The latest chapter in a years-long cryptocurrency mystery is over — and the true identity of Satoshi Nakamoto, the pseudonym used by the creator of bitcoin, is still unknown.
On Monday, a court in Florida ruled that Craig Wright, an Australian computer scientist who claims to be Nakamoto, won’t have to pay the family of deceased computer programmer Dave Kleiman tens of billions of dollars in the cryptocurrency.
The lawsuit argued that Kleiman, Wright’s former business partner, was the co-creator of bitcoin and therefore entitled to a large chunk of Nakamoto’s assumed fortune — a cache of more than 1.1 million bitcoin that would be worth around $54 billion today.
But the federal judge presiding over the case made it clear that the court would not weigh in on Wright’s claim of inventing bitcoin.
“The court is not required to decide, and does not decide, whether defendant Dr. Craig Wright is Satoshi Nakamoto, the inventor of the bitcoin cybercurrency,” U.S. Magistrate Judge Bruce Reinhart wrote on Monday. “The court also is not required to decide, and does not decide, how much bitcoin, if any, Dr. Wright controls today.”
Before the verdict was issued, Wright claimed that he would offer proof that he invented bitcoin if he were to prevail, which he has now done. He hasn’t yet specified exactly what form that proof could take.
So at least for now, the Nakamoto mystery continues. Here’s what you need to know:
How the Satoshi Nakamoto mystery came to be
In 2008, a nine-page white paper outlining the idea for bitcoin was published to a mailing list for cryptography enthusiasts by an author calling themself Satoshi Nakamoto. The white paper described bitcoin as “a purely peer-to-peer version of electronic cash [that] would allow online payments to be sent directly from one party to another without going through a financial institution.”
Nakamoto officially launched the first version of bitcoin software in early 2009, collaborating with software developers and coders online over the next couple of years to improve the software. In 2010, the value of a single bitcoin was roughly 8 cents. By the end of the year, the total value of the cryptocurrency topped $1 million.
However, no one ever knew Nakamoto’s true identity. Experts believe the pseudonym could have represented either one person or a group of people.
The mystery around Nakamoto deepened in 2011, when the pseudonymous creator stopped working on bitcoin altogether and essentially disappeared — handing control of the open-source code that enables the use of bitcoin to software engineer Gavin Andresen, who helped refine bitcoin’s software in its early days.
Who people think Nakamoto is
Over the past decade, as bitcoin has grown to reach a total market value of roughly $1 trillion, speculation has swirled over the true identity of its creator.
In 2014, a California man named Dorian Nakamoto (whose birth name was Satoshi) had been reported to be the bitcoin creator, but he later denied those claims and said he’d never even heard of bitcoin.
Three years later, Tesla CEO Elon Musk publicly denied that he was Nakamoto after blog posts suggested he might be behind bitcoin.
Computer engineer Nick Szabo invented a bitcoin predecessor called Bit Gold in the late 1990s, but he has regularly denied being Nakamoto.
Nakamoto’s online posts originally identified the bitcoin creator as a man in his 30s living in Japan. Some people have pointed to Nakamoto’s early posts in online forums, which used British spellings and phrases like “colour” and “bloody hard,” as proof that Nakamoto could be originally from England or a British Commonwealth.
Craig Wright has said he’s Nakamoto before
Wright stepped forward in 2016 to say that he was Nakamoto, the inventor of bitcoin. In a blog post at the time, the Australian computer engineer and entrepreneur thanked the online community of bitcoin developers and miners for promoting the cryptocurrency’s massive growth since its launch.
“This incredible community’s passion and intellect and perseverance has taken my small contribution and nurtured it, enhanced it, breathed life into it. You have given the world a great gift. Thank you,” Wright wrote.
Wright’s claims garnered support from some members of the bitcoin community, including Jon Matonis, co-founder of the nonprofit Bitcoin Foundation. However, Andresen, who took control of bitcoin’s code from Nakamoto but never met the creator(s), initially supported Wright’s claims but later admitted he had his doubts, adding that it was at least possible Wright had fooled him by manufacturing fake proof meant to prove he was Nakamoto.
Other skeptics have called Wright’s claims a “scam,” and security researchers have claimed Wright put forth fraudulent cryptographic proof to back his assertion. Wright digitally signed a message using cryptographic keys — a string of data, like letters or numbers — associated with Nakamoto’s bitcoin. But many researchers believe that Wright copied an existing cryptographic signature of Nakamoto’s and tried to pass it off as new.
In a 2020 interview, Wright hit back at his doubters, saying he felt they would remain skeptical of him even if he did show he had control over Nakamoto’s bitcoin. “People would be running around saying I stole coins .. or some other bullshit,” he told tech website Modern Consensus.
How Wright could prove he invented bitcoin
In another lawsuit that ended in June, Wright sued the anonymous operator and publisher of the website bitcoin.org for copyright infringement in the U.K. over its display of the infamous bitcoin white paper, outlining what bitcoin is and how it works — which he claims he wrote in 2008.
At the time, Wright’s lawyers claimed that the lawsuit could prove that Wright was Nakamoto, but the case eventually ended in a default judgment in Wright’s favor after the website’s pseudonymous creator, known as Cobra, declined to appear in court.
There is a convincing way to prove whether Wright is Nakamoto, says William and Mary Law School professor Eric Chason, who researches cryptocurrencies. It involves the portfolio of more than 1 million bitcoin that Nakamoto is believed to have mined.
“The strongest evidence that Mr. Wright could put on would be if he could show control over some of the early bitcoin mined by Satoshi Nakamoto,” Chason says.
Other avenues do exist, Chason says. For instance, Wright could show the ability to access Nakamoto’s accounts on the online forums where the bitcoin creator interacted with developers and the cryptocurrency community in the early days of bitcoin.
Computer files predating the 2008 white paper that show research or writing on bitcoin as a concept could potentially sway Wright’s doubters. So could dated correspondence, like an email to a colleague showing an early draft of the paper or bitcoin research.
Still, Chason says, it would have been “a great courtroom drama” if Wright had been forced to prove his claims in court by transferring control of some of the bitcoin known to have been mined by Nakamoto with just the click of a button. “That would be convincing, and a pretty cool story,” Chason says.
Update: This story has been updated to reflect a Florida court ruling in favor of Craig Wright, who claims to have invented bitcoin.
Check out: Meet the middle-aged millennial: Homeowner, debt-burdened and turning 40
Don’t miss:
What a crypto executive wishes investors knew before buying bitcoin for the first time
