back to article Bitcoin inventor Satoshi 'outed' as Aussie, then raided by cops – but not over BTC

The home of a bloke fingered by WiReD and tech blog Gizmodo as a possible inventor of Bitcoin has been raided by the Australian Federal Police – just hours after their articles were published. The Register was happy to watch the house publication of deluded entrepreneurs and Giz slug it out over whose evidence is best and who …

  1. Turtle

    False Modesty.

    "The umbrella company most associated with Wright, DeMorgan, lists security, banking and finance, maths, AI and software development as well as cryptocurrency."

    Apparently they are very shy; they seem to have omitted "money laundering".

    1. Pascal Monett Silver badge
      Trollface

      Well they obviously don't want to come off as braggarts.

    2. dogged

      Re: False Modesty.

      Is there evidence or is that just normal nerd-libel?

  2. frank ly

    Tulip Trading

    Does anybody remember what happened the last time there was significant trading of tulips?

    1. Gordon 10 Silver badge

      Re: Tulip Trading

      Not to mention Tulip Computers of course....

    2. Mage Silver badge

      Re: Tulip Trading

      One does wonder if BitCoin is a clever ponzi scheme and if someone "engineered" the mad Tulip "investment" bubble ... The name surely is a deliberate joke?

      At the peak of tulip mania, in March 1637, some single tulip bulbs sold for more than 10 times the annual income of a skilled craftsman. It is generally considered the first recorded speculative bubble (or economic bubble),[3] although some researchers have noted that the Kipper- und Wipperzeit episode in 1619–22, a Europe-wide chain of debasement of the metal content of coins to fund warfare, featured mania-like similarities to a bubble.[4] The term "tulip mania" is now often used metaphorically to refer to any large economic bubble (when asset prices deviate from intrinsic values).[5]

      The 1637 event was popularized in 1841 by the book Extraordinary Popular Delusions and the Madness of Crowds, written by British journalist Charles Mackay. According to Mackay, at one point 12 acres (5 ha) of land were offered for a Semper augustus bulb.[6] Mackay claims that many such investors were ruined by the fall in prices, and Dutch commerce suffered a severe shock. Although Mackay's book is a classic, his account is contested. Many modern scholars feel that the mania was not as extraordinary as Mackay described and argue that not enough price data are available to prove that a tulip bulb bubble actually occurred.[7][8]

      Wikipedia, may contain nuts.

      https://en.wikipedia.org/wiki/Tulip_mania

      1. boltar Silver badge

        Re: Tulip Trading

        "One does wonder if BitCoin is a clever ponzi scheme "

        Well its certainly more of an investment vehicle than a true currency due to its deliberately limited supply day to day and ultimately. Whether when that final bitcoin is created and any resemblence to a true currency finally vanishes, the price of a coin will go up because they become virtual collectors items, or crash because everyone wants to offload ASAP, is frankly anyones guess.

        1. TakeTheSkyRoad

          Re: Tulip Trading

          Take a look at this review of a "proof of concept" app developed by VISA Europe.

          http://www.coindesk.com/hands-on-with-visa-europes-bitcoin-remittance-app/

          "The idea is for a user to link a Visa card to the remittance app. Once linked, the app will show an available balance and the corresponding card details."

          "Once signed up, the user can then add a list of recipients using a variety of contact information. For example, Clarke said, a user could add a Kenyan telephone number to the recipient list."

          "Once added, BitPesa generates a bitcoin address for the recipient, meaning the recipient never has to generate an address or wallet of their own to receive the funds. The sender can also include a note with the money transfer."

          "The recipient doesn't need a BitPesa account to obtain the funds. Instead, they would simply receive Kenyan shillings transferred by M-Pesa, the dominant mobile money channel there."

          "The app, then, has allowed 'John' to send 25 pounds from a Visa card to his grandma in Kenya, who received Kenyan shillings on her phone, with the whole process taking about six steps."

          Tulips are a very old joke now, anyone still talking tulips should read up & research or keep looking foolish.

          Again, this is a real app developed by VISA Europe.

          1. Mage Silver badge
            Facepalm

            Re: Tulip Trading

            Visa are nuts if they are serious about bitcoin.

            IBAN will be the basis of a sensible Universal Electronic Currency, not PayPal or Bitcoin. The only current obstacle is the USA.

            1. TakeTheSkyRoad

              Re: Tulip Trading

              Transfers with Bitcoin take on average 10 minutes to any address on the network and the network is useable anywhere world wide with internet access (so global transfers in 10 minutes).

              I've had IBAN transfers before and the time taken was I think a day.

              As for SEPA this is a similar time scale at around 3 days.

              SWIFT however is great and completes in minutes. This could be a viable competitor to bitcoin but only if it's adopted to the same scale (worldwide) but as it stands this is just local to the UK.

              1. TakeTheSkyRoad

                Re: Tulip Trading

                "The City" is getting serious about Bitcoin and the Blockchain tech.

                After an curious search have a look at this positions going on CW Jobs...

                Lead Web Developer (Ruby on Rails, Javascript, Blockchain) - £70,000

                From £50,000 to £70,000 per annum Equity

                http://www.cwjobs.co.uk/JobSearch/JobDetails.aspx?JobId=64195676&Keywords=bitcoin

                Chief / Lead Architect - Technical / Enterprise / Solutions

                £120000 - £250000 per annum + equity

                http://www.cwjobs.co.uk/JobSearch/JobDetails.aspx?JobId=64218979&Keywords=bitcoin

                Both EC4 and looking pretty serious to me.

                1. Sorry that handle is already taken. Silver badge

                  Re: Tulip Trading

                  Lead Web Developer (Ruby on Rails, Javascript, Blockchain) - £70,000

                  What does a web developer need a blockchain for?

                  1. TakeTheSkyRoad

                    Re: Tulip Trading

                    "What does a web developer need a blockchain for?"

                    I'd speculate it's a role involving creating a site which queries the/a blockchain.

                    There are many similar Bitcoin sites already which show the blocks, transactions processed and the ledger history. For example...

                    https://blockexplorer.com/

              2. Sorry that handle is already taken. Silver badge

                Re: Tulip Trading

                Transfers with Bitcoin take on average 10 minutes to any address on the network and the network is useable anywhere world wide with internet access (so global transfers in 10 minutes).

                The average hovers around 10 minutes, however any transaction could be confirmed in the next block, or it could languish for days, based on any number of factors.

                It's also good practice to wait for multiple confirmations to ensure that the block containing that first confirmation isn't orphaned.

                1. TakeTheSkyRoad

                  Re: Tulip Trading

                  "The average hovers around 10 minutes, however any transaction could be confirmed in the next block, or it could languish for days, based on any number of factors."

                  Correct so I did a little google research. Cases where the time is more than say 30 minutes look to be rare and the most the delay between blocks has ever been (back to 2011) is around 1.5 to 2 hours.

                  "It's also good practice to wait for multiple confirmations to ensure that the block containing that first confirmation isn't orphaned."

                  Yep, good point again. For example most exchanges won't let you trade deposited Bitcoin until there have been 10 confirmations.

                  Clearly this isn't ideal for payments so the payment processors are keen to reduce this. Bitpay for example already allow you to make a instant payment but I'm not sure if this is iron-clad or if they accept some risk. Sorry, I'm not close enough to the technical details but as a user the experience is instant.

                  See also...

                  http://cointelegraph.com/news/113409/bitpay-proposes-zero-confirmation-instant-payments-solution

                  1. Sorry that handle is already taken. Silver badge

                    Re: Tulip Trading

                    Correct so I did a little google research. Cases where the time is more than say 30 minutes look to be rare and the most the delay between blocks has ever been (back to 2011) is around 1.5 to 2 hours.

                    The time between blocks is another important consideration.

                    However, I was referring to the fact that when you send a transaction to the network, there's no guarantee that it will be included in a block. Miners aren't forced to verify transactions and occasionally mine empty blocks because it saves on processing time. You can add a transaction fee to improve the probability, but it's still no guarantee. When you do so you're also trying to guess what fee you will need to exceed the fees attached both to transactions that are already sent and waiting, and those that haven't been sent yet. Fees below a certain amount are at risk of being marked as spam and if you haven't included a large enough fee, many miners will simply ignore you anyway.

                    In the last few months there have been attacks that pushed the number of transactions in the network's "mempool" out to a day or more worth of backlog, which even with a big enough fee to avoid the transactions being marked as "spam", cost a trivial amount of money to stage (several thousand US dollars). It isn't a very robust system.

        2. dan1980

          Re: Tulip Trading

          @boltar

          "Well its certainly more of an investment vehicle than a true currency due to its deliberately limited supply day to day and ultimately."

          BTC has only two uses: investment and exchange.

          Some people, prompted by libertarian, small-government ideologies see Bitcoin as an alternative to the fiat currencies prevalent in the world today. The value they see in Bitcoin is that it is not and can not be (directly) controlled by any government.

          Well and good, but simply being free from direct government interference is not enough. For a currency - any currency - to work, it must provide a faith that the money you have now will be worth more-or-less the same in the near future as it is today and that you will be able to exchange it for the goods and services you need and want.

          Money is a token of value and so it relies on the value that the receiver puts on it.

          Thus the only real options are to use something that is widely agreed to be valuable or to use something that is legally defined to have value.

          Bitcoin is neither. It has no use outside of the currency itself; one cannot melt down a bitcoin (generally) to make a piece of attractive jewelery that you might be able to to trade. Nor can one make a corrosion-resistant cup or, getting more technical, contacts for an electrical device. If some kind of technological disaster happened - something that rendered the Internet inoperable - then Bitcoin would be useless for anything. Indeed the currency would essentially vanish.

          And clearly, it has no legal definition of value as fiat currency does. That's the two-edged sword of being immune to government control: it is also not supported by government and so there is no one to guarantee the value.

          So we are back to the start and its use for temporary exchange, where I exchange my (fiat) currency for BTC for the purpose of transferring value anonymously. The Important bit is that the price to me is effectively still in my local currency.

          Now we must consider its use as an investment device and here's where the true volatility and therefore unsuitability for use as a currency comes in because the value of Bitcoin is linked purely to the supply and demand of the currency itself - without any other factors.

          To explain, consider something like iron ore. The price of iron ore is based on the demand for iron ore, obviously. But, crucially, the demand for iron ore is based on it's use for manufacturing steel and the demand for steel can be linked to other factors like economic growth in (e.g. in China) that sees construction projects being undertaken.

          Bitcoin has no such chain of dependency on which any independent value can reasonably be based, which means the value of a bitcoin is determined by whether investors think that other investors will invest or divest.

          Hence the insane levels of volatility and hence is utter lack of suitability as a 'real' currency.

          1. TakeTheSkyRoad

            Re: Tulip Trading

            @dan1980

            Ok, huge post but everything you are saying is based on

            "BTC has only two uses: investment and exchange."

            So if Bitcoin can be used for investment and exchange then I assume you acknowledge the medium has value. Dollars have values, Pounds have value, gold has value and so does the iron in your example. In every case the influences differ with demand/manufacture/useage and in this Bitcoin is no different but it is very new and traded in tiny tiny volumes compared to even iron so there will be some volatility.

            As for goverment control then there is control in place and many people using Bitcoin today do not desire to be outside of goverment control. The simplest control method is to either ban or legislate. Some countries have chosen to ban and some have banned and then leglisated later. So far the leglislation used is based around exchanging back to the local Fiat currency (eg GBP).

            There's a good list here :

            https://en.wikipedia.org/wiki/Legality_of_bitcoin_by_country

            It's not up to date though since it states that in the uk bitcoin is unregulated and a more accurate article is here :

            http://www.coindesk.com/bitcoin-regulation-uk/

            In short the goverment has ruled that trading GBP for Bitcoin is VAT free and if you are trading then you would be liable for Capital Gains Tax on GBP profits.

            As for buying and selling anonymously you won't find many places today they won't ask for a copy of your passport and various other points of ID. Ok can meet someone in the street and trade in person but they still isn't anonymous since the sellers knows who you are and knows the address he deposited your Bitcoin into from which your transactions can be traced.

            I've seen many arguments that a currency should have more use than it's sole value but why ? As long as a curreny unit cannot be forged or duplicated and the populace accept it then isn't that enough. There have been decades of science fiction where Credits have been the currency or choice and nobody has questions the economic value of a Credit and if they can be melted down.

            Douglas Adams had his take of course...

            http://www.bbc.co.uk/cult/hitchhikers/gallery/guide/ningi.shtml

            Yes an electronic currency does depend on the internet but so does quite allot else and frankly if world wide networks failed then we'd be more worried about keeping the lights on and less about how we're going to pay the electric bill.

            Just to conclude you pointed out this :

            "Money is a token of value and so it relies on the value that the receiver puts on it."

            .... I agree and as of this moment the masses place of value of £274.58280 on Bitcoin. You might disagree but the masses set the value and as the number of users increase the stability of the price will increase too. Influencing a few thousand people is easy, influencing a million or more isn't though as some forex scandals have proved some people still try.

            1. dan1980

              Re: Tulip Trading

              @TakeTheSkyRoad

              "So if Bitcoin can be used for investment and exchange then I assume you acknowledge the medium has value. Dollars have values, Pounds have value, gold has value and so does the iron in your example"

              Yes - bitcoins do have a value and I agree readily. My point is that the value they hold depends almost ENTIRELY on investors. This is in contrast to fiat currency, where the value depends on the government and commodity currency, where the value depends on the underlying value of the commodity as something independently desirable/useful.

              Of course BTC has value - it's just a wildly variable value (for the above stated reasons) and thus not suitable for use as a currency.

              My point about government control was that government doesn't control the value of bitcoins - not that they can't regulate or tax or ban it.

              This reveals itself as a two-edged sword. To small-government, tax-is-theft, libertarian* types, it is a positive as it means that the government cannot devalue the currency (e.g. by printing more money), which they see as theft. Personally, I don't see it that way but I don't need to support or oppose that argument because the other side is that when government can't devalue the currency, they can't guarantee it either.

              Taking that together, my point is that Bitcoin can and does lose value so to use it as a currency, you are essentially replacing government control of currency value (as is the case with regular fiat currency) with INVESTOR control of currency value.

              It should be blatantly obvious that one of those options is far more stable than the other but if it's not then consider that the price of bitcoins has changed by 16% in the past 7 days.

              Now, that's an increase in value, against the USD so you might say that this is excellent news and if you got paid by your employer in BTC you have just effectively got a handsome pay rise. But look at it from a different angle for a moment - from, say, the perspective of a shop keeper.

              Let's imagine that a shop-keeper pays his invoices on a 7-day period and is charged in BTC - because hey, let's use that as a currency. So, he purchases some stock at the cost of 10BTC on December 2. The invoice is for 10BTC which, at the time of purchase equates to ~$3600USD. Well and good. But now it's December 9 and time to pay the invoice and that 10BTC is now ~$4200USD.

              We can foresee an objection to that logic which is that the store owner should just price his goods in BTC so he knows that he will be able to meet his obligations. To keep the math simple (it's December after all) let's ignore profit and say that our shopkeeper bought 100 widgets and sells them at 0.1BTC each. That way, once all are sold, it covers the 10BTC invoice.

              The problem is that for price then jumps for the customer - from $36 USD to $42 USD and so the store is uncompetitive (excusing our no-profit shortcut) with another store that deals solely in USD and has their widgets priced at $36.

              You can go further and say that this is no issue if the customer is dealing in BTC too but that assumes that they are paid their wages in BTC which then brings the problem of what happens when they pay their rent or mortgage, which would be in USD? In this instance, that's great because this week, their rent only costs 1.5 BTC where last week it cost 1.8 BTC, but what about when the value drops, as it did in Jan-Feb, when it lost 30%?

              The resultant conclusion is that using BTC as an actual, day-to-day currency only works if EVERYONE does it.

              But how do you ensure that that is the case when the currency is deliberately set up to prevent any kind of government control? It's that defining factor - universal acceptance (within the country) - that is one of the main points of fiat currency: it is designated by the government as legal tender.

              And this addresses your point about stability because, while 'millions' may be using it and this may well make the currency more stable, it's very likely you'll still have to pay for at least some things in your local currency and even if you are able to avoid that, you'll need to pay your taxes in the local currency.

              Which means that at some point there will be a conversion. Indeed at almost every point as anything you buy is taxed so the vendor must remit those taxes to to the government in the local currency because the government sure as hell won't accept taxes in BTC. When our shopkeeper remits the sales tax to the government, the government will expect that payment to reflect the value in USD.

              And that's the bottom line - if the government won't accept it for payment of tax obligations then BTC will always require conversion to the local currency and thus it will really be a token of exchange representing the underlying currency of the realm.

              * - By that I mean libertarians who also believe in the whole 'tax is theft', 'the reserve bank steals from the people' deal - there are plenty of libertarians who don't go in for that and so don't advocate for currency that is independent of government.

    3. lurker

      Re: Tulip Trading

      thatisthejoke.jpg

  3. oldtaku
    Facepalm

    Yeah, NOT RELATED, sure - the Aussie police are lying f@$#s, like any Feds.

    [ But I don't think it's actually him. Wired and Gizmodo took pains to point out just how stupid and careless this guy is for someone who's supposed to be a genius cryptographer. Probably not actually Satoshi, though maybe his dead friend was the brains. ]

  4. Your alien overlord - fear me

    And how did the (American) Feds take down Al Capone? Over tax issues. Not looking good.

    1. The First Dave

      Looks like a conspiracy because it _IS_ a conspiracy...

  5. Anonymous Coward
    Anonymous Coward

    The Australian Federal Police were just puppets being controlled from somewhere in Virginia.

    1. TeeCee Gold badge
      Facepalm

      FFS, Steve Jackson's "Illuminati" is a fucking game, not a history book.

      1. Anonymous Coward
        Anonymous Coward

        @TC

        Sigh, did Edward Snowden teach you nothing ?

        The NSA would be extremely interested in the inner workings of the bitcoin world and the (alleged) creator might have some intelligence of interest.

        5 eyes.

        1. dan1980

          In defence of the AFP and in the weak promotion of sanity, understand that the ATO don't get the AFP to carry-out an operation like this unless the case is pretty well under-way already.

          Regardless of whether this chap has anything to do with the invention of Bitcoin or not, the overwhelmingly likely reason for the ATO investigation that led to this raid is his involvement with Australian government money.

          They just don't care about Bitcoin - they care about taxes, so the only way this is related to Bitcoin is if he has been shirking his tax obligations in his dealings with the 'currency'. If you buy or sell with Bitcoin, you pay taxes. If you make money trading Bitcoin, you pay taxes. That is the limit of what the ATO care about.

          What would they - or any other government - want with him in relation to his possible creation of Bitcoin? It's open - fully and completely. It's understood and it's distributed. The only way to bring down the currency other than trading it into oblivion is also well understood - you just throw enough compute power at it to gain a suitable level of control over validations and then you could, effectively, stop transactions being validated and new coins being mined.

          That's been know for ages because that vulnerability is almost built-in due to the distributed nature that essentially relies on consensus.

          So for those who think this guy was raided in an attempt to net the inventor of Bitcoin, please explain what that would gain the proposed government/law enforcement agency/spy group.

  6. Anonymous Coward
    Anonymous Coward

    Once I take over the world...

    ... I'll personally flog any so-called "journalist" who writes "may or may not be" manifestations of the obvious.

    Yes, of course this bloke, or any other entity on, in, or near Earth, or elsewhere, "may or may not be" fucking Satoshi. Thank you, we're all so much wiser now.

    And now for the forecast: it may or may not rain, snow, or blow a hurricane today.

    1. Anonymous Coward
      Anonymous Coward

      Re: Once I take over the world...

      This article is basically doxxing in a blog post style. They found a guy that was leaving hints that he's Satoshi and then google'd a bit to find any account associated with him and bingo 73 + 0.83333 = "WE'VE FOUND HIM!! MAKE SURE TO CLICK THE ADS GUYS!".

      The reg on the other hand is; Take stories from other site. Rewrite as if you were borrowing someone else's homework on the bus to school. Add click bait headline. At least they sometimes link to the articles that they borrowed from.

    2. DropBear

      Re: Once I take over the world...

      "I'll personally flog..."

      So how do you reckon one should get across the point that the bloke is neither confirmed to be Satoshi nor confirmed _not_ to be Satoshi, in the context of a news item which might appear to suggest that he is in fact positively identified as the person in question...?

      1. dan1980

        Re: Once I take over the world...

        @DropBear

        In the context of commenting on a news story alleging this to be a fact, I would say something along the lines of: "no evidence has been presented to justify such a claim".

  7. TeeCee Gold badge
    Meh

    describes himself as “the only person in the world to hold all three GIAC Security Expert (GSE) certifications,” and therefore “certifiably the world’s foremost IT security expert”.

    And so modest with it too.

    1. dan1980

      @TeeCee

      Little matter that there two of those three certificates are now retired so no longer obtainable, leaving just the general one. It seems that the other two were only offered for a brief period of time.

  8. boltar Silver badge

    Superb at computer science...

    ... not so hot on the accountancy side it would seem. Not a great recommendation for someone who might have invented the worlds newest type of money.

    1. lurker

      Re: Superb at computer science...

      Well, looking at his history he seems to have issues with 'traditional' accountancy practices, which in fact might make him an ideal candidate for the inventor of a cryptocurrancy. The fact that he runs a company which owns one of very few privately owned supercomputers on the top 500 tables suggests he can't be all that bad at bean counting in at least some way.

      It's wait and see at this point, but he's certainly an interesting candidate.

  9. Yet Another Anonymous coward Silver badge

    Accounting rules

    If it's anything like the tax credits here - there is no way to get it right, you claim everything and a year or two later they decide what the rules were.

    Call somebody a software developer and you get R&D tax credits, developer = research & development. Call them a software engineer and you can't, engineer = production.

    Doesn't matter what work they actually do - just what is on the business card.

    Money to go to a conference = ok, conferences are research. money to send them to a trade show = no. So what is siggraph ?

  10. Anonymous Coward
    Anonymous Coward

    "the house publication of deluded entrepreneurs"

    Best description of wired ever.

  11. Anonymous Coward
    Anonymous Coward

    Conspiracy Theory of the Week

    I contend that the NSA created Bitcoin with the purpose of tracking terrorists by use of the block chain. Why else would the "creator" of Bitcoin be so hard to find? Why would they hide their identity/ies at all?

    The NSA has the resources and knowledge to do it and the Wikipedia page indicates that there are "possible attacks" that can link BTC users to an IP address which is probably the NSA's intentional back door.

    <Spooky theremin music goes here>

  12. Nicko
    Alert

    Possibly all a giant fraud/mistake....

    https://www.reddit.com/r/Bitcoin/comments/3w027x/dr_craig_steven_wright_alleged_satoshi_by_wired/cxslii7

    Nice bit of detective work... Basically, the PGP key used on the evidence emails (as used by Wired & Gizmondo) uses cipher-suites that weren't in PGP at the time the emails were supposed to have sent. Theories vary, maybe he's a time traveller, the co-creator of PGP, or both?

    1. Frumious Bandersnatch Silver badge

      Re: Possibly all a giant fraud/mistake....

      maybe he's a time traveller

      Hmmm.. Should we throw the name "John Titor" into the hat, too, then?

  13. Dick Emery

    There are only two certainties in life.

    Death and government officials wanting to know why your are making more money than them.

    We need a rich fat guy camping out in New Zealand icon.

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