Bitcoin Users Collect Apology Fund, Discover Transfer of Mt. Gox Fortune

Bitcoin

 The misled release of the “real” identity of legendary Satoshi Nakamoto was big news for a small community. Though many would appreciate the Bitcoin founder remaining a mystery for practical reasons, they all looked into the article about Dorian Nakamoto, a man unfortunate enough to be surrounded in circumstantial evidence. The group of Internet users followed the two main events of the story, the first being the published claim that Satoshi had been found, and the following statements from both Dorian and Satoshi that the article was false and Dorian had nothing to do with Bitcoin, plus the supporting evidence. As of Friday, it was old news being frequently retold. The Bitcoin community on the No. 2 rated news website, Reddit, has been unraveling one huge story while also being active in a sweet gesture of the community banding together. They remained focused and Bitcoin users of Reddit began collecting an apology fund for Dorian, and discovered a fortune tied to Mt. Gox undergoing mysterious transfers.

Ultimately, they view Satoshi Nakamoto with great respect. So much so one user, in a discussion about Nakamoto’s post to a Bitcoin thread, remarked, “It’s like Jesus himself posted on [a Catholic forum.]” They are also knowledgeable enough to realize Bitcoin is open source, public for anyone to view, and has many people contributing to the code, which means the creator’s identity is at best irrelevant , but finding out the identity could lead to many negative outcomes and tarnish the currency’s growing acceptance. Satoshi Nakamoto himself is indeed highly important, as he owns nearly $400 million worth in Bitcoins. Because he does not use these, they act to stabilize the currency. That does not mean that who he is as a person or what his hobbies are is important.

Still, they all had to watch the drama unfold as Dorian Nakamoto endured a stalking media presence, and the confusing week he had after the article “revealing” him was published. Astounded by his negative exposure to Bitcoin, one user, Andreas M. Antonopoulos, user name andreasm, created an apology fund that could help with his numerous medical bills and any legal fees his family may face in coming days.

“Most of all,” andreasm writes, “it serves to soften the damage caused by irresponsible journalism and to demonstrate the generosity and empathy of the community, which I know is huge.” The community has lived up to those expectations. When the announcement first came, everyone was thrilled and eager to keep the money rolling in. As of Sunday, the fund has collected 43.679 Bitcoins from 1,798 separate donations. With the current exchange rate of one Bitcoin equaling $637.7 that converts to $27,850 to be given to Dorian Nakamoto and his family. The apology fund was underway and the users were calming down about the dramatic news story right when several people discovered that the Mt. Gox fortune was being transferred.

Since word first got out, they have been documenting the sudden movement of 180,000 Bitcoins, or $114,600,000, and the code address was linked to Mt. Gox, the now bankrupt exchange. The story broke Friday, and many people were online analyzing and discussing the news. It is not hard to sort out the pessimists from the optimists, as two opposing theories formed quickly. The 180,000 Bitcoins are being divided with a random 60/40 split and when mapped out creates a binary tree. This could be Mt. Gox preparing to redistribute the wealth back to investors’ wallets by dividing it into the specific amounts they lost. Coins might be getting arranged into addresses so owners can withdraw them, and this would be the final step of this process, if the optimists are correct.

However, the pessimists are not shy at pointing out loose ends, and most are pointing fingers at Mt. Gox CEO Mark Karpeles. When the exchange reported the 850,000 missing coins, Karpeles claimed that they had been stolen while in cold storage. Referring to this claim as a fairy tale, user Karl-Friedrich_Lenz expressed doubt about the secrecy surrounding the CEO’s statements. After all, he reminded the forum, none of the investors were told which wallets the coins belonged in as very limited information was disclosed.

One user rejoiced that it is Mt. Gox’s code for splitting, therefore it must be their wallets coming back online. But it is not so easy, several people explained. The splitting code is public, so anyone could have used it. The money does trace back to Mt. Gox, but it could be anyone who has access, namely Karpeles, moving the funds around. The only reason for an individual to operate this splitting function is to run it long enough that each branch is no longer worth tracing. If it runs for long enough there could be 360,000 wallets soon, each storing fractions of coins. Each would still be worth plenty of money, but not worth the effort and nothing compared to the $114,000,000.

What the community is watching for now is the next step the money undergoes, which will likely determine the motives. If it is one person moving the funds around for their own gain, the next move is likely to be sending the split amounts through a tumbler to mix multiple transactions so nothing is direct enough to remain traceable. It has since quieted down, but they are keeping a look out and are focusing on supporting those that suffered losses. The Bitcoin apology fund is still open and taking donations while the recent discovery of the transfer of Mt. Gox linked fortune is still a mystery.

By Whitney Hudson

Sources:

Reddit

Reddit

Reddit

BitcoinLayman

Reddit

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