Stakes are high in hunt for bitcoin’s ‘messiah’

9 Dec 2015 | Author: | No comments yet »

Australia police raid home of man said to be bitcoin founder.

Australian police on Wednesday raided the home and business premises of a man that technology news sites have claimed is the founder of virtual currency bitcoin. The stakes are high in the hunt for Satoshi Nakamoto, the person or people behind bitcoin, not just for the journalist who gets it right first, but also for the cryptocurrency itself.An Australian entrepreneur and academic, Craig Steven Wright, is the latest candidate, outed in articles by Wired magazine and technology news website Gizmodo hours before his home and office in Sydney were searched by police.

Australian entrepreneur Craig Wright has been identified by tech publications as possibly the mysterious founder of online cryptocurrency Bitcoin, shortly before his Sydney home was reportedly raided in a tax probe today. A statement from the Australian Federal Police said the searches were related to a tax investigation and not recent media reports on the virtual currency, which is used for transactions across borders without third parties such as banks. Both articles said investigations based on leaked emails, documents and web archives pointed strongly to Wright being “Nakamoto”. “Either Wright invented bitcoin, or he’s a brilliant hoaxer who very badly wants us to believe he did,” said Wired. There has long been speculation about who was behind the software written in 2009 under the Japanese-sounding name Satoshi Nakamoto, with various media outlets unsuccessfully trying to find out. But the search has already tripped up several journalists, most famously Newsweek’s Leah McGrath Goodman, who identified Japanese American Dorian Prentice Satoshi Nakamoto in March 2014 as bitcoin’s creator.

Whoever is behind it likely wants to keep their identify secret as detractors say Bitcoin’s use on the underground Silk Road website, where users could buy drugs and guns with it, could link them with criminal activity. Dorian Nakamoto denied it – as has nearly everyone else alleged to be the mastermind credited with writing the paper, protocol and software in 2008 that gave rise to bitcoin and its underlying blockchain technology. “Decision-making power doesn’t rest with any individual, but Nakamoto is such a mythical figure, if he appears he could become a sort of messiah to the community,” said Roberto Capodieci, a Singapore-based entrepreneur focusing on the blockchain.

Persuading that community is not easy: while the system is decentralized by design, a cluster of so-called bitcoin miners based in China are key, Antony Lewis, a Singapore-based bitcoin consultant, said. Gizmodo reported that Wright and Dave Kleiman, an American computer forensics expert who died in 2013, were both involved in the development of the digital currency.

Unlike traditional currency, bitcoins are not distributed by a central bank or backed by physical assets such as gold, but are “mined” using computers to calculate increasingly complex algorithmic formulas. It cited hacked emails and other documents, passed to its website, apparently showing Wright making repeated claims to being Satoshi Nakamoto over a period of years. Miners run pools of computers that process transactions and create new bitcoins, an energy intensive business that has frozen out all but a handful of players.

David Moskowitz, Singapore-based founder of start-up Bitcoin Brokerage, said knowing who Nakamoto was would be significant “because people are looking for a core voice behind (bitcoin). Then there’s the fact that bitcoin researchers believe he or she may be holding up to 1 million bitcoins, which if sold today would fetch $414 million.

The police search of the man’s home in the wealthy northern Sydney suburb of Gordon lasted several hours and drew a steady trickle of perplexed neighbors into the quiet, tree-lined street. If Nakamoto chose to sell out, or even hinted that he might, that would push the price down, reducing the incentive to mine which might in turn provoke a steeper fall in the currency, Lewis said. Many described the man as quiet and somewhat standoffish, and said they had noticed the family kept an unusual amount of electronics running in the sunroom at the front of their two-story brick house.

Wright has not commented publicly on the Wired and Gizmodo reports, and Reuters attempts to contact him using various listed email addresses were unsuccessful. That could be done by announcing he would move some of the bitcoin believed to belong to him, and then doing so, or signing a message with one of the encryption keys used in emails known to have been written by Nakamoto when bitcoin first appeared. In September someone with his name, position and profile picture “upvoted” another Quora user’s comment that “as a currency that is meant to be ‘for the people, by the people’, it is probably smart that no one knows who exactly started this coin.

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