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Rashek writes:

"After a a two-month investigation, Newsweek claims it's found Satoshi Nakamoto, the inventor of Bitcoin[PayWall]: a 64-year-old Japanese-American man whose name really is Satoshi Nakamoto!

The article contains interviews with some of Nakamoto's family members, a picture of his house and even a picture Satoshi Nakamoto himself. At least that's what the journalist behind this, Leah McGrath Goodman, claims them to be."

The Telegraph takes up the article and, at time of writing, it is accessible to all.

AnonTechie writes:

Some bitcoin enthusiasts have used their cryptocurrency to travel around the world. Others have spent it on a trip to space. But the very earliest user of bitcoin (after its inventor Satoshi Nakamoto himself) has now spent his crypto coins on the most ambitious mission yet: to visit the future.

Hal Finney, the renowned cryptographer, coder, and bitcoin pioneer, died Thursday morning at the age of 58 after five years battling ALS. He will be remembered for a remarkable career that included working as the number-two developer on the groundbreaking encryption software PGP in the early 1990s, creating one of the first “remailers” that presaged the anonymity software Tor, and—more than a decade later—becoming one of the first programmers to work on bitcoin’s open source code; in 2008, he received the very first bitcoin transaction from Satoshi Nakamoto.

Now Finney has become an early adopter of a far more science fictional technology: human cryopreservation, the process of freezing human bodies so that they can be revived decades or even centuries later.

http://www.wired.com/2014/08/hal-finney/

Hugh Pickens writes:

For the past year Nathaniel Popper has been working on a book about the history of Bitcoin and writes in the NYT that it is hard to avoid being drawn in by the almost mystical riddle of Satoshi Nakamoto’s identity. Popper has his own candidate for founder of Bitcoin, a reclusive American man of Hungarian descent named Nick Szabo. Szabo worked in a loosely organized group of digital privacy activists who over decades laid the foundation for Bitcoin and created many parts that later went into the virtual currency. Bitcoin was not a bolt out of the blue, as is sometimes assumed, but was instead built on the ideas of multiple people over several decades. Several experiments in digital cash circulated on the Cypherpunk lists in the 1990s. Adam Back, a British researcher, created an algorithm called hashcash that later became a central component of Bitcoin. Another, called b money, was designed by an intensely private computer engineer named Wei Dai.

It may be impossible to prove Satoshi’s identity until the person or people behind Bitcoin’s curtain decide to come forward and prove ownership of Satoshi’s old electronic accounts and at this point, the creator’s identity is no longer important to Bitcoin’s future. Since Satoshi stopped contributing to the project in 2011, most of the open-source code has been rewritten by a group of programmers whose identities are known. According to Popper whoever it is, the real Satoshi Nakamoto has many good reasons for wanting to stay anonymous. Perhaps the most obvious is potential danger. Satoshi Nakamoto most likely collected nearly a million Bitcoins during the system’s first year. Given that each Bitcoin is now worth about $240, the stash could be worth more than $200 million. That could make Satoshi a target. "With his modest clothes and unassuming manner, Mr. Szabo could be the kind of person who could have a fortune and not spend any of it," concludes Popper, "or even throw away the keys to the bank."

[ Editor's note: The "b money" link does not appear to work. ]

HughPickens.com writes:

Nobel Prizes are given for making important — preferably fundamental — breakthroughs in the realm of ideas and that just what Satoshi Nakamoto has done according to Bhagwan Chowdhry, a professor of finance at UCLA, who has nominated Satoshi Nakamoto, the creator of Bitcoin, for a Nobel prize in economics. Chowdhry writes that Prize Committee for the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, popularly known as the Nobel Prize in Economic Sciences, has invited Chowdhry to nominate someone for the 2016 Prize and he started thinking about whose ideas are likely to have a disruptive influence in the twenty first century.

"The invention of bitcoin -- a digital currency -- is nothing short of revolutionary," says Chowdhry. "It offers many advantages over both physical and paper currencies. It is secure, relying on almost unbreakable cryptographic code, can be divided into millions of smaller sub-units, and can be transferred securely and nearly instantaneously from one person to any other person in the world with access to internet bypassing governments, central banks and financial intermediaries." Satoshi Nakamoto's Bitcoin Protocol has also spawned exciting innovations in the FinTech space by showing how many financial contracts -- not just currencies -- can be digitized, securely verified and stored, and transferred instantaneously from one party to another.

There's only one problem. Who is Satoshi Nakamoto? Suppose that the Nobel Committee is convinced that Satoshi Nakamoto deserves the Prize. Now the problem it will face is how to contact him to announce that he has won the Prize. According to Chowdhry, Nakamoto can be informed by contacting him online just the same way people have communicated with him in the past and he has anonymously communicated with the computer science and cryptography community. If he accepts the award, he can verifiably communicate his acceptance. Finally, there is the issue of the Prize money. Nakamoto is already in possession of several hundred million U.S. dollars worth of bitcoins so the additional prize money may not mean much to him. "Only if he wants, the committee could also transfer the prize money to my bitcoin address, 165sAHBpLHujHbHx2zSjC898oXEz25Awtj," concludes Chowdhry. "Mr Nakamoto and I will settle later."

Original Submission

takyon writes:

Wired and Gizmodo have named Craig Steven Wright (along with deceased American computer forensics expert Dave Kleiman) as the inventor of Bitcoin, known by the apparent pseudonym Satoshi Nakamoto. Hours after their stories were published, the man's home was raided by the Australian Federal Police:

The latest attempt came this week from Wired magazine. Except this time, the story based its findings on numerous recorded links between the man and the identity of Nakamoto, through leaked emails, old blog posts and public documents. And then, just hours later, a twin story from tech website Gizmodo: more emails and documents, independent research, similar findings.

Their shared conclusion: It's probably a man named Craig Steven Wright, an Australian entrepreneur and academic, working with American computer forensics expert David Kleiman until his death in 2013.

And then, another few hours later: reports from Reuters and The Guardian that Australian police have raided Wright's home and office in Sydney. The authorities told The Guardian that the execution of search warrants was "to assist the Australian Taxation Office" but the "matter is unrelated to recent media reporting regarding the digital currency bitcoin."

The Register has some more details about Wright:

[More after the break.]

An Anonymous Coward writes:

Cornell computer science professor Emin Gün Sirer has posted a blog on MIT Technology Review reacting to the recent news 'outing' the Australian Craig Steven Wright as the person most likely to be 'Satoshi Nakamoto', the creator of Bitcoin. The WIRED story presents evidence both for and against the Wright-as-Satoshi hypothesis; for starters, Wright is supposedly a polymath with two Ph.Ds who has dabbled in finance, has spent considerable time in the cyber-underground, and has a huge stash of coin. Most tellingly, there are a series of blog posts and emails referencing Bitcoin made by Wright in 2008 and 2009, coinciding almost to the day with posts made by Satoshi to the cryptography mailing list. But the WIRED story points out that there is evidence that the blog posts were edited by Wright in 2013 to include the Bitcoin references, raising the possibility of a hoax. And Wright's awesome Linkedin profile seems to have been recently deleted.

More doubts about Wright (warning: possible paywall) here.

Sirer thinks the press, and the Internet, are looking for Satoshi in the wrong place. Rather than look for a polymath and uber geek with an amazingly broad range of knowledge and interests, we should look at the limited community of individuals who have expertise in consensus algorithms and protocols; in other words, a specialist. Furthermore, the person would almost certainly be one who makes mental models and presents arguments in the same manner as Satoshi; Sirer calls this a "mental signature". Sirer says that Wright doesn't satisfy either of these criteria, based on his personal dealings with the man.

But who could be a match? Sirer:

Sirer then goes on to say why he won't disclose his suspect - not that he's 100 percent sure he's got the man (or woman).

Original Submission

Phoenix666 writes:

Australian entrepreneur Craig Wright has publicly identified himself as Bitcoin creator Satoshi Nakamoto.

His admission ends years of speculation about who came up with the original ideas underlying the digital cash system.

Mr Wright has provided technical proof to back up his claim using coins known to be owned by Bitcoin's creator.

Prominent members of the Bitcoin community and its core development team have also confirmed Mr Wright's claim.

Will the real Satoshi Nakamoto please stand up? Seriously, though, how deep and dark will be the hole that this guy is thrown into?

takyon writes:

Craig Wright has declared himself to be "Satoshi Nakamoto," the alias of the creator behind Bitcoin:

I have been staring at my screen for hours, but I cannot summon the words to express the depth of my gratitude to those that have supported the bitcoin project from its inception – too many names to list. You have dedicated vast swathes of your time, committed your gifts, sacrificed relationships and REM sleep for years to an open source project that could have come to nothing. And yet still you fought. This incredible community's passion and intellect and perseverance has taken my small contribution and nurtured it, enhanced it, breathed life into it. You have given the world a great gift. Thank you.

Be assured, just as you have worked, I have not been idle during these many years. Since those early days, after distancing myself from the public persona that was Satoshi, I have poured every measure of myself into research. I have been silent, but I have not been absent. I have been engaged with an exceptional group and look forward to sharing our remarkable work when they are ready.

Satoshi is dead. But this is only the beginning.

Fnord666 writes:

On Friday, a user going by "CipherionX" on the Bitcointalk forum published five emails allegedly between Satoshi Nakamoto and former Bitcoin developer Mike Hearn. In an email to Motherboard, Hearn confirmed that he shared the emails with the user. While Hearn himself, who was one of the earliest Bitcoin developers, has previously quoted most of the juicy bits from his correspondence with Nakamoto, it appears to be the first time much of the material has been shared in full. None of the emails are included on a popular database of Nakamoto's writings collected from old emails and forum posts.

The emails range from 2009 (just months after Nakamoto published the details of Bitcoin for the first time) all the way to 2011, when the anonymous creator sent their now-legendary goodbye note to Hearn: "I've moved on to other things. It's in good hands with Gavin [Andresen] and everyone."

Source: https://motherboard.vice.com/en_us/article/7xx9gb/former-bitcoin-developer-shares-early-satoshi-nakamoto-emails [Requires js]

Original Submission

FakeBeldin writes:

Over at Medium, a blogger claims to have an inside source at NSA that claimed that the NSA put in effort to determine the person(s) behind Satoshi Nakamoto, creator of Bitcoin.

According to the blog, the NSA created a "fingerprint" of Nakamoto's writing style(s) and used this fingerprint as follows:

The NSA then took bulk emails and texts collected from their mass surveillance efforts. First through PRISM (a court-approved front-door access to Google and Yahoo user accounts) and then through MUSCULAR (where the NSA copies the data flows across fiber optic cables that carry information among the data centers of Google, Yahoo, Amazon, and Facebook) the NSA was able to place trillions of writings from more than a billion people in the same plane as Satoshi's writings to find his true identity. The effort took less than a month and resulted in positive match.

The blog goes on to discuss that it may be a Chinese or Russian individual or group, possibly a state actor. Of course, that's quite a claim so that would require quite a proof.

The blogger has updated the post to decline to substantiate these rumours.

What do you guys think: does the NSA have the capability to perform such an investigation? And is it cheap enough for them to waste it on this? If so, what's next? the NSA identifying the location of Jimmy Hoffa's body?

Original Submission

canopic jug writes:

Digital preservationist, David Rosenthal, has a blog post discussing his recent Coalition for Networked Information (CNI) talk about distributed ledger technology. CNI is a joint initiative of the Association of Research Libraries (ARL) and EDUCAUSE to promote the use of digital information technologies to advance scholarship and education. The discrepancy between the available capacity in transactions per second and what is actually needed, plus the excessive power consumption, suggests that many attempted uses for distributed ledgers are inappropriate and counterproductive.

I gave a talk at the Fall CNI meeting entitled Blockchain: What's Not To Like? The abstract was:

We're in a period when blockchain or "Distributed Ledger Technology" is the Solution to Everything™, so it is inevitable that it will be proposed as the solution to the problems of academic communication and digital preservation. These proposals typically assume, despite the evidence, that real-world blockchain implementations actually deliver the theoretical attributes of decentralization, immutability, anonymity, security, scalability, sustainability, lack of trust, etc. The proposers appear to believe that Satoshi Nakamoto revealed the infallible Bitcoin protocol to the world on golden tablets; they typically don't appreciate or cite the nearly three decades of research and implementation that led up to it. This talk will discuss the mis-match between theory and practice in blockchain technology, and how it applies to various proposed applications of interest to the CNI audience.

Below the fold, an edited text of the talk with links to the sources, and much additional material. The colored boxes contain quotations that were on the slides but weren't spoken.

Earlier on SN:
BitCoin's Record Drop may have Started Scaring Miners Away
Cryptocurrency Miners Are Building Their Own Electricity Infrastructure

Original Submission

"exec" writes:

Arthur T Knackerbracket has found the following story:

A cryptocurrency exchange in Canada has lost control of at least $137 million of its customers' assets following the sudden death of its founder, who was the only person known to have access the the offline wallet that stored the digital coins. British Columbia-based QuadrigaCX is unable to access most or all of another $53 million because it's tied up in disputes with third parties.

The dramatic misstep was reported in a sworn affidavit that was obtained by CoinDesk. The affidavit was filed Thursday by Jennifer Robertson, widow of QuadrigaCX's sole director and officer Gerry Cotten. Robertson testified that Cotten died of Crohn's disease in India in December at the age of 30.

Following standard security practices by many holders of cryptocurrency, QuadrigaCX stored the vast majority of its cryptocurrency holdings in a "cold wallet," meaning a digital wallet that wasn't connected to the Internet. The measure is designed to prevent hacks that regularly drain hot wallets of millions of dollars (Ars has reported on three such thefts here, here, and here.)

Thursday's court filing, however, demonstrates that cold wallets are by no means a surefire way to secure digital coins. Robertson testified that Cotten stored the cold wallet on an encrypted laptop that only he could decrypt. Based on company records, she said the cold wallet stored $180 million in Canadian dollars ($137 million in US dollars), all of which is currently inaccessible to QuadrigaCX and more than 100,000 customers.

"The laptop computer from which Gerry carried out the Companies' business is encrypted, and I do not know the password or recovery key," Robertson wrote. "Despite repeated and diligent searches, I have not been able to find them written down anywhere."

The expert, she added, has already accessed Cotten's personal and work email accounts and is now trying to gain access to an encrypted email account. Cotten also used an encrypted messaging system, but the chances of successfully reading the communications appear dim because, the expert has reported, "messages would disappear from the encrypted messaging system after a short period."

-- submitted from IRC

Original Submission

Arthur T Knackerbracket has found the following story:

Last summer, Adrian Bednarek was mulling over ways to steal the cryptocurrency Ethereum. He's a security consultant; at the time, he was working for a client in the theft-plagued cryptocurrency industry. Bednarek had been drawn to Ethereum, in particular, because of its notorious complexity and the potential security vulnerabilities those moving parts might create. But he started instead with the simplest of questions: What if an Ethereum owner stored their digital money with a private key—the unguessable, 78-digit string of numbers that protects the currency stashed at a certain address—that had a value of 1?

To Bednarek's surprise, he found that dead-simple key had in fact once held currency, according to the blockchain that records all Ethereum transactions. But the cash had already been taken out of the Ethereum wallet that used it—almost certainly by a thief who had thought to guess a private key of 1 long before Bednarek had. After all, as with Bitcoin and other cryptocurrencies, if anyone knows an Ethereum private key, they can use it to derive the associated public address that the key unlocks. The private key then allows them to transfer the money at that address as though they were its rightful owner.

That initial discovery piqued Bednarek's curiosity. So he tried a few more consecutive keys: 2, 3, 4, and then a couple dozen more, all of which had been similarly emptied. So he and his colleagues at the security consultancy Independent Security Evaluators wrote some code, fired up some cloud servers, and tried a few dozen billion more.

"You have a thief here that amassed this fortune and then lost it all when the market crashed.

In the process, and as detailed in a paper they published Tuesday, the researchers not only found that cryptocurrency users have in the last few years stored their crypto treasure with hundreds of easily guessable private keys, but also uncovered what they call a "blockchain bandit." A single Ethereum account seems to have siphoned off a fortune of 45,000 ether—worth at one point more than $50 million—using those same key-guessing tricks.

"He was doing the same things we were doing, but he went above and beyond," Bednarek says. "Whoever this guy or these guys are, they're spending a lot of computing time sniffing for new wallets, watching every transaction, and seeing if they have the key to them."

Original Submission

AnonTechie writes:

EPFL Researchers Invent Low-Cost Alternative to Bitcoin:

The cryptocurrency Bitcoin is limited by its astronomical electricity consumption and outsized carbon footprint. A nearly zero-energy alternative sounds too good to be true, but as School of Computer and Communication Sciences (IC) Professor Rachid Guerraoui explains, it all comes down to our understanding of what makes transactions secure.

To explain why the system developed in his Distributed Computing Lab (DCL) represents a paradigm shift in how we think about cryptocurrencies -- and about digital trust in general -- Professor Rachid Guerraoui uses a legal metaphor: all players in this new system are "innocent until proven guilty."

This is in contrast to the traditional Bitcoin model first described in 2008 by Satoshi Nakamoto, which relies on solving a difficult problem called "consensus" to guarantee the security of transactions. In this model, everyone in a distributed system must agree on the validity of all transactions to prevent malicious players from cheating -- for example, by spending the same digital tokens twice (double-spending). In order to prove their honesty and achieve consensus, players must execute complex -- and energy-intensive -- computing tasks that are then verified by the other players.

But in their new system, Guerraoui and his colleagues flip the assumption that all players are potential cheaters on its head.

What do you guys think? Will this replace Bitcoin?

Original Submission

An Anonymous Coward writes:

Bitcoin Price: Cryptocurrency Investors See Red As Market Value Drops:

Crypto investors are waking to sea of red this morning as the entire market took an absolute hammering overnight for the second time in just a few weeks.

The price of bitcoin fell sharply on overnight, approaching a dreaded $US30,000 ($A38,800) threshold it has not crossed since January and dragging other cryptocurrencies in its wake.

At around 2am, bitcoin fell 8.6 per cent to a value of $US31,501 ($A40,715), a level not seen since mid-May, when the volatile cryptocurrency temporarily lost 30 per cent in one session.

The second-largest cryptocurrency, ethereum, lost 11.2 per cent of its value, falling to $US2361 ($A3051).

Bitcoin's value has recovered slightly since the drop, rising to $US33,738 ($A43,606) at around 7am today – but, across the board, almost all of the smaller cryptos have been battered overnight.

[...] No concrete reason appeared to explain the price drop on Tuesday, but some analysts pointed to the seizure of $2.3 million ($A3 million) worth of bitcoin belonging to the Darkside hackers by US authorities as a possible factor.

[...] The US managed to recover almost all the bitcoin ransom paid to the perpetrators of the cyber attack on the Colonial Pipeline last month.

[...] It is being seen as a sign that law enforcement is capable of pursuing online criminals even when they operate outside the nation's borders – and, crucially, that crypto isn't beyond government control.

Original Submission

upstart writes:

US government seizes $3.6 billion in bitcoin tied to 2016 hack of crypto exchange Bitfinex:

Two individuals, Ilya Lichtenstein and Heather Morgan, were arrested in New York and are expected to appear in court Tuesday afternoon. The two are charged with conspiracy to commit money laundering and conspiracy to defraud the United States. They face as many as 25 years in prison if convicted.

The DOJ detailed the seizure operation in a press release, explaining:

"According to court documents, Lichtenstein and Morgan allegedly conspired to launder the proceeds of 119,754 bitcoin that were stolen from Bitfinex's platform after a hacker breached Bitfinex's systems and initiated more than 2,000 unauthorized transactions. Those unauthorized transactions sent the stolen bitcoin to a digital wallet under Lichtenstein's control. Over the last five years, approximately 25,000 of those stolen bitcoin were transferred out of Lichtenstein's wallet via a complicated money laundering process that ended with some of the stolen funds being deposited into financial accounts controlled by Lichtenstein and Morgan. The remainder of the stolen funds, comprising more than 94,000 bitcoin, remained in the wallet used to receive and store the illegal proceeds from the hack."

"After the execution of court-authorized search warrants of online accounts controlled by Lichtenstein and Morgan, special agents obtained access to files within an online account controlled by Lichtenstein. Those files contained the private keys required to access the digital wallet that directly received the funds stolen from Bitfinex, and allowed special agents to lawfully seize and recover more than 94,000 bitcoin that had been stolen from Bitfinex. The recovered bitcoin was valued at over $3.6 billion at the time of seizure."

Notably, the amount seized corresponds to a series of transactions of Bitfinex hack-tied BTC on February 1. According to a statement of facts issued by the Department of Justice, investigators gained access to the wallets on January 31, meaning the February 1 transactions took place one day later.

Original Submission

upstart writes:

Nvidia's anti-cryptomining GPUs have finally been 100% unlocked:

It took almost an entire year from their initial release, but the LHR (low hashrate) versions of Nvidia's RTX 30 series graphics cards have finally been completely unlocked by a mining software called Nicehash, restoring each card's respective mining capabilities.

Many of the best graphics cards were nearly impossible to find available to buy over the last two years because of the global chip shortage, a broader supply chain crisis at ports around the world and demand for consumer tech putting even more pressure on the availability of semiconductors needed by AMD and Nvidia for their products.

Part of this demand also included cryptominers who were buying up the available stock in bulk of popular GPUs during the height of the recent crypto currency boom. And while there are mixed opinions about how this affected overall availability for gamers and building hobbyists, there was certainly no love lost between the two groups which resulted in Team Green putting measures in place to make its consumer graphics cards less desirable to those hoping to use them to mine currencies such as Ethereum.

[...] As reported by WCCFTech, NiceHash has now announced that it can utilize 100% of available mining speeds using these previously restricted Ampere-series cards [...]

Original Submission

upstart writes:

So much for enthusiasts championing the decentralization of cryptocurrencies:

One of the prominent developers behind the bitcoin blockchain said he has asked the FBI to assist him in recovering $3.6 million worth of the digital coin that was stolen from his storage wallets on New Year's Eve.

Luke Dashjr is a developer of the Bitcoin Core, an app that runs 97 percent of the nodes making up the bitcoin blockchain. Bitcoin Core derives from the software developed by the anonymous bitcoin inventor who uses the pseudonym Satoshi Nakamoto. That software was called simply Bitcoin but was later changed to Bitcoin Core to distinguish it from the coin. Dashjr has been contributing to the Bitcoin Core since 2011 and has long championed the concept of decentralization that the cryptocurrency was founded on.

[...] Dashjr said the wallets compromised were both hot—meaning accessible over the Internet—and what he believed were cold—meaning they were hosted on a device not connected to the Internet. He didn't elaborate, but it appears he was theorizing that one or more computers he used was infected and that the hackers could then obtain the funds stored on them. It's hard to make sense of that, however, since a wallet stored on an Internet-connected device is, by definition, hot.

[...] There's still a lot that doesn't add up to the events Dashjr has reported. Without more details, it's hard to come to any firm conclusions. One takeaway, however, is clear, as evidenced by one of the most influential bitcoin developers calling on law enforcement to recover his stolen digital coin: The notion that cryptocurrencies provide a decentralized platform that cuts out established authorities is nothing short of a pipe dream.

Original Submission

upstart writes:

The Kingdom Of Bhutan Has Been Quietly Mining Bitcoin For Years:

The Himalayan kingdom confirmed it has been running a bitcoin mining operation as mystery surrounds the scale of its earlier cryptocurrency investments.

Beneath the Himalayas, rivers fed by ancient glaciers supply the tiny kingdom of Bhutan with immense stores of hydroelectricity. The renewable resource has become an economic engine, accounting for 30% of the country's gross domestic product, and fueling the homes of nearly all of its 800,000 residents. But for the past few years, Bhutan's royal government has been quietly devising a new use for these reserves: powering its very own bitcoin mine.

Sources familiar with Bhutan's efforts to develop sovereign mining operations told Forbes that discussions have been occurring since 2020, though until this week its government had never disclosed its plans. Bhutan sought to harness the country's hydroelectric plants to power racks of mining machines that solve complex mathematical problems in order to earn bitcoin rewards. Once completed, this would make Bhutan one of the only countries to run a state-owned mine, alongside El Salvador.

On Saturday, days after Forbes contacted Bhutanese officials with questions about the mining scheme, a government representative confirmed to local newspaper The Bhutanese that it had begun mining "a few years ago as one of the early entrants when the price of Bitcoin was around USD 5,000." It explained that the earnings go towards subsidizing power and hardware costs.

Arthur T Knackerbracket has processed the following story:

Periodically, the door would open, the light would turn on, and a petite, dark-haired graduate student named Sarah Meiklejohn would enter the room and add to the growing piles of miscellaneous artifacts. Then Meiklejohn would walk back out the door, down the hall, up the stairs, and into an office she shared with other graduate students at the UC San Diego computer science department. One wall of the room was almost entirely glass, and it looked out onto the sunbaked vista of Sorrento Valley and the rolling hills beyond. But Meiklejohn’s desk faced away from that expanse. She was wholly focused on the screen of her laptop, where she was quickly becoming one of the strangest, most hyperactive Bitcoin users in the world.

Meiklejohn had personally purchased every one of the dozens of items in the bizarre, growing collection in the UCSD closet using bitcoin, buying each one almost at random from a different vendor who accepted the cryptocurrency. And between those ecommerce orders and trips to the storage room, she was performing practically every other task that a person could carry out with bitcoin, all at once, like a kind of cryptocurrency fanatic having a manic episode.

She moved money into and out of 10 different bitcoin wallet services and converted dollars to bitcoins on more than two dozen exchanges such as Bitstamp, Mt. Gox, and Coinbase. She wagered those coins on 13 different online gambling services, with names like Satoshi Dice and Bitcoin Kamikaze. She contributed her computer’s mining power to 11 different mining “pools,” groups that collected users’ computing power for mining bitcoins and then paid them a share of the profits. And, again and again, she moved bitcoins into and then out of accounts on the Silk Road, the first-ever dark-web drug market, without ever actually buying any drugs.

In all, Meiklejohn carried out 344 cryptocurrency transactions over the course of a few weeks. With each one, she carefully noted on a spreadsheet the amount, the Bitcoin address she had used for it, and then, after digging up the transaction on the Bitcoin blockchain and examining the public record of the payment, the address of the recipient or sender.

Meiklejohn’s hundreds of purchases, bets, and seemingly meaningless movements of money were not, in fact, signs of a psychotic break. Each was a tiny experiment, adding up to a study of a kind that had never been attempted before. After years of claims about Bitcoin’s anonymity—or lack thereof—made by its users, its developers, and even its creator, Meiklejohn was finally putting its privacy properties to the test.

All of her meticulous, manual transactions were time-consuming and tedious. But Meiklejohn had time to kill: As she was carrying them out and recording the results, her computer was simultaneously running queries on a massive database stored on a server that she and her fellow UCSD researchers had set up, algorithms that sometimes took as long as 12 hours to spit out results. The database represented the entire Bitcoin blockchain, the roughly 16 million transactions that had occurred across the entire Bitcoin economy since its creation four years earlier. For weeks on end, Meiklejohn combed through those transactions while simultaneously tagging the vendors, services, markets, and other recipients on the other end of her hundreds of test transactions.

When she had started that process of probing the Bitcoin ecosystem, Meiklejohn had seen her work almost as anthropology: What were people doing with bitcoin? How many of them were saving the cryptocurrency versus spending it? But as her initial findings began to unfold, she had started to develop a much more specific goal, one that ran exactly counter to crypto-anarchists’ idealized notion of bitcoin as the ultimate privacy-preserving currency of the dark web: She aimed to prove, beyond any doubt, that bitcoin transactions could very often be traced. Even when the people involved thought they were anonymous.

Original Submission