Juha Saarinen is a tech blogger for nzherald.co.nz.

Juha Saarinen: Is Bitcoin's Satoshi Nakamoto Wright or wrong?

1 comment

Once again, the geek monde is abuzz with news that Australian businessman Dr Craig Wright is Satoshi Nakamoto, inventor of bitcoin - or is he?

Wright, who was first "outed" as Satoshi in December last year and written off as a hoaxer soon after, has now published what he says is proof that he is indeed the creator of the digital cryptocurrency bitcoin.

In interviews with the BBC, GQ Magazine and The Economist, Wright is further elaborating on his Satoshi alter ego, and bitcoin itself.

The claims are backed up by bitcoin heavy-weight Gavin Andresen and Jon Matonis, the chief scientist and founding director respectively of the currency's eponymous development foundation. Neither Andresen nor Matonis had met "Satoshi" in person.

Others are not so sure, including the publications Wright spoke to. Wright's "proof of identity" is long winded and vague, and looks more like how-to on cryptographic signing with the CentOS Linux distribution, than an attempt at providing a digital bona-fide.

Bitcoin is by most measures an oddity. Although there is now a supply of around A$9.2 billion worth of bitcoin, it is still a niche currency struggling to gain mainstream acceptance.

Instead, bitcoin has been tarnished through its use by ransomware scammers, illicit online marketplaces like Silk Road, and embezzling exchanges. That's before you consider the wild fluctuations in bitcoin's value that saw the currency spike at over NZ$1,500 per unit in 2013, dropping down to just over NZ$215 little over a year ago. It now trades at NZ$634 per bitcoin.

Australian entrepreneur Dr Craig Wright. Photo / Youtube
Australian entrepreneur Dr Craig Wright. Photo / Youtube

The crypto currency could also be very environmentally unfriendly. A recent, very detailed study by environmental researcher Sebastiaan Deetman pointed to the large amount of energy that "mining" bitcoins will require in four years' time - in his pessimistic scenario, the currency network would draw 14.6 giga Watts of power.

That's as much as how much smaller nations generate. In comparison, Australia generated 62 GW worth of energy in 2014. Deetman is totally correct in saying that such a level of energy consumption for bitcoin is unacceptable, and a rethink is needed to lower it.

Satoshi meanwhile sits on around a million bitcoin, which is worth over A$577 million today. Ironically enough, while it might be tempting for Wright to cash in that stash of bitcoin, mined early on in the history of the crypto currency, and it might help prove that he is Satoshi, he probably couldn't do it.

If Satoshi was to cash in the hoard of bitcoin it could spark a run on the currency. Wright has indeed said that he won't do this.

There is no doubt however that blockchains, the distributed transaction ledger technology that underpins bitcoin, is a stroke of genius.

Governments and banks are lukewarm if not outright hostile towards bitcoin, but love the idea of blockchains for creating integrity and trust in data and transactions efficiently, cheaply and quickly.

More than one person would be disappointed if Wright indeed is Satoshi. The bitcoin founder hasn't created the same size myth as vanished British peer and murderer Lord Lucan, and whom journalist Garth Gibbs spent thirty years chasing without luck around the world, but plenty of people from respected publications have put in much work to discover the true identity of Satoshi.

So far, nobody have established beyond doubt the true identity of Satoshi. Perhaps it would be best to leave the whole affair in that state if Bitcoin is to prosper.

- NZ Herald

Get the news delivered straight to your inbox

Receive the day’s news, sport and entertainment in our daily email newsletter

Juha Saarinen is a tech blogger for nzherald.co.nz.

Juha Saarinen is a technology journalist and writer living in Auckland. Apart from contributing to the New Zealand Herald over the years, he has written for the Guardian, Wired, PC World, Computerworld and ITnews Australia, covering networking, hardware, software, enterprise IT as well as the business and social aspects of computing. A firm believer in the principle that trying stuff out makes you understand things better, he spends way too much time wondering why things just don’t work.

Read more by Juha Saarinen

Have your say

1200 characters left

By and large our readers' comments are respectful and courteous. We're sure you'll fit in well.
View commenting guidelines.

Sort by
  • Oldest

© Copyright 2016, NZME. Publishing Limited

Assembled by: (static) on production bpcf02 at 28 Oct 2016 10:10:05 Processing Time: 542ms