Satoshi Nakamoto is the founding father of cryptocurrency—and a mystery.
In October 2008, Nakamoto gave Bitcoin to the world. Then they disappeared. To this day, nobody knows who Nakamoto is. Amongst the speculation, one man stepped forward: Craig Wright, an Australian computer scientist who has, since 2016, maintained that he is Nakamoto. Now he’ll have to prove it in court.
On February 5, a trial will begin in the UK High Court, the purpose of which is to challenge Wright’s claim to Satoshi-hood. The case is being brought by the Crypto Open Patent Alliance (COPA), a nonprofit consortium of crypto and tech firms, in response to a slew of lawsuits filed by Wright against Bitcoin developers and other parties, in which he is trying to assert intellectual property rights over Bitcoin as its ostensible creator.
In its complaint, COPA claims that Wright’s behavior has had a “chilling effect,” obstructing the progress of Bitcoin by scaring away developers. It is seeking a declaration that Wright does not own the copyright to the white paper that first proposed Bitcoin and did not author the original code, and an injunction preventing him from saying otherwise. In effect, COPA is asking the court to rule that Wright is not Nakamoto.
The verdict will have direct implications for a tangle of interlocking cases, which will determine whether Wright can prevent developers from working on Bitcoin without his permission and dictate the terms under which the Bitcoin system can be used.
“The stakes are very high,” says a representative of the Bitcoin Legal Defense Fund, a nonprofit that helps Bitcoin developers defend against legal action, who asked to remain nameless for fear of legal retaliation from Wright. “In the eyes of the law,” they claim, Wright “is asking for ultimate control over the Bitcoin network.”
Wright declined to be interviewed for this story.
In their 2008 white paper, released in the shadow of a global financial meltdown, Nakamoto sketched a vision for a new electronic money and peer-to-peer payment system that would obviate the need for troublesome intermediaries like banks. In January 2009, they sent the first Bitcoin transaction. A little more than two years later, they disappeared without a trace. The hunt for Nakamoto began.
The absence of a “leader,” says software developer and early Bitcoin adopter Jameson Lopp, has been an asset to Bitcoin in the period since, making it “robust” by demanding it evolve under a system of unspoiled anarchy. Free from the overbearing influence of a founder, anyone that volunteered their time to work on Bitcoin could have a say in its direction. Yet Wright’s claim to be Nakamoto threatens to complicate matters.
Wright was first nominated as a potential candidate by both WIRED and Gizmodo on the same day in December 2015. The original story, based on a trove of leaked documents, proposed that Wright had “either invented Bitcoin or is a brilliant hoaxer who very badly wants us to believe he did.” A few days later, WIRED published a second story, pointing to discrepancies in the evidence that supported the latter interpretation.
Wright did not respond initially to reports that he was Nakamoto, although he did largely scrub his online accounts. By the following year, though, he had begun to present himself publicly as Bitcoin’s creator. He has tried on multiple occasions—through various means—to categorically prove the claim, earning himself a band of supporters who swear by his credibility. In 2016, Wright was able to convince Gavin Andresen, an early contributor to Bitcoin’s underlying software, and Jon Matonis, former director of the Bitcoin Foundation, an advocacy group. His most vocal advocate is billionaire Calvin Ayre, whose venture capital firm recently acquired a controlling stake in one of Wright’s businesses.
Otherwise, Wright has failed to alter the prevailing opinion that the mystery of the Bitcoin founder remains unsolved. Only a minority of Bitcoiners, claims Lopp—those that “really want for there to be a Satoshi figure”—buy into Wright’s story. Andresen recently walked back his position: “I now know it was a mistake to trust Craig Wright as much as I did. I regret getting sucked into the ‘who is (or isn’t) Satoshi’ game,” he wrote in February 2023 in a revision to an earlier blog post.
Since 2019, Wright has seemingly reached for litigation as the primary means of asserting his claim. He has filed a sequence of lawsuits against the developers that maintain the Bitcoin codebase and organizations that deal in Bitcoin, who he has accused of breaching his copyright, and libel cases against individuals who have challenged him publicly.
In the absence of a patent, claims Lindsay Gledhill, IP partner at law firm Harper James, Wright’s strategy seems to be to use legal action to “cobble together a basket of rights” that perform a similar function when taken together. To assert ownership over Bitcoin, Wright has attempted to “use the wrong tool to do the job of a patent,” she claims. “That is what it boils down to.”
Three of the cases filed by Wright—against crypto exchanges Coinbase and Kraken and a group of Bitcoin developers—are predicated specifically on the idea that he is Nakamoto. Therefore, the judge presiding over the cases, Edward James Mellor, has arranged for the COPA proceeding to come first. It will serve as a preliminary issue trial, in the lingo of the courts, whose outcome will be respected in the interlocking disputes, too.
The identity issue is “fundamental,” says Rachel Alexander, an IP specialist at law firm Wiggin. “If [COPA] can nip that in the bud, it makes the broader claims much more difficult to continue with.”
The COPA case is expected to run for six weeks. Wright is set to give testimony early on, with much of the rest of the trial to be spent examining the credibility of the documentary evidence on which his claim to be Nakamoto depends.
The main allegation is that Wright has forged or tampered with many of these documents to make them seem as if they were created at a particular point in time. “COPA has filed extensive evidence that we believe shows Wright has fabricated and forged,” says a COPA representative, who asked that their name not be published to prevent personal legal retaliation from Wright. In reports submitted to the court, they claim, COPA “systematically reviews and dismantles” the documents, pointing to “anachronisms” that “undermine his claim to have been Satoshi Nakamoto.”
Figures from the bitcoin world, including Lopp and blogger-podcaster Arthur van Pelt, have attempted previously to catalog Wright’s alleged misrepresentations. Van Pelt calls the story Wright has constructed a “Potemkin village” and his behavior a “Satoshi Nakamoto cosplay.” Wright has dismissed these kinds of criticisms as “basically fluff.” In September 2022, he told a court in Norway he had “never changed any documents or manipulated any documents.”
That one of the UK’s highest courts is allowing COPA to allege forgery is significant, Gledhill claims. This, she adds, is not an accusation the court will automatically permit: “The courts will not let you make vague suggestions. There are strict rules.” COPA would not be allowed to accuse Wright of forgery, in other words, without the court finding that it has grounds to do so.
The dispute over the documents will be the “heart of the case,” says Alexander. “That will be the key issue for the court to grapple with.” If the judge concludes that Wright is guilty of forgery, not only would it damage his prospects of succeeding in the COPA case and those that depend on its outcome, but it could also lead to him being charged with contempt of court, she says. The penalty for this could be a fine, imprisonment, or both, Alexander adds.
On January 24, two weeks before the trial was due to begin, Wright presented COPA with a surprise settlement offer. By the terms of the proposal, Wright would halt his own legal action in the connected cases and forfeit the right to pursue IP rights over Bitcoin. In return, COPA would have to recognize Wright as Satoshi Nakamoto and agree to various other stipulations. In a tweet, COPA said it would “hard pass” on the offer, which, it claims, featured “loopholes that would allow [Wright] to sue people all over again.” COPA hopes that a ruling in its favor will “create a safe space,” says the representative, in which developers cannot be “bullied or cowed” into halting work on cryptocurrency technologies.
While a victory for COPA would effectively represent a return to business as usual, a win for Wright would mean the opposite. If the court finds that Wright is, in fact, the author of the Bitcoin white paper—that he is Nakamoto—it would pave a clearer route to victory in the connected cases, in which Wright is the plaintiff. In the most high-profile of those cases, known informally as the Database Rights Case, Wright accuses Bitcoin developers of breaching his IP rights by making “fundamental changes” to the Bitcoin system without applying for a license or authorization. In effect, he is seeking a ruling that would make it illegal for developers to iterate on the Bitcoin code without his say so, and that would afford him control over the main software used to plug into the Bitcoin system.
The impact would also be felt globally. Each country “will analyze a copyright case on their own basis,” says James Marsden, a senior associate at law firm Dentons, “but the general principles beneath copyright law are harmonized” by an agreement adopted by the overwhelming majority of countries. In other words, if a UK court rules that Wright is Nakamoto, he’ll likely be seen as such by courts around the world.
The Bitcoin network, says Lopp, is architected in such a way that the parties running the client software—that prop up the payment system, as so-called nodes—cannot be forced to adopt code changes. By design, alterations may only be proposed, not enforced. That means Wright would not be able to make unilateral changes to Bitcoin.
If he wins, though, Wright could make it harder for developers to collaborate freely on the Bitcoin codebase—to spoil the unspoiled anarchy—by wielding the affirmation of his IP rights to file lawsuits against those that do not seek a license. Developers on the project may have to operate anonymously to protect themselves. “We’d have to become much more hardcore cypherpunks,” says Lopp. If fewer and fewer developers are willing to risk legal action, the health and usability of the system could deteriorate. Over time, the risk is that Bitcoin would slide toward obscurity.
Bitcoin would be far better off, claims Lopp, if the identity of its creator remained a mystery. Bitcoin is “far from perfect,” he says, but without a Satoshi figure, whether that be Wright or anyone else, developers will never be prevented from working to improve it.
“Satoshi’s greatest gift to the world was Bitcoin,” says Lopp. “His second greatest gift was to disappear.”
Source : Wired
