Why we should worry about the BBC and bitcoin

Of all the technology stories which are bimbling about in the press, the saga of Satoshi Nakamoto and the bitcoin is one of the least interesting to me. But it has just gained much greater importance for the insight it provides into the major news media.

All currencies are to a degree illusory and virtual, but none more so than the bitcoin. Conjured out of thin mathematics, it emerged in software first released in 2009 by a pseudonymous fraudster calling themselves Satoshi Nakamoto. I use the word fraudster because that individual (or group) has in the process magicked themselves what at current exchange rates is almost half a billion dollars, from nothing.

There are, sadly, a lot of people who are too clever to have any common sense. Regular banks, national banks, and reserve banks are close enough to money-making illusions, but at least they have, to some degree, assets and reserves with some sort of grounding in the physical world. Several sensible people and organisations have claimed that the bitcoin is a Ponzi scheme of fraud, although perhaps the best summary is that by Eric Posner, a law professor at the University of Chicago:
A real Ponzi scheme takes fraud; bitcoin, by contrast, seems more like a collective delusion.

If you are really that interested, the Wikipedia article makes valuable reading.

Repeated intense press coverage of such a collective delusion would be bad enough, but it gets worse. There has been sustained speculation as to who Satoshi Nakamoto really is; again, Wikipedia is worth browsing. A couple of years ago, Newsweek magazine thought it had a real scoop when it tried to identify Dorian Prentice Satoshi Nakamoto, a Japanese American living in California, as the inventor of the bitcoin. It all turned out to be a misunderstanding.

Yes, a major international news magazine had published a high-profile ‘scoop’ story on the strength of a misunderstanding during “a brief in-person interview”. Technical investigative journalism had turned out to be as substantial as the bitcoin itself.

Then in December 2015, Wired claimed that an Australian, Craig Steven Wright, was a candidate for Satoshi Nakamoto – although at least they had to admit that he might just be “a brilliant hoaxer”. Yet Wired, which I believe still employs people with a job role of journalist, felt it was too difficult to actually determine whether he was hoaxing us all, and just published.

Gizmodo published a similar story based on ‘evidence’ obtained by a hacker who claimed to have broken into Wright’s emails – the sort of grossly illegal act that good journalists have recently been attacking bad journalists and newspapers over – think phone hacking, for example.

Not content to let pass a story so fishy that you could feed your cat on it, and following Craig Wright’s claim on his blog that he is Satoshi Nakamoto, journalists (that word again) from the BBC, The Economist, and GQ magazine apparently met with Craig Wright, were convinced by a ‘demonstration’ that he did for them, and published the claim that Craig Wright is Satoshi Nakamoto.

If you look at the foot of that BBC story – I use the word advisedly – you will see the BBC admitting that it initially published it under the headline of Bitcoin creator reveals his identity. Which may as well have been: BBC News reveals its failure to exercise due diligence in reporting a story which it must have known would be a highly technical minefield.

There followed a series of careful technical examinations of what had convinced the journalists to write “Mr Wright has provided technical proof to back up his claim using coins known to be owned by Bitcoin’s creator.” Inevitably it turned out that there were several good grounds for rejecting Wright’s “technical proof” and suspecting that this might just be another elaborate hoax.

Then Craig Wright’s claim started to fall apart even more visibly. It came to an end when, after promising “extraordinary proof” of his claim, he then chickened out, saying that he was “not strong enough” to do so.

It is hard to know whose reputation has taken the greater knock: Craig Wright’s, variously described as a “former academic” or an “entrepreneur”, or BBC News, The Economist and GQ magazine. I fear that we may have coined a new oxymoron of ‘investigative journalism’.