In this week’s Bitcoin review, we examine the (possible) unmasking of Bitcoin’s creator and the effect that the MtGox disaster is having on cryptocurrency worldwide.
Was Newsweek wrong?
On Thursday morning, Newsweek published an article that appeared to solve the mystery of Bitcoin’s elusive creator. His name really was Satoshi Nakamoto, although he had changed it legally to Dorian Prentice Satoshi Nakamoto, and he was a 64-year-old Japanese American who lived humbly in a house in Temple City, Cal. and collected model trains.
However, the backlash and doubt about the piece was swift. While some praised it as brilliant journalism, many questioned why a man who had been so careful to hide his identity and create an anonymous network didn’t use a pseudonym at all. Others were furious at Newsweek for “doxxing” or outing the life of a man who wanted to stay private.
After lunch with an AP reporter chosen at random and a “car chase” to the AP’s downtown Los Angeles bureau, Nakamoto gave the outlet an exclusive two-hour interview in which he denied creating Bitcoin, even reportedly calling it “Bitcom” throughout the interview. (The AP has posted the video of the interview here).
The story took an even weirder turn Thursday night when the original Satoshi Nakamoto posted in the same forum where he announced Bitcoin in 2009 “I am not Dorian Nakamoto.”
So now we’re back at square one.
Newsweek continues to stand by and defend its story. Dorian Nakamoto and the original Nakamoto online both say Newsweek has the wrong guy. Felix Salmon at Reuters summed it up nicely Friday: “Call it the Satoshi Paradox: the probability that Dorian is Satoshi would seem to be very small, and the the probability that Dorian is not Satoshi would seem to be just as small — and yet, somehow, when you add the two probabilities together, the total needs to come to something close to 100%.”
There’s no definitive proof that Dorian isn’t Nakamoto. There’s also no definitive proof that he is Nakamoto. And that’s where the Newsweek story erred.
How is the market reacting?
The price of Bitcoin continues to rise following the MtGox collapse even as Japan mulls over possible regulation and taxation of the digital currency. Federal Reserve Chair Janet Yellen said Monday though that the Reserve can’t regulate it in the U.S. because it exists entirely outside of the banking agency.
For background on why we’re using Coindesk’s Bitcoin Price Index, see note at bottom of the post.
In other news we covered this week:
- The newest cryptocurrency startup accelerator backed by Match.com’s founder brings Ripple into the spotlight. Instead of focusing on the currency itself, it wants to take the Ripple protocol mainstream as a payment system.
- Overstock reported more than $1 million in sales paid for with Bitcoin.
Here are some of the best reads from around the web this week:
- The most dangerous man to Bitcoin is the man trying to clean it up: Preet Bhrarara, says Fast Company.
- WIRED reporter Robert McMillan talks to MtGox insiders for a comprehensive look at Mark Karpeles and the troubled exchange.
- The Winklevoss twins are going to space! The two bought tickets using Bitcoin because, as Tyler Winklevoss wrote in a blog post, they see it “as seed capital supporting a new technology that may forever change the way we travel, purchased with a new technology that may forever change the way we transact.”
- The Lakota Nation adopted MazaCoin, a cousin to Bitcoin, as its official currency.
Bitcoin in 2014
Bitcoin price is up nearly $100 from where it was last week.
Bitcoin’s weekly closing price since 2013
A note on our data: We use Coindesk’s Bitcoin Price Index to obtain both a historical and current reflection of the Bitcoin market. The BPI is an average of the two Bitcoin exchanges which meet their criteria, Bitstamp and BTC-e. To see the criteria for inclusion or for price updates by the minute, visit Coindesk. Since the market never closes, the “closing price” as noted in the graphics is based on end of day Greenwich Mean Time (GMT) or British Summer Time (BST).