2nd May, 2016
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.
Signed blocks
Mr Wright has revealed his identity to three media organisations – the BBC, the Economist and GQ.
At the meeting with the BBC, Mr Wright digitally signed messages using cryptographic keys created during the early days of Bitcoin’s development. The keys are inextricably linked to blocks of bitcoins known to have been created or “mined” by Satoshi Nakamoto.
“These are the blocks used to send 10 bitcoins to Hal Finney in January [2009] as the first bitcoin transaction,” said Mr Wright during his demonstration.
Renowned cryptographer Hal Finney was one of the engineers who helped turn Mr Wright’s ideas into the Bitcoin protocol, he said.
“I was the main part of it, but other people helped me,” he said.
Mr Wright said he planned to release information that would allow others to cryptographically verify that he is Satoshi Nakamoto.
Soon after Mr Wright went public, Gavin Andresen, chief scientist at the Bitcoin Foundation, published a blog backing his claim.
“I believe Craig Steven Wright is the person who invented Bitcoin,” he wrote.
Jon Matonis, an economist and one of the founding directors of the Bitcoin Foundation, said he was convinced that Mr Wright was who he claimed to be.
“During the London proof sessions, I had the opportunity to review the relevant data along three distinct lines: cryptographic, social, and technical,” he said.
“It is my firm belief that Craig Wright satisfies all three categories.”
How Bitcoin works
But it may be best to think of its units being virtual tokens rather than physical coins or notes.
However, like all currencies its value is determined by how much people are willing to exchange it for.
To process Bitcoin transactions, a procedure called “mining” must take place, which involves a computer solving a difficult mathematical problem with a 64-digit solution.
For each problem solved, one block of Bitcoins is processed. In addition the miner is rewarded with new Bitcoins.
This provides an incentive for people to provide computer processing power to solve the problems.
To compensate for the growing power of computer chips, the difficulty of the puzzles is adjusted to ensure a steady stream of new Bitcoins are produced each day.
Watch Craig Wright’s BBC interview here
There are currently about 15 million Bitcoins in existence.
To receive a Bitcoin, a user must have a Bitcoin address – a string of 27-34 letters and numbers – which acts as a kind of virtual post-box to and from which the Bitcoins are sent.
Since there is no registry of these addresses, people can use them to protect their anonymity when making a transaction.
These addresses are in turn stored in Bitcoin wallets, which are used to manage savings.
They operate like privately run bank accounts – with the proviso that if the data is lost, so are the Bitcoins owned.