Satoshi Nakamoto may have been an investor in Silk Road, according to a new research paper by two Israeli computer scientists.
The mysterious Bitcoin creator, or creators operating under a shared pseudonym, may have had a financial interest in drugs and vice bazaar Silk Road if the research of two Israeli computer scientists proves true.
On March 20 of this year 1,000 bitcoins were transferred to an account controlled by Silk Road proprietor Ross William Ulbricht, better known as Dread Pirate Roberts, from an account created on the eighth day of the Bitcoin network’s existence, according to a paper by Adi Shamir and Dorit Ron of the Weizmann Institute of Science. The widely held genesis story of Bitcoin holds that all early mining was all done by Satoshi Nakamoto, who accumulated nearly one million bitcoins (worth approximately $795 million in today’s dollars) by mining the first 20,000 blocks.
At the time they were created these bitcoins were worth approximately $60,000, but by today’s exchange rate they are worth closer to a million dollars. Before Ulbricht’s arrest in October, his Silk Road empire had accumulated $1.2 billion in sales and close to $80 million in commissions.
Read the paper here
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Shamir and Ron found this connection when researching the laundering of Ulbricht’s commissions from Silk Road. Earlier this year the duo had earlier obtained a listing of all Bitcoin transactions to date, and were working on mapping the network to attempt to determine relations between major Silk Road customers and the Bitcoin network at large. The research also included tracking the efforts of the FBI in recovering Ulbricht’s commissions — of which they have only seized approximately 22 percent.
“The short path we found suggests (but does not prove) the existence of a surprising link between the two mysterious figures of the Bitcoin community, Satoshi Nakamoto and DPR,” they wrote in the paper.
“Such a single large transfer does not represent the typical behavior of a buyer who opens an account on Silk Road in order to purchase some narcotics (such buyers are expected to make an initial deposit of tens or hundreds of dollars, and to top the account off whenever they buy additional merchandise),” they continue. “It could represent either large-scale activity on Silk Road, or some form of investment or partnership.”
Nakamoto hasn’t been heard from since 2010. Silk Road first opened its virtual doors in early 2011. As Nakamoto has always taken great steps to keep himself, or themselves anonymous, so it’s not likely that the 1,000 bitcoins were for a product order. Perhaps Nakamoto was planning on setting up some kind of investment fund with the massive cache of Bitcoins gathered from the early days of mining.
Ulbricht has not yet commented on any kind of relationship between Nakamoto and Silk Road. He is currently pre-trial confinement in a New York City jail, awaiting trial for murder-for-hire, narcotics trafficking and computer hacking charges.
Ulbricht was denied a bail request last week on the grounds that he had the “means to flee.”