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[Newsmaker] Bitcoin creator’s identity still a mystery

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Published : 2014-03-09 20:20
Updated : 2014-03-09 20:21

WASHINGTON (AFP) ― The world was little closer to knowing for sure who invented Bitcoin Friday, despite Newsweek’s claim to have unmasked the enigmatic “Satoshi Nakamoto” behind the computer-coded currency.

The magazine relaunched its print version with an ostensibly huge scoop, identifying 64-year-old Japanese-American engineer Dorian Satoshi Nakamoto as the creator.

But the mystery remained after the apparently retired model train enthusiast from suburban Los Angeles asked a reporter to buy him lunch and then denied he was the Nakamoto of legend.

“I’m not involved in Bitcoin,” he told the AP reporter.

Hours later, raising more doubts about the Newsweek report, a web forum where “Satoshi Nakamoto” used to share his ideas for the virtual currency and the computing structure behind it unexpectedly received a curt message on the same Nakamoto account.

“I am not Dorian Nakamoto,” the message on the P2P Foundation members discussion board said.

But neither denial quite settled the matter. There is still some mystery about Dorian S. Nakamoto himself.

And Joseph Davies-Coates, who established the P2P discussion board, said that while the source of the second denial “could easily be” the original Satoshi Nakamoto, there was no way to prove that.

Critics bashed Newsweek for making a compelling but not definitive link between Bitcoin and Dorian Nakamoto, and still publishing his picture and one of his home, while writing that he is worth at least $400 million in unspent Bitcoin.

The report sparked a minor media frenzy at the home, leading to Dorian Nakamoto’s denials and a host a fresh questions.

The Bitcoin Foundation, whose officials worked online with “Nakamoto” to develop the computer code underpinning the currency, said they saw “zero conclusive evidence” that Dorian Nakamoto was their online contact.
Dorian S. Nakamoto, identified by Newsweek magazine as the founder of Bitcoin, speaks to members of the media as he arrives home in Temple City, California, Thursday. (Bloomberg)

But Newsweek issued a statement saying it “stands strongly behind” the story.

“The facts as reported point toward Mr. Nakamoto’s role in the founding of Bitcoin,” it said.

Whatever the case, whether or not Dorian S. Nakamoto is the Satoshi Nakamoto, the story gave more prominence to the digital crypto-currency that was created to revolutionize payments and banking worldwide.

In the five years since it was created, Bitcoin has trumped a score of other startup virtual currencies to gain viability as a means of exchange and investment, if not global acceptance.

The structure designed for it automatically increases the supply and keeps a record of each coin while protecting the identity of owners.

Transferring Bitcoin to others, for a purchase for instance, is simple and does not require a bank as an intermediary ― a key goal of Nakamoto’s design.

The Bitcoin network infrastructure is distributed over the massive computing power of Bitcoin users, an ingenious solution that ensures the decentralized network grows steadily with the currency’s usage.

Its rise to popularity has been fast. It traded for cents per Bitcoin for the first two years of its existence, and then began a frenzied climb that took it to $40 a coin in late 2012 and $1,100 last year, before falling off to the current $620 level.

Avenues for usage have widened. The initial sprinkle of vendors accepting it for payment has multiplied to hundreds, including travel agents, restaurants, and even ATM cash machines.

Last week the Winklevoss brothers, Bitcoin investors, announced that they had bought tickets into space on Richard Branson’s Virgin Galactic aircraft using Bitcoin.

But challenges remain. For one, those accepting Bitcoin for payment continue to price their goods first in other currencies ― $250,000 each for the Virgin space tickets, for instance.

Bitcoin’s anonymity and hidden digital tracks have made it an avenue for money launderers and drug sales, and authorities have made arrests and shut down exchanges hosting such activity.

Several Bitcoin exchanges have shut down claiming they are victims of electronic theft of the currency. Mt Gox, once the largest Bitcoin exchange, collapsed in February after claiming hackers robbed it of $300 million worth of Bitcoin.

Now some Bitcoin fans are calling for regulation to protect owners of the currency before scandal undermines it.

But many of those who support Bitcoin have done so precisely because it was outside of the world of government controls.

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