Bitcoin ‘founder’ finds there is such a thing as a free lunch

Journalism can be a pretty dull job these days – sitting at the desk making calls to beat the looming deadline. Nothing clears the cobwebs like a good old-fashioned car chase.

So it’s no wonder that the media circus surrounding the discovery of what was alleged to be the founder of virtual currency Bitcoin generated such interest.

As soon as Newsweek splashed its story, hacks began arriving at the Los Angeles home of Satoshi Nakamoto – who then fled in the car of an AP journalist with the media scrum in tow. After a brief stop at a sushi restaurant, they sought refuge at AP’s offices.

A quick primer for the uninitiated: Bitcoin is a virtual currency. You can swap pounds and dollars etc. for Bitcoins, and then spend those Bitcoins on everything from pizzas to pints. The transaction from payer to payee passes through a series of computers around the world which verify the trade. But that process also anonymises the transaction, making Bitcoin the currency of choice for criminals and libertarians.

The currency was created following the publication in 2008 of a document outlining how the system would work. The document was signed by Satoshi Nakamoto, who, after it was launched in 2009, faded from public view and whose identity has since been the subject of febrile speculation.

Charistmatic cryptographer

Take a second to think what type of person (if indeed it was a single individual) the real Satoshi would have to be: a master cryptographer, someone adept in computer code, someone with financial savvy and versed in the failures of previous online currencies, but chiefly someone charismatic enough to harness a talented team of likeminded souls to develop, debug, launch and administer the currency that would gain global appeal.

For a journalist to claim that such a person had used his real name is a pretty big stretch. But it gets worse when you read Newsweek reporter Leah McGrath Goodman’s own account of their exchange when she door-stepped him:

‘Tacitly acknowledging his role in the Bitcoin project, he looks down, staring at the pavement and categorically refuses to answer questions.

“I am no longer involved in that and I cannot discuss it,” he says, dismissing all further queries with a swat of his left hand. “It’s been turned over to other people. They are in charge of it now. I no longer have any connection.”’
(Mr Nakamoto now claims he was talking about his role in engineering and denies any involvement in Bitcoin.)

Topsy-turvy world

If it was me, I’d have gone back to Mr Nakamoto at least once more, very possibly with a print-out of the potential story, and made it painfully clear to him what I was about to publish, asking him for an explicit (rather than a tacit) yes or no. Without that, I doubt I’d have run the story (and I certainly wouldn’t have used it as the front page splash for my magazine’s return to a print version).

Of course, in the topsy-turvy world of Bitcoin, perhaps it will transpire that Mr Nakamoto really is the currency’s founder. But, given that he seemed to choose which journalist to speak to on the basis of who would give him a free lunch, it seems unlikely.

There’s a bigger picture here, though, than Newsweek’s failure to copper-bottom its story. Why is Bitcoin newsworthy? Not because it’s innovative (other so-called cryptocurrencies have tried and failed), nor because of its enigmatic beginnings. Bitcoin is a story because it works.

Yes, the currency is a roller-coaster ride. Yes, one of the largest Bitcoin exchanges last week seems to have lost half a billion dollars. Yes, it’s almost certainly used for money-laundering on an epic scale. But when push comes to shove, at the beginning of 2011 one Bitcoin was worth one dollar. It’s now worth $636.

Any investment fund that generated similar returns within three years would also be getting headlines, so it’s no wonder the identity of the man behind Bitcoin arouses such interest.

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