At its current price, 1.1 million bitcoin is worth a whopping $92 billion dollars. That’s how much is at stake in a protracted legal battle over the original Bitcoins, minted way back in 2009 and 2010.
The case between Ira Kleiman and Dr Craig Steven Wright goes right to the heart of cryptocurrency and the mysterious origins of Bitcoin. Ira is the sister of the late David Kleiman who she claims is the co-creator of Bitcoin.
Wright is a renowned Australian computer scientist who has claimed to be the man behind the pseudonym Satoshi Nakamoto, the legendary inventor of Bitcoin.
The three-week trial, which started on Wednesday, November 3 in Miami, Florida, is intended to show who is the true owner of the Bitcoins held in the digital wallet belonging to Nakamoto.
If you’re not too familiar with Bitcoin and the lore surrounding it, don’t worry, it’s a little complicated. Suffice to say that back in the day, someone called Satoshi Nakamoto created Bitcoin by inventing the blockchain technology that it runs on and encouraging others to run the software. Bitcoin is the reward for running the software which, in 2009, was virtually worthless.
Nakamoto and others ran the programme to start with, collecting Bitcoin as they went. As its popularity spread, others became interested and began gaining bitcoin too. It wasn’t until a few years later that the coins began to be spent in earnest and started acquiring real value.
Now, Bitcoin is worth more than $80,000. Those who got in on the ground floor have made millions for their efforts and none more so than Nakamoto, whose Bitcoin wallets currently hold more than 1.1 million coins.
The identity of Nakamoto has always been a mystery, with some claiming that the person was really a team of software developers, or a secret government programme, or this random guy who happened to have the same name. Others said that he was dead or in hiding but the main theory says that he never wanted to reveal himself and devalue the currency. Beginning as an algorithmic circumvention of the financial system, it doesn’t look great if your digital alternative to banks has you as the head.
For various legal reasons, Wright has had to reveal himself to protect his intellectual property but not everyone is convinced that he’s the guy. While some of the most prominent early adopters who conversed with Nakamoto back at the start are certain that Wright is him, most of the Bitcoin community either think he’s a fake or don’t care.
If Wright were Nakamoto, he could very easily prove it by sending a public message encoded in the first Bitcoin which he owns. Since he has declined to do this, and the funds have never moved, most are certain that he’s lying.
Still, others, like Ira Klieman, aren’t so sure. That’s why she’s taking Wright to court in an effort to claim half of those original Bitcoins on behalf of her brother’s estate. She alleges that her brother, who died in 2013, collaborated with Wright to develop Bitcoin, and is therefore entitled to up to half of the 1.1 million coins in the original wallet.
However, even if it can be proven that Wright had a business relationship with Klieman, it doesn’t necessarily prove that he is the creator of Bitcoin, or that he has access to those coins.
Still, crypto enthusiasts will be watching the case with interest, as any confirmation over the identity of the creator could tank the value of the currency. Showing that someone like Wright has access to those coins, and indeed could be forced to offload them in legal settlements, would send other holders scrambling to ditch theirs, sending the price plummeting.
Wright was cleared of all charges against him except for a single count of conversion – ie, theft. Wright was ruled the sole owner of the 1.1 million Bitcoin at the centre of the case however he was ordered to pay $100 million in intellectual property rights to the joint firm that both himself and Klieman established.
The Florida jury sitting in the civil trial returned the verdict on Monday after jurors took a full week to deliberate on the decision. The trial was filled with technical explanations over the nature of Bitcoin and the functioning of cryptocurrencies and at one point the jurors indicated to the judge that they had reached a deadlock.
The $100 million Wright now has to pay was claimed as “a tremendous victory” by his lawyers as it was far less than what the Kleiman estate was asking. “I have never been so relieved in my life,” Wright said in response. He said he won’t appeal the decision and says that the “victory” proves that he is the creator of Bitcoin.
“The jury has obviously found that I am because there would have been no award otherwise,” he said. “And I am.”
The announcement has done little however to persuade the vast majority of sceptics who still view Wright as a “charlatan” and a “fraud.”
In closing arguments to the jury, the Kleiman estate attorney said that Wright schemed and connived to “steal from his dead best friend with forgery and lies”.
The estate was hoping to secure $600 billion and punitive damages from Wright.
Wright has previously said that he plans to prove the coins are his and that he is the creator of Bitcoin if he wins the trial and, in a post-trial interview, he confirmed that he still intends to do the same.