UPDATED 05:09 EDT / NOVEMBER 25 2013

NEWS

Bitcoin creator Satoshi Nakamoto ‘linked’ to the Silk Road

The mysterious entity that is Satoshi Nakamoto is best known as being the person (or persons) behind the creation of the Bitcoin digital currency, but now a new report suggests that he (or she) may have also helped to fund the online drugs marketplace known as the Silk Road.

The accusation comes from a couple of Israeli computer scientists, who stumbled upon a puzzling financial link between Silk Road founder Ross William Ulbricht, AKA “Dread Pirate Roberts”, and a Bitcoin account that’s presumed to be owned by the cryptocurrency’s secretive inventor, reports the New York Times.

That there’s a link between the recently arrested Ulbrich and Nakamoto doesn’t come as a surprise – the pair have always been loosely connected, in a sense, as the Silk Road economy was fulled almost exclusively by Bitcoin. But now, Dorit Ron and Adi Shamir of the Weizmann Institute in Rehovot, Israel, believe that the two may have had a much deeper relationship than anyone first thought.

By analyzing activity associated with a digital wallet that was discovered by the FBI on Ulbricht’s laptop, the researchers have identified a curious transaction that they believe may have involved Nakamoto.

According to Ron and Shamir’s research paper, Ulbricht is believed to have received a payment of 1,000 BTC in March of this year, from an account that dates back to January 2009 – which is, in the words of the New York Times, “the very earliest days of the Bitcoin network”.

“Such a single large transfer does not represent the typical behavior of a buyer who opens an account on Silk Road in order to purchase some narcotics (such buyers are expected to make an initial deposit of tens or hundreds of dollars, and to top the account off whenever they buy additional merchandise),” the researchers wrote.

“It could represent either large-scale activity on Silk Road, or some form of investment or partnership, but this is pure speculation.”

When the transaction was made, 1,000 BTC would have been worth around $60,000, reports the NYT. However, given the volatile nature of Bitcoin’s value, the same sum would now be worth in the region of $800,000.

Of course, there’s no evidence as such that Nakamoto really was the individual who made the transfer to Ulbricht, but most early Bitcoin accounts are believed to be controlled by the currency’s inventor, hence the researchers claim that it’s a reasonable assumption to make.

If indeed the transfer was made by Nakamoto, then it’s a startling discovery to say the least, given that he or she seemingly disappeared without a trace back in 2010. So startling in fact, that one could reasonably begin to wonder if ‘Nakamoto’ and Ulbricht might even be the same person… Just a thought.

Interestingly, the transfer to Ulbricht wasn’t the only point of note. Ron and Shamir also discovered that the same account previously accumulated some 77,600 BTC as a result of “mining” Bitcoins, and so it’s safe to assume that whoever owns the account also knows a thing or two about ‘making’ money, another reason to believe it belongs to the mysterious Nakamoto.

As for Ulbricht, well he was pretty canny when it came to accumulating Bitcoin too, though his ‘methods’ were less-than-savory, according to the FBI. Following his arrest, the Feds claimed that the Silk Road founder netted some $80 million in profits since the website’s launch, yet they have only been able to trace around a third of that amount.

What with so much Bitcoin still unaccounted for, it’s not surprising that a judge refused Ulbricht’s bail application last week on the grounds that he has more than enough funds to do a disappearing act like his old buddy Nakamoto has done before.

UPDATE: The Israeli researchers who originally made this claim have retracted it in the face of harsh criticism and scant evidence.


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