Magical Thinking: Bitcoin Gathers at Disney

The hotel is a tomb of hopeful thinking. Built in the 1980s, the single tower of the Wyndham Lake Buena Vista Hotel at Disney World juts up from the Orlando ground as if tectonic forces pushed skyward a sheet of pure, brown stucco. A soundtrack of Mickey Mouse anthems plays around the clock. The carpets are damp. And for a weekend in October, a group of men and women who mean to change the future of civilization were staying there.

The inaugural Coins in the Kingdom conference had been billed as a three-day stretch of "bitcoin partying," but the hotel swimming pool was desolate the evening I arrived. "Baby I Love Your Way" drifted from a speaker as the sun went down, while a handful of immobile guests—none of them bitcoin enthusiasts—loafed nearby. A shirtless man with a large marijuana-leaf tattoo scolded his son.

Bitcoin culture, like Bitcoin, is still an emergent phenomenon. The virtual money, uncontrolled by any government or bank, came to the general public's attention with some notoriety, thanks to the Silk Road, the now-defunct website that employed bitcoin to help you easily buy and sell heroin and other contraband. But any publicity can be good publicity: After Silk Road, the all-but-unregulated new form of money became a tech phenomenon and a currency speculator's dreamscape—the exchange rate for one Bitcoin rose from around $11 in November of 2012 to a peak of more than $1,100 a year later.

It has subsided since, but some proponents say it could go on to $100,000 or a million. Why not a trillion? The enthusiasm had always seemed silly to me—bitcoin was a neat technology concept, but it was hard to see why it should exist. Who really needs a decentralized, deflationary digital currency, other than drug dealers and Reddit recluses?

But the bitcoin people generate their own purpose: The security of the system against forgery relies, in lieu of regulators, on a communal effort called the "blockchain," a distributed ledger system that stores transaction records on the computers of the network of bitcoin users. The blockchain, collaborative and protective, was the technical foundation of this new economic fervor but also, it would soon become clear, a sort of metaphor behind the faith.

I'd flown to Orlando and made my way to the hotel—adjacent to "Downtown Disney," (an outdoor shopping area that resembles what you imagine the nice parts of Pyongyang to be) and quite far from the familiar Disney magic—to see if their bitcoin belief could be contagious. Might bitcoin be not a childish, cultish delusion, but what they held it to be, the next great human invention?

But first there was the emptiness of this other, aging vision of the future: the sprawl of dangerous intersections, poorly laid walkways, and artificial lakes. The hotel did not offer, and never would offer, any indication whatsoever that we were in the state of Florida, or even on Earth, or even alive. It was a solid block of fluorescent-lit corridors and large beige rooms. There were no windows anywhere occupied by the conference.

*** BTC @ $354.95

I was rescued from poolside suicidal ideation by Jeremy Gardner, the 23-year-old head of the College Cryptocurrency Network and the co-organizer of Coins in the Kingdom. Gardner is a recent University of Michigan dropout who'd gained prominence in the internet money community for cashing out his bitcoin holdings at $1,000. A sort of gangly hybrid of Ryan Phillippe and Michael Cera, if they were both debate team captains, he has what seems like infinite enthusiasm. He speaks a lot, and loudly. In his striped polo shirt and cargo shorts, he could have passed for someone walking through Downtown Disney for entirely non-bitcoin reasons.

But unlike everyone else strolling with us past animatronic dinosaurs and kiosks selling Aladdin pins, Gardner thinks about seemingly nothing but bitcoin, at every single hour of every single day. He is wholly dedicated to a very, very particular kind of software, and thinks it's going terrifically: "I'm one of the only people in bitcoin with no enemies," Gardner said, beaming, on our way to a Disney approximation of Italian dinner.

His community is at once filled with both profound enthusiasm, profound trust, and constant paranoia. As far as bitcoin boosters go, Gardner is a moderate—he doesn't see eye-to-eye with anti-statist hyper-libertarians, which he tells me this conference is flush with. But he does see his pet technology in us-versus-them terms. The world is divided between those who "believe in the blockchain" and their foes, of which there are many: banks, politicians, universities, and perhaps above all, Western Union—"motherfucking remittances," Gardner remarked again and again, are a chief evil on the bitcoin moral plane.

There were so many people waiting in line to buy things with dollars, we were ravenous by the time we found an open restaurant. It's not unimaginable that one of Disney's overpriced restaurant simulacra might accept bitcoin someday. Over $180 million in venture capital has flowed into bitcoin-related companies this year alone, backed by A-list boosters like Marc Andreessen and the Winklevoss twins.

That's enough money to create a small industry of people whose sole work is just sort of talking about bitcoin all the time. Bitcoin conferences are sprouting across the country (and globe) fast enough to make you think people actually use bitcoin. Some are geared at educating us cash-users about the advantages of the new way of doing things. But most are just gatherings of people who have agreed on the internet gathering in some conference room to agree more.

Even if bitcoin is still far from the mainstream, the chatter circuit keeps the backers and believers occupied (except when they're defrauding each other through fake conferences, which Gardner said happens quite often). It seems like a lucrative—if not kind of imaginary—career path: With bitcoin expertise, "anyone can get a job," Gardner told me. Was this a job interview? Or even something shy of expertise: "If you know anything about bitcoin, I can get you a job," he repeated, too earnest to be bragging.

Gardner travels constantly, hotel-hopping between bitcoin conferences, gulping Adderall, consulting for extra income, and generally spreading the good news to anyone within earshot. He was inexhaustible, with the bottomless positivity of someone who hasn't read tech coverage over the last year. He and his peers are "changing the world," he insisted. They turning bitcoin into something that will be "bigger than the entire internet."

Bitcoin is galvanizing in the way no other current technology is. In 2014, smartphones are boring. Digital cameras are disappearing. In 2014, bitcoin is where hope and imagination run free.

As we finished our family-sized pasta and whiskeys, I offered to pick up the bill, as a thank-you for rescuing me from sitting alone in an Orlando hotel room. Not a chance. "Trust me," Gardner said, "I think I make more money than you."

"There are those who just want to be left alone, there are those that just won't leave 'em alone! It's no more complicated than that. You think it is, but it's not."

Podcaster Ernie Hancock, who takes credit for Ron Paul's "rEVOLution" campaign logo and once brandished a weapon at an Obama rally, provided Saturday's opening remark before an audience of about 12. If you've ever wondered where the carpet that was removed from your parents house wound up, it appears to be in a Disney conference ballroom now.

Hancock delivered his comments urgently, as if stormtroopers from the Federal Reserve would storm the room at any moment. "What we want to do," he went on, with the lilt of a carny, "is try to make sure that bitcoin develops in such a way that it is supportive of the rights of the individual."

I would hear this again, and again, and again: bitcoin is a weapon for liberty that we dearly need to wield against government. Bitcoin isn't just a way to buy gift cards online, but an act of civil disobedience, a democratization of the global financial system. There's no denying how radical that idea is.

But before we resisted them, we needed to be scared of them.

"Can they?" Hancock asked the audience, invoking every conceivable form of big government malice. "Then they are." It was up to all of us in the uncomfortable chairs to stop this. "If it's technologically possible to advance the interest of those with coercive power, then it will eventually become politically inevitable." The audience nodded along—it starts with regulation, with Wall Street acceptance, and before you know it, a prison state. Or something. If anyone disputed the notion that the very concept of government was just one fat obstacle in the way of unobstructed bullion exchange paradise, they kept quiet.

Hancock was in good company at the Magic Kingdom. Down the orange-tinted hall from his orange-tinted conference room was another chasm of hellish textiles, set up with folding chairs and tables as an exhibitor hall. At one table stood Mark Edge and Carla Mora from the Free State Project, a campaign to get 20,000 people who hate and fear government to move to New Hampshire and live near each other. Carla, asking me if I were "liberty-minded" (the actual word "libertarian" was rarely heard), touted New Hampshire's permissive laws about bar closing times.

I wasn't ready to commit to a new life in a liberty-minded colony, but I was curious what any of this had to do with bitcoin. Orlando was a long way from Manchester.

Edge provided a cheery answer with his radio host's tenor: "Wide [bitcoin] adoption needs to happen to decimate the state." Edge always said the word "state" with finger air-quotes. "The state is the most killing-minded thing," he explained. As a pacifist, he saw bitcoin as his best means to hurt the U.S. government back, by ditching its dollars.

Edge's outlook may have sounded fringe-y, but in this particular magic kingdom, there is no lunatic fringe. Edge isn't a bitcoin outsider: He boasts of his friendship with Gavin Andresen, who was selected as bitcoin's engineering successor by the software's creator, Satoshi Nakamoto, before the latter decided to completely vanish. He's plugged in. He was the rule, and I was the exception. He kept smiling.

Mora still seemed a little put off by my reluctance to move to New Hampshire, but remained enthusiastic about the blockchain: "Bitcoin represents pure freedom," she beamed. It was something untouched by the "tentacles of the state."

She was new to the bitcoin community ("the community" or "the space" for short), but the group zeal had taken her already. It was pervasive, even in the ugliest of conference rooms: "There are so many people starting companies… it's a beautiful thing."

Edge stepped out briefly with a skinny, rough-bearded young man from central casting, and they returned with a large Dominos pizza. "This was 27 fucking dollars," the skinny companion announced. The Disney Dominos did not accept bitcoin, but he offered to sell me a slice for five dollars' worth of coin.

I hadn't brought any, and didn't plan to buy, so I'd have to choose from one of the other available options: room service, a cantina by the pool, or a $25 buffet for children that included visits from costumed characters.

*** BTC @ $333.11

The exhibitor's room was uncomfortably big, with more people sitting and waiting to talk about bitcoin than there were pre-registered pairs of ears. Some of the tables had been temporarily abandoned, leaving behind only scattered business cards and crumpled QR codes. But the tone was genial, that of a high school reunion (if you attended high school inside a subreddit and spent the intervening years growing hateful of the government instead of getting fat).

Men in Bitcoin shirts, some sporting Mickey ears, shook hands with internet friends. Children were herded toward a "Kids Room" with "blockchain-inspired activities," though one seven-year-old named Alexander idled by the table where his father was selling bitcoin-logo mugs. For a conference centered around money, very little of it seemed to be changing hands. I asked Alexander what he liked about bitcoin, and he just shrugged back: "I dunno, I just like it." Alexander didn't yet fear the tentacles of the state.

Fear was everywhere else. In another conference room session, Brian Soveryn, the self-described "baddest boy in the blockchain," railed against CFL light bulbs (forced upon us by regulators), warned against radio chips in door knobs, and deemed the U.S. government "unfit to exist." The reasoning behind all of this was never much more substantial than Alexander's explanation of why he likes bitcoin.

There was nothing to do between the panels, which all ran late. There was no way to leave the hotel complex without a car, which I didn't have. Even the shuttles drove you further into Disney occupied territory. When I'd run out of people to talk to, I took the elevator up to my room and looked out the window and wondered what the view looked like before roller coasters and resorts peeked above the tree line.

A few hours later came the day's keynote address, delivered before a crowd of literally dozens of people. Andreas Antonopoulos (Twitter bio: "Security guy, entrepreneur, coder, hacker, pundit, humanist, pacifist.") delivered another refrain of minor paranoia and galaxy-eyed encouragement.

"Welcome," he began. "We're all crazy." The room filled with hoots of approval. The moral of the day was to ignore bitcoin's many skeptics, for "history vindicates the people who take a chance." It all started to feel less like an alternative-currency conference and more like self-help.

Antonopoulos began with an analogy: Once upon a time, governments feared the automobile, and tried to clamp down on its use (not mentioned: the tens of thousands of people who died gruesome deaths before safety glass and seat-belt laws were forced on us by government tendrils). Even electricity had its skeptics, callow souls who thought indoor wiring would burn down homes (not mentioned: electrical fires).

Every technology has its doubters, Antonopoulos argued. Bitcoin has doubters. Ergo, bitcoin (or something like it) would be as widespread as electricity in the near future.

"Be comfortable in [your] position," he urged, "in the position of the weirdo, of the outsider." More applause. "Let them laugh at you." Nods all around. Bitcoin believers were rhetorically perched on the shoulders of Tesla, and Curie, and Edison. "You're not taught that every single person in the history of technology was ridiculed," Antonopoulos exclaimed (not mentioned: the ones who've deserved it).

At his side and serving as a sort of personal moderator and hype man was anarcho-capitalist celebrity Jeffrey Tucker. Tucker was an odd sight in a room full of people in bitcoin shirts and cargo shorts: impeccably dressed, with a fey demeanor and theatrical voice verging on stage accent. Reports from the 2008 presidential campaign fingered Tucker as the author behind Ron Paul's notoriously homophobic and racist newsletters, a charge on which he's demurred.

In the Horizon ballroom, Tucker dazzled: He decried bitcoin critics as "Luddites," praised the robber baron mansions of Newport (monuments to "early adopters"), urged us to browse rare coin shops ("an authentic part of the social order, a symbol of an age that's gone by"), and of course, denounced the federal hand. "The regulatory books are stuffed so full of hundred years of crufty laws," he said.

The content was the same as every diatribe, but the air was tinglier. This man didn't speak like he'd skulked out of an internet message board, but with Hollywood confidence. He wore a bow tie. He used large words, and gestured artfully with his hands.

Even so, the stock talking points were numbing. The government will clamp you if you give it a chance, so trust in this esoteric internet technology. Our enemy: Wall Street, the state, the White House. Our ally: the blockchain. Oppressor and liberator. Regulation and liberty. Them, and us.

I'd never seen the bitcoin community as monetary Manichaeism, but now it was the only way it made sense. How else could what is essentially a group of software enthusiasts act like they're attending the next Vatican Council? The blockchain, basically a fancy ledgerbook of wire transfers, was one thing in which these families could feel absolutely secure. Bitcoin was safety.

Why else travel to Orlando, this cartoon swamp? The government could come for their guns, or their land, or their light bulbs, but it couldn't seize the blockchain. No matter that the blockchain, at present, wasn't capable of doing very much other than serving as a symbol of personal liberty at a conference in Florida.

The conference dispersed for dinner, reconvened for a charity poker tournament (with a bitcoin purse, of course) and slept. There was a wedding the next morning.

I love weddings but dislike the happiness of strangers, so I was ambivalent about the union of David and Joyce, who were to perform the first "blockchain wedding" in history. If you'd told me I would come close to tears at a bitcoin wedding inside a Disney convention center I'd spent the better part of two days inside, I'd have assumed you were speaking to me through a malarial fever.

Yet here we all were, a room of smiling strangers, dressed for a trip to Dave & Busters, seated in neat hotel rows. "Is it bad luck on your wedding day if you get a stuck block?" cracked one guest to another. I didn't quite get the joke.

The bride's parents were watching the ceremony from the Philippines via Skype, the groom's mother next to them, all the way from Brooklyn. They clapped and cried, and I wondered how you'd explain this to your parents and thought how much they'd have to love you not to mind. Jeffrey Tucker officiated with a grandiloquent speech on human volition, beauty, love, and entrepreneurship. Bless his laissez faire heart, he did indeed find a way to compare the union two people to a bitcoin transaction: "Through entrepreneurship, and enterprise, there is also love."

[There was a video here]

But who needed metaphors? They tied the knot with an actual money transfer—David transferred himself 3.5 bitcoins (around $1,300 in criminal statist fiat money) through an adjacent crypto-ATM. The transfer was accompanied by a commemorative marriage memo, so that a statement of their love was repeated across the world, transferred from peer to peer across the whole blockchain.

There was no marriage certificate for the IRS to trample. When the symbolic transfer was complete and pressed into the immutable cyber-ledger, the couple received a printer receipt from the ATM. Say what you will about this modern marriage, but that's more than most couples ever get.

In sickness and in health, for richer or for poorer, and "because the blockchain is forever." We were all jubilant. We ate slices of a custom-ordered wedding cake shaped like a bitcoin ATM, bright orange and red velvet. The bride tossed a bouquet. I gave David a strong put-'er-here-pal handshake, not even thinking that I didn't know his last name. "I wanted to give her something special," he told me. The ceremony was the gift. The bride was beautiful.

All the tone-deaf Reddit posting and speculative greed on Twitter, all the arrogance and triviality of "the bitcoin community" seemed to dwindle beside the family in the Philippines crying tears of joy. For a small part of the day, the presiding sentiment wasn't fear. The bitcoin community, such that it was in the Magic Kingdom that afternoon, felt like a community, not simply an opt-out from the rest of the world. It felt like a church.

Faith in the blockchain hadn't amounted to much beyond a mini-bubble of venture capital and a lot of startup confidence, but in the aftermath of the wedding, it was unimpeachable. A hyperactive child stomped down the aisle as the cake crowd dwindled, shouting "I'M SATOSHI NAKAMOTO! I INVENTED BITCOIN!" over and over, to the delight of every guest. If bitcoin amounts to nothing more than a strange mid-decade fad and cautionary lesson for future MBA classes, at least it made a group of people happy for a couple hours.

I decided I'd have some sort of breakdown if I stayed in Orlando through the evening, so I switched my ticket home to an earlier flight and paid a surcharge of U.S. dollars. It worked perfectly. By the time I would reach Orlando International Airport, the price of one bitcoin would have sunk to around $296—the lowest in almost a year.

"The next step is we need a couple of these," the groom told me as I headed out, gesturing to the children of the coin.

"Can't do that with the blockchain yet!" I replied. How else do you talk about unborn children with a stranger at the end of his virtual-currency-themed wedding?

This Australian Says He and His Dead Friend Invented Bitcoin

This story was originally published on December 8, 2015. Shortly thereafter, Craig Wright scrubbed much of his digital presence and disappeared for months—until May 2, 2016, when he publicly announced that he is the creator of Bitcoin.

A monthlong Gizmodo investigation has uncovered compelling and perplexing new evidence in the search for Satoshi Nakamoto, the pseudonymous creator of Bitcoin. According to a cache of documents provided to Gizmodo which were corroborated in interviews, Craig Steven Wright, an Australian businessman based in Sydney, and Dave Kleiman, an American computer forensics expert who died in 2013, were involved in the development of the digital currency.

Wired reported this afternoon that Wright and Kleiman were likely involved in creating Bitcoin. Gizmodo has been following a similar trail for weeks, one that in recent days has included face-to-face confrontations with Wright’s business partners in Sydney and interviews with Kleiman’s closest associates in Palm Beach County, Florida. Gizmodo also obtained confirmation from on-the-record sources that Wright claimed on at least two occasions that he and Kleiman were both involved in the creation of Bitcoin.

In early November 2015, Gizmodo received a series of anonymous tip emails from someone who claimed to not only know the true identity of Satoshi Nakamoto, but who also claimed to have worked for him. “I hacked Satoshi Naklamoto [sic],” the first message read. “These files are all from his business account. The person is Dr Craig Wright.” What followed was a package of email files apparently pulled directly from an Outlook account belonging to Craig Wright, an Australian academic, computer engineering expert, and serial entrepreneur with a litany of degrees and corporations to his name.

Last year, Wright publicly announced his plan to establish the “world’s first Bitcoin bank.” Wright’s LinkedIn page lists him as the CEO of DeMorgan Ltd, a company whose website describes it as “focused on alternative currency, next generation banking and reputational and educational products with a focus on security and creating a simple user experience.” Among DeMorgan’s subsidiaries, also listed on its website, are C01n, a Bitcoin wallet company; Coin-Exch, a Bitcoin exchange; and Denariuz, the aforementioned Bitcoin bank, and one of the top supercomputers in the world.

Several of the emails and documents sent to Gizmodo point to a close relationship between Wright and Kleiman, a U.S. Army veteran who lived in Palm Beach County, Florida. Kleiman was confined to a wheelchair after a motorcycle accident in 1995, and became a reclusive computer forensics obsessive thereafter. He died broke and in squalor, after suffering from infected bedsores. His body was found decomposing and surrounded by empty alcohol bottles and a loaded handgun. Bloody feces was tracked along the floor, and a bullet hole was found in his mattress, though no spent shell casings were found on the scene. But documents shared with Gizmodo suggest that Kleiman may have possessed a Bitcoin trust worth hundreds of millions of dollars, and seemed to be deeply involved with the currency and Wright’s plans. “Craig, I think you’re mad and this is risky,” Kleiman writes in one 2011 email to Wright. “But I believe in what we are trying to do.”

Writing about Satoshi Nakamoto, the Bitcoin originator’s pseudonym, is a treacherous exercise. Publications like the New York Times, Fast Company, and the New Yorker have taken unsuccessful stabs at Satoshi’s identity. In every instance, the evidence either hasn’t added up or those implicated have issued public denials. And then there was Newsweek, whose 2014 story “The Face Behind Bitcoin” is easily the most disastrous attempt at revealing the identity of Satoshi. The magazine identified a modest California engineer, whose birth name was Satoshi Nakamoto but who went by Dorian, as the creator of Bitcoin. The story resulted in a worldwide media frenzy, a car chase, and—after Dorian’s repeated denials and legal threats—a great deal of embarrassment for Newsweek.

All of which means that the real Satoshi Nakamoto is still out there. And although Bitcoin has yet to upset the free market and establish the crypto-libertarian monetary utopia that its boosters once anticipated, the currency doesn’t appear to be going away: its users span the globe, with some analysts predicting 5 million worldwide by 2019. Bitcoin isn’t just some cryptographic niche. It’s an outrageous, brilliant phenomenon concocted by either a single subversive genius or a group of them. The digital currency went from being worth fractions of a penny in 2009 to $1,200 per coin just four years later, built on a network that makes wiring money anywhere as simple as sending an email, and that aims to singlehandedly render the entire global financial system obsolete. If Satoshi Nakamoto revealed himself to the world, he (or they) would be lauded as one of the greatest living minds of computer science—and the target of incessant, global scrutiny.

And at an October 2015 panel discussion with fellow Bitcoin experts (including Nick Szabo, long suspected by many as being the real Satoshi), Wright is asked to introduce himself. “[I do] a whole lot of things that people don’t realize is possible yet,” he replied. When asked by the moderator for clarification, Wright said that “I’m a bit of everything...I have a masters of law...I have a masters in statistics, a couple doctorates, I forget actually what I’ve got these days.” When asked how he got involved in Bitcoin, Wright pauses before replying: “uhh, I’ve been involved in all of this for a long time...I try and stay...I keep my head down.”

That’s all circumstantial evidence. But the hacked emails and other documents, if authentic, show Wright making repeated claims to being Satoshi Nakamoto over a period of years starting in 2008, before Nakamoto published the now-legendary white paper introducing the world to Bitcoin.

The most persuasive evidence from the apparently hacked account is a message dated January 8th, 2014, which shows Wright emailing three colleagues from satoshi@vistomail.com, the email address that Nakomoto used to regularly communicate with early Bitcoin users and developers. In this thread, with the subject line “Fear of the future,” Satoshi@vistomail.com strategized about lobbying Australian Senator Arthur Sinodinos on the matter of Bitcoin regulation.

The email includes a signature with the name Satoshi Nakamoto and a phone number that belongs to Craig Wright. The reply-to field, which determines where responses to the message will be sent, lists an email address that, according to Google, belongs to Craig Wright. Also included in the cache of messages is this reply from Andrew Sommer, a partner at Sydney-based law firm Clayton Utz, which represented Wright at the time the emails were exchanged.

The hacker-tipster also included multiple PDF files that contain what appear to be a transcript of a meeting about Bitcoin regulation between Wright, his attorney, and the Australian Taxation Office (ATO), as well as the minutes of a subsequent meeting of the ATO and Wright’s attorney. Wright appears to have been trying to persuade the Australian government to treat his Bitcoin holdings as currency, as opposed to an asset subject to greater taxation. Without this regulatory move, his business interests would be scuttled. During an interlude in one such meeting, Wright makes an oddly casual admission of his identity as Satoshi (highlighting added).

A request to confirm the authenticity of the document sent to Auscript, the transcription service whose logo appears at the top of the file, was denied on the basis of company policy. A request sent to the ATO was also denied on the basis of state confidentiality.

Multiple phone calls to Wright suggest that the material is, at the very least, not fabricated: In an initial call placed in November, he said he “couldn’t talk about” the documents we’d received, or the suggestion that he is Satoshi Nakomoto. On a subsequent call, in which lines from his purported emails were read back to him, an audibly unsettled Wright asked “how did you get that?” and stated “you shouldn’t have that.” He also confirmed that the people CCed in the first email were his attorney, accountant, and a coworker at one of his companies, DeMorgan Ltd. After those two calls, Wright stopped answering the phone, did not respond to emails, and made his Twitter account private.

Andrew Sommer, the attorney, refused to comment on the contents of the email or meeting transcripts, but did confirm that Wright was his client. 

Contacted by phone, Wright’s ex-wife Lynn recalled her husband working on Bitcoin “many years ago,” but noted that he “didn’t call it Bitcoin” at first, but rather “digital money.” She also confirmed Wright’s friendship with Dave Kleiman: “I knew Dave...I knew they were friends and they talked about stuff, different things that were happening in the geek world...half the time he was taking I wouldn’t listen, hence the ex.” When asked specifically if Wright was the inventor of Bitcoin, Lynn replied “I’m not going to comment on things that we talked on.”

Ramona Watts is Craig Wright’s wife, a director at his company DeMorgan, and a recipient of Wright’s apparent email from Satoshi@vistomail.com. Reached by Gizmodo at their home in an moneyed suburb north of Sydney and asked about Wright’s role in creating Bitcoin, Watts at first only smiled, shook her head, and began to close the door. When asked if Wright was the inventor of Bitcoin, she smiled coyly again and shut the door.

John Chesher was Wright’s accountant, a recipient of his Satoshi email, and was present at one of the ATO meetings. When reached at his apartment via intercom and asked whether he’d ever received an email from Craig Wright using Satoshi Nakamoto’s email address, Chesher responded, “I might’ve...that was a year ago.” When asked if he had ever told the Australian Tax Office that Wright was in possession of a Satoshi-sized Bitcoin sum, he replied, “I may have.”

Ann Wrightson, a former employee of Wright’s who was also present at an ATO meeting, confirmed to Gizmodo that the meetings took place. She noted that she has cut all ties with Wright and Watts and is much happier for it: “Personally, he’s a nice fella, but, um, business-wise, I don’t believe he’s… He’s not a model to aspire to.” We asked Wrightson directly whether Wright had invented Bitcoin, and she demurred: “I’d prefer not to actually incriminate himself or incriminate myself...I’m sure if you’re a reporter, you can find other people to answer that for you.”

When a Gizmodo reporter visited the office of DeMorgan, Wright’s firm, Ramona Watts attempted to steer employees away from speaking to him, as seen above.

A purported email from March 28, 2008, months before Satoshi Nakomoto published the white paper that laid out the Bitcoin framework, appears to show Wright divulging the idea of a “new form of electronic money” to Kleiman for the first time. “I need your help and I need a version of me to make this work that is better than me,” the sender wrote, seemingly presaging the Satoshi persona.

Several years later, after Bitcoin’s value had exploded and the currency had permeated mainstream consciousness — and months before online accounts associated with Satoshi Nakomoto went dark — Wright wrote to Kleiman, with apparent fatigue, about the secrecy around his identity: “I cannot do the Satoshi bit anymore,” he wrote. “They no longer listen. I am better as a myth.”

The hacker also provided a PDF file of what appears to be an unfinished draft of a legal contract between Wright and Kleiman forming a secret Bitcoin trust in the Seychelles, a notorious tax haven in the Indian Ocean. The contract shows Dave Kleiman in receipt of 1,100,111 bitcoin, to be repaid to Craig Wright on January 1, 2020. Several reports, including an oft-cited technical analysis by Bitcoin expert Sergio Demian Lerner, estimate Satoshi Nakamoto’s legendary Bitcoin fortune at around 1 million BTC — a figure that nearly matches the amount in the Seychelles trust. It also lists five PGP keys — files that are used to establish encrypted lines of communication over email — that will be used to manage the trust. Searching for those keys in a public database reveals that one belongs to Wright, one belongs to Kleiman, and two belong to Satoshi Nakamoto.

The contract also contains a clearly incomplete sentence fragment and several other strange details and inconsistencies. On June 9, the date on the document, one bitcoin was valued at roughly $31, meaning that the million-bitcoin cache would have been worth about $31 million U.S., but the document values the sum at just $100,000. The contract also claims that Wright is facing bankruptcy. According to Australian public records, Wright filed for personal insolvency in 2006 and was denied, but records make no reference to an insolvency petition in 2011.

The contract stipulates that if Kleiman should die, “Dr Wright will be returned shares in the Tulip trust and company 15 months after my death at his discretion.” Perhaps most bizarrely, it includes a similar stipulation for Wright’s death, bequeathing all holdings to Ramona Watts, his wife and colleague, minus a sum that would be used “to show the ‘lies and fraud perpetrated by Adam Westwood of the Australian Tax Office,” an Australian government employee whom he blamed for an unfortunate regulatory ruling against one of his Bitcoin-related companies.

In the contract, Kleiman also vows not to divulge “the origins of the satoshin@gmx.com email,” an email account used by Satoshi Nakamoto to publish the research paper announcing Bitcoin the world.

Patrick Paige and Carter Conrad, who run a Palm Beach County business called Computer Forensics, LLC, in which Kleiman was also a partner, formed their own suspicions about Satoshi’s identity after receiving a string of bizarre communications from Wright following Kleiman’s death in 2013.

Days after their friend and partner died, Paige and Conrad sent an email about his passing to a group of associates who may have only known Kleiman through a computer screen. He was rendered paralyzed from the chest down by a motorcycle crash while working for the Palm Beach County Sheriff’s Department in 1995, and spent the final years of his life hospitalized with a deadly infection of the bacterium MRSA. Against his doctors’ recommendations, Kleiman left the hospital and returned to his home after nearly three years of treatment in 2013, Paige and Conrad said. The infection stopped his heart and killed him just weeks later.

Kleiman’s hospitalization only exacerbated what was already an isolated, sedentary lifestyle. “That motherfucker was on the computer nonstop,” said Paige, meaning that many of Kleiman’s relationships were strictly digital, and those friends wouldn’t be immediately aware of his death.

Among the recipients of that 2013 email was Craig Wright, a man whom Paige and Conrad understood to have a casual working relationship with their late friend. Wright and Kleiman had authored a paper together five years earlier on the mechanics of overwriting hard drive data, and they corresponded sometimes about other technological esoterica. So it was a surprise when, days after sending the email, they came across a mournful video about Kleiman on Wright’s YouTube channel. In the video, Wright narrates footage from Kleiman’s various TV appearances, growing increasingly emotional. By the end, Wright is audibly choking back tears. “I’m proud to say I knew Dave Kleiman,” he concludes. “I’ll miss you, Dave. You were my friend, and I’ll miss you.”

Paige didn’t know what to think of the video, but it wasn’t a total shock that Kleiman had maintained such an intense and largely secretive bond with a peer in a different hemisphere. Stranger, however, was a document that Paige and Conrad received in their business mailbox several months later, which bore an Australian return address and informed them that their late partner was no longer legally affiliated with a company called W&K Info Defense Research. The name was totally unfamiliar to both men, and, because the notice didn’t seem to require any action from them, they ignored it.

According to public records, W&K was founded in Palm Beach County in 2011, with Dave Kleiman as its registered agent and Kleiman’s home address as its place of business. In 2014, after Kleiman’s death, it was reinstated as an LLC with a new registered agent, a new place of business, and Coin-Exch, one of Wright’s companies, listed as an “authorized person.” A document purporting to show minutes of a meeting between Wright’s attorney and the ATO, which was provided to Gizmodo by Wright’s apparent hacker, also makes reference to W&K. In the minutes, Wright’s accountant John Chesher calls W&K “an entity created for the purpose of mining Bitcoins,” and states that Wright and Kleiman founded the company together.

The only thing zanier than Satoshi Nakamoto’s fabled Bitcoin vault would be the thought of another person possessing “a similar amount”—unless the stockpile was being held in some sort of secret monetary trust.

The next communication that Paige and Conrad received from Wright was stranger still. Emails provided to Gizmodo, the authenticity of which were confirmed by Paige and Conrad, show that in February 2014, 10 months after Kleiman’s death, Wright emailed the pair to tell them about a mysterious project he’d been working on with their friend. As part of this undertaking, Wright wrote, Kleiman had mined an enormous amount of bitcoins—an amount “too large to email.” Wright asked them to ensure that Kleiman’s computers were safe, and to check whether their hard drives contained wallet.dat files, the pieces of software that contain bitcoins and their owners’ account information. On a subsequent phone call with Wright, a baffled Paige asked for more information about the partnership with Kleiman. After that, he said, Wright assumed a clandestine tone. “Can I trust you?”

According to Paige, Wright eventually told him that Kleiman was the creator of Bitcoin. Later, he clarified that the cryptocurrency was invented by a group of people which included Kleiman. If that was true, Kleiman was likely sitting on a fortune when he died in April 2013—even if he were in possession of only half of Satoshi’s fabled million-bitcoin stockpile, that would have been worth about $65,000,000 at the time of his death. Wright made clear to Paige that he wasn’t after the money—he only wanted to make sure that it made its way into Kleiman’s estate and didn’t sit gathering dust in a digital vault.

Paige was stunned by the idea that his friend had achieved such an amazing feat, but when he considered it further, it didn’t fall apart entirely. Paige regularly refers to Kleiman as a genius in conversation, and his expertise in computer security aligns with the skill set that would have been needed to build—or at least contribute to—the bitcoin protocol.

Still, there were major questions. Another 2014 email provided to Gizmodo shows Paige telling Wright that Kleiman mentioned Bitcoin to him just once, and this month said he doesn’t recall the digital currency coming up any other time in his daily conversations with his partner. And according to those who knew him well, Kleiman needed money badly—his house was under foreclosure and he spent nearly three years in a VA hospital before he died. If Dave Kleiman were Satoshi Nakamoto—or one of several Satoshis—wouldn’t he have cashed out at some point?

Shyaam Sundhar, a computer security professional who coauthored an academic paper with Kleiman and Wright in 2008, doubted and expressed dismay at the idea that either man was involved in Bitcoin’s creation. “Our conversations has only been pertaining to HDD project,” he responded to an inquiry via email, referring to their research on hard drive data. “I would hope that what you have stated is mere rumors, since I have never heard any such thing about Craig or Dave.”

Paige and Conrad left the matter unresolved, and Wright stopped calling and emailing them after he made contact with Kleiman’s brother, the executor of Kleiman’s estate. “We knew one day a reporter would come calling,” Paige said. “But we left it at that.”

In November, after being contacted by Gizmodo, Paige emailed Wright to ask whether he planned to release any information about Kleiman’s—and by extension, his own—involvement in creating Bitcoin. “Not yet. We are in the process of finalising some of the research. I was hoping we could be at the point of release before the reporters started sniffing,” Wright responded. He added in a later email, “When it all comes out, there is no way Dave will be left out.”

While he was alive, Kleiman kept an aluminum-encased USB drive on his person at nearly all times. If there really is a cache of Kleiman’s bitcoins or anything else linking him to Satoshi, Paige said, “I guarantee that drive has some shit in it.” According to Paige, when Kleiman died, his brother, Ira Kleiman, took possession of it.

Ira Kleiman declined to speak on the record about whether he is in possession of his brother’s hard drives. Described by acquaintances as guarded and private, Ira Kleiman also refused to meet with a reporter in person or speak over the phone, opting instead to send dozens of cagey and cryptic emails and SMS messages in an exchange that lasted several days. He claimed that after his brother’s death, Wright contacted him and told him that he and Dave Kleiman were involved in creating Bitcoin, and also alleged to possess documents provided to him by several sources that might corroborate the information provided to Gizmodo by Wright’s apparent hacker. However, Kleiman declined to provide any concrete information about those documents or their sources, and would not answer when asked if he believed that Wright had been telling him the truth.

The Bitcoin Bubble and the Future of Currency

A few days ago, the value of all the bitcoins in the world blew past $1 billion for the first time ever. That’s an impressive achievement, for a purely virtual currency backed by no central bank or other authority. It’s also temporary: we’re in the middle of a bitcoin bubble right now, and it’s only a matter of time before the bubble bursts.

There are a couple of reasons why the bubble is sure to burst. The first is just that it’s a bubble, and any chart which looks like the one at the top of this post is bound to end in tears at some point. But there’s a deeper reason, too — which is that bitcoins are an uncomfortable combination of commodity and currency. The commodity value of bitcoins is rooted in their currency value, but the more of a commodity they become, the less useful they are as a currency.

Still, it’s worth taking a look behind the bitcoin bubble, because there are fascinating implications for anybody who cares about payments, or currencies, or trust.

First, though, let’s go back to the night of Sunday June 12, 2011. That was the date of the first big bitcoin heist: a theft of such simplicity and audacity that it might well be considered the perfect crime. A man — we know him only as “All In Vain” — went to bed that night with his Windows computer turned on and connected to the internet. On that computer was a wallet containing 25,000 electronic coins. When he woke up on Monday morning, the wallet was still there. But the money was gone.

Those 25,000 coins were, at the time, worth some $500,000; today, they are worth about $3.5 million. If All in Vain had noticed the theft within a couple of minutes of it happening, it’s conceivable that he could have got his money back. But he was asleep — and ten minutes after the theft occurred, it was utterly permanent and irrevocable. The only way All in Vain could get his money back would be if the thief were to simply transfer it back into his wallet.

No one will ever find the person who stole All in Vain’s coins. That’s because the coins were designed, by another pseudonymous internet denizen known only as Satoshi Nakamoto, to be the perfectly anonymous payment mechanism for a digital world. That’s one of the things about bitcoins: once you send them, they’re sent. Similarly, if someone sends you bitcoins, you know for sure that you own them. You don’t need to know or trust the sender — all you need to know is that the coins have arrived in your virtual wallet, ready for saving or spending.

Bitcoins were designed to be – and, in many ways, are – the perfect digital currency: they’re frictionless, anonymous, and cryptographically astonishingly secure. For anybody who’s ever suffered the incompetence of a bank, or bristled at the fees involved in just spending money, either domestically or abroad – that is to say, for all of us – the promise of bitcoin is the holy grail of payments. Especially since, to all intents and purposes, bitcoins are invisible to law enforcement and the taxman.

Those strengths are also weaknesses. No one wants to risk losing millions of dollars worth of currency overnight, just because they were outsmarted by some computer hacker.

Still, for the time being, bitcoin is in many ways the best and cleanest payments mechanism the world has ever seen. So if we’re ever going to create something better, we’re going to have to learn from what bitcoin does right – as well as what it does wrong.

The source code for bitcoin is free and public, which means that just about every hacker and cryptographer in the world has had a crack at it. And they’ve all come to the same conclusion: it really works. There are question marks over just how anonymous it is and just how scalable it is, but when bitcoins first arrived in early 2009 – right at the height of a massive global crisis of capitalism – they had immediate and magnetic appeal to the anarcho-utopian crowd of techno-libertarians who drive an enormous amount of innovation online.

Such people, including Satoshi Nakamoto, are far from unique in their mistrust of all existing financial institutions. What sets Nakamoto apart is that he turned that mistrust into a philosophy, the most important driving force behind the bitcoin project. When he introduced bitcoin to the world in February 2009, Nakamoto boasted that his new currency was “completely decentralized, with no trusted parties”. And he explained in some detail what he saw as the problem in need of a solution:

The root problem with conventional currency is all the trust that's required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust. Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve. We have to trust them with our privacy, trust them not to let identity thieves drain our accounts.

Nakamoto’s no paranoiac crazy: what he’s saying here is not all that different from what Warren Buffett wrote in his 2012 letter to shareholders.

Investments that are denominated in a given currency include money-market funds, bonds, mortgages, bank deposits, and other instruments. Most of these currency-based investments are thought of as "safe." In truth they are among the most dangerous of assets.

Over the past century these instruments have destroyed the purchasing power of investors in many countries, even as these holders continued to receive timely payments of interest and principal. This ugly result, moreover, will forever recur. Governments determine the ultimate value of money, and systemic forces will sometimes cause them to gravitate to policies that produce inflation. From time to time such policies spin out of control.

Even in the U.S., where the wish for a stable currency is strong, the dollar has fallen a staggering 86% in value since 1965, when I took over management of Berkshire. It takes no less than $7 today to buy what $1 did at that time.

If you hold dollars, you’re trusting the US government not to destroy your wealth. Bitcoin, by contrast, is based on mistrust — it’s specifically designed so that it’s every man for himself. All in Vain was blamed by many in the bitcoin community for his stupidity: what was he thinking, keeping his wallet on a Windows computer attached to the open internet?

But even with bitcoin, people nearly always end up trusting someone – and the entity they’re trusting often turns out to be unreliable. MyBitcoin, turned out to be a fraud; Mt Gox was hacked. The latest hot new bitcoin company is Coinlab, but given how much money can be made by hacking into these companies, and given that law enforcement authorities are unlikely to make any attempt to go after the perpetrators, there will always be a pretty substantial risk that clients will lose their money.

The level of mistrust built into bitcoin is both feature and bug – most of us actually like being able to outsource our wealth-hoarding to some large trusted institution, rather than burying $1,000 under a black volcanic rock in a dry stone wall next to an old oak tree, or wrapping $90,000 in hundred-dollar bills in aluminum foil and hiding it in the freezer. Looking after your own coins is dangerous, and requires a pretty substantial level of tech-savviness. But trusting someone else to look after your coins requires the very trust that bitcoin was designed to circumvent.

Bitcoin’s built-in mistrust of institutions doesn’t just set it apart from fiat currency, it also sets it apart from other virtual currencies, such as Facebook credits in the US, QQ coins in China, or Linden dollars in Second Life. All those currencies are closely controlled and guarded by the companies that invented them – and have very little value outside that particular ecosystem. (That said, credits in World of Warcraft are valuable enough that Chinese prison guards reportedly force convicts to perform monotonous tasks within the game for 12-hour stretches at a time, building up credits which can then be sold for many times the guards’ official salary.)

Some of these virtual currencies are roughly the same order of magnitude as Bitcoin in size, although it’s hard to make apples-to-apples comparisons. Revenues from Facebook credits are running at a rate of about $1 billion a year, for instance, and the market in QQ coins was so big in 2007 that the Chinese central bank, fearing that it was losing control of the money supply, cracked down on their use, calling on companies to stop trading in them. In this latest bubble, bitcoin transaction volume has managed to exceed $30 million in one day, and most days are seeing volumes of more than $5 million. That works out to about $2 billion in volume per year, so long as the bubble doesn’t burst.

But the biggest difference between bitcoin and other virtual currencies is that bitcoins are the only one which have speculative value. What’s more, because they’re not tied to a corporate parent, bitcoins appeal to the web’s anarcho-libertarians in the way that no other virtual currency can. Bitcoins hold exactly the same gleaming promise for techno-utopians as gold does for Glenn Beck. They’re a scarce resource, and there’s no government or corporation which can control that resource.

Bitcoins, like gold, are beholden to no government; they can’t be printed by any central bank, and they certainly won’t be subject to hyperinflation, since the global supply of bitcoins will never exceed 21 million. Like gold, bitcoins are mined; but unlike gold, no one can stumble over some large seam and make a fortune. Mining for bitcoins involves an enormous amount of computer power, and very little luck, and the global rate at which new bitcoins will be mined is both predetermined and slowing down. There were about 3 million coins outstanding at the beginning of 2010, there are about 11 million coins outstanding today, and we’ll get to 14 million in early 2014. Come 2021 or so, assuming bitcoins are still used then, the rate of growth of bitcoins will be so low that to a first approximation the money supply will be constant. This carries with it its own problems, as we’ll see. But there’s no risk that some central bank will print millions of new bitcoins, thereby diluting or inflating away the value of existing ones.

As the reverberations from the financial crisis continue to echo, people betting on a decline of trust in government have been stocking up on gold and bitcoins. (Or rather, gold or bitcoins: although they can be equally zealous and vehement about their respective asset classes, there’s surprisingly little overlap between goldbugs, on the one hand, and the bitcoin community, on the other.) These are the perfect assets for rugged individualists, who trust their guns or their ultra-secure passwords more than they do their country. And in times of global turmoil, as we’re seeing today, such assets can perform very well.

The immediate impetus for the current spike in bitcoin prices, of course, is the events in Cyprus. There, the government, under extreme pressure from the European Union, first proposed taking all bank accounts – even the insured ones – by at least 6.75%. That didn’t work, but now uninsured account holders at Cyprus’s two largest banks stand to lose most of their money. It’s a stark reminder of the dangers associated with depositing money in a bank.

Bitcoin has become suddenly popular in Cyprus for obvious reasons: no government can confiscate your bitcoins, or prevent you from transporting them out of the country. (On the other hand, if your bank account is frozen, it’s hard to find the money needed to buy coins.)

More generally, bitcoins could be emerging as a very useful currency in police states, or anywhere that monetary policy could fail catastrophically. At the end of 2011, for instance, there was a significant uptick of bitcoin activity in Belarus and Ukraine, two countries at severe risk of hyperinflation. If you want to protect your wealth from the policies of your national government, or from the inflationary policies of a heterodox central bank, then bitcoins can be a very good way of doing so in a largely undetectable manner.

Of course, acquiring bitcoins in such countries can be non-trivial: there’s not a lot of liquidity on the major internet exchanges from people looking to sell bitcoins and buy the Ukrainian hryvnia. And even if there were, your local Ukrainian bank might frown on sending lots of hryvnia to Mt Gox. But it’s conceivable that people in Ukraine and Cyprus, especially information workers, might start working for bitcoins, spending them on goods and services, and introducing them into the local economy that way. At which point one can envisage the coins getting the same kind of status, at least among the information elite, that dollars had in the Soviet era.

Bitcoins, then, are like cash — but they take the idea a step further than has ever been possible. If you give me a $100 bill, the transaction is anonymous and untraceable, but we both need to be in the same place at the same time. And it helps if we both live in a country where the US dollar is an accepted unit of currency.

With bitcoins, transfers can take place across continents and timezones with no problems, no timelags, and only minuscule transaction fees. No banks are involved; no central bank controls the money supply; no taxes ever need to be paid. Once you’ve obtained a stash of bitcoins, they’re yours to do with as you like.

And there’s lots that you can do with bitcoins. You can convert them into any of a dozen currencies, on various online exchanges. (Although at that point you’re going to start needing a bank account.) You can gamble with them in online casinos. Or you can just go out and spend them. The list of things which have been bought with bitcoins is very long, and is by no means confined to laptop computers and computer-programming services. Hotels take them, a sock manufacturer in Massachusetts is famous for accepting bitcoins, and the more enthusiastic members of the bitcoin community regularly do things like split checks at a restaurant – even one which doesn’t take bitcoin itself – by transferring coins to the person paying in dollars.

And then, more notoriously, there’s Silk Road – a site which is not only a hub of bitcoin activity, but also played an important role in the first bitcoin bubble, the vertiginous rise in market value of bitcoins in 2011 which made the rest of the world sit up and pay attention to what was going on.

Silk Road — and bitcoins — hit the public consciousness on June 1, 2011, a couple of weeks before the All in Vain heist. That’s when Gawker’s Adrian Chen published an article headlined “The Underground Website Where You Can Buy Any Drug Imaginable”. His post was viewed more than 1.5 million times, and caused a sensation, with Senators Joe Manchin, of West Virginia, and Chuck Schumer, of New York, writing an outraged (and entirely ineffective) letter to the Attorney General and the head of the Drug Enforcement Administration, demanding Silk Road be taken down.

Bitcoins were – and still are – the only currency accepted on Silk Road, and overnight they became a speculative bet on the online future of illegal trading. The price of bitcoins, which had never before traded in the double digits, soared in just one week to as much as $33 apiece.

The value of bitcoins, it turns out, is highly sensitive to media coverage: a year earlier, in July 2010, the influential technology site Slashdot posted a short item about bitcoin which sent the price soaring tenfold — from less than a cent to about 7 cents per bitcoin — also in a few days. And a single post on Time.com in April was enough to double the price of Bitcoins in a week, from 80 cents to $1.60. Even the article you’re reading now is appearing now because of the current bubble, and will, at the margin, help to continue to inflate it.

For speculators, the math is incredibly compelling. If you spent $100 on bitcoins the day after the Slashdot article came out, those coins would have been worth $72,500 when the Gawker article came out just under a year later. And they would have been worth $250,000 a week after that. Today, they would be worth more than $1 million. There aren’t many perfectly legal investments which offer that kind of return.

All of which helps explain the current bitcoin bubble as well. Each time the value of a bitcoin hits a new high or a new milestone, there’s more press coverage of the phenomenon, drawing new people in, and sending the value of bitcoins even higher. Indeed, if you chart the value of bitcoins against the number of times that they’re being talked about on Twitter, you’ll see a very strong correlation. And because of the Cyprus connection, mainstream publications have a handy real-world news hook, now, with which to explain the bitcoin phenomenon.