Bitcoin Page 8
When FriendlyChemist began demanding funds again, Roberts wrote to Redandwhite, ‘I wouldn’t mind if he was executed…I have the following info and am waiting on getting his address. I would like to put a bounty on his head, if it’s not too much trouble for you’.67
Redandwhite quoted a price of between $150,000 and $300,000 to kill the blackmailer. Roberts said, ‘Don’t want to be a pain here, but the price seems high…Not long ago, I had a clean hit done for $80K. Are the prices you quoted the best you can do?’
They settled on 1,670 bitcoins – about $150,000 – and according to the block chain that money was sent. Roberts then handed over the real name of FriendlyChemist and his address where he lived with his wife and three kids.
Redandwhite did the job, sent in a photo of the done deed with, lying next to the body, a piece of paper with some numbers on it that Ulbricht had asked for. Redandwhite would go on to kill another four people who were involved in this conspiracy, according to emails, for a fee of half a million.68
There is no record of any related murders having taken place in British Colombia or elsewhere at that time. Investigators say there is no evidence anyone died, despite almost three quarters of a million dollars alleged to have been spent.
But when Ulbricht was arrested, he found himself wanted for six charges of attempted murder.
The FBI found that the IP address used to access the Silk Road was an internet cafe 500 feet from where Ulbricht lived. How they managed to do this given the encryption involved is not known. Some believed the weakness lay in Ulbricht’s code. Others feel they may have been tipped off.
Google records showed Ulbricht would regularly access his Gmail account from this same IP address and both the Silk Road and Ulbricht’s Gmail account were accessed several times on the same day in June. ‘This evidence places the administrator of Silk Road, that is, DPR [Dread Pirate Roberts], in the same approximate geographic location, on the same day, as Ulbricht’.69
There was another twist. Shortly before, customs officials opened a package from Canada containing fake IDs, all with Ulbricht’s face on them. The FBI knew that the Dread Pirate Roberts had been asking questions about fake ID. Customs visited the address and found Ulbricht. Ulbricht told them anyone could hypothetically go to a website called the Silk Road and buy fake ID there. What a thing to say.
He would soon be arrested.
I’m writing this in March 2014. The attempted murder charges relating to Redandwhite have been dropped, presumably because it is obvious Ulbricht was being scammed. But the Curtis Green charges are still live, as are charges of large-scale criminal enterprise, drug trafficking, hacking and money laundering.
Ulbricht has pleaded not guilty. A campaign has begun to help him raise the money to fight his case, Free Ross Ulbricht – freeross.org.
Why Bitcoin will end the war on drugs
The FBI congratulated themselves. Over a year’s work and they had got their man. It was a great victory. The bitcoin price fell from $140 to $110 in just a few hours. The Silk Road had been busted. FBI agent Christopher Tarbell was hailed as the ‘Elliott Ness of cyberspace’.70
Many libertarians saw it as a loss. They need not have been despondent. Within two weeks, three copycat sites had opened up, including Silk Road 2.0 – run by – you guessed it – the Dread Pirate Roberts.
When I first wrote this chapter I could find 17 different so-called ‘dark sites’, where you can buy drugs with bitcoins on the Tor network: Silk Road 2.0, Black Market Reloaded, Pandora Market, Agora Market, TorMarket, The Marketplace (the M of ‘Market’ is the McDonald’s M), the Three Hares Bazaar, the RoadSilk, White Rabbit Marketplace, Outlaw Market, Bungee Discreet Global Mailorder, Blue Sky, Modern Culture, Budster, Dutchy and Utopia. At Utopia I noticed you could also buy a guide to hacking ATMs, $100 of counterfeit dollars for $35 together with instructions on how to spend them, and ‘untraceable, 3D-printed guns’.
At the point of final edit, there now seem to be 25 different sites. Meanwhile, of the above, Black Market Reloaded has shut down, TorMarket disappeared in a scam, as did Budster, Three Hares doesn’t seem to have ever actually operated, RoadSilk has renamed itself Pirate Market, White Rabbit I’m advised is currently a scam, and Utopia has been busted by Dutch police.
These are just the ones a cursory search has revealed to me. If it took the FBI over a year to track down and arrest Ulbricht – assuming he is the Dread Pirate Roberts – how long and how much manpower will it take them to track down and arrest the people behind these 25 sites (who, one assumes, won’t make the same mistakes the Dread Pirate Roberts did)?
There are now even directories of online Tor marketplaces – for example, All Markets Vendor Directory, run by one ‘El Presidente’, and DarkList.
DarkList said it was aiming to be as ‘uninteresting’ to law enforcement as possible. ‘We don’t sell product’, says an administrator. ‘The brief history of dark web marketplaces shows that there are three possible outcomes: incarceration, scam, or get hacked – none of which are congruent with our aspirations or morals’.71
He’s right. The Silk Road was shut down and Ross Ulbricht was incarcerated. Sites like Atlantis, Project Black Flag and Sheep Marketplace all saw their administrators make off with their clients’ money. Silk Road 2.0 was hacked to the tune of $2.7 million worth of bitcoins.
If a dark market should close down (as, sooner or later, seems inevitable), DarkList says it will help the site’s customers reconnect with their dealers. There are even functions to message them and send them bitcoins. ‘So, instead of being the Wal-Mart of drugs, we are more interested in a model analogous to Yelp. I can tell you that we have limited our functionality, as well as monetization opportunities, to mitigate the interest of those wishing to enforce their laws’.72
‘Let’s face it – buying and selling anonymously on the Dark Web is currently in a volatile state’ reads the tag on the homepage. ‘We built this directory so that you can always have a way to stay in contact with those you love’.
Darklist operates on Tor to hide users’ identities. Rather than replace the markets, Darklist links to them, taking a 2.5% commission. Its operations are not such a clear-cut violation of the law – they are selling information, not drugs. It makes enforcement of law that much more difficult and complicated. As laws change to try to keep up, coders find new ways round them. Technology is moving faster than the law.
And guess what? Since writing this, Darklist has already gone offline. Now all the rage is about the Grams directory and search-engine.
If the Silk Road or any of these other sites used government money – pounds, euros or dollars – to effect transactions, they would be considerably harder to operate – and considerably easier to police.
Bitcoin is not completely anonymous, as many mistakenly think it is – if I know you and I know your wallet address, I can track your spending – but there is the potential to be much more anonymous than traditional banking, if so desired. Completely anonymous dark wallets are currently being developed – by Amir Taaki among others – as well as various dark coins. But Bitcoin is considerably less restricted than fiat money systems.
The ease with which money can be sent, and the potential to hide identity, has changed black markets – and led to a proliferation of them. It will take huge resources to police them all. In all probability, Bitcoin will lead to changes in law – changes that already seem to be slowly happening.
People are always going to want to buy drugs. Bitcoin is enabling them. Unless the authorities launch a War on Bitcoin – which due to its decentralized nature will be a very hard war to win – it seems they will lose the War on Drugs once and for all. Bitcoin may be what ends it.
6
Who is Satoshi Nakamoto?
Satoshi is everywhere and nowhere.
Satoshi could be all of us, or none of us.
Satoshi came from nowhere and disappeared to nowhere, but his coins are everywhere.
Satoshi has n
o past, no future, and no present, but his creation is immortal.
Satoshi is an idea. Satoshi has inspired all of us. Satoshi is legend.
em3rgentOrdr
The Mary Rose, Big Foot, the Bermuda Triangle, the Loch Ness Monster, the Babushka Lady. These are just a few of the great mysteries that have bewitched, bothered and bewildered.
To that list you can add ‘Who is Satoshi Nakamoto?’
He has invented an entirely new digital system of money with the potential to change the world as we know it. He has watched it grow to a market cap of at one stage over 12 billion dollars – equivalent to the currency value of a small country. He has half the internet nosing about and trying to figure out who he is. And he is worth over half a billion dollars.
Yet he has managed to stay completely unknown and anonymous. It is almost unbelievable.
Anyone can claim to be him. Anyone can deny it. If someone pins him down with arguments and evidence that ‘demonstrate’ his identity, he can go on denying it. Without access to his computer records, nothing can be proven.
I have spent a lot of time on this detective hunt – way more than I anticipated or intended. But the mystery is overpoweringly compelling. Who is this computer genius who never reveals himself? Why the secret? Does he have something else to hide?
And there are personal dilemmas I’ve had to grapple with. If I have found out who Satoshi Nakamoto is, should I say? He has taken great steps to hide his identity. Anonymity and privacy are obviously what he wants. Should I be the one to violate that?
Is Bitcoin undermined if we suddenly know who the creator is?
Or is it in the public interest to know, given how much is now invested in Bitcoin and the power he has (he owns about 10% of all coins) to move the price?
How America’s most famous news magazine got the wrong Satoshi
Founded in 1933, Newsweek came to rival Time as America’s most famous news magazine. Perhaps the highlight of its impressive history was the breaking of the Monica Lewinsky scandal that so undermined Bill Clinton’s presidency.
But the web changed the way we consume news. It challenged the behemoths that had controlled the media. Newsweek, like so many others, failed to embrace the new technology and it fell into drastic decline. Despite numerous attempts to re-format the magazine and change focus, by 2010 falling sales were such that it was sold for a dollar.
December 31st 2012 was the publication date of the last printed issue of the magazine.
But, in March 2014, another attempt was made to revamp it. The print edition would be re-launched, and the editors needed a big story for the front cover. They decided that big story would be the revelation of Satoshi Nakamoto’s identity.
Reporter Leah McGrath Goodman was given the job. She spent two months on the story – and hired two forensic scientists to help her.
Combing a database that contained the registration cards of naturalized US citizens, she found a Satoshi Nakamoto. Born in Japan in 1949, he emigrated to the US ten years later. But after graduating from California State Polytechnic at 23, he dropped ‘Satoshi’, changing his name to ‘Dorian Prentice Satoshi Nakamoto’ and signing it ‘Dorian S. Nakamoto’.
She delved deeper. Speaking to Nakamoto’s family and work colleagues, she put together a profile. Here was a libertarian, a man who would always expound ‘on politics and world affairs’,73 a maths genius who loved technology, built computers at home and told his children off if they came near them, a recluse who would work all hours from before his children woke up till after they went to sleep. His work experience included defensive electronics and communication for the US military, computer engineering for financial information services and software engineering for the Federal Aviation Administration in New Jersey in the wake of the terrorist attacks on September 11th. He ticked a lot of boxes.
But then he stopped replying to her emails. She went to his house. He refused to talk and called the police on her. Goodman was convinced she had her man hiding in plain sight and she broke her story. ‘Standing before me, eyes downcast’, she wrote, was ‘the father of Bitcoin…tacitly acknowledging his role in the project’. Newsweek had a huge scoop, trumpeted the fact and the story went viral.
She even published his address and pictures of his house, a ramshackle affair in a poor Southern Californian suburb.
Satoshi’s game was up.
The world’s media descended on Nakamoto’s home. Here they found a confused, gentle-looking, sickly and retired 64-year-old Japanese man who looked like a comically eccentric professor. He had not heard of Bitcoin, he said, until three weeks ago when Goodman first mentioned it to him. As journalists bombarded him with cameras and questions outside his home, he declared he would only talk to one person, who must buy him a free lunch. ‘I want my free lunch,’ he said.
Nakamoto left with an Associated Press journalist. Such was the frenzy, there was an actual car chase across Los Angeles.
I read the article despondently, thinking my many months of research into Satoshi and the 12,000 words I had written on the subject were wasted.
But something didn’t ring right. Goodman’s article had a slightly nasty tone to it, as if she was getting her own back on Nakamoto for the fact he had called the police on her. There was too much bias and too many projections of her imagination. ‘He stands not with defiance,’ she said, ‘but with the slackness of a person who has waged battle for a long time and now faces a grave loss.’ That’s a subjective interpretation. He might just have had bad posture. Why insult him?
Her tone was too confident; arrogant, even – anyone who’s spent fruitless months on the Satoshi trail is soon taught humility. His age didn’t seem right, either. Sixty-four is too old (as I’ll explain). And, most glaringly of all, there was no mention of Cypherpunks in her story, nor even any suggestion that she had investigated this crucial theme.
The web quickly got to work. Examples were found of things Dorian Nakamoto had written – Amazon reviews, letters to magazines, local authorities. His prose was a far cry from the meticulous accuracy of Satoshi’s.
His Amazon reviews were actually published under his own name. Would the secretive Satoshi have done that? Dorian was, it seems, not satisfied with a razor he had bought, saying:
after even 2 shaves, it begans to dull. i can only get about 12 – 15 shaves vs. no name K-mart lasting 35 shaves. and i wipe any moisture off the blades for both, the no-name brand and the merkur despite the latter reads no need.
remember, the major cause of poor lasting edge is the rust u don’t c.
the merkur blades r too expensive to boot! i won’t buy it again. Warning: K-mart had other no-name blades that didn’t last either but this last one bought about 4 months ago is still bood, blade after blade. 74
He was rather more happy with some Royal Danish cookies:
royal danish butter cookies in a big 4lb round blue tin can
it has lots of buttery taste.
the shipment went well. i’ve had a nice comment from my kids. it’s a perfect xmas and i would say, for other occasions.75
An email was found that he’d written to the Metro transit system:
hi!
i vote for underground railing for above project. the project should be done so the business shops’s income from clients would be minimally affected.
good secruity system against usage of rail as a get away means from the low income generated theives/criminals from area of east LA et. al must be also put in place regardless of the rail passage chosen.
i like the idea of using an economical and modern rail to little tokyo from sierra madregold line station. the parking fee + gasoline costs $10 now to get there from my home and i would go there more often with my mother for shoppings.
dorian nakamoto
a recident from temple city, calif 76
The above reviews and email are published as written, with errors uncorrected.
The idea that the person who wrote these reviews also produc
ed the more than 80,000 words of unblemished prose that Satoshi produced is laughable. Forbes magazine called in a stylometrics expert, as if such a thing were needed, by the name of John Noecker Jr. He verified that the person who wrote the above was not the same person who composed the Bitcoin white paper and all Satoshi’s other posts.
Coders, too, were sure this was not the man who had coded Bitcoin. The techno entrepreneur and writer Anil Dash summed up their view when he said on Twitter, ‘I haven’t found a single person who codes who thinks Dorian is credible as the creator’.
While Satoshi was busy coding Bitcoin, Dorian, it seems from the communication he had with a particular magazine,77 was busy with his hobby – building model train sets.
At his free lunch with the AP journalist, apparently he referred to Bitcoin as ‘Bitcom’.
Why did Goodman fail to see all this?
She did not look hard enough, is the answer. She could have delved further and discovered these writings of Dorian. She could have spoken to coders. She could have put her findings to the Bitcoin community and exploited the vast communal knowledge therein. They would soon have put her right. But she didn’t. She wanted her big story and she had a deadline.
This is something I have encountered time after time on the trail of Satoshi. You find someone who fits the profile, and then find heaps of circumstantial evidence to confirm your bias, but you ignore the evidence that discredits it. It’s the prosecutor’s fallacy.
Within a few hours, Goodman’s research had been debunked. The Nakamotos might have shared the same name, but the parallels ended there. Newsweek looked bad, Goodman’s reputation lay in tatters and a shy, retiring man’s life had been up-ended.
Goodman was castigated for publishing Nakamoto’s address and using such circumstantial evidence. Gavin Andresen, who had given a lengthy interview for the article, said on Twitter: ‘I’m disappointed Newsweek decided to dox (expose personal information) the Nakamoto family, and regret talking to Leah.’