Mystery of the bitcoin man lingers
Tuesday, 28 May 2024
Australian Craig Wright has long claimed to be the creator
of bitcoin. But the courts disagree, writes David Yaffe-Bellany.
For much of its existence, the cryptocurrency company nChain was
governed by a golden rule of office politics: it was not a good idea to
challenge Craig Steven Wright, the chief science officer.
At nChain's London offices, Wright, an Australian computer scientist, was
treated as a sort of philosopher king. He wore threepiece suits and drove a
Lamborghini. A middle manager would tape Wright's ramblings about obscure
technical matters and then share the recordings with a staff of researchers,
who were instructed to turn his musings into patents.
In 2017, Martin Sewell, an nChain employee, circulated a sceptical memo
documenting technical errors in a series of papers that Wright had published. A
manager called Sewell into his office and told him that he had to stop.
The deference to Wright ‘‘was just this extraordinary arrangement,'' Sewell
recalled. ‘‘Like he was some sort of god of everything.''
Indeed, Wright's authority rested on a claim to a kind of divine significance -
that he was the mysterious creator of bitcoin, the original cryptocurrency.
In 2008, a person using the pseudonym Satoshi Nakamoto published a white paper
explaining the basics of bitcoin, a clever idea that eventually became the
foundation of a multitrillion-dollar industry. Then, as abruptly as he had
emerged, he vanished.
Satoshi, who's known by his first name, controls an estimated 1.1 million
bitcoins, a $US75 billion ($112.5 billion) stash that has sat untouched for
more than a decade.
The mystery of Satoshi's identity has long obsessed crypto experts. Various
candidates have been proposed as possible Satoshis, only for them to deny any
role in bitcoin's creation.
Wright, by contrast, has gone to extraordinary lengths to prove that he is
Satoshi. He has presented himself as bitcoin's inventor in interviews and
social media posts. Wright, 53, had a financial interest in squelching their
work: He and a gambling tycoon had joined forces to promote an alternative
digital currency that they claimed was a pure, uncorrupted version of bitcoin,
with better practical applications.
This year, bitcoin's price surged to an all-time high. But the crypto industry
is still tarnished by a procession of recent financial scandals that cost
investors billions in savings. The mystery of Satoshi is the last remnant of a
more innocent time in its history.
Much of what is known about Satoshi Nakamoto comes from hundreds of messages he
exchanged with early collaborators, including Gavin Andresen, an American
software developer who helped promote bitcoin in the media. In emails and forum
posts, Satoshi wrote about his commitment to privacy and his frustrations with
the financial establishment, while revealing little about his background.
Then in 2011, Satoshi went silent. Over the next few years, his identity became
a tech-industry obsession.
‘‘You can't help but be pulled into this black hole - the gravity of it is so
enormous,'' said Andy Greenberg, a long-time tech reporter. ‘‘Satoshi's
identity is one of the greatest mysteries in the history of technology.''
Hardly anyone had heard of Wright until 2015, when Greenberg cowrote an article
for Wired arguing that Wright was probably Satoshi. The article was based
partly on private emails and transcripts supplied by an anonymous leaker.
Wired did not reveal its source, and Wright has denied he was behind the leak.
At the time, he was operating on the margins of the crypto industry. He was
also in serious financial trouble. By early 2015, months before Wired published
its article, he was locked in disputes with the Australian tax office,
court records show.
Wright needed a lifeline. A former colleague put him in touch with Calvin Ayre,
a Canadian entrepreneur who had made a fortune in the sports betting industry
and wanted to invest in crypto. In 2012, the US Justice Department charged Ayre
with operating an illegal online gambling business. He pleaded guilty to a
misdemeanour and avoided prison time.
Before Wired's article came out, Wright met with Ayre. He and a business
partner made plans to offer financing to Wright and publicise his Satoshi
claim. The eventual deal included a loan of $2.5 million to resolve
Wright's tax problems. It also made Wright the chief scientist of a
new company, which would have ‘‘exclusive rights to Craig's life story''.
But when the Wired article appeared that December, it drew a sceptical
reaction. Wright hadn't given an interview. And in any case, there was only one
definitive way to prove that he had written the white paper: the genuine
Satoshi would have access to cryptographic keys unlocking his bitcoin stash.
Wright's sponsors devised a plan to prove that the Satoshi claim was genuine.
In 2016, they flew Andresen to London, hoping to secure the endorsement of
Satoshi's old collaborator. Wright gave a demonstration meant to show Andresen
that he controlled Satoshi's private keys.
Andresen was impressed. In a blog post titled ‘‘Satoshi'' he gave his
endorsement, saying Wright's demonstration proved he had invented bitcoin.
Wright's backers saw an opportunity to profit. Soon, Wright was supposed to
make the cryptographic proof public and end the Satoshi mystery forever. But
when the day arrived for the big reveal, Wright didn't offer any proof.
Wright pressed his claim to Satoshidom in the courts. In 2021, Wright's lawyers
asked COPA and its members to remove the bitcoin white paper from their
websites. COPA responded by suing Wright in High Court in London, seeking a
ruling that he did not invent bitcoin.
At first glance, the page of notes scrawled on a Quill pad looks like an
artefact of potentially historic significance. Dated August 2007, the notes
summarise a meeting that Wright held with a colleague in which he discussed a
new form of digital money. A list of follow-up steps mentions a ‘‘paper,'' set
for publication in 2008.
The notes were part of a cache of more than 100 ‘‘reliance documents'' that
Wright filed as evidence that he invented bitcoin. Before the trial in High
Court began in February, a forensic expert hired by COPA submitted to the court
an analysis finding that the vast majority of the documents had been doctored.
As the trial reached its conclusion in March and Wright's legal team tried to
address the forgery claims, Ayre began texting a New York Times reporter. The
trial was ‘‘old powers wanting to slow innovation,'' Ayre wrote. He said only a
‘‘moron'' would disbelieve Wright.
A few minutes later, the judge overseeing the proceedings, James Mellor, issued
a ruling.
‘‘Dr Wright is not the person who adopted or operated under the pseudonym
Satoshi Nakamoto,'' he said.
This week, Mellor elaborated on his conclusions, finding that Wright had forged
numerous documents. Wright has already dropped his defamation claim, as well as
one suit he filed against bitcoin developers. But he said he planned to appeal
the COPA ruling.
The mystery of bitcoin's creation seems likely to endure. One morning, in the
final stretch of COPA v Wright, a blonde man in a baseball cap shuffled into
the gallery, taking a seat among a group of reporters before striking up
conversation. At first, he revealed little about himself, other than his
devotion to personal security. A back brace he had started wearing after a
motorcycle accident served as a convenient ‘‘stab vest,'' he explained - no
knife could penetrate it. But why had he shown up to Wright's trial?
He leant in to whisper a secret: He was the real Satoshi Nakamoto.
1.1m
The estimated number of bitcoins Satoshi, who's known by his first name,
controls. A $US75 billion ($112.5 billion) stash that has sat untouched for
more than a decade.
Craig Wright claimed to be Satoshi Nakamoto, the mysterious creator of bitcoin.
Photo: Getty Images
This Man Did Not Invent Bitcoin
For years, Craig Steven Wright, an Australian cryptocurrency enthusiast, claimed to be Satoshi Nakamoto, the mysterious creator of Bitcoin. Then the courts got involved.
Craig Steven Wright, center, arriving at High
Court in London, where he was sued over his claim that he invented Bitcoin
under the pseudonym Satoshi Nakamoto.Credit...Daniel
Leal/Agence France-Presse — Getty Images
Reporting from High Court in London
Published May 21, 2024Updated May 24, 2024
For much of its existence, the
cryptocurrency company nChain was governed by a golden rule of office politics:
It was not a good idea to challenge Craig Steven Wright, the chief science
officer.
Listen to this article with reporter commentary
Listen 23:36
At nChain’s London offices, Dr. Wright, an
Australian computer scientist, was treated as a sort of philosopher king. He
wore three-piece suits and drove a Lamborghini. A middle manager would tape Dr.
Wright’s ramblings about obscure technical matters and then share the
recordings with a staff of researchers, who were instructed to turn his musings
into patents.
In 2017, Martin Sewell, an nChain employee,
circulated a skeptical memo documenting technical errors in a series of papers
that Dr. Wright had published about economics and computer science. A manager
called Mr. Sewell into his office and told him that he had to stop.
The deference to Dr. Wright “was just this
extraordinary arrangement,” Mr. Sewell recalled. “Like he was some sort of god
of everything.”
Indeed, Dr. Wright’s authority rested on a
claim to a kind of divine significance — that he was the mysterious creator of
Bitcoin, the original cryptocurrency.
In 2008, a person using the pseudonym
Satoshi Nakamoto published a white paper explaining the basics of Bitcoin, a
clever idea that eventually became the foundation of a multitrillion-dollar
industry. Then, as abruptly as he had emerged, he vanished. Satoshi, who’s
known by his first name, controls an estimated 1.1 million Bitcoins, a $75 billion stash
that has sat untouched for more than a decade.
The mystery of Satoshi’s identity has long
obsessed crypto experts, who analyze every record of his communications with
the reverence of Talmudic scholars. Various candidates have been proposed as
possible Satoshis, only for them to deny any role in Bitcoin’s creation.
Dr. Wright, by contrast, has gone to
extraordinary lengths to prove that he is Satoshi. He has presented himself as
Bitcoin’s inventor in interviews and social media posts, laying out evidence
for virtually anyone who would listen. In lawsuits tried in three countries, he
has testified that he wrote the original white paper. After a
small-time crypto personality challenged his claims in 2019, Dr. Wright sued for defamation in England. He followed that
up with an aggressive suit against software developers working to improve
Bitcoin’s code, accusing them of violating his intellectual property rights.
“A few will be bankrupted, lose their
families and collapse,” he declared.
Dr. Wright had a financial interest in
squelching their work: He and a gambling tycoon had joined forces to promote an
alternative digital currency, Bitcoin Satoshi Vision, that they claimed was a pure, uncorrupted version of
Bitcoin, with better practical applications.
This year, Bitcoin’s price surged to
an all-time high, renewing optimism that crypto is
destined for widespread adoption. But the industry is still tarnished by a
procession of recent financial scandals that cost investors billions in
savings. The mystery of Satoshi is the last remnant of a more innocent time in
its history, when crypto was a renegade, communal system that seemed to have
materialized out of thin air.
Dr. Wright’s claim to Satoshi-dom wasn’t
simply an antagonistic legal strategy: It was a threat to the purity of that
founding myth. This year, several of crypto’s most powerful companies mobilized
to stop Dr. Wright from bringing cases. An influential group led by Coinbase,
the largest U.S. exchange, and Block, a company started by the Twitter founder
Jack Dorsey, took him to trial in High Court in London.
They were seeking a judicial declaration:
We may never know for sure who invented Bitcoin, but it wasn’t Craig Wright.
A
Financial Lifeline
Among the mysteries about Satoshi Nakamoto
that Dr. Wright has tried to explain is the mystery of Satoshi’s name.
Before Bitcoin was invented, Dr. Wright,
53, worked as an I.T. security consultant in Australia, but he claims that his
interest in creating a new monetary system arose from extensive academic study.
At one point, he testified in court, he was enrolled in 19 universities at
once, pursuing five doctorates simultaneously. (“I actually wrote three papers
last night,” he said at that trial in 2021.) The surname Nakamoto,
he claimed, was an homage to a Japanese philosopher whose writing he admired.
Much of what is known about Satoshi
Nakamoto comes from hundreds of messages he exchanged with early collaborators,
including Gavin Andresen, an American software developer who helped promote Bitcoin in the media. In emails and forum
posts, Satoshi wrote about his commitment to privacy and his frustrations with
the financial establishment, while revealing little about his background. None
of his correspondents ever met him in person.
Image
Gavin Andresen, interviewed at the 2014 Web
Summit in Dublin, was one of Satoshi’s closest collaborators but didn’t know
the Bitcoin creator’s true identity.Credit...Stephen
McCarthy/Sportsfile
Then in 2011, with no warning, Satoshi
went silent, cutting off communication. “I wish you wouldn’t
keep talking about me as a mysterious shadowy figure,” he told Mr. Andresen
in their final email exchange.
Over the next few years, his identity
became a tech-industry obsession. “You can’t help but be pulled into this black
hole — the gravity of it is so enormous,” said Andy Greenberg, a longtime tech
reporter who has written a book about cryptocurrencies. “Satoshi’s identity is
one of the greatest mysteries in the history of technology.”
Hardly anyone had heard of Dr. Wright until
2015, when Mr. Greenberg co-wrote an article for Wired arguing that Dr.
Wright was probably Satoshi. The article was based partly on private emails and
transcripts supplied by an anonymous leaker: “I did my best to try and hide the
fact that I’ve been running bitcoin since 2009,” Dr. Wright said in one
transcript. “By the end of this I think half the world is going to bloody
know.” (The article included a caveat: “Either Wright invented bitcoin, or he’s
a brilliant hoaxer who very badly wants us to believe he did.”)
Wired did not reveal its source, and Dr.
Wright has denied he was behind the leak. At the time, he was operating on the
margins of the crypto industry. He had written some blog posts about Bitcoin,
and made it onto a conference panel in Las Vegas.
He was also in serious financial trouble.
By early 2015, months before Wired published its article, he was locked in
disputes with the Australian tax office, which accused him of backdating
documents and conducting “sham transactions,” court records show.
Dr. Wright needed a lifeline. A former
colleague put him in touch with Calvin Ayre, a businessman
who had made a fortune in the sports betting industry and wanted to invest in
crypto. A Canadian, Mr. Ayre was worth at least $1 billion in the early
aughts, according to Forbes. In 2012, the U.S. Justice
Department charged him with operating an illegal online
gambling business. He pleaded guilty to a misdemeanor and avoided prison
time.
Before Wired’s article came out, Dr. Wright
met with Mr. Ayre in Vancouver, British Columbia, where they discussed “all
things Bitcoin,” according to an account that Mr. Ayre gave in 2022. He and a
business partner made plans to offer financing to Dr. Wright and publicize his
Satoshi claim. The eventual deal, outlined in court documents in London,
included a loan of 2.5 million Australian dollars to resolve Dr. Wright’s tax
problems. It also made Dr. Wright the chief scientist of a new company, which
would have “exclusive rights to Craig’s life story.”
Image
Calvin Ayre, right, who made a fortune in the
sports betting industry, bankrolled Mr. Wright’s crypto endeavors.Credit...Eamonn
M. McCormack/Getty Images
But when the Wired article appeared that
December, it drew a skeptical reaction. Dr. Wright hadn’t given an interview,
which meant some crucial questions remained unanswered. Forbes pointed out that Dr. Wright’s résumé appeared to
exaggerate his credentials. And in any case, there was only one definitive way
to prove that he had written the white paper: The genuine Satoshi would have
access to cryptographic keys unlocking his Bitcoin stash.
Dr. Wright’s sponsors devised a plan to
prove that the Satoshi claim was genuine. In 2016, they flew Mr. Andresen to London, hoping to secure the
endorsement of Satoshi’s old collaborator, who was one of the most trusted
figures in the Bitcoin world. In a hotel conference room, Dr. Wright gave a
demonstration meant to show Mr. Andresen that he controlled Satoshi’s private
keys.
Mr. Andresen, still groggy after his
overnight flight from Boston, was impressed. In a blog post titled “Satoshi,”
he gave his endorsement, saying Dr. Wright’s demonstration proved he had
invented Bitcoin.
“I saw the brilliant, opinionated, focused,
generous — and privacy-seeking — person that matches the Satoshi I worked
with,” Mr. Andresen wrote.
Dr. Wright’s backers saw an opportunity to
profit. He was “the goose that lays the golden egg,” one of them told the author Andrew O’Hagan. Soon, Dr. Wright was
supposed to make the cryptographic proof public and end the Satoshi mystery
forever. But when the day arrived for the big reveal, Dr. Wright didn’t offer
any proof. Instead, he published a jargon-heavy blog post about the mechanics of “digital signatures.”
Crypto aficionados dismissed Dr. Wright as
a charlatan. “I’m starting to doubt myself and imagining clever ways you could
have tricked me,” Mr. Andresen wrote in an email to him.
Mr. Andresen did not respond to requests
for an interview. But his correspondence with Dr. Wright left him even more
confused, he testified at a deposition years later. “I don’t recall thinking
anything other than maybe Craig Wright is crazy,” he said.
Why
Claim to Be Satoshi?
Hardly anyone knows as much about Craig
Wright as Arthur van Pelt. A prolific blogger,
Mr. van Pelt is the dominant figure in a small but enthusiastic corner of the
internet where obsessive historians of the Satoshi saga dissect Dr. Wright’s
legal campaign.
Mr. van Pelt returns repeatedly to a key
psychological question: What would motivate someone to insist that he invented
Bitcoin if he hadn’t?
Over the years, Mr. van Pelt said in an
interview, he has weighed various possible answers, from fame and money to
family trauma. In one lawsuit, Dr. Wright ordered up a medical declaration from
a psychologist who had diagnosed him with autism and who described his
struggles with a “volatile” and “abusive” father.
“The feeling that Craig Wright has is that
he has never been enough,” Mr. van Pelt said.
Even after Dr. Wright failed to produce the
evidence, he retained a band of loyal online followers. He didn’t have access
to Satoshi’s private keys, he claimed in court, because he had smashed a hard
drive containing them; he described it as an impulsive decision, partly related
to his autism.
Mr. Ayre stood by him, and in 2018, he and
Dr. Wright launched Bitcoin Satoshi Vision, which trades at about $70 per coin, a tiny fraction of
Bitcoin’s price. Dr. Wright oversaw its development from the offices of nChain,
a company that Mr. Ayre funded as a vehicle for converting his partner’s
ideas about crypto into a portfolio of patents.
At nChain, Dr. Wright was a difficult boss,
prone to shouting, four people who worked with him said. He liked to flaunt his
wealth, bragging that he had more money than the entire
country of Rwanda. Employees at nChain attended extravagant parties in London:
At one memorable event, arranged by Mr. Ayre, guests ate sushi off the bodies
of naked women, while performers in samurai costumes hovered nearby, two of the
people said.
Rejected by much of the crypto industry,
Dr. Wright pressed his claim to Satoshi-dom in the courts, pursuing litigation
that Mr. Ayre helped finance. By 2022, his defamation battle reached Norway, where
Magnus Granath, the little-known Bitcoin enthusiast who had accused him of
fraud on social media, won a judgment against him. That year, Dr. Wright also
sued the Bitcoin coders, claiming copyright infringement.
“He seems to have enough money and backing
from others that he can make good on his threats to ruin people financially by
bringing expensive litigation,” Steve Lee, a manager at Block, a company that
Mr. Dorsey co-founded after Twitter, said in a court filing last year.
Mr. Lee was part of a coalition of
prominent crypto companies called the Crypto Open Patent Alliance, or COPA,
which was founded to stop patent rules from preventing the development of
crypto technology. In 2021, Dr. Wright’s lawyers asked COPA and its members to
remove the Bitcoin white paper from their websites. COPA responded by suing Dr.
Wright in High Court in London, seeking a ruling that he did not invent
Bitcoin.
Image
Christen Ager-Hanssen, who was previously on
Dr. Wright’s legal team, had a change of heart.Credit...REX,
via Shutterstock
As the litigation intensified, Christen Ager-Hanssen, a venture investor, joined
nChain and helped oversee Dr. Wright’s legal affairs. Mr.
Ager-Hanssen has a flair for the dramatic: He has acknowledged secretly recording meetings, and
likes to compare his work to John Grisham novels. Last fall, he switched
sides, saying he didn’t believe Dr. Wright’s claims.
On social media, he posted an email that
appeared to show that Dr. Wright’s relationship with his sponsor was starting
to sour. “Every cent spent on your cases is me pissing away my kids
inheritance,” Mr. Ayre wrote. (In a post on X that was cited in court, Mr.
Ayre seemed to acknowledge that the email was authentic.)
In an interview, Mr. Ager-Hanssen said Dr.
Wright struck him as clever but delusional, someone who clearly enjoyed the
trappings of wealth and status. Still, he said, he found it hard to understand
why Dr. Wright has spent so many years trying to prove that he invented
Bitcoin.
“This is my biggest question,” Mr.
Ager-Hanssen said. “I believe he thinks he deserves to be Satoshi.”
A
Judge Decides
At first glance, the page of notes scrawled on a Quill pad looks like an artifact of
potentially historic significance. Dated August 2007, the notes summarize a
meeting that Dr. Wright held with a colleague in which he discussed a new form
of digital money that passes directly from person to person, without an
intermediary to oversee the transaction. A list of follow-up steps mentions a
“paper,” set for publication in 2008.
Image
Notes that Dr. Wright claimed proved he
invented Bitcoin.
The notes were part of a cache of more than
100 “reliance documents” that Dr. Wright filed in High Court as evidence that
he invented Bitcoin — the “identity claim,” as the judge described it. Before
the trial began in February, a forensic expert hired by COPA submitted to the
court an analysis finding that the vast majority of the documents had been
doctored.
The notebook entry was one of them. A sworn
statement from Hamelin Brands, the parent company of Quill, revealed that the
pad didn’t go into circulation until 2012, four years after Bitcoin was
invented. Dr. Wright took the witness stand in the first week of the trial and
insisted that the company was mistaken about the provenance of its own pad.
“Dr. Wright,” COPA’s lawyer responded, “you
are making this up as you go along.”
As the trial reached its conclusion in
March, a few of Dr. Wright’s supporters, mostly investors in Bitcoin Satoshi
Vision, gathered in the courtroom to watch his final stand. Mr. Ayre was not
among them. He had written some supportive messages for Dr. Wright on X, but he
spent the morning of closing arguments in a pool, drinking beer and
posting clips from “The Godfather” on social media.
As Dr. Wright’s legal team tried to address
the forgery claims, Mr. Ayre began texting a New York Times reporter. “Drunk
and happy,” he wrote in one of dozens of typo-riddled messages. (The texts came
from a number that Mr. Ayre had used in the past; it was later disconnected.)
The trial was “old powers wanting to slow
innovation,” Mr. Ayre wrote. He used a series of vulgar expressions to describe
his business rivals and said only a “moron” would disbelieve Dr. Wright.
“Craig is Satoshi,” Mr. Ayre declared. “He
is also 14 year old kid.”
A few minutes later, the judge overseeing
the proceedings, James Mellor, issued a ruling from the bench. “Dr. Wright is
not the person who adopted or operated under the pseudonym Satoshi Nakamoto,”
he said.
Crypto fans celebrated online, proclaiming
the end of a “reign of terror.” Mr. Dorsey, the
Twitter founder, posted the full text of Justice Mellor’s ruling. In a
closing submission, COPA’s lawyers called for the court papers to be forwarded
to British prosecutors, who could investigate whether Dr. Wright had committed
perjury.
Once the most talkative man in the
industry, Dr. Wright went silent. He did not answer calls or texts requesting
an interview, and his name no longer appears on nChain’s website. (The company
did not respond to messages seeking comment.)
The week after the ruling, corporate
filings in England showed that Dr. Wright was transferring assets worth as much
as 20 million pounds to an offshore entity. COPA argued that he might be
shielding them from seizure by the court, and Justice Mellor ordered his assets frozen. COPA has “a very powerful claim to
be awarded a very substantial sum,” the judge said.
This week, Justice Mellor elaborated on his
conclusions in a 231-page ruling, finding that Dr. Wright had forged numerous
documents. “He is not nearly as clever as he thinks he is,” Justice Mellor
wrote. Dr. Wright has already dropped his defamation claim, as well as one suit he filed against Bitcoin developers. But
a message posted to his X account on Monday said he
planned to appeal the COPA ruling.
The mystery of Bitcoin’s creation seems
likely to endure. One morning, in the final stretch of COPA v. Wright, a blond
man in a baseball cap shuffled into the gallery, taking a seat among a group of
reporters before striking up conversation. At first, he revealed little about
himself, other than his devotion to personal security. A back brace he had
started wearing after a motorcycle accident served as a convenient “stab vest,”
he explained — no knife could penetrate it. For supplemental protection, he had
reinforced the lining of his hat with plastic, which he planned to upgrade to
Kevlar.
But why had he shown up to Dr. Wright’s
trial? He leaned in to whisper a secret: He was the real Satoshi Nakamoto.
Audio produced
by Sarah Diamond.
The Wild World of Crypto
Bitcoin Hits Record High, Completing a Stunning Comeback
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Is Crypto Back? What to Know About Bitcoin’s Surge.
David
Yaffe-Bellany writes
about the crypto industry from San Francisco. He can be reached at davidyb@nytimes.com. More
about David Yaffe-Bellany
