Everything makes sense if David Kleiman was Satoshi Nakamoto. Here’s why

Dave Kleiman

There is so much about Craig Wright’s claim to be Satoshi Nakamoto that does not add up.

It all started back in December when he was ‘outed’. The problem is all the evidence back then pointed to an elaborate fraud, orchestrated by Wright himself.

Why would Craig Wright want people to believe he is Satoshi Nakamoto? Well, he’s under investigation from the Australian Tax authorities who gave his company a $54m tax refund for spending on R&D, spending it looks possible was never was actually spent, since the manufacturer denied ever selling the supercomputer this research was supposed to be carried out on. If he could persuade them he was Satoshi Nakamoto it would certainly help him convince them of his legitimacy, and make it easier to attract additional investment. The motive here is obvious.

David Kleiman was an expert in Computer security. He was paralyzed from the chest down after a motorcycle accident in 1995 and became a reclusive computer forensics obsessive. In late 2010 he was hospitalised where he would remain until discharging himself a few months before his death from MRSA complications in April 2013. He died broke and in squalor.

In December 2015, following the ‘leaked’ documents, Gizomodo ran with the headline “This Australian Says He and His Dead Friend Invented Bitcoin”, and Wired said:

Another leaked email from Wright to computer forensics analyst David Kleiman, a close friend and confidant, just before bitcoin’s January 2009 launch discusses a paper they’d been working on together.

From the leaked documents, it seems the tone was that Kleiman and Wright worked on Bitcoin together.

Fast forward to the BBC interview and Wright says that while there were others involved, he [Wright] “was the main part of it”.

If the leak was the result of a genuine hack on Wright, then the documents that were leaked should be considered more accurate than anything Wright is saying now, since everything he is saying now he will be shaped to serve his own self interest.

If the leak was made by Wright, as seems likely, perhaps the change of tone reflects a change in strategy. Maybe ‘sharing’ credit for somebody else’s work feels more acceptable, but you get to a certain point where you’ve sunk so deep into the deceit and you might as well go all the way.

It gets even more interesting, according to the Gizmodo article Wright made contact with some of Kleiman’s business partners in February 2014 to inform them they’d been working on a project together and that Kleiman had mined an enormous amount of Bitcoins, and he requested they check his old computers for wallet files.

Kleiman’s business partner, Patrick Paige, called to ask for more information and was told by Wright that Kleiman was the creator of Bitcoin, before he later backpedaled and said Bitcoin was invented by a group of people which included Kleiman.

At around this same time, on Feb 12th 2014, Kleiman’s then 92 year old father commented on a Techcrunch article about Bitcoin with the message “Please send information pertaining to David Kleiman’s participation in the development of Bitcoin”. Perhaps this was related to something Kleiman had told his father while still alive, or details of Wright’s phone call being passed on by Paige.

There is good reason to believe Kleiman and Wright knew each other well. Wright posted an emotional tribute to Kleiman on YouTube (since removed) upon learning of his death. It is entirely possible that Wright was a trusted friend and confidante of Kleiman’s, and this might have given him access to information that ‘only Satoshi could have known’ that would have been useful when Craig Wright convinced Gavin Andresen of his legitimacy.

What does not make any sense, if Wright is Satoshi, is for him to create a trust to prevent himself being able to access his own Bitcoins until 2020 – and leave this in the trust of a man in Florida.

Such a trust is detailed in the December 2015 leak and includes bizarre stipulations including that if Wright dies, all the Bitcoins would transfer to his wife, minus a deduction to show the “lies and fraud perpetrated by Adam Westwood of the Australian Tax Office against Dr Wright”. It would be interesting to know when the Australian Tax Office began their investigation. The trust is dated 9th June 2011, and values 1.1 million Bitcoins at $100,000 at a time when their actual value was closer to $30 million. The document is just odd and full of inconsistencies.

What seems more likely is that Kleiman possessed the Bitcoins, and Wright is trying to create a retrospective paper trail to enable him to make a legal claim for ownership of them in the event they ever become accessible. Perhaps Kleiman had made provisions that would enable his family to recover his Bitcoins at some future point in the event of his death, and that he had disclosed details of this to Wright.

Everything makes a lot more sense if David Kleiman was Satoshi Nakamoto and confided in Craig Wright. It explains why Wright would possess enough information to convince some people of his authenticity, but has been unable to provide any verifiable proof that he has access to any of Satoshi’s private keys. Craig Wright has gone to an extraordinary level of effort to convince people he is Satoshi Nakamoto. Given that 1.1 million Bitcoins are currently worth around $500m – it’s not hard to imagine why.

If Craig Wright is Satoshi Nakamoto he could easily verify it cryptographically. The fact he has gone to such lengths without providing this proof suggests he simply doesn’t have it. What’s most likely to happen next? Well, if he’s been involved in Bitcoin since the early days he probably has some early coins – so he’ll probably move them as ‘proof’. Not early enough to be linked to Satoshi, but early enough for him to claim they are and make the circus drag on a little longer.

I believe the fact that he has gone to such lengths to link himself to 1.1 million Bitcoins held by Kleiman suggests he genuinely believes David Kleiman possessed that number of Bitcoins, and that he has a chance of being able to claim them for himself. This adds support to the idea that Kleiman, and possibly the also deceased Hal Finney, really were Satoshi Nakamoto.

It is also notable that Kleiman was hospitalised in late 2010. Gavin Andresen became lead developer of Bitcoin in December 2010 and Satoshi then disappeared.

Whatever is happening is fascinating, it’s a plot worthy of Hollywood. Sadly, this is the real world, and I can’t help but feel sadness for the family of David Kleiman who are possibly about to encounter tremendous invasions of their privacy as a consequence of Craig Wright’s actions.

Keiman was a security expert who practised what he preached. All his data was no doubt encrypted and any evidence of his being Satoshi likely died with him. It is possible this mystery will never be solved.

It is also possible that David Kleiman had nothing to do with Bitcoin at all.

I just know that if he was Satoshi, he seemed a modest man who died a pauper while likely sitting on a trove of millions and avoiding the abundance of recognition he deserved. Craig Wright on the other hand is an egotist who fakes having PhDs and drags out a bizarre media circus to reveal himself as Satoshi without providing simple evidence.

John Hardy
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John Hardy

Software developer living in Bristol, UK.
Bitcoin advocate since 2011.
Email [email protected]
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John Hardy
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Author: John Hardy

Software developer living in Bristol, UK. Bitcoin advocate since 2011. Email [email protected] Donations welcome: 1H2zNWjxkaVeeE3yX6uVqng5Qoi6gGvYTE

  • venzen

    Great read. Interesting idea and plausible scenario.

  • ebliever

    This is a great read, but more investigation should be done. Not mentioned here is that past analysis of the timing of Satoshi’s communications suggests he slept typically in the midnight-6 AM timeframe, Eastern Standard Time (US). Of course that doesn’t prove he lived in that time zone, but the further away you get the less likely we have a match (and someone in Australia would have to be a night shift worker to explain this pattern!)
    On the flip side, Satoshi was noted for using ‘British’ spelling of some words. Is there anything in Kleinman’s background, or examples of his writing, to corroborate or explain that?

    • http://mause.me Dominic May

      By British spelling, do mean “Favour” vs “Favor” and the like?

      • http://gamesfitness.com Jake Bedard

        No he called it Ye Olde Bitcoin.

      • Crypto HB

        He used the word “bloody”.

    • TheJeebus

      Craig Wright is an Aussie, and they use British spelling. However, I still don’t think he’s Satoshi.

  • http://www.bitcoinfundme.com/current-campaigns/help-bring-coinfest-2016-to-the-tampa-bay-area/ Barb H.

    Here is a paper David Kleiman and Craig Wright coauthored in 2008: http://link.springer.com/chapter/10.1007/978-3-540-89862-7_21#page-1

  • digitaurus

    Thank you for the article. I agree that this scenario is the most likely given what we know at the moment. Wright obviously does not expect the real Satoshi to contradict him. This requires that Wright knows Satoshi’s identity and that Wright knows that Satoshi is dead. Ian Grigg has claimed/confirmed that both Wright and Kleiman were members of the original bitcoin team (http://financialcryptography.com/mt/archives/001593.html). However, it also looks like Wright doesn’t have access to either the Satoshi bitcoin stash or the Satoshi private keys. So, bottom line is that Wright is not a fraud in that he was a core member of the original team but that he doesn’t have (most of) the stash or the private keys.

    • venzen

      sensible deduction

  • sam16

    Does there exist any publicly, or otherwise, available code written by David Keiman with which one can compare coding style?

  • http://motls.blogspot.com/ Luboš Motl

    Fine, even if that’s true and even if Wright hasn’t worked on the Bitcoin much, Wright as a naturally chosen close friend would be a natural heir. They had written papers together and done other things. Wright would be an honorary Kleiman in the same sense as the robot boy in Spielberg’s AI movie became an honorary human.

    • n3n5n1

      Every government has an established legal practice to handle property transfer in the event of individual’s death. No need to invent anything like “Wright as a naturally chosen close friend would be a natural heir”.

      • http://motls.blogspot.com/ Luboš Motl

        I am not proposing any change to any laws.

    • kshfno

      Why am I not surprised to see you pop-up here, Lubos? David Wright has a history of deceit and he has not provided any proof of having Satoshi’s keys when he easily could have. All you (and him) have is circumstantial evidence. I submit that you’re so blinded by him being a “climate skeptic” like you, that you can’t help but associate with him other good qualities.” You’re a moron dude.

      • http://motls.blogspot.com/ Luboš Motl

        It’s just silly. Most people I have praised in my life were “alarmists” even though some 50% of the people in the world are skeptics. It’s much more likely that the alarmists are imposing ideological filters such as this one. It’s not just about his opinion about the climate – which is not being discussed by the media at all. Wright is probably considered inconvenient by some people for many other reasons.

        As the article “Craig Wright ticks the right boxes for being the founder of Bitcoin: Dominic Frisby” (Google search) and others say, Wright just passes lots of tests. They were surely close enough to Kleiman. Even if Kleiman had been the top guy, Wright probably had some role. We will probably never learn the exact truth, ever, but the probability that the role of Wright will be understated is at least as high as the probability that it will be overstated.

        • kshfno

          Why do you put this in terms of alarmists vs non-alarmists? Your heuristics about people don’t work very well, you should know this by now.

          There is a very simple way that Satoshi that use to prove his identity. A lot of people pass a lot of tests but no one has yet passed the only test that matters.

          What is suspicious about Craig is that he keeps going on and on how no one is going to believe him when, if true, there’s something he could do that guarantees that 99% of the people that matter will believe him.

  • PimFortuyn

    Craig Wright fits better as the visionary behind Satoshi. Kleiman was probably the one running the mining the most. I believe that Wright has access to the private key for block #9 and was the one who made the transaction to Hal Finney, but Kleiman did the most of the mining and was sitting on the most of the bitcoins. It was most likely Wright who came up with the name Satoshi Nakamoto. This has also been stated by JVP: https://twitter.com/haq4good/status/727295380019277830

  • Mindaugas Jackūnas

    If Kleiman died in 2013, then who wrote “I am not Dorian” in 2014? (-;


  • centralbanksequalsbombs

    Thank you John Hardy, great post.

    If one observes the massive price spike of Bitcoin the month of David Kleiman’s death, April 2013, it leads to believe there may have been others involved with Bitcoin who may have known Satoshi to have died with his private keys of approximately 1 million bitcoins…a further reduction of bitcoin’s very limited supply.

    Craig Wright is out of the question but could’ve known David to be Satoshi as his attempts were know obvious to simply to profit/pay off his previous fraud/debts that he is fleeing from.