Why We Still Debate Who Satoshi Is

The biggest crypto news and ideas of the day

Nov. 16, 2021

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Today’s must-reads

Top Shelf

ON-CHAIN: Crypto asset manager Valkyrie Investments will launch a decentralized finance (DeFi) fund next week with $100 million behind it, designed to give investors safe and easy exposure to the fast-growing industry. Unlike similar rival funds, Valkyrie plans to hold its assets “on-chain” to participate in yield farming and other economic activities across Ethereum, Avalanche, Solana, Binance Smart Chain, Matic and Fantom.

CRYPTO MINERS: Shares of Riot Blockchain (RIOT) were down almost 11% in early trading on Tuesday after the bitcoin miner’s Q3 revenue and earnings missed average analyst estimates, according to FactSet data. The miner said it increased bitcoin production by 482% to a record 1,292 BTC. Meanwhile, Canadian crypto miner Hive Blockchain reported record revenue of US$52.6 million in its fiscal second quarter, up 305% from the same period last year. Shares were down more than 5% on Tuesday.

GUIDING PRINCIPLES? Cryptocurrency giant Binance has published “10 Fundamental Rights for Crypto Users,” a carefully worded manifesto calling for balanced regulation and fair access for users. Among the tenets are financial inclusion, personal data privacy, reliable security and rules around selling crypto derivatives. It ends by saying, “Crypto regulation is coming. And we believe it will change the industry for the better.” Elsewhere in the world of crypto exchanges, Voyager Digital posted fiscal first-quarter revenue of $65.6 million and plans to expand into staking and non-fungible tokens.

CRYPTO CRACKDOWNS: More than 488,000 people have downloaded the consumer wallet for Nigeria’s central bank digital currency, the eNaira, which launched on Oct. 25. The country banned crypto in February. Speaking of bans: China’s National Development and Reform Commission (NDRC) said Tuesday it will consider “punitive electricity prices” for some crypto mines as part of the next stage of its crypto mining crackdown.

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“What this really means is the ability for the next generation of digital nomads and users to really enter a different type of environment, virtually walk into a virtual, embassy and apply for various digital services.”

–Barbados Ambassador to the United Arab Emirates Gabriel Abed discussing the country setting up an embassy in the metaverse, on CoinDesk TV’s “First Mover.”

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Putting the news in perspective

The Takeaway

Why We Still Debate If Craig Wright Is Satoshi

Hi, David Z. Morris today. On Saturday, the Wall Street Journal ran a tantalizing headline: “Bitcoin Creator Satoshi Nakamoto Could Be Unmasked at Florida Trial.” Nakamoto, of course, is a pseudonym used by the person or people who laid out the basic principles of Bitcoin, helped develop it between roughly 2008 and 2011, then disappeared with secret identity intact. You would think the Journal’s report on possible new information about Satoshi’s real identity would be welcomed by the cryptocurrency world.

You would be mistaken. The headline was greeted with reactions ranging from confusion to withering scorn from major crypto figures including Matthew Graham of Sino Global Capital, Bitcoin educator Matt Odell and author Vijay Boyapati.

The crux of the backlash was at least twofold.

First, the headline and much of the story are at best misleading on purely factual grounds. The ongoing civil trial between computer scientist Craig Wright and the estate of former collaborator David Kleiman does not actively consider the question of whether Wright is, as he has claimed for years, Satoshi. The Kleiman estate largely accepts Wright’s claim as part of its standing for the lawsuit, and a verdict either way would not, in itself, amount to a judgment on whether Wright is Satoshi.

But more substantively, fury over the Journal story manifests a bone-deep exhaustion among Wright skeptics at having, yet again, to deal with all this. Wright has been making claims to be Satoshi for more than half a decade at this point, but the bitcoin and broader crypto communities have found his evidence consistently unconvincing. Defenses of Wright these days come overwhelmingly from his own affiliates, particularly CoinGeek, the news operation owned by Calvin Ayre. Ayre is also an investor in nChain, where Wright is chief scientist.

nChain develops commercial blockchain services on Bitcoin SV, which forked from Bitcoin (BTC) as part of the long fallout of the so-called “block-size war.” The campaign to prove that Wright is Satoshi is inextricable from nChain and Ayre’s financial stake in BSV, which stands for “Bitcoin Satoshi’s Vision” and purports to represent Satoshi’s true design intentions. If the BSV price is an index of the industry’s acceptance of that claim, it has not been very convincing: BSV has lost roughly 94% of its value relative to BTC since January 2020.

The continued serious treatment of Wright’s claim to be Satoshi, by no less an institution than the Wall Street Journal and despite the apparently widespread disbelief of Wright’s peers, exemplifies much broader challenges of the digitized information age. Just as cyberlibertarians like John Perry Barlow predicted in the early 1990s, the internet has provided a powerful platform for voices that break from the consensus. CoinGeek and Ayre have stuck by Wright despite nearly universal condemnation and mockery, and have managed to attract enough true believers to keep their version of the story, at the very least, on the menu.

Of course, the Wright story may also be an example of the costs that come with this diversity of voices. Wright-as-Satoshi is just one in a long list of issues that can be plausibly characterized as “unresolved” because of the persistence of a vocal or well-funded minority against an overwhelming expert consensus. For those who remain skeptical of Wright, that leaves the barn door open for an endless debate that is, at best, a wearying distraction from more substantive and constructive issues.

Other similarly contested claims have had devastating real-world consequences and torn open large social rifts. The nonsensical “Q” movement colonized the brains of tens of thousands of Americans, distracting would-be child saviors from actual pedophile rings, only to fizzle out in deadly embarrassment. A single since-retracted study has become the foundation for a terrifying backlash against the scientific triumph of vaccination.

Read the full post on CoinDesk.

–David Z. Morris

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