, a lawyer for Mr. Wright.

For avid bitcoiners, there is only one piece of evidence that could prove the identity of Satoshi Nakamoto: the private key that controls the account where Nakamoto stored one million bitcoins. Anyone who claims to be Satoshi could prove that he or she has them by simply moving even a fraction of a coin out of it.

The mystery of Satoshi Nakamoto is one of bitcoin’s largest curiosities. On October 31, 2008, someone using that alias sent a nine-page paper to a group of cryptographers thoroughly explaining a system of “electronic cash” that gave people the ability to exchange value without the need for a bank or other party. A couple of months later, the bitcoin network went live, and Satoshi collected one million bitcoins in its first year.

The family of Mr. Kleiman claims his business partner, Mr. Wright, asked for Kleiman’s help in 2008, in what would become that nine-page paper. The suit alleges that bitcoin was launched by the two of them together.

Bitcoin combined cryptography, encryption, distributed computing, and game theory. With bitcoin, any two people in the world—with an internet connection, of course—could make a transaction without a middleman in seconds. 

For every single one of the more than 650 million bitcoin transactions out there, which are all publicly visible on a ledger called the “blockchain,” there are two strings of numbers that can control how the digital currency is moved: through a public and private key. Anyone can send bitcoin to the public key, or the destination address, which can be compared to a bank account. Only the person who controls the account will have the private key, essentially owning the bitcoin.

In bitcoin’s earliest days, no one really cared much about who Satoshi Nakamoto was. Bitcoin had no tangible value and was backed by a small group of supporters. Nakamoto was extremely active in its development for about two years, emailing with developers and writing on several message boards. However, in December of 2010, Nakomoto disappeared. He or she was known to use two email addresses and have one registered website, but he immediately stopped posting publicly.

Those with the technical knowledge to create bitcoin are limited, and most of the prominent names in cryptography have been tagged as Nakamoto, yet no conclusive evidence has ever linked anyone to bitcoin’s creation.

Meanwhile, in 2011, Mr. Kleiman incorporated a Florida company called W&K Info Defense Research. His family alleges that this was a partnership between the two and that Mr. Wright later attempted to claim ownership. The defense says that there was never a partnership.

Mr. Kleiman died on April 26, 2013.

The following year, Newsweek reported that an older man with the same last name as Satoshi, Dorian Nakamoto, was bitcoin’s creator. He denied the claim, and a one-sentence statement appeared on a message board from an account known to have been used by the real Nakamoto. The message read: “I am not Dorian Nakamoto.”

If this was a genuine message from bitcoin’s founder, it is his last public correspondence.

In May 2016, Mr. Wright claimed that he was in fact bitcoin’s founder. He gave exclusive interviews to three different media outlets, met with several bitcoin pioneers, and loaded a website with papers he had written about bitcoin and cryptography.

Days later, he dropped his claim. Everything was removed from the website and replaced with a four-paragraph apology. “I broke,” he wrote. “I do not have the courage. I cannot.” He has since renewed his insistence that he created bitcoin.

Whether Wright or Kleiman possess or possessed the knowledge to have created bitcoin, the identity of Satoshi Nakamoto continues to remain a mystery.

Mr. Wright “has been hacking, bamboozling and fooling people, playing the confidence game,” said Arthur van Pelt, a bitcoin investor who has emerged as one of Mr. Wright’s most vocal critics. “There is no genuine, independent, credible proof whatsoever.”

Mr. Kleiman’s computing expertise was known to be profound. It is possible that he created bitcoin, but there isn’t enough information to be sure. “It’s an open question,” said Emin Gun Sirer, founder of Ava Labs.

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