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Michael Hiltzik

Dorian Nakamoto's denial blows up Newsweek's bitcoin 'scoop'

It's still possible, very marginally, that Newsweek is correct in fingering Dorian S. Nakamoto as the mysterious inventor of bitcoin. But it's hard to imagine a more thorough and detailed denial than the one the 64-year-old Temple City man issued late Sunday through a Los Angeles lawyer. 

The unemployed computer engineer, whose full name is Dorian Satoshi Nakamoto, says he's not the "Satoshi Nakamoto" who wrote the seminal paper outlining a complex form of electronic cash several years ago. That Nakamoto has been widely assumed to be a pseudonym for person or persons unknown; it appears he, she, or they still are unknown.

Dorian Nakamoto says in his statement that he has never "worked on cryptography, peer-to-peer systems, or alternative currencies." He says he hasn't been employed steadily for 10 years but has been forced to find work as a laborer, poll taker and substitute teacher while battling severe health problems and living in a working-class neighborhood with his 93-year-old mother. The real Satoshi Nakamoto is thought to own a hoard of bitcoins worth as much as hundreds of millions of dollars.

Newsweek hasn't responded to Nakamoto's denial as of this writing. But one red flag we've pointed out about the original article by Leah McGrath Goodman is the wan defense of it the magazine published earlier, after its accuracy came under attack. Newsweek, which had published the article as the cover story for its relaunch in a print edition, didn't address the specific questions raised against the piece but instead cited its own 80-year tradition of "high editorial and ethical standards."

Two problems there: One, the current owners of Newsweek have no connection with the former owners during that 80-year stretch, and two, among the high points of that tradition of high standards was the old Newsweek's publication of the "Hitler diaries" in 1983 -- after they were shown to be frauds. 

Goodman's original article would have to be much stronger for it to hold up in the face of Nakamoto's challenge. Unfortunately, as many critics have observed, the article was shot through with holes. Goodman hung her story on inflated factoids that couldn't support the weight she placed on them. For example, she observed that the original bitcoin paper used double-spaces after periods, like a typist of Dorian's age -- except that the published paper was off-printed, not typescript.

Her two key pieces of evidence were, first, that Dorian's given name, Satoshi Nakamoto, was the same as the bitcoin inventor's pseudonym -- as though he was so intent on concealing his identity that he hid in plain sight -- and, second, that he appeared to acknowledge involvement in bitcoin during a hurried conversation with Goodman in his driveway, with two sheriff's deputies standing by. But even though the sheriff's department has confirmed that she quoted the conversation accurately, it's still unclear if Dorian Nakamoto understood her questions and therefore, knew what he was acknowledging. Felix Salmon's detailed demolition of Goodman's piece is here, and an even more thorough "annotation" of the article by several experts can be found on the NewsGenius site here.

Dorian Nakamoto conceivably could be involved today in an elaborate game of misdirection to preserve what's left of his anonymity. But he seems less and less to be the type of person who could have invented bitcoin. If, as now seems likely, Newsweek's flashy expose is a flop, the lesson to be learned is the one it should have learned from the Hitler diaries affair: Haste, as in this case trying to assemble a blockbuster on a tight deadline, breeds disaster. Or at least absurdity.

Reach me at @hiltzikm on Twitter, Facebook, Google+ or by email. MORE FROM MICHAEL HILTZIK

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