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“Death of Satoshi Nakamoto” [pdf] (sec.gov)
75 points by pope_nope on Aug 27, 2016 | hide | past | web | favorite | 25 comments

Section 1 is so strange I'm at a loss for words.

"...in the style of the massive wall of water resembling a menacing prolongation of Mount Fuji as depicted in The Great Wave off Kanagawa"

the fuck?

Section 2 defends BTC from being a Ponzi scheme. The public doesn't worry it's a Ponzi scheme so much as an instance of Tulip Mania.

Section 3 says that since Bitcoin is prone to getting ripped off, it needs to be insured. The SEC would of course argue that since it's prone to getting ripped off, it SHOULDN'T be insured.

Section 4 is just horse shit no one at the SEC is going to understand, let alone read. FUD.

Section 5 is a basic conclusion.

Sounds a lot like gold, then, $43/gram for elemental nothing. OK, it's something, but not nearly justifing its price relative to other metals, except the shared delusion that underlies all currency.

You're right. They're both speculative in nature. I'd argue against gold as an investment for that reason. Think I'm crazy? Get educated.

Compare gold to the DJIA since 1900.



And don't go comparing Bitcoin to gold in any event. It doesn't have the history behind it, and there are too many instances of investment fads that die hard.

Incidentally, the value that grew, and that you would have extracted in dividends, is not reflected in the share price. Also, the DJIA is weighted by the share price rather than the market capitalization of each component. (Really, it is that absurd as an index!)

Anyway I agree with your point that while the economy has surged over the past 116 years, gold has been tradeable for an ever-decreasing share of economic output or share of the available real assets, and has been far outpaced by how a conservative portfolio of equities would have performed over the same period.

While a distinction can be drawn between real economy and money or financial economy, currencies, like the US dollar, are defined as legal tender by the governments that are backed up by significant real economies.

Official currencies can be devalued relative to real economic production, either intentionally or through mismanagement, but they are not an act of faith like betting on precious metals that have long since been deprecated as official currency.

Anybody wondered whether the real Satoshi actually had a hard drive crash or something like that, and actually lost access to his wallet and PGP key?

Then making it impossible for him to claim his bitcoins or prove that he's the real Satoshi, thus will never claim to be Satoshi?

Sometimes, the most simple yet stupid explanation can be real

He probably mined more BTC once he realized that the first few would be linked back to him. He had plenty of time.

I just assumed this was the case. Seems like the most likely explanation to me, at least based on the technologists I know.

Are you really implying that someone would store a wallet key to a million bitcoins on one single hard disk? Hardly anyone could be this stupid, let alone the creator of Bitcoin.

I think it is much more reasonable to assume that he fears for his life and about hacker attacks and that is why he takes every precaution possible to conceal his identity. People have killed other people for less money than a million bitcoins.

I'm completely oblivious here, so this might sound stupid; but is it possible that he lost access to the wallet before bitcoins were actually worth anything? I.e, he just didn't bother much with backups or security because losing a million bitcoins would be like dropping a 50 cent coin.

I think this is a very solid theory if you think of satoshi as an average developer. How many of us have created an app that had promise but let it die due to apathy/boredom/etc

I believe, based on the white paper, that his creation was ideologically motivated. He believed in what he was making, and would have taken every precaution possible.

There's always the chance he didnt think it would take off and let his Bitcoin stagnate and get lost. But I don't believe it is so.

There is a quote of him saying something like he would never destroy a private key. And the fact that his disappearance happened right before everything really took off, but I clearly remember there was a very tight knit group of people who absolutely believed in the cause.

And he handed development off so carefully, I can hardly believe he would have just neglected something in my opinion he personally believed would be world changing.

Didn't he post a signed message denying that he was Dorian Nakamoto (proving he still has access to his keys), Or was that one a fake?

Someone posted a message from one of his accounts, but it wasn't signed IIRC.

Pretty sure satoshi never signed anything.

Note that all 5 of the letters written to the SEC in response to the proposal can be found here [0]

[0]: https://www.sec.gov/comments/sr-batsbzx-2016-30/batsbzx20163...

The one to read is from Jorge Stolfi, professor of computer science and knowledgeable cryptocurrency critic:


The individual spent years smearing cryptocurrency, insisting it had no future, was a ponzi, etc, because he was/is ideologically opposed to its undermining of authoritarian government control. He has publicly said he thinks a "totally free" society would be a "nightmare". It was his ideological disposition to authoritarianism that motivated his anti-Bitcoin writings. He attacked Bitcoin for the purpose of making a failure outcome for it more likely. His letter to the SEC is a perfect example of that.

This is the SEC, their entire reason for existing is to regulate transactions between USD and the rest of the world. If you want to transact on the blockchain directly, you are absolutely free to do so, but if you want a situation where law enforcement backs you up when something goes wrong, the US govt has been pretty clear that they are not interested in recognizing transactions as legally enforcable if they can't know where the money's coming from or where it's going for about 15 years now.

Three of the letters indicate concerns about the insecurity of the uninsured Winkelvoss trust. They're probably right.

Centralized Bitcoin security effectively amounts to preying that you never get hacked because if you do -- there is still no way to limit what can be done with your private keys (and this is true regardless of whether the key is stored inside a hardware module or not.) The document here correctly notes that their security model amounts to little more than security through obscurity and further points out that their multi-sig signing is still at risk of collusion, mishandling of keys, blackmail, theft, and any number of unforeseen things.

With no concrete way to prevent a hack and no insurance if one were to happen -- I can only see this ending badly -- and quite frankly, given how little thought they've put into security I'm quite alarmed. Effectively, everything they've put forward to protect these Bitcoins has been known to be inadequate since 2012. We've seen that multi-sig was introduced and it still didn't help. We've also seen that multi-sig and hardware modules haven't been enough to prevent every inside job, hack, or scam.

In my view the only concrete way to handle Bitcoins as an exchange is to extend Bitcoin to allow coins to be locked up into a special clearing phase. You would have it so that coins could be spent after N confirmations but before then they could be transfered to a fail-safe address. This isn't my idea but its a simplification of what Emin Gün Sirer proposed with his Bitcoin vault idea (though I did think of something similar in the past.)

Because honestly, you can never, ever rely on fully preventing these hacks as the basis for a solid security model. Hacks. Are. Going. To. Happen. Regardless of how many walls you decide to build. Thus, the only effective security model for doing high-risk crypto-finance is to do something that offers us a plan B when they do. And that's what Bitcoin vaults are for -- they allow us to cancel / revoke coins during a clearing phase without breaking Bitcoins irrevocable nature (since you only treat coins as final after +6~ confirmations after the clearing phase.)

The simple truth of the matter is -- Bitcoin in its current form is inadequate for services like centralized exchanges (as evidence by numerous hacks) and the only reason why people continue to do business under this scenario is for opportunistic profit. If any of these companies really gave a shit about security there is absolutely no way they would continue to run a financial service with NO WAY to cancel fraudulent transactions. I consider this a pretty basic corner-stone of modern banking and as long as it can't be done in Bitcoin, EVERY wallet, Bitcoin exchange, and store that's handling Bitcoins is just waiting to be fucked.

> We've seen that multi-sig was introduced and it still didn't help.

Only because nobody actually uses it, I think? Or have I missed out on something in the Bitcoin community since I left it?

Well, Bitfinex used it, but in a very stupid way.

How much coke was used to write this? O_o

I read the Bitcoin subs on Reddit and occasionally contemplate a Buzzfeed quiz: "Can you match the Reddit comment to the darknet research chemical it was written on?"

This is probably my favourite. Yeah, people who just want to buy drugs are definitely going to follow eleven screens of directions in detail: https://np.reddit.com/r/AlphaBay/comments/3t9e79/a_full_mult...

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