Why hasn't Satoshi Nakamoto come out? Are the first 50 Bitcoin in the Tulip Trust?

Phil Wilson claims:

To be one of three members of the group called Satoshi Nakamoto, with the other two being Dave Kleiman and Craig Wright.

That Satoshi Nakamoto stayed anonymous for legal reasons, but always intended to go public until than plan was derailed by Bitcoin's quick growth and Kleiman's death.

That the so-called "Tulip Trust" was intended to contain the original Satoshi Nakamoto Bitcoin, which can be used to prove Satoshi's identity.

Satoshi Nakamoto was a team of three, Phil "Scronty" Wilson explains to Finder in a detailed tell-all explanation of where Bitcoin allegedly came from, and how it allegedly got here and who Satoshi Nakamoto allegedly really is.

Satoshi Nakamoto was a team composed of Craig Wright, Dave Kleiman and himself, he explains.

Where's the proof?

It's widely accepted that the only way someone can truly prove that they're Satoshi Nakamoto is by accessing some of the oldest Bitcoin in the world. Bitcoin's genesis block emerged on 3 January 2009, but the Bitcoin software was only released publicly on 9 January 2009. So all the Bitcoin mined in the intervening week could only have gone to Satoshi Nakamoto.

So as the theory goes, if you can move those Bitcoin, you must be Satoshi Nakamoto. And the plan was always to do exactly that, Wilson said.

Satoshi Nakamoto didn't intend to remain anonymous forever, but some discretion was thought to be necessary at the start given the dubious legality of creating a new currency.

"I was doing a lot of programs and testing it [Bitcoin], and said 'this thing ain't breaking'. This might be the solution, not just a solution, but the solution," Wilson recounted. "If it is the solution, we should not be putting our names onto it... at least not straight away."

"Every person no matter which state they live in, which country they live in... they've got treason laws, they've got monetary laws," Wilson said, explaining his reasoning at the time. "If it works, that's fiat currency gone. We will end up having a global currency. That means its against all the monetary policies of all the countries of the world."

"The idea is once it's out there and we find we're not gonna get prosecuted, like, do an update and put our names on it. That was always the plan after a year or so, put our names on it, right? But right at the start it's better to be safe than wearing an orange suit."

But as Wilson tells it, circumstances would conspire against Satoshi Nakamoto and it wouldn't be quite so simple.

A change of plans

Satoshi disappeared from the Bitcoin Talk forums in December 2010, right as Bitcoin started heating up in a big way for the first time. One of the last messages left by the account was a note of concern over the attention Bitcoin had been getting since its connection to the Wikileaks scandal.

"It would have been nice to get this attention in any other context. WikiLeaks has kicked the hornet's nest, and the swarm is headed towards us," Satoshi wrote at the time.

And it was also clear to Wilson that a lot of people were trying to de-anonymise Satoshi Nakamoto, he said.

"People were boasting online that they'd spent thousands and thousands of dollars on private investigators to track us down, or track down who is Satoshi or who is behind Satoshi," he recalled. "And I thought, if private people are boasting about it, what are the three letter agencies doing right now?"

"So we got it so that if we even spent one coin from those addresses we'd be sniffed out. People are running software, keeping an eye on all those 2009, 2010 addresses. If any of them move..."

But at the same time, Wilson noted, Satoshi Nakamoto was still a group of three people, any one of which could unmask the other two if identified. And at the same time, Bitcoin prices were rising quickly, all three of them had access to Satoshi's private keys and there were growing concerns around whether all three members could resist the temptation to sell, Wilson said.

Enter the Tulip Trust

The Tulip Trust is a semi-mythical fund of over 1 million Bitcoin. At prices of $5,000, that's a value of more than $5 billion all up.

And although he doesn't know what actually ended up happening to it, Wilson suggests that at some point it was intended to contain the original Satoshi Nakamoto coins, in a fashion.

"With the Tulip Trust, there were a few ideas what were supposed to happen. What actually happened I don't know," he said.

"So the Tulip Trust, the idea is get rid of the private keys," Wilson explained. "If we had the private keys, the incentive to actually sell some would be too high. So you've got to take that away."

"You're supposed to transfer the old 50 BTC from 2009 to 2010 (the Bitcoin which can belong only to Satoshi Nakamoto) to these new addresses... the signing of that transaction, you get a raw transaction, right? Those raw transactions are supposed to be put on memory sticks and put in a trust somewhere, and the original private keys are deleted... if something leaked that only we knew about, we'd know who'd done it."

What's a raw transaction? In Bitcoin, raw transactions are essentially pre-assembled transactions which have not yet been broadcast to the network. With raw transactions, users can get a very granular level of control over a transaction and do some interesting things. For example, you can validate transactions without broadcasting them. In this case, if Satoshi's 2009 Bitcoin had been converted into a raw transaction, it would be possible for someone with access to that raw transaction to privately prove beyond any doubt that they are Satoshi, without publicly moving the coins. You can also set up various multi-signature arrangements. For example, you could make a transaction which requires more than one person's key before it goes through.

"So you have these transactions signed... supposedly... they were supposed to go into a trust, and [be] split in a certain way," Wilson said. "Whether that actually happened or not, I do not know. Whether that trust was set up, I do not know. I think current court cases will bring that information out."

W&K Info Defence Research LLC

Satoshi Nakamoto disappeared from view in December 2010, right as Bitcoin was heating up in a big way for the first time. Three months later in February 2011, a company in Dave Kleiman and Craig Wright's name – W&K Info Defence Research LLC – was registered. According to documents previously obtained by Gizmodo, the Tulip Trust is believed to have been inked into agreement three months after that, on 8 July 2011, the very next day after Bitcoin hit its first major peak of US$31.

"There's also the issue of the public officer. I was supposed to be the public officer for the W&K," Wilson said, "and I said I'm not putting my name in the open. If one of you guys – especially Craig – decides to keep the private keys and try and sell some bitcoin if the price pops up, I don't want that leading to you, and that leading to W&K, and that... leading back to me."

Dave Kleiman passed away in 2013, and ownership of his share passed on to his sibling, Ira Kleiman. But this broke out into a lawsuit, and the Kleiman estate has accused Wright of stealing Bitcoin that rightly belonged to Dave.

The lawsuit uncovered old correspondence between Craig and Dave, and in 2014 Ira Kleiman sent Craig an email saying:

"In one of the email exchanges between Dave and you, he mentioned that you had 1 million Bitcoins in the trust and since you said he has 300,000 as his part. I was figuring the other 700,000 is yours. Is that correct?"

"Around that. Minus what was needed for the company's use," Wright replied.

That lawsuit is still in the works, and it's also brought up in conversation about the identity of Satoshi Nakamoto.

"It is plaintiffs' theory that Satoshi Nakamoto is the name of a partnership between Craig Wright and Dave Kleiman," said the Kleiman estate's lawyer.

And as that lawsuit starts coming to a head, with the question of "who is Satoshi Nakamoto?" at the centre of it, Wright has also launched several more legal battles to defend his identity as Satoshi Nakamoto.

No proof... yet?

Wilson maintains that Craig Wright was part of the team known as Satoshi Nakamoto, but also says Wright has yet to show any definitive proof.

"He should have the information, but if he had the information he would have published it already... The fear I put into him about deleting all the information so if anyone grabs him there's no proof... looks like it might've actually happened. It might be reliant on the trust, transferring the coins or something."

As for his own side of the story, Wilson says he can't offer much in the way of evidence.

"I can't do any proving, because I've got no data, no emails or any of that," Wilson concedes.

Most communications were between Wright and Kleiman he said, and Kleiman in particular was more of a data repository because forensic computing was much more his area of expertise than either of the other two.

If there's anyone who can verify his side of the story, Wilson says, it might be someone who went as Bitboy on Sourceforge, which served as the main Bitcoin forum prior to the creation of Bitcoin Talk.

Wilson and Bitboy engaged over the Bitcoin logo design instructions, Wilson said, and might still have some communications between them.

"The idea that Satoshi is a group of people came on Sourceforge forums in 2009, when Craig and I had different viewpoints on which direction it should go," Wilson said. "I wanted planetary civilisation [a sustainable, decentralised planetary currency], he wanted online gambling, transfer of tokens type of thing. And we all had access to the Sourceforge forum's Satoshi account, so that we'd post, but some newbies come in and read all the information, and start saying 'hang on, is Satoshi one person or multiple people?' here he's saying one thing and then two weeks later he's contradicting himself'."

This issue directly led to the creation of the Bitcoin Talk forum, Wilson said, and gave the team a chance to cover its footprints more carefully.

What's Satoshi's Bitcoin for?

The whole point of bitcoin, Wilson said, was to create a deflationary currency which could later be used to fund enormous technological advances. If Bitcoin were to become the global currency, those early holdings would be worth a potentially incalculable amount.

The assumption was that the early adopters, who would end up with large holdings, would be more interested in experimentation and technology than the more classically inclined billionaire class, and so would be more likely to turn that interest to further technological advances. This also influenced Bitcoin's economics, he said, and it was specifically designed to be given lopsided rewards to the start.

"Tidal dams and space elevators and all the other stuff... with a deflationary currency, where the bulk of it is actually mined early, you can do that. The inflation rate, and deflation rate and the rest... that was all figured out later on."

"Of course, to be able to do that I'm supposed to have access to those funds. However, due to Craig's behaviour... doesn't seem to be happening anymore. And of course, Dave's death didn't help whatsoever. But that's just one direction. We're still going to have a planetary civilisation. We're just going to have to do it a different way."

Disclosure: The author holds BTC at the time of writing.