[148239] in cryptography@c2.net mail archive
[Cryptography] Study Suggests Link Between Dread Pirate Roberts and
daemon@ATHENA.MIT.EDU (Robert Hettinga)
Sun Nov 24 15:23:18 2013
X-Original-To: cryptography@metzdowd.com
From: Robert Hettinga <hettinga@gmail.com>
Date: Sun, 24 Nov 2013 16:19:10 -0400
To: Cryptography List <cryptography@metzdowd.com>
Errors-To: cryptography-bounces+crypto.discuss=bloom-picayune.mit.edu@metzdowd.com
Looks like Adi Shamir &Co have been having a little fun=85
Cheers,
RAH
----------
http://bits.blogs.nytimes.com/2013/11/23/study-suggests-link-between-dread-=
pirate-roberts-and-satoshi-nakamoto/?_r=3D1
Study Suggests Link Between Dread Pirate Roberts and Satoshi Nakamoto
Two Israeli computer scientists say they may have uncovered a puzzling fina=
ncial link between Ross William Ulbricht, the recently arrested operator of=
the Internet black market known as the Silk Road, and the secretive invent=
or of bitcoin, the anonymous online currency, used to make Silk Road purcha=
ses.
Dorit Ron, a computer scientist at the Weizmann Institute, and Adi Shamir, =
a pioneering cryptographer who is a member of the applied mathematics facul=
ty at the Institute, will publish a paper Sunday exploring how the 29-year-=
old Mr. Ulbricht, who was arrested by the Federal Bureau of Investigation i=
n October and has been charged with a murder-for-hire scheme and narcotics-=
trafficking, acquired and protected the estimated millions he made in commi=
ssions operating Silk Road. The researchers say Silk Road, at the time of M=
r. Ulbricht=92s arrest, had sales of $1.2 billion, generating $80 million i=
n commissions. A huge run-up in the value of bitcoin in the last month has =
exponentially increased those amounts.
However, the researchers added, they believe the F.B.I. has seized only abo=
ut 22 percent of the commissions they have identified, and that they themse=
lves have only been able to trace about a third of the total.
The Silk Road site, which has been called an =93eBay for drugs=94 was inten=
ded to permit any kind of anonymous transaction between buyers and sellers =
of illegal goods or activities. It was shut down when the F.B.I. arrested M=
r. Ulbricht, who used the Internet identity =93Dread Pirate Roberts,=94 whi=
le he was sitting in a public library in San Francisco near his home.
The two scientists have been exploring the web of financial transactions pr=
oduced by bitcoin, the anonymous currency that has drawn the attention of b=
oth law enforcement and federal regulators in recent months. Their research=
is made possible by the fact that while bitcoin is designed to protect the=
anonymity of buyers and sellers, the actual transactions are public. Earli=
er this year, the researchers obtained a complete listing of all bitcoin tr=
ansactions and have since been exploring the =93graph=94 of those interacti=
ons in an attempt to gain statistical insights into user behavior in the an=
onymous financial market.
After Mr. Ulbricht was arrested last month, the scientists used public info=
rmation to begin tracing Silk Road-related transactions. Among their discov=
eries was a particular transfer to an account controlled by Mr. Ulbricht fr=
om another that had been created in January 2009, during the very earliest =
days of the bitcoin network, which was set up the previous year.
Although the authors state that they cannot prove that that account belongs=
to the person who created the bitcoin currency, it is widely believed that=
the first accounts belong to a person who identifies himself as =93Satoshi=
Nakamoto,=94 but who has remained anonymous and has not been publicly hear=
d from since 2010.
Individual bitcoin is generated using a cryptographic algorithm that requir=
es computer-processing power and that insures that each coin remains unique=
and cannot be copied.
After seizing Mr. Ulbricht=92s computer, the F.B.I. spent several weeks ana=
lyzing data, determining that the laptop contained a digital wallet with 14=
4,336 bitcoin, currently valued at more than $122 million, which the agency=
has attempted to freeze.
In tracing various transactions made to and from Mr. Ulbricht=92s account, =
the authors found an intriguing one involving the transfer of 1,000 bitcoin=
, which would have been worth $60,000 when it was made on March 20 of this =
year, but is now worth roughly $847,000.
They write: =93Such 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 addit=
ional merchandise). It could represent either large-scale activity on Silk =
Road, or some form of investment or partnership, but this is pure speculati=
on.=94
The mysterious account that made the investment had at one point accumulate=
d 77,600 bitcoin, mostly through =93mining=94 operations, an amount which w=
ould now be worth approximately $64 million.
=93The short path we found suggests (but does not prove) the existence of a=
surprising link between the two mysterious figures of the bitcoin communit=
y, Satoshi Nakamoto and DPR,=94 the authors write, referring to Mr. Ulbrich=
t as the Dread Pirate Roberts.
In addition to the curious transaction, which they say they cannot explain,=
the authors said they discovered that much of the bitcoin accumulated by M=
r. Ulbricht has remained beyond the F.B.I.=92s grasp.
The scientists note that, for technical reasons, seizing and controlling bi=
tcoin from a computer is a much greater challenge for law enforcement than =
illicitly obtained cash stored in a safe. With bitcoin, its very design may=
make it possible for its support community to move to thwart law enforceme=
nt or any resale of the digital tokens.
In addition, the scientists speculated that the reason the F.B.I. had not r=
ecovered all Mr. Ulbricht=92s bitcoin might be that he was using a second c=
omputer that has not been located.
Dr. Ron and Dr. Shamir noted that despite the fact that the F.B.I. closed t=
he original Silk Road black market, a second =93Silk Road anonymous market=
=94 has been created since.
Satoshi Nakamoto=92s actual identity remains a hotly debated topic among In=
ternet researchers. A number of individuals claim to have discovered his tr=
ue identity, but those assertions have either been denied or ignored by tho=
se named.
The F.B.I. did not immediately respond to a request for comment.
=97=97
"... however it may deserve respect for its usefulness and antiquity,
[predicting the end of the world] has not been found agreeable to
experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'
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