Life After Google

by George Gilder

  “Thus at the heart of bitcoin is a process that combines the irreversible passage of time with the exponential advance of technology through Moore’s Law: the ever increasing number of cycles per second of computation. Without Moore’s Law, bitcoin would be swamped by its own data, and the blockchain would grind to a halt. The genius behind bitcoin comes from a dynamic vision in which computer resources—storage and processing—always grow faster than the blockchain. It is the epitome of value creation in a world of abundant goods and services and a scarcity of time. Linear time reflects the span of life—the time domain. The frequency domain is bounded by the speed of light. Together they can represent the sources of value in the world.”

  “You’re getting somewhere,” Satoshi repeated. “But in fact, the system is much better than that. It does not merely measure value. It enables transactions and verifies them and thus can vastly enhance the world’s creation of wealth and expansion of liberty.”

  Then I opened my eyes. It was dark. And Satoshi was gone.

  It was not until two years later, in 2015, that I again encountered Satoshi. As before, it was an indirect meeting. During a trip to Los Angeles to speak at David Horowitz’s Freedom Center, I ran into a professed Satoshi associate named Joseph Vaughn-Perling. Soft-spoken and intense, he looked like an aging hippie, with a wide-brimmed hat and a ponytail. He was a twenty-year veteran of the struggle to devise new forms of money, which climaxed with the bitcoin specie project, the New Liberty Dollar of glistening silver. Over dinner, he told me that Satoshi was in fact a computer scientist and entrepreneur from Australia named Craig Wright, who reportedly invested some $28 million in a previous ill-fated version of the Liberty project.

  I invited Vaughn-Perling to my Telecosm Conference that year, held in conjunction with the MoneyShow in San Francisco, and he showed up with an intriguing twenty-three-year-old Vietnamese woman out of my dream visitation, called, as I initially heard it, “Win-Win”—spelled, as I later learned, Uyen Nguyen. He introduced her to me as Wright’s key assistant and programmer, involved in bitcoin since she was only eighteen, which is to say almost from the beginning. She was now serving as trustee of Wright’s Tulip Trust, the holder of his bitcoin stash, now being sued by the heirs of his coding partner David Kleiman. The heirs apparently believed that Wright is Satoshi. I was excited. During my MoneyShow keynote address, which was largely devoted to bitcoin, I predicted exciting revelations to come.

  I myself speculated that Wright is the probable Satoshi and then brought Vaughn-Perling onto the stage. But for some reason, in this public forum, the normally confident and articulate “JVP” of money conferences became tongue-tied, and I couldn’t get him to say anything of interest about Wright or bitcoin. Perhaps, the situation is less clear than it seems. After all, Nguyen did not join Wright until after bitcoin had been launched.

  My next serious encounter with Satoshi in the guise of Craig Wright came in his presentation on July 1, 2017, titled “Shinseiki Evangerion” or “The Gospel of the New Century” to a conference on the Future of Bitcoin at Arnhem in the Netherlands. Here he announced with great bravado, “I am here to kill off Satoshi.”3 The plot was thickening.

  In actuality, he was there to kill off a major new rival who had been set in his path by the master investor-philosopher Peter Thiel.

  The blockchain war was underway.

  CHAPTER 13

  Battle of the Blockchains

  Here he comes, the sainted Satoshi, revealed at last as . . . the ignominious Craig Steven Wright. Isn’t his halo a bit awry? Do we really have the right guy? The truest believers seem to be the Australian Tax Office, but they want to put him in prison stripes.

  No one expected the exalted Satoshi to have emerged from a wilderness of casino sites with names such as Centrebet and Bodog. But Reuters’ analysis of early bitcoin software provided by Wright indicates that “bitcoin grew out of code originally developed with online poker in mind.” His prime credit before bitcoin was probably Lasseter’s Online, arguably the first Internet casino, and profitable until the United States government banned online gambling in 2006. Wright’s ventures have a way of incurring the wrath of authority.

  Having devoted much of his life, by his own account, to proving himself to a mostly absent father, Wright has studied for degrees in everything from nuclear physics to statistics and has purported to hold a doctorate in computer science. But Australia’s Charles Sturt University acknowledges awarding him only two computer science master’s degrees. Wright can never quite consummate the paperwork for academic laurels. His firmest credential is in network security audits (GIAC-SANS), and his best-documented Ph.D. is in theology, where he wrestles with the ultimate Father and deems him also absent or inattentive.

  For a living, he served as a consultant-accountant in investigatory computer forensics and other network and cybersecurity jobs. He launched a series of computer-related startups, climaxing with Hotwire Preemptive Intelligence Group, which sought to establish Denariuz as the first bitcoin bank. It failed to pass muster with regulators and died in 2014. The founder of a consulting firm named after the mathematician De Morgan, Wright managed to end up in jail briefly for defying an injunction to stop marketing to its customers after he was thrown out. Most of his various other companies failed.

  So who is this troubled, triple-ledgered, declamatory, “hard-forking” computer scientist hustler Craig Wright? Anyone who wants to know him can consult his biographer, Andrew O’Hagan, who lived intimately with Wright during the critical six months in 2016 when he presented himself as Satoshi and then botched his proofs to the press.

  Cashiered and discredited by the Economist, the Financial Times, the BBC, GQ, and scores of vitriolic cyberpunks, he fled the stage in tears and tatters. It is all recorded in O’Hagan’s masterly 36,000-word essay in the June 2016 London Review of Books.1 But Satoshi devotees may not be eager to read it. As O’Hagan writes, “Satoshi was loved by bitcoin fans for making a beautiful thing and then disappearing. They don’t want Satoshi to be wrong or contradictory, boastful or short-tempered, and they really don’t want him to be a 45-year-old Australian called Craig.”

  Tall, dark-haired, Hollywood-handsome, contradictory, libertarian, boastful, and short-tempered, Wright smacks of a cypherpunk Donald Trump. Or as his Sydney project manager put it, “He’s like Steve Jobs, only worse.”

  O’Hagan’s saga opens cinematically on December 9, 2015, with the woebegone Aussie in a rush to the airport from his police-thronged Sydney home, discovering on the way that he has forgotten his passport. Creeping back against the advice of his Asian wife, Ramona, he hides until the police give up and leave. He retrieves the crucial document, only to be apprehended again at his plane’s gate. Bluffing his way onto a flight, he gets to Auckland, New Zealand, where he picks up a “Billabong” surfers’ tee shirt that he still occasionally wears as a gesture of rakish defiance. He ends up safely in London, where he remains.

  For Craig—a man on the lam for years; harried by the Australian Tax Office for a reported bitcoin hoard; charged with “dark net” affiliations, from the mob in Latin America to Ross Ulbricht, the “Dread Pirate Roberts” of Silk Road; juggling several near-bankrupt companies that received as much as fifty-four million Australian dollars in public money—being wrong is just the beginning of being Wright of bitcoin.

  With the price of bitcoin passing eighteen thousand dollars on the way to revisiting six thousand, many assume that he is rich. But as O’Hagan shows, he may well have botched that too. Like many counterparts in Silicon Valley, he is totally illiquid, a frozen unicorn.

  As confided to O’Hagan by the late David Kleiman, Wright’s close partner in security forensics and the purported co-coder of bitcoin, the putative Satoshi has suffered a further financial setback. He shared with Kleiman 50 percent of a digital exchange called Liberty Reserve in Costa Rica. Kleiman thought their half-share was worth $28 million, or $14 million for Wright. But Preet Bharara, the federal prosecutor in N
ew York and scourge of insider trading, thought Liberty should be shut down as a money-laundering operation under the Patriot Act because many of its twelve million annual transactions were apparently conducted by criminals. Bharara doesn’t kid around. Liberty’s management went to jail for twenty years. Wright’s strongest motive for coming out as Satoshi may well have been to pay his bills and exact vengeance on all the officious beadles in his life.

  If a tangle of litigation can be unraveled, Wright may come into a trust fund, the playfully-named Tulip Trust, established in 2011 to hold his bitcoins until 2020. One of the most compelling reasons to believe Wright is Satoshi is that the Tulip trustee, Uyen Nguyen, told me so in 2015 at my Telecosm-MoneyShow conference in San Francisco. She was with Wright from early in 2010 and may know. But he may not be able to collect even this money. After he reportedly showed his Aussie collaborator Stefan Matthews, an associate of the Canadian casino tycoon Calvin Ayre, an early draft of the Satoshi white paper in 2008, Ayre decided to back him. But Wright left Ayre’s joint-companies nTrust and nCrypt holding the bag for a $15 million debt from his bankrupt bouquet of startups.

  Wright’s failure to come out as an unimpeachable Satoshi, as he had promised to do, made it impossible for Ayre’s team to fulfill their plan. Buying Wright’s intellectual property and his companies, they were hoping for a multibillion-dollar harvest, which was to end “with Craig working for, say Google, with research staff of 400.” That didn’t happen. Wright left the scene in 2016 with little wealth or credibility, and he may not collect anything in 2020. Meanwhile, Kleiman’s heirs are suing the trust for the appreciated bitcoins.

  In late June 2017, Wright flamboyantly reemerged, full of flair and contrarian ideas, dense equations and high theories, still an impassioned bitcoin spearhead. Commanding the world’s fifteenth-ranked supercomputer in Reykjavik, he is testing the bitcoin protocol and finding it virtually boundless. In appearances before his fall, he wore dark suits and bold ties and spoke with humble earnestness, but now he vamps in the bitcoin vanguard in the Silicon Valley camouflage of billionaire’s bleached denim.

  At the Future of Bitcoin conference in Arnhem, the Netherlands, on July 1, 2017,2 Wright tried to dispel all doubts and regain leadership of the bitcoin movement in a ninety-minute speech—a profanity-laden harangue delivered mostly without notes—full of objections to the current drift of the bitcoin protocol and arguments for his position as a “bitcoin maximalist.” He swaggered and sneered; he preened and postured. He warned of “hard forks” of the blockchain code, threatening to lead a break-off from the prevailing chain—a threat he presently made good on with the hard fork of Bitcoin Cash, which in late May 2018 was still worth some $17 billion.

  For all the ranting, a potent theme emerged from Wright’s speech. The bitcoin movement was going astray through such dilutive divergences from the original bitcoin blockchain as “side chains” and “lightening” channels for small-fast-transactions, betraying the original Satoshi promise.

  With unlimited block sizes, Wright insisted, bitcoin can be more scalable, secure, robust, efficient, and even more “Turing-complete” as a computing platform, than any alternative, including schemes with most of the bitcoin patches or BIPs (bitcoin improvement protocols). At the same time, he proposed a controversial new regime of “split keys,” which would ensure that, regardless of hacks, keys would be recoverable (but also dependent on trusting third parties to store the parts). “There need never be another Mt. Gox.”

  A chain with unlimited block size, said Wright, can compete with Visa and all the world’s financial players and restore “financial sovereignty” to individuals around the world: “The bitcoin blockchain can be scaled up to replace all existing payment system networks to become the world’s single global economic infrastructure. . . . ” In fact, there’s no stopping it: “If central banks try to print more money, bitcoin just will become more valuable.”

  Perhaps he protested too much to be believed. A mix of bombast and brilliance, Wright was born to be doubted. He is nothing like the elegant and fastidious Japanese sage I had imagined from Satoshi cypherpunk posts.

  Yet after long meetings with Wright, the head of the Bitcoin Foundation, Jon Matonis, declared, “There is never going to be another Satoshi.” Wright also convinced Gavin Andresen, Satoshi’s chosen heir, whom I tracked down in Amherst, Massachusetts. As Andresen has written in his blog, “After spending time with him, I am convinced beyond a reasonable doubt: Craig Wright is Satoshi. . . . Even before I witnessed the keys signed and then verified on a clean computer that could not have been tampered with, I was reasonably certain I was sitting next to the father of bitcoin . . . the brilliant, opinionated, focused, generous—and privacy-seeking—person that matches the Satoshi I worked with six years ago. . . . I am very happy to be able to say I shook his hand and thanked him for giving bitcoin to the world.”3

  Responding to critics who thought Wright had merely poached Satoshi’s public key, which is available on the blockchain to anyone who looks, Andresen said, “He signed a message of my choosing with the private key on block number 1 on a computer, which had not been tampered with.” Andresen is a sophisticated programmer who has moved to the Media Lab at MIT to superintend the Bitcoin Foundation there.

  There is circumstantial evidence that Wright is Satoshi Nakamoto. His mother, O’Hagan, and his earliest teachers testify that he was obsessed with Japanese culture from childhood. By his desk, he hung a Samurai sword. Asked in Arnhem in July 2017 why he used the name Satoshi, Wright provided a poignant story: “I had a single mother. One of the guys who helped bring me up was Japanese. . . . I thought it was a cool culture. . . . In Japan, people know how to cooperate with each other. . . . We seem to think we need to fight each other in a zero-sum game. But trade is not a zero-sum game.”

  Then he got to the point. “In Japan, there was a Tokugawa-period [1603–1868] philosopher who talked about trade. He was named, as it happened, with part of Satoshi’s name. He was called Nakomoto. He was in favor of an open Japan. He wrote how if Japan was to grow great, it needed to stay open to the West. Trade is not a zero-sum game. We in the bitcoin movement need to remember Nakomoto’s lesson today.” According to Vaughn-Perling, Wright introduced himself as Satoshi Nakomoto years before the release of bitcoin.

  If you take him at his word, Wright is bitcoin’s main inventor and the author of a doctoral dissertation on the “gnarled roots of creation theory” from Eden to Dionysius. He is a burly libertarian classicist-cryptographer and a bundle of contradictions. Bluntly outspoken, scatologically dismissive of critics and rivals, addicted to flimflam ventures and less than punctilious in citing his own academic credentials, flamboyantly anonymous and a LinkedIn exhibitionist-deletionist, he emerges as the Aussie Samurai Satoshi.

  Among Wright’s strengths as a consultant is expertise in Internet Protocol version 6 (IPv6), the new Internet Protocol that can accommodate more addresses than there are stars in the galaxy. He postures as the minatory seeker of some four hundred blockchain patents (seventy submitted to date in the United Kingdom). Adept in network and graph theory, he explains that the bitcoin’s resistance to attack is measured not by the number of nodes but by the number of edges—that is, links between the nodes. He shows that bitcoin nodes, compared with any other blockchain, are interconnected with nearly biological neuronal density as every node propagates new blocks back and forth to all the others through a so-called randomized gossip protocol.

  Marching to and fro across stages at Fintech conferences, Wright declares the bitcoin a superior platform for any kind of smart contract or “Turing-complete” thaumaturgy. “Smart contracts,” embodied in rigorous software, were proposed by Nick Szabo in the 1990s along with much of the rest of the bitcoin portfolio. They are self-executing contracts that can ride on an immutable blockchain and bypass lawyers and accountants. But to implement such contracts a computer platform must be fully programmable as a “Turing machine.” With an abstruse discours
e on the properties of the Forth programming language, Wright attempts to show that bitcoin is as Turing-complete as any other platform. Szabo curtly disputes that claim, as well as nearly everything else that Wright says. But I could go along with Wright in citing the predicate logic of Kurt Gödel to show the intrinsic limits of all claims of Turing-completeness.

  In a new Satoshi assertion, Wright ended his Arnhem address with a pointed declaration: “We are now nearly at ten years old. Visa currently can do 15 million online transactions per day. Bitcoin can already scale to that level with existing hardware for a fraction of the cost.” Its software, he said, can function with 365 gigabyte blocks. “Unlimited blocks.” Such unlimited blocks are not precisely a blockchain. They more resemble the hashgraphs proposed by Leemon Baird of Swirlds and the Tangle of IOTA.4

  Moore’s Law continues in new vectors and exceeds the pace of blockchain growth. Over five years it increases capability tenfold, over ten years a hundredfold. Revenues can grow for everyone.”

  He mentioned transistors with gate lengths near one nanometer and systems progress multiplying software “threads” and parallelism over time. Both are happening today.

  Bitcoin is constantly improving its security and Turing-complete software capabilities, leading Wright to predict increasing revenues “from tokenization issuance and marketing fees,” from “smart contract and scripting fees,” and from “escrow and insurance fees.” Again and again he implied that smart contracts could be created on the bitcoin blockchain that critics claimed could not accommodate them.

  He ended his Arnhem speech by throwing down a gauntlet to his rivals. “I’m not going away. We will scale radically. You’re either with us or against us. We will compete by growing the value through easy connectivity and easy use.”

  Asked directly what he thought of the rival blockchain from Ethereum, he declared, “I was a bitcoin maximalist in 2013 and I am a bitcoin maximalist today.” A bitcoin maximalist bars all other blockchains.