Bitcoin’s Founder: Recent History and 2020 Vision

Bitcoin’s Founder: Recent History and 2020 Vision

Two things happened almost at once recently: Wired told us who actually invented bitcoin, (well, it gave the world the latest hot theory), and officials in Australia raided that same fellow’s home in re a tax investigation. More specifically on the first of those points, Wired (and soon thereafter Gizmodo) published investigative pieces indicating that the real person behind “Satoshi Nakamoto” is an entrepreneur living in Gordon, a suburb of Sydney in New South Wales.

There’s one distinction to be made, at the start, between the reports in the two publications. Gizmodo’s report suggests that Craig Stephen Wright is the surviving half of what was originally a composite “Nakamoto,” a composite that also included the American computer forensics scientist Dave Kleiman, who died in poverty in 2013. Gizmodo suggests that the two men deserve equal weight in this historic role. Wired’s report, on the other hand, while assigning to Kleiman some significance as Wright’s “close friend and confidant” in connection with Bitcoin, treats Wright alone as the principal.

Why does anyone care? Other than the puzzle-solving interest and the fact that this person whoever-he-is, or people whoever-they-are, are parts of recent financial history, there are good reasons to care: “Satoshi” holds a heck of a lot of bitcoins as a personal cache. Enough so that, if he sold them, he’d overwhelm demand, rendering them near worthless. This is the so-called “Tulip Trust,” consisting of 1.1 million bitcoins: or, at the present rate of exchange with U.S. dollars, more than $480 million.

If the two publications are wrong about the common elements in the two stories, it is because someone has faked documents to confuse the historic issue, perhaps out of a desire to protect that person or someone else’s privacy, perhaps for some baser reason. That is a very real possibility.

Assuming they are right, though….

According to one of the documents that turned up in the course of Wired’s research, a trust fund PDF from Wright to Kleiman, those 1.1 million coins are to be locked in place until 2020. In other words, the terms of the trust indicate that the world may be just four year and days away from the removal of the lid on that fortune. Perhaps our vision will be 20/20 in 2020.

Gizmondo is more forthright than is Wired about what seems to be behind both stories: someone wanted to out Wright, and worked hard at it. Gizmondo refers to its receipt of “a series of anonymous tip emails” from a self-described hacker.

Both the stories make clear that, as one might expect from a bitcoin entrepreneur, not even to say from the bitcoin entrepreneur, Wright is at loggerheads with his country’s taxing authorities. Thus, the raid would not have been all that much of a surprise to careful readers, although its timing was oddly coincidental.

The Guardian Australia reported that “more than 10 police personnel arrived at [Wright’s] house in the Sydney suburb” hours after the publications discussed above, and that at least two were “wearing white gloves [and] could be seen from the street searching the cupboards and surfaces of the garage.”

The Australian authorities ruled a year ago that bitcoins should be treated as an asset rather than as a currency. This stance isn’t a novelty, but it understandably makes some in the bitcoin world unhappy as it exposes holders of the currency to capital gains tax when they sell. This fact may have some connection to the controversy behind that raid.

What Will Remain

Cryptocurrency, in its colorful history as a market and an investment, has broken a lot of hearts.

But… dissatisfaction with the fiat money dominated by central bankers and by the printing press will not go away. The long history of “quantitative easing,” the spreading understanding of how fiat money is gamed by some of the population at the expense of the rest, this will ensure continued discontent and continued search for an alternative.

The future of alternative currency as a field turns on how and when that dissatisfaction shows itself in the transactions on the front lines of any economy. We have yet to see quite how that will break but, when the story is written, “Nakamoto” under any name will be a major figure in it.

 

 

 

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