The Story that Opened a Can of Worms: A Critical Analysis

Perhaps Newsweek is now longing for a publisher’s edition of Mark Cuban’s new Cyber Dust tool to make it all

Perhaps Newsweek is now longing for a publisher’s edition of Mark Cuban’s new Cyber Dust tool to make it all go away. But once something gets on the web, it’s not coming out- which is precisely the point that the Nakamoto family and members of Bitcoin community have been up in arms about in their concerns for privacy.

For its part, Newsweek stood up for its writer defiantly. In its response, the magazine did little by way of providing facts, or at least a reference to them, that befit their assertion of “Mr. Nakamoto’s role in the founding of Bitcoin”. The response instead emphasized Newsweek’s rich history:

Join the iFX EXPO Asia and discover your gateway to the Asian Markets

“Ms. Goodman’s research was conducted under the same high editorial and ethical standards that have guided Newsweek for more than 80 years. Newsweek stands strongly behind Ms. Goodman and her article. Ms. Goodman’s reporting was motivated by a search for the truth surrounding a major business story, absent any other agenda. The facts as reported point toward Mr. Nakamoto’s role in the founding of Bitcoin.”

It also attacked the less than scholarly reactions but did not address those that were legitimate:

“At the same time, Newsweek encourages fellow members of the press and the public at large to focus on analysis of the facts at hand rather than rush to assumptions or resort to emotion.”

There was no remorse or regret expressed for the revelation of private details the Nakamoto family did not want disseminated.

Getting to Know Bitcoin

In hindsight, and especially after hearing Leah McGrath Goodman’s response, it becomes apparent that nothing close to the overwhelming backlash and negative fallout were expected. In her response, Goodman said she envisioned the story to stimulate a lot of discussion and not be interpreted “as an act of war on Bitcoin on Satoshi Nakamoto himself”. On a basic level, this is intuitive. One can easily imagine as follows: story comes onto reddit, a flurry of activity ensues with passionate Bitcoiners advancing Newsweek’s research, uncovering new details which they seem to be so good at, and Newsweek’s story serving as the epicenter of a spirited, congenial debate.

Leah McGrath Goodman's Response

It backfired on several fronts.

Firstly, the Bitcoin community is composed of a wide array of clientele, the extremities of which are unlikely to take well to a story of this kind. At one end, you’ll have the zealots, incredibly defensive of their cause and hostile to any element threatening it. Perhaps they were anticipated beforehand, with the expectation of their relegation as a fringe to the sidelines. This is not the case though in the libertarian world of Bitcoin, where with some notable exceptions, scholar and zealot share the podium equally.

At the other end, the scholars. The keeners who don’t let anything slip under the table. They were not as greatly anticipated. And they came out firing on all fronts. For them and those in between, skepticism is the order of the day. Proof of work is mandatory for anything to be accepted as truth, and this was largely absent as explained further on.

Gavin Andresen, chief scientist at the Bitcoin foundation, said in an open letter that he regretted talking to Leah.

Suggested articles

The Participants in Forex Trading and their Role in the MarketGo to article >>

Proof of stake may have been lacking as well. A common challenge encountered by any journalist is acquiring the subject matter knowledge for what they’re writing about. For Bitcoin, this isn’t trivial. To her credit, Goodman made good on this front for the most part. Even so, there were gaps:

“Even so, Bitcoin is vulnerable to massive theft, fraud and scandal, which has seen the price of Bitcoins whipsaw from more than $1,200 each last year to as little as $130 in late February.”

Missing here is the key point that these were MtGox prices, which no longer exist. On Bitstamp, in contrast, the range is $380-1160. While still pretty wild, the reader is nonetheless entitled to this bit of critical information and the writer should be aware of the difference, at least on an elementary level.

The Core Claim

The article loses convincibility as soon as it makes the following transition:

Tacitly acknowledging his role in the Bitcoin project, he looks down, staring at the pavement and categorically refuses to answer questions.

“I am no longer involved in that and I cannot discuss it,” he says, dismissing all further queries with a swat of his left hand. “It’s been turned over to other people. They are in charge of it now. I no longer have any connection.”

Nakamoto refused to say any more, and the police made it clear our conversation was over.

But a two-month investigation and interviews….

While probable that he is referring to Bitcoin, it would be far more newsworthy had it occurred in the context of explicit conversation on the topic. This, combined with the man’s quirkiness and behavior with AP, render such a claim as borderline spurious for journalistic standards. Nowhere else in the story is hard evidence supplied, although very good indications are reported. They certainly don’t justify such a definite headline or opening paragraph:

“Satoshi Nakamoto stands at the end of his sunbaked driveway looking timorous. And annoyed.”

It would have been better to simply brand the article as a question or potential discovery rather than so confidently writing off the issue as a foregone conclusion.

One would do well to read Felix Salmon’s critique on Reuters’ blog.

We still don’t know if Newsweek indeed uncovered Satoshi’s identity. Perhaps they did. Perhaps all the pieces will fall into place over the coming months, with elements of Dorian Satoshi’s satirical Twitter account not being too far off. Mainstream media will from then on hail Newsweek for the discovery. For now, Newsweek is no longer expecting the glory they were hoping for prior to the story’s publication, and will probably be relieved if it falls off headlines sooner than later.

Got a news tip? Let Us Know