Guy Who Wants Everyone To Believe He Created Bitcoin, Now Patenting Everything Bitcoin With An Online Gambling Fugitive

from the because-reasons dept

As you may recall, there was a giant fuss last year, when an Australian guy named Craig Wright not only claimed that he was "Satoshi Nakamoto" -- the pseudonymous creator of Bitcoin -- but had convined key Bitcoin developer Gavin Andresen that he was Nakomoto. That was a big deal because Andresen was one of the first developers on Bitcoin and regularly corresponded with Nakamoto (Andresen's own name sometimes popped up in rumors about who Nakamoto might be). Even with Andresen being convinced, plenty of others soon picked apart the claims and found the claims severely lacking in proof.

Then, last summer, Andrew O'Hagan published an absolutely massive profile of Wright that only served to raise a lot more questions about Wright, his businesses, his claims to having created Bitcoin, and a variety of other things. However, as we noted at the time, buried in that massive article was a bizarre tidbit about how Wright was actively trying to patent a ton of Bitcoin related ideas. As we noted, the article stated that Wright's plan was to patent tons of Bitcoin stuff, reveal himself as Nakamoto and then sell his patents for a billion dollars.

Of course, part of that plan fizzled because basically no one believes Wright was Nakamoto. But, apparently the patenting has continued. Earlier this months, Reuters released a big "investigation" showing that Wright is rushing to get as many Bitcoin-related patents as possible, and has partnered with an online gambling mogul who's a fugitive because of his business dealings (add this to the long list of sketchy connections between Wright and other businesses):

Craig Wright, the Australian computer scientist who made the Satoshi claim, has the backing of Calvin Ayre, a wealthy Canadian entrepreneur, according to people close to Wright and documents reviewed by Reuters. Ayre has been indicted in the United States on charges of running online gambling operations that are illegal in many U.S. states – an accusation he rejects.

Wright’s expertise combined with Ayre’s support make a potentially formidable force in shaping the future of bitcoin and blockchain, the ledger technology that underlies digital currencies. Wright and his associates have lodged more than 70 patent applications in Britain and have plans to file many more, according to documents and emails reviewed by Reuters and sources with knowledge of Wright’s business. The patents range from the storage of medical documents to WiFi security, and reflect Wright's deep knowledge of how bitcoin and blockchain work.

Their total compares with 63 blockchain-related patents filed globally last year and 27 so far this year by multinationals from credit card companies to chipmakers, according to Thomson Innovation.

And, because it's patents we're talking about, there's a shell company here, because shell companies are quite popular in the patent trolling world. But Reuters claims that Ayre and Wright are behind this particular shell company and point to lots of close connections between the two. The report further notes that there are plans to file 150 patent applications, and maybe up to 400, and again repeats the claim from last year about the "ONE BILLLLLLLLLION DOLLARS!" sales plan:

The range of patent applications lodged by Wright and colleagues is wide. Five, registered on Dec. 14, were made by EITC Holdings with the bland description “computer-implemented method and system,” public filings show. One, registered on Dec. 28, was described as “Determining a common secret for two blockchain nodes for the secure exchange of information” - apparently a way to use the blockchain to exchange encrypted data. Other applications by Wright and his associates relate to sports betting and a blockchain-based operating system for simple electronic devices.

Emails from Wright to Ayre’s associate Matthews, reviewed by Reuters, set out plans to file 150 patents. A person with direct knowledge of Wright’s businesses said he and associates ultimately aim to file closer to 400. None has been approved so far and it’s not clear whether the patents would be enforceable if granted, but Wright’s associates have been quoted as saying the patents could be sold “for upwards of a billion dollars.”

The Reuters article argues that this "rush to patent applications poses a threat to the original conception of bitcoin as a technology available to all." Of course, that also seems like a pretty big strike against the idea that Wright is Nakamoto.

But it also seems like a misunderstanding about patents themselves. First off, just because you file for a ton of patents, it doesn't mean you're going to get them. And, thankfully, lately the USPTO has actually gotten much, much better at rejecting really bad patents. These things may be worth talking about if he's actually granted these patents -- and, even then, it may only really matter if he (or any later holder of the patents) seeks to enforce them. The really crazy thing, though, is that this once again demonstrates the sheer silliness of our patent system. Rather than actually trying to build a viable business by leveraging the useful features of Bitcoin/blockchain, you have someone trying to lock it up by putting tollbooths wherever possible. Tons of work is being done to advance Bitcoin and blockchain these days, because of all the opportunities it will create... not because of patents. And, once again, it shows the folly of believing that patents are a key incentive for innovation. That's rarely the case. Often, they're a key incentive for putting hurdles in the way of actual innovations, so that you can shake the actual innovators down for cash.

Filed Under: bitcoin, blockchain, calvin ayre, craig wright, patents, satoshi nakamoto

Feds Continue Crackdown On Poker... By Seizing The Wrong Bodog Domain

from the keystone-kops dept

The feds domain name seizure powers seem simple enough (if of extremely questionable legality, seeing as domains involve speech which requires a higher standard to seize), so it really amazes me how badly they seem to regularly screw up in using them. The latest is the seizure of Bodog.com as well as the indictment of Bodog boss Calvin Ayre. While there's been lots of attention paid to the seizures of sites having to do with copyright and trademark infringement, the same feds (ICE and the DOJ) have also been using the same powers gleefully to stop you from playing poker online. You may recall that they seized PokerStars, Full Tilt Poker and Absolute Poker last April, followed up by 10 more domain seizures in May (which was especially bizarre, since the key thing that's illegal is processing payments, but in that case, the federal government set up its own fake payment processor for those sites...).

Bodog, however, has been considered the "big dog" of online poker for quite some time, raising some questions as to why it wasn't included in last years' busts. Of course, in typical fashion, the feds seem to have targeted the wrong domain. Bodog gambling sites moved off of Bodog.com ages ago -- first due to a patent dispute, and later to avoid having the sites on US controlled domains. For quite some time the company has mainly relied on bodog.eu, and more recently has been offering a different domain called Bovada.lv for US-based players.

As for Bodog.com? It had become the face of the "Bodog Brand" and was used for licensing the Bodog name, but wasn't itself a gambling site in ages. The affidavit for seizure (pdf and embedded below) claims that federal agents set up accounts and gambled on Bodog.com, but I really wonder if they didn't miss the fact that they were redirected to another site. Checking the internet archive, it certainly looks like Bodog.com was pretty much out of commission long before the feds claimed to have set up and used accounts there. Either way, the seizure seems unlikely to do much to stop gambling on Bodog sites, considering that the actual gambling was happening on sites, other than Bodog.com, which likely are still perfectly operational.

As for the actual indictment (pdf and embedded below) against the individuals, it's more or less what you'd expect. They focus a lot how Bodog moved money around, but much of that was only necessary because of the (relatively recent) decision by some politicians in the US to sneak an anti-online gambling bill into a bill about protecting our ports and harbors. Ever since then there's been a growing effort in Congress to actually make online gambling legal again -- in part because the big casinos who mostly supported the original ban have now changed their minds and want in on the action. In other words, while it is likely that Ayers and his team did violate the law, there are a lot of questions about the law itself, and there's a half decent chance that what he was doing will be perfectly legal before too long.

Kinda makes you wonder why the feds are spending their time and taxpayer-funded resources on such a thing, doesn't it?

As for Ayers, he sounds pretty defiant, suggesting that this is really just the feds acting in the best interests of large casinos who don't like the competition:

I see this as abuse of the US criminal justice system for the commercial gain of large US corporations. It is clear that the online gaming industry is legal under international law and in the case of these documents is it also clear that the rule of law was not allowed to slow down a rush to try to win the war of public opinion.

These documents were filed with Forbes magazine before they were filed anywhere else and were drafted with the consumption of the media as a primary objective. We will all look at this and discuss the future with our advisors, but it will not stop my many business interests globally that are unrelated to anything in the US....

The whole thing seems like a big waste of time by some federal officials who like big headlines, but don't seem particularly focused on stopping crimes that actually cause real harm.

Filed Under: calvin ayre, doj, domains, ice, online gambling, poker, seizures
Companies: bodog