Bitcoin exchanges by volume
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Since its creation in , bitcoin has become widely available, as demonstrated by the launch, above, of a bitcoin vending machine at a pub in Singapore in February Filed March 2, , A computer scientist and an online gambling fugitive have joined forces in a land grab for intellectual property related to bitcoin and blockchain.
Craig Wright, the Australian computer scientist who made the Satoshi claim, has the backing of Calvin Ayre, a wealthy Canadian entrepreneur, according to people close to Wright and documents reviewed by Reuters. Ayre has been indicted in the United States on charges of running online gambling operations that are illegal in many U.
The patents range from the storage of medical documents to WiFi security, and reflect Wright's deep knowledge of how bitcoin and blockchain work. Their total compares with 63 blockchain-related patents filed globally last year and 27 so far this year by multinationals from credit card companies to chipmakers, according to Thomson Innovation.
Neither Wright nor Ayre would comment for this story on their business relationship, details of which are revealed here for the first time, or their goals. But their interest in bitcoin and blockchain highlights two key trends. First, an increasing number of entrepreneurs believe blockchain, which can circumvent the need for big financial intermediaries, will challenge traditional payment systems.
Various banks are investing large sums to explore how blockchain could revolutionise payment systems and cut costs. Bitcoin involves sending payments directly, securely and potentially anonymously between two people's digital wallets, whereas all mainstream transactions, including those using intermediaries like Paypal and credit card lenders, run through banks and usually require named accounts and verification.
Second, blockchain has the potential to defy authorities trying to enforce borders and national regulations — and it already does so in areas such as online gambling. In internet chatrooms some online gamblers say that using bitcoin enables them to disguise their identity and transactions.
The confidentiality conveyed by the currency is one source of its popularity. Bitcoin hit a record high this week, partly because of speculation that the first bitcoin exchange-traded fund is set to receive U.
Early bitcoin code, seen by Reuters and analysed by a computer coding consultant with no ties to Wright or any blockchain-related project, contains unimplemented functions related to poker. It remains unclear whether he is Satoshi Nakamoto or not, and even whether Satoshi is one person or a group of people. Whatever Wright's original role, he has suggested bitcoin could have widespread applications. In a paper from November , also reviewed by Reuters, he wrote: The paper is unpublished, but it gives an insight into the global scope of his plans for the technology.
While it's far from clear the two will be successful in their patent applications, bitcoin and patent experts say Wright's project represents the single largest filing of bitcoin-related intellectual property they've seen.
Ayre lives in Antigua, and EITC Holdings is headed by associates of Ayre, according to one source close to Wright and one with direct knowledge of his business, as well as corporate documents reviewed by Reuters. It isn't clear if he's still associated with the company. The documents do not disclose the shareholders of the company.
Neither man responded to requests for comment. Sources familiar with the company said they had gone to some lengths to avoid their roles in EITC being discovered. The range of patent applications lodged by Wright and colleagues is wide. Five, registered on Dec. One, registered on Dec.
Other applications by Wright and his associates relate to sports betting and a blockchain-based operating system for simple electronic devices. About 70 banks and Thomson Reuters have joined a company called R3, which is examining whether blockchain could cut costs in the way financial markets execute transactions.
A spokesperson for R3 did not respond to requests for comment. Whoever wins this intellectual property race, the rush to patent applications poses a threat to the original conception of bitcoin as a technology available to all. In Wright told the ATO that he had been producing software for online casinos and other gambling businesses when he was writing computer code that later helped to develop bitcoin. Wright is clad in a waistcoat and tie, fielding questions about his complex businesses and claims for tax breaks.
At one point he is quizzed about his work for Bodog, the online gambling network set up by Ayre. A person close to Wright told Reuters that Wright began working for Bodog in Ayre had set up Bodog in the s. Ayre chose to base his gambling business in Costa Rica. But much of its revenue came from players in the United States, where online gambling was and is illegal in many states.
In February , the U. They were also indicted for moving funds from overseas to pay winnings to gamblers in the United States. He worked on computer code with an American cybersecurity consultant named David Kleiman, and by the pair had amassed 1. Their activities were described by Wright in his interviews with the ATO, of which Reuters has reviewed the transcripts.
Kleiman died in Wright lost money when an online currency exchange ran into difficulties, according to documents reviewed by Reuters. Wright left Australia and relocated his business ventures to Britain. In , associates of Ayre began setting up companies which are now involved with Wright and bitcoin and blockchain. According to the person with direct knowledge of the patent filings, Wright now works for The Workshop Technologies and MacGregor is his boss.
The Workshop Technologies did not respond to requests for comment. However, when the cameras rolled, Wright failed to convince experts he really was Satoshi - and the bitcoin world dismissed him as a crank. The publicity misfire led people with knowledge of Wright to speculate at the time that he would stop making bitcoin and blockchain patent applications.
Wright did drop from public view. According to an overview document and presentation slides reviewed by Reuters, in Wright planned to propose to the Antigua government that the island adopt bitcoin as its official currency.
It is unclear which government department Wright approached, or indeed whether he made the proposal as planned. Requests for comment from three ministries in the Antiguan government produced no response. Toggle navigation Bitcoin bet. Chris Inton and Ciaran Hughes Design: Other Reuters investigations and long-form narratives.