New Yorker Reporter May Have Uncovered Secretive Bitcoin Creator

from the in-the-clear dept

Tue, Oct 4th 2011 6:38am — Mike Masnick

There's been plenty of press attention on Bitcoin over the last six to eight months, and many talk about how Bitcoin came about in a rather secretive manner by someone going by the name "Satoshi Nakamoto," who then basically disappeared. No one seems to know who Nakamoto is. However, in a new New Yorker article (mostly hidden behind a paywall), reporter Joshua Davis may have tracked down Nakamoto. While the New Yorker is going to lose traffic and interest in this story by not putting it online, it's opened up the opportunity for others, such as the folks at Planet Money, who have the key details: including the belief that "Nakamoto" is likely a guy named Michael Clear.

So Davis, the author of the New Yorker story, emails Clear.
"I like to keep a low profile," Clear replies. "I'm curious to know how you found me."

Davis eventually cuts to the chase:

Finally, I asked, "Are you Satoshi?"

He laughed, but didn't respond. There was an awkward silence.

"If you like, I'd be happy to review the design for you," he offered instead. "I could let you know what I think."

"Sure," I said hesitantly. "Do you need me to send you a link to the code?"

"I think I can find it," he said.

In the end, Clear says he's not the guy � but his denial leaves the door open just a crack:

"I'm not Satoshi," Clear said. "But even if I was I wouldn't tell you."

The other key point is that Clear points out a weakness in the Bitcoin code: encryption for wallets. When Planet Money's Jacob Goldstein asks another Bitcoin expert about what's new in Bitcoin, the guy points out that the latest version... has wallet encryption.

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Filed Under: bitcoin, currency, michael clear, satoshi nakamoto

42 Comments

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Anonymous Coward, 4 Oct 2011 @ 6:58am

A currency that can't be created out of thin air by the Fed. The U.S. is going to be cracking down as soon as possible.
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Spaceboy (profile), 4 Oct 2011 @ 7:34am

Wallet encryption has been the single biggest point of contention with Bitcoin to date. Just because the guy mentioned wallet encryption and then the next release has it doesn't mean it's him. The bitcoin forums are full of people who have lost their bitcoins because their wallets weren't protected and people have been screaming for this for a long time.
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Anonymous Coward, 4 Oct 2011 @ 7:34am

Re:
I think the government will end up eventually adopting such a currency. It does provide the government with some advantages.

A: More transparency. Tax evasion is much harder. Black markets are much more difficult. There is far more transaction traceability.

B: Forgery is much more difficult.

In some ways it gives governments more control, in other ways it gives them less.

At the same time it does have its drawbacks, which are being worked on (ie: the lack of wallet encryption, which has been discussed by me and others on Techdirt, can make it easier for people who gain access to a computer to gain access to someones bitcoins. That's now being/been corrected).

It might not do away with regular money, which also has its pluses and minuses, but it might turn into an international currency that works alongside regular money. Maybe not Bitcoin itself, but perhaps Bitcoin is a precursor to something else to come.
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Anonymous Coward, 4 Oct 2011 @ 7:35am

Re:
My thoughts exactly.
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Spaceboy (profile), 4 Oct 2011 @ 7:36am

Re:
You're a little late to this party. Bitcoin has been around for years and they haven't done anything about it. The fact that most of the network is outside of the US means they can't do shit about it. Outlawing it will not stop people from using it.
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iamtheky (profile), 4 Oct 2011 @ 7:39am

Re: Re:
B: Forgery is much more difficult.
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iamtheky (profile), 4 Oct 2011 @ 7:40am

Re: Re: Re:
https://en.bitcoin.it/wiki/Mining_hardware_comparison

https://en.bitcoin.it/wiki/Deflationary_spi ral

a currency that can be created out of thin air by everyone interested in doing so, that should be easy enough to make sure your millions don't turn in to ones.

When you have to adjust your currency based on the market, rather than adjusting the market based on currency, something seems very amiss.
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cc (profile), 4 Oct 2011 @ 7:53am

Meh. The guy wanted his privacy and there was no good reason to expose him.
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Anonymous Coward, 4 Oct 2011 @ 7:54am

Re: Re:
So, I think the bottom line is that the problem isn't with what kind of system is used. People think/thought that 'digital' is the solution to copy barriers, then DRM came out. People often thought that digital books are better than physical books because you can freely copy them, them digital books that can be revoked came out (as has been discussed on Techdirt). You buy a physical book, it's much harder to take that book away. You can buy digital books that limit how long you can use them to the duration of a class/semester (sure, that can be cracked, but that requires extra work and time. Just like copying a physical book that you check out from the library requires work). Same thing with trial software (I've once had to pay like $50+ for software that only lasted a semester, after which the software trial ended. Though the non-trial version costs between a thousand and two thousand dollars, depending on which variation you get I think). The problem isn't a physical vs digital problem, it's a who's in charge problem. Digital can have its advantages but it can have its disadvantages.

I suspect Bitcoin will be no different. The government can implement it and simply tax more. It can implement it and start banning more products and better enforce the abolition of black markets to products that it doesn't like. Sure there are ways around it (ie: I'll pretend I'm selling you x when I'm selling you y, an alternative currency can be used, but such limitations make markets less efficient; there is also bartering, which is also less efficient), but that requires more work and can more easily raise suspicion, especially with people who have a history of something. and Bitcoin use still lets the government know more about how much money you earn, spend, and where it goes, where it comes from, which can make it easier for them to figure out what you're doing regardless. Such information is also great for marketers and can pose a huge privacy concern.

So the solution to our monetary and other problems isn't 'bitcoin' or 'digital money', it's a having a reasonable non-oppressive government. There is no easy solution, we still need to go out there and protest, vote, assemble, keep ourselves informed, etc...
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Anonymous Coward, 4 Oct 2011 @ 8:04am

Re: Re: Re: Re:
But that's not forgery. Everyone knows that inflation is built into the system, but they know the inflation dynamics ahead of time.

and processor time requires money. It requires computer use (which takes up electricity), the cost of paying for computers, opportunity cost of those CPU cycles, the space required to store those computers, etc...

and Bitcoin already controls for increased future processor speeds.
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Anonymous Coward, 4 Oct 2011 @ 8:06am

Re: Re: Re: Re: Re:
(and it controls for more people entering the bitcoin mining market. Over time, coins per CPU cycle will naturally decrease).
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College of Content, 4 Oct 2011 @ 8:14am

New York Reporter
If that's the case, then show more. Keep the informative posts coming!
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Anonymous Coward, 4 Oct 2011 @ 8:17am

Wait for it.... wait for it...

Who gives a crap about bitcoin?
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iamtheky (profile), 4 Oct 2011 @ 8:26am

Re: Re: Re: Re: Re: Re:
Please tell me more about the 'controls' on this 'decentralized' currency.

http://www.newscientist.com/blogs/onepercent/2011/06/bitcoin-value-plummets-as-main.html
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Jay (profile), 4 Oct 2011 @ 8:31am

Re: Re: Re:
"So the solution to our monetary and other problems isn't 'bitcoin' or 'digital money', it's a having a reasonable non-oppressive government. There is no easy solution, we still need to go out there and protest, vote, assemble, keep ourselves informed, etc.."

I believe a look at who would oppose bitcoin is more telling than how the government might oppose it. Sure, they can try to buy more bitcoins, increasing the value. Just the same that people can buy more gold and it raises the value.

I believe the ones opposed are the ones tied to the current system of borrowing money, ie the Federal Reserve Bank. Otherwise, bitcoins sound pretty good to use and I just don't understand how the government could even know what your money is without infringing on your rights to privacy and anonymity.
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Jay (profile), 4 Oct 2011 @ 8:32am

Re:
They say he's a likely suspect. But all in all, we could have a Spartacus moment and no one would know.
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Anonymous Coward, 4 Oct 2011 @ 8:34am

I have no problems with Bitcoins.
Even my local wifi coffee shop accepts bitcoins, which rocks. Never had any problems with it as a currency, works just like a credit card. It does have some wild fluctuations recently however, not sure why.
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Anonymous Coward, 4 Oct 2011 @ 9:30am

Re: Re: Re: Re: Re: Re: Re:
Like I said, problems are being worked on (like the lack of wallet encryption) and currencies rise and fall relative to each other all the time. Exchange rates change regularly.

But my post wasn't addressing the economic side of the debate since that's not the issue you brought up. It was addressing the technical side.

Two basic ways inflation can happen. The creation of more money (all other things constant), or the production of fewer goods (all other things constant). Bitcoin controls for the former, which was the point that you raised and the point that I was addressing.

Other ways 'inflation' can happen is simply the adoption of a new currency (which can inflate, or devalue, the old currency) or simply the public attribution of less value for a given unit of currency (though I'm not sure how much these possibilities meet the definition of 'inflation'?). Currency has ascribed value, the reason that a hundred dollar bill is worth more than a one dollar bill is purely artificial. Bitcoin can't control for how much value we ascribe to those coins.
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Anonymous Coward, 4 Oct 2011 @ 9:31am

Re: Re: Re: Re: Re: Re: Re: Re:
"Bitcoin can't control for how much value we ascribe to those coins." But regular, traditional currency has similar difficulties.
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iamtheky (profile), 4 Oct 2011 @ 9:55am

Re: Re: Re: Re: Re: Re: Re: Re: Re:
my post was not addressing the economics either, quite the opposite: when a technical flaw (and implementation as well) causes something as drastic as a complete rollback of currency exchange transactions, that does not equal inflation; nor does 'regular currency' have a limitation that would feasibly allow for such a case.

Suppose I need DH to author, or Marcus to pen a rhyme entitled:

"technical flaws -vs- implementation flaws -vs- ridiculous market fluctuations in a digital currency"

so that i can start telling them apart.
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Anonymous Coward, 4 Oct 2011 @ 10:46am

Re: Re: Re: Re: Re: Re: Re: Re: Re: Re:
"my post was not addressing the economics either, quite the opposite: when a technical flaw..."

No, what you said was,

"a currency that can be created out of thin air by everyone interested in doing so"
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Anonymous Coward, 4 Oct 2011 @ 10:48am

Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re:
and you also linked to a bunch of relevant sites discussing the mining aspect of it.
Your links

"Deflationary spiral is an economic argument ..."
[emphasis added]

https://en.bitcoin.it/wiki/Deflationary_spiral

Then, when I addressed that issue, you went off on a tangent about a technical issue.
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iamtheky (profile), 4 Oct 2011 @ 11:51am

Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re:
But my post wasn't addressing the economic side of the debate since that's not the issue you brought up. It was addressing the technical side.

you went off on a tangent about a technical issue.

yeah, i was as lost as you were in your posts. The contention that 'mining' is somehow built in to the system and the future abilities to do so forecast, and that is somehow related to its inflation....is not something i could not readily believe as i cannot place that much faith in any piece of code, so i gave examples highlighting the waterfall effect to the market, when technical flaws are exposed upstream. And they will be exposed.
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Anonymous Coward, 4 Oct 2011 @ 12:33pm

Re: Re:
Black markets are much more difficult.

This is a mark against it being officially adopted. The government and (especially) big business absolutely require the existence of a viable black market.
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Anonymous Coward, 4 Oct 2011 @ 12:52pm

Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re:
"yeah, i was as lost as you were in your posts. "

I wasn't lost, I was merely addressing your posts. No one here got lost besides you.
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iamtheky (profile), 4 Oct 2011 @ 1:44pm

Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re:
address this: the contention that 'mining' is somehow built in to the system and the future abilities to do so forecast, and that is somehow related to its inflation....

because chances are the only thing you will address (again) is the smarm with which i litter the post.
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Anonymous Coward, 4 Oct 2011 @ 2:03pm

Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re:
Much of that was already addressed, both from an economic and from a technical perspective. I'm not going to reiterate what I already said.

For example, see "the number of bitcoins in existence will never exceed 21 million"

https://en.bitcoin.it/wiki/Controlled_Currency_Supply

To address your "a currency that can be created out of thin air by everyone interested in doing so" comment. It's not that simple. Entities can't simply create unlimited bitcoins at will.
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Anonymous Coward, 4 Oct 2011 @ 3:39pm

Re: Re:
The conspiracy theory people will flame me, but I do believe we need a global currency or to be more specific a pseudo currency that everybody can use.

Bitcoin would be perfect, it doesn't create a currency that can be manipulated centrally and all participants have their own currencies that they translate to that one value.

It would be like an overlay.
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Anonymous Coward, 4 Oct 2011 @ 3:43pm

Re: Re: Re:
That was complete nonsense but is good that you at least try.

All copy protections can be circumvented, and nobody found a way to stop that, everything can be copied.

In the monetary realm, people will trade with the coin that it is easiest for them and in a global market, if you like it or not, solutions to the problem for different currencies and values will appear with or without government approval this is not something that will be negotiated behind closed doors, this is something that you can see happening before your eyes.
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Anonymous Coward, 4 Oct 2011 @ 3:44pm

Re: Re: Re: Re: Re:
Nobody knows inflation dynamics ahead of times they have a compass not a future prediction machine.

If anybody had that we would have trillionares by now.
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Guest, 4 Oct 2011 @ 5:29pm

You can learn about Bitcoin, here: http://www.youtube.com/user/TheBitcoinCurrency?feature=mhee
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Risk, 5 Oct 2011 @ 9:23am

The Saga of BitCoin
The existence of Operation Mockingbird suggests that 'Joshua Davis' may just be another government stooge operative trying to flush out the innovator(s) of this rational alternate currency. Such an act would signal the beginning of the full-scale propaganda war against BitCoin. I.e. by discrediting the creator.

What BitCoin really and truly needed yesterday is an adjunct:

A communication methodology whereby BitCoin can operate alternately over the Internet *and* also through it's own adhoc network comprised of both wifi routers and individual computers linked peer-to-peer. Something akin to a BitCoin VPN.

This will help to avoid the inevitable attacks by government (sovereign or shadow) upon BitCoin. Both obvious (arbitrary declaration of illegality, etc) and surreptitious (propaganda and slander, etc.)
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Chris Rhodes (profile), 5 Oct 2011 @ 10:26am

Re: Re: Re: Re: Re: Re: Re: Re: Re: Re:
Erm, Bitcoin didn't have the flaw. An exchange (MtGox) did.

That's like saying the US dollar is worthless because Paypal got hacked.
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Anonymous Coward, 5 Oct 2011 @ 12:00pm

Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re:
fair point, but i was thinking quite along those lines. It did adversely affect other US bitcoin exchanges, and many marketplaces during the rollback activities. Combined with the fact 1/13th of all your currency in existence could be jacked by a single entity, is in my opinion quite an implementation flaw.

..Ive seen other advocates boast of the artificial ceiling of 21 million coins. And i can only see that continuing to keep the market shallow enough to be influenced by single trading events such as these.
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iamtheky (profile), 5 Oct 2011 @ 12:19pm

Re: The Saga of BitCoin
I like antagonizing the passionate advocates and all, but i hadnt even considered it being of small enough scale for governments to use as target practice, you have probably offed the rest of my day :)
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iamtheky (profile), 5 Oct 2011 @ 12:21pm

that was me.
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wappledoo, 6 Oct 2011 @ 6:01am

Silk Road?
If black markets are more difficult, why is bitcoin the currency of choice for Silk Road?
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wappledoo, 6 Oct 2011 @ 6:05am

Bitcoin via Tor
Operating bitcoin via Tor, alleviates much of the concern about government attacks on it. Tor is a project specifically designed to allow citizens to circumvent their governments' attempts to monitor and censor the Internet, so it complements bitcoin nicely.
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Chris Rhodes (profile), 6 Oct 2011 @ 7:45am

Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re:
Combined with the fact 1/13th of all your currency in existence could be jacked by a single entity, is in my opinion quite an implementation flaw.
First of all, that's not an "implementation flaw" of Bitcoins. There's nothing that stops everyone in the US from depositing their money in a single bank, but that isn't a flaw with the US dollar. Second, given the current state banks in the US and the EU, I think you just might get a chance to see what the "implementation flaw" with paper money actually is. :)
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iamtheky (profile), 6 Oct 2011 @ 3:03pm

Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re:
Did you just compare an exchange to a bank? I think that just clouds any defensive arguments. Can you liken any Forex activities to those of MtGox, where an entire currency is devalued by a single voluminous trade?
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Billy Wenge-Murphy, 6 Oct 2011 @ 4:18pm

Re: Bitcoin via Tor
Tor is also a project originally pioneered by the US Navy, that the same paranoids claim is a government plot as well.

Besides fears of backdoors, the most popular conspiracy theory is that they wanted to build out a network of anonymous communications in order to shield their own spies.
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Chris Rhodes (profile), 7 Oct 2011 @ 1:55pm

Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re:
Any flood of a commodity or currency onto a market will drive the price down. That's basic supply and demand, and it happens on the market every day.

If China stopped pegging the yuan to the dollar tomorrow, what do you think would happen to the values of the yuan and dollar?
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