keys

Bitcoin Silent Payments And Secret Blinding Keys

25/04/2022 by Idelto Editor

One issue with Bitcoin’s privacy, the ability to receive funds without giving up valuable information, is addressed with “silent payments.”

Bitcoin is one of the most pivotal breakthroughs in the entire digital age in terms of transferring value between one person and another. It does not require intermediaries. It is secured by a decentralized quorum of miners and validated by every participant on the network who chooses to in order to guarantee the validity of individual payments. The architecture of the system is designed to allow anyone from anywhere on the planet to receive money from anyone else regardless of where they are. Crowdfunding, charity, funding anything you want becomes instantly possible without needing anyone’s permission, without dealing with any gatekeepers, without any red tape. It’s a brilliant idea in theory, but in reality, it suffers from one massive shortcoming: privacy.

As a push based payment system (no one is allowed to “pull” payments from you, you have to explicitly authorize them yourself and “push” them to other people), Bitcoin requires the sender to have the information necessary to define the destination for money they send. This requires the recipient communicating to the sender their Bitcoin address in one way or another. In the case of trying to raise money from the general public, this has massive consequences in terms of privacy or needing to maintain a constant interactive presence online. Anyone is totally capable of simply posting a single Bitcoin address somewhere online, and from that point, anyone who wishes to send money to that person can simply do so, but there is no privacy in raising money in this way. Simply take that address and look it up on the blockchain, and you cannot only see how much money that person has been sent, but you can see the footprint on the blockchain of everyone who has sent them money. Both the person attempting to raise funds and everyone who has donated to them have no privacy whatsoever; everything is completely open and correlated for the whole world to see.

The only alternative to address reuse in the form of posting a single static address publicly requires running a server that remains online constantly so that people can request a new unused address every time someone new wants to donate money. While it might not seem like a problem to have something online all the time in the digital age, it does come at a cost and complexity, especially if someone is trying to run it themselves at home on their own hardware. And what about people who only have a mobile device? It is almost impossible these days, with current operating system features, to optimize battery use to keep something running in the background all day, and even if you can, it’s going to drain the battery.

BIP47

Enter BIP47 by Justus Ranvier. The purpose of this proposal is to enable a way for someone to be able to post enough information publicly to be able to receive funds from anyone who chooses to, without that public information being enough to (1) track how much money the person who posted it has received and (2) revealing to the pubic any information about who has sent funds to the person requesting them. The core idea is taking that publicly posted information (or payment code) and, from there, combine their own payment code to generate a new set of addresses the receiver can construct the private keys for. This new set of addresses is specific to the relationship between a single sender and the receiver, each time a new sender utilizes this protocol to send money to a receiver, it will generate a new set of addresses unique to the two of them.

At a high level, the general flow follows as such: The person who wants to receive money generates a new extended public key from their HD wallet in a new derivation path and publishes this publicly. This new public key functions as their “payment code.” From here, someone wanting to send them money will take this new payment code, and they have all the information necessary in order to generate new addresses to send money. The problem is though, the sender needs to communicate their own payment code information to the receiver, otherwise they will be unable to generate the private key needed to actually spend the funds sent to them. This requires a special “notification transaction.”

Say Alice wants to transact with Bob using payment codes. Alice selects a UTXO to send to Bob’s notification address, from here she takes the private key associated with this UTXO and the public key associated with Bob’s notification address. She multiplies them together to create a secret blinding key. With this, she can encrypt her payment code and encode them in an OP_RETURN output. This means that Bob, taking the private key to his notification address and the public key of Alice’s spent input, is the only person who can decrypt and read this information. This works because multiplying Alice’s private key with Bob’s public key produces the same value as multiplying Bob’s private key with Alice’s public key.

Alice and Bob can now derive a new set of addresses that only the two of them are aware of, and Alice can now send any amount of transactions to Bob using a new address each time without any external observer being aware of the linkage between them. There is a second variation where, instead of sending an output to Bob’s notification transaction, Alice creates a change output to herself using a 1-of-2 multisig where one key is her change address, and the second is Bob’s payment code identifier. A third variation uses a 1-of-3 multisig output to encode the necessary information in lieu of OP_RETURN. Other than that, things function the same.

The one shortcoming of BIP47 is the need to utilize blockspace to send a special transaction notifying a recipient they are going to be receiving money before actually spending it. This winds up being very inefficient for use cases where someone is only trying to send a single payment. There is also the risk of actively damaging privacy if the UTXO used for the notification transaction is connected to the UTXOs used to make payments to someone’s BIP47 addresses. Care must be taken to ensure isolation between these two things to not create correlations that could be tracked on chain and associate ownership of UTXOs resulting from different payments.

Silent Payments

Silent payments are Ruben Somsen’s latest idea. It effectively solves the same problem as BIP47 without needing a notification transaction with the trade-off of needing to scan more transactions to detect payments made to the recipient. The idea is abstractly pretty much the same: You publish a piece of public information, and from that, a sender is able to construct a new address that only the recipient will be able to reconstruct. The difference is in the implementation details.

The receiver posts a “silent” public key in some accessible location, and then the sender takes this and tweaks this public key using the private key of an input they are going to spend to make a payment to the receiver. This is done by multiplying the private key of the sender with the silent public key of the receiver and then adding that silent public key again. This results in a new address, which the receiver can recover by multiplying their private key with the sender input’s public key, and adding their silent public key. It’s that simple.

The big downside here is that support for light clients is very difficult, as the receiver has to scan every transaction in each block and compute the combinations of inputs tweaked to their key to see if it matches an output in a transaction. For a full node user, this isn’t an unbearable increase in validation costs, but for light wallets without their own full node this becomes very expensive. This could be optimized even further by simply scanning the UTXO set. Jonas Nick from Blockstream ran a benchmark test on an Intel i7, and he found it took about three-and-a-half hours to scan the entire set and run the computations to check for addresses. This did not include the time it takes to look up the transaction that created each UTXO to find the input public keys necessary to run that computation. That has not yet been benchmarked or tested, so the cost and time remain an open question.

A further optimization that could be made is using every input in the sending transaction’s public key as part of the tweak, which would bring down the cost of scanning to see if you have received money by not requiring you to scan each individual input in a transaction and run the computation individually. This would raise the complexity of doing it with CoinJoin transactions though, as it would require every other participant to actively participate in the key tweaking. It would also leak to them the output you are paying to in the naive implementation. However, it would prevent the recipient from learning what input was used to pay them, and by cryptographically blinding the information shared with other participants in the CoinJoin, it would prevent them from learning which output is the silent payment, thus mitigating all privacy concerns.

It is also possible to add together a scanning and spending key in the derivation process so that the receiver can have one key online that is all that is needed to detect incoming payments, while keeping the key necessary to spend coins they’ve received offline and in cold storage. This would change the derivation to multiplying the sender’s input private key with the scanning key and then adding the key necessary for spending. This would allow for more security in receiving payments, leaving only your privacy at risk if the receiver’s device was compromised.

A last major thing to consider is the potential for address reuse on the sender’s side. In the base implementation, if a sender has multiple UTXOs with the same public key, reusing those to send to the same person with a silent payment would result in the same silent address and constitute address reuse. This could be prevented by including the TXID and input index of the transaction input used in the scheme, which could be precomputed before being sent to light clients to not create an additional computational burden for them.

Overall the idea is a substantial improvement over BIP47 in every way, except the higher validation costs for the receiver to scan for funds they have been sent. It retains the deterministic recovery property, achieves unlinkability between different payments sent to the receiver, and removes the need for a notification transaction to take place before payments are made. Once again, Somsen has come up with a very solid idea for a protocol that could be implemented to improve the usefulness of Bitcoin.

This is a guest post by Shinobi. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

Coachella Music and Arts Festival Partners With FTX US to Issue Solana-Based NFTs

03/02/2022 by Idelto Editor

The Coachella Valley Music and Arts Festival is stepping into non-fungible token (NFT) technology space, according to the festival’s official Twitter account. Coachella partnered with the crypto exchange FTX US, and the NFTs are minted on the Solana blockchain.

Coachella Partners With FTX US to Mint Solana-Based Digital Collectibles

Since 1999, the festival co-founded by Rick Van Santen and Paul Tollett called Coachella has been a popular music and arts event with its highest attendance in 2017, peaking at 250,000 attendees. Music acts that have played at various Coachella festivals include performers like the Chemical Brothers, Rage Against the Machine, Tool, Morrissey, A Perfect Circle, and Jurassic 5. Coachella celebrated its 20th anniversary in 2019 and had to cancel the 2020 event over the Covid-19 pandemic.

Goldenvoice — the firm that operates Coachella — revealed on June 1, that the event will return on April 15–17 this year, featuring artists like Swedish House Mafia, Billie Eilish, Harry Styles, and Ye. On February 1, Coachella’s official Twitter account announced it was launching NFTs minted on the Solana (SOL) blockchain. “We have partnered with FTX US to build an environmentally friendly marketplace on Solana,” Coachella tweeted. The festival organizers have also published a web portal dedicated to the NFTs.

Nft.coachella.com says that participants can “unlock lifetime Coachella passes, art prints, photo books, digital collectibles, and more.” The festival’s website asserts that Coachella collectibles are “a first of its kind opportunity to own lifetime festival passes, unlock unique on-site experiences, physical items, and digital collectibles.” Limited Coachella digital collectibles will drop on Friday, February 4, at 10 a.m. (PT) and NFT drop participants need to have an FTX US account.

The NFT sale proceeds will be given to givedirectly.org, liderescampesinas.org, and findfoodbank.org. Coachella further details that the festival’s NFT art was created by Emek Studios. As far as the unlock-able lifetime Coachella passes are concerned, there are 10 NFT keys that grant you lifetime access to Coachella available. “This includes passes to one festival weekend every April and Coachella produced virtual experiences… forever,” the website details. Coachella’s NFT key description adds:

These keys also include unique experiences for 2022 like front and center views at the Coachella Stage, lifetime Safari camping, or a dinner prepared by a professional chef in the Rose Garden. There’s no telling what else these NFT keys will unlock in the near future.

What do you think about Coachella partnering with FTX US and issuing Solana-based NFTs and lifetime pass NFT keys? Let us know what you think about this subject in the comments section below.

The Fight For Bitcoin: The Keys To Victory

27/01/2022 by Idelto Editor

The key to Bitcoin lies in the keys — and scaling based upon the understanding of current shortcomings and where improvements are needed.

The Fight For Bitcoin: Round Four

“Nothing is built on stone; all is built on sand, but we must build as if the sand were stone.” – Jorge Luis Borges

There is no such thing as digital scarcity. Information always yearns to be free, and with the advent of the transistor, and later the microprocessor, the compression of the universe’s infinite states has never been more possible. Music, video, jpegs, an Excel sheet, and even this article itself are all being converted into a serpentine chain of ones and zeros, flung across the globe in packets of lights, only to be captured and stored in stasis in the magnets of our laptops and smart phones.

The Bitcoin network, while a rapid departure in implication, is still bound by the laws of thermodynamics and the binary basics of analog computers found in the many switch transistors that make up a microchip. Bitcoiners love to mock the NFT speculators by making reference to this computer science factoid by making many a meme of “right-clicking” and saving the image reference file these digital signatures point to on the smattering of centralized databases utilized in the wash trading schemes of today’s digital frontier of artistic commodification.

But while these dunks are very often warranted, they are often accompanied with a grand misallocation of definition to what their own private keys are accomplishing on the Bitcoin network. There simply is no digital scarcity, just an applied probabilistic utilization of proper private key management. There is nothing special about the massively vast, entropically-derived number that designates your keys that cannot also be right clicked and copied ad infinitum. In fact, it is very often a terrible idea to artificially reduce your seed phrase to only one safe place, in case of human error or an act of God removing yourself from access to your private key. There is also nothing unique about your private key that makes it “private” or “scarce” outside of the probabilistic application of cryptography to astronomically large data sets making the chances of some bad faith actor stumbling upon your private key astronomically unlikely, but not impossible. Would it take the computation power beyond the scope of processors known today attached to power sources the size of our galaxy’s sun before a single key was brute forced? Seemingly. Would it make more sense economically to apply this energy in good faith towards securing the network? Seemingly. Would the obvious economic focus be towards a single Satoshi-era wallet, effectively acting as a bug bounty for the security of the entire network? Most likely. Does cryptography move exponentially away from said liner brute force, and with an agreed-upon snapshot of the network, could a change in hashing algorithm reapply this probabilistic application of security and scarcity to the Bitcoin ecosystem? Theoretically, and hopefully, although if these hashing algorithms are significantly broken, the last thing anyone will be worried about is Bitcoin when all nuclear codes, military communications and legacy banking systems are suddenly available and corruptible.

So why is this important to understand? Without proper utilization, self-custody and reasonable privacy practice with your private keys and corresponding UTXO set, Bitcoin is just a public, clunky and slow database; an MMORPG sequel to Windows Excel. You might have heard Bitcoin being described as a triple-entry accounting system, and all that means is that alongside the typical input (credit) and output (debit) columns, there is a third entry for signatures, or receipts for corresponding witness data to ensure claim on these specific expressions of volatility between two specific parties. This on its own is no technological achievement, and it is only when paired with the two other implications of the Nakamoto Consensus that the social constructs of the Bitcoin protocol begin to take form.

For starters, even if we agree digital scarcity is a misnomer, the application of such is pointless without the ability to prevent a double-spend. A double-spend is a financial issue that only comes to be in non-bearer asset applications; if Alice hands Bob a dollar bill, Alice can not then go and hand that same dollar bill to Charlie. But in the digital realm, when all data can be reduced to a string of bytes, Alice can email a picture of a dollar bill to Bob, then go ahead and email that very same image to Charlie, and Donald, and Edgar, with no future implication of running out of that image reference file. The theoretical hard cap on Bitcoin’s supply issuance, an asymptotic approach of just under 21 million, is rendered useless without preventing Alice’s ability to double-spend her satoshis by sending the same UTXO to Bob and then again to Charlie. This novel economic application comes from creating a distributed timestamp server with an append-only database system via proof-of-work.

Essential to the ability to snuff out the digital double-spend is utilization of a decentralized transactional ordering system that places Alice’s initial transaction to Bob before her attempted secondary fraudulent transaction to Charlie on this triple-entry ledger, immutably and chronologically secured by the amend-only qualifier of the Bitcoin blockchain without use of a centralized clock nor trusted third party. This ability to communicate immutable truth through public, peer-to-peer channels is often misrepresented as a solution to the computer science adage known as the Byzantine Generals’ Problem. In actuality, much like the misnomer of digital scarcity, Nakamoto Consensus is not a true solution to the problem, but rather another probabilistic application that serves as a usable work-around in lieu of a guaranteed execution; a coordinated mining effort to reorganize a Bitcoin transaction is not impossible, albeit as each consequential nonce is hashed into the next block header, the statistical likelihood and corresponding financial incentive to do such plummets to near impossible-but-still-possible unwanted outcomes.

So a Bitcoin transaction can be reduced to an input, an output, and a signature in this aforementioned triple-entry structure, but in reality multiple inputs from multiple UTXOs can make up an input entry, and in fact nearly always are multiple outputs utilized in the form of payment receiver address, miner fee for writing the transaction into the block, and a change output address for the remainder of satoshis from your UTXOs back into control of your private key. You can think of a UTXO as a $100 bill, with $75 going towards the item purchased, $5 going towards sales tax (playing the role of miner fees) and $20 going back to the payer in change, but in a completely different form from the initial payment mechanism. But say you don’t have a single $100 bill in your wallet, since you got paid for two days work at $50 a day, and instead pay with those two $50 bills, playing the role of dual inputs in a Bitcoin transaction. The difference between paying with two $50s in a cash exchange is incredibly minute, and at no extra cost to the merchant, and thus has no common practical implications on the cost of a transaction. Unfortunately in Bitcoin, this is simply not the case, and with every additional input, the necessity of space in the block increases, thus making your transaction more expensive. This in a vacuum perhaps seems innocuous, but after a long period of incentivizing single inputs and thus a single UTXO per transaction to save block space and thus fees, the spender is now left with a bouquet of smaller UTXOs exacerbating the problem of attempting to avoid multiple inputs in future transactions, plus expanding the complete UTXO set of the Bitcoin network. This has vast compounding effects on the future of Bitcoin in regards to scaling via transactional throughput, especially when attempting to onboard billions of users onto second-layer solutions, as well as implications to incentivizing centralization on both hardware requirements for individuals validating the state of the blockchain as well as mining pools being able to practically dole out rewards to individuals securing the chain without using custodial or third-party solutions potentially rendering the decentralized nature of the pool moot. Any further attempt to increase block size will result in an exponential expansion of the UTXO set rendering the privilege of validating consensus to a select few, while simply ignoring the throughput constraints of the current protocol will limit the practical usage of the Bitcoin chain to a select few, both of which renders the practical, decentralized application of digital scarcity, well, practically useless.

Does this mean Bitcoin is doomed to failure? Are we not only handing the transactional history of the Bitcoin network to the powers that be on a silver platter while rendering future application of the network to a small set of wealthy early adopters who can afford to pay the on-chain fees in a hyperbitcoinization scenario? Of course not, and while unregulated optimism can set one up for an Icarus-like, naivety-induced failure, so too, can such negative thinking stunt a growing revolution in the crib; without optimism that Bitcoin can win, there would be no incentive to make change to even try. The key to Bitcoin’s victory is not to simply ossify and retain the status quo, but to modulate the potentials of network growth with proper utilization of second-layer solutions that encourage self-custody, privacy, and individual empowerment without compromising the revolutionary core values of the base layer to achieve a semblance of pertinent scalability. Lightning is the furthest along of these solutions, but many issues still persist. A roadblock in achieving a cash-like privacy on the Lightning Network is the necessity of a hot wallet being connected to an internet service provider at all times in order for successful use of receiving and sending payments on the network. By integrating cold wallet interoperability, whether by non-custodial and seamless atomic to submarine swaps, or further Lightning maturation like the perhaps incoming Eltoo upgrade or ANYPREVOUT compatibility purposed in bitcoin improvement proposals such as BIP-119, the issues of batching funding and closing channels could be mitigated by hiding massive amounts of users’ transactions in single-in-appearance Schnoor signatures, diminishing the block size, economic overhead and time currently necessary for onboarding the world to Bitcoin. There are even possibilities of yet-to-be-popularized non-Lightning networks that are not as reliant on constant utilization of the main chain whenever a user joined or left the network. These state or federated solutions can create cryptographically secure transfers of UTXOs between users much like the Lightning Network but without needing to ever eventually settle on the base layer, with anonymous users joining and leaving the network at whim. These types of network infrastructures would allow all the necessary scaling potentials of a global monetary network and unlock the medium of exchange properties of Bitcoin without compromising user privacy nor exposing them to the assumed scarce block space and thus expensive on-chain transactions of the future. There is a lot of work left to do to Bitcoin to ensure its success, but the path to victory will not be illuminated with blind optimism to current shortcomings, nor crippling negativity to potential applications only possible via collaboration, due process, and eventual decisive action. There is simply no digital scarcity without proper individual application to a group consensus; the only reason there is any value at all in the Bitcoin network is the sheer belief that certain economic principles of monetary policy will remain and that practical ownership of keys will unlock their usage. Bitcoin is the least worst money we have ever found, and its presumed disruptive power and eventual mass societal implication will only be successful if it remains a champion of the individual and their accompanying minority rights. Bitcoin needs to remain practically useful for anyone, or it will become practically useless for everyone.

This is a guest post by Mark Goodwin. Opinions expressed are entirely their own and do not necessarily reflect those of BTC, Inc. or Bitcoin Magazine.

If You Don’t Trust Yourself, These Crypto Vaults Will Help You Hodl Safely

18/03/2020 by Idelto Editor

Hodling in difficult times has historically proven to be a long-term winning strategy. Keeping your cryptocurrency in your own cold storage is by default a good idea as far as security is concerned. But if you don’t trust yourself to not lose a small hardware device or a piece of paper, then there are alternatives that involve trusting others, for good or bad.

Also read: An In-Depth Look at the Multi-Currency Cold Storage Card Ballet

Bunker in the Alps Sounds Like a Good Option

Companies providing vault storage services for crypto assets gained prominence a couple of years ago, following the Bitcoin boom that brought many new investors into the space. A few of them have already established themselves as reliable platforms for crypto storage. Hong Kong-headquartered bitcoin wallet and cold storage provider Xapo is a good example. In the spring of 2018, it was revealed that the company held an estimated 6.25% of BTC’s almost $160 billion market capitalization at the time, or more than 1,000,000 BTC.

Xapo, founded by Argentine entrepreneur Wences Casares, attracted media attention with its focus on building ultra-secure facilities for cryptocurrency storage. The company had reportedly built a network of underground vaults on five continents, most notably one in a decommissioned military bunker in Switzerland, where clients’ private keys are kept on encrypted drives behind steel doors designed to withstand a nuclear blast and guarded by security personnel and systems. Even owners would need a couple of days to get access to their money.

In August 2019, U.S. crypto exchange Coinbase bought Xapo’s institutional businesses. Announcing the acquisition, the trading platform revealed that its Coinbase Custody subsidiary had grown to over $7 billion in assets under custody in just over a year since its launch in July 2018. The funds are stored on behalf of more than 120 clients in 14 countries, the company detailed. Coinbase acknowledged Xapo’s expertise in security techniques. Its custody arm now serves hedge funds, family offices, endowments, and proprietary trading desks, supporting major cryptocurrencies like BTC, ETH and XRP. The assets are insured by global leaders such as Lloyd’s of London.

Switzerland a Magnet for Crypto Riches

With its crypto-friendly regulations, Switzerland is very attractive for companies operating with cryptocurrencies and over 800 of them are based or represented in the country, including providers and developers of crypto custody solutions. Another company working in the niche, California-based Bitgo, announced in February the establishment of new custodial entities in Switzerland and Germany, which introduced a licensing regime for crypto custodians. The Swiss subsidiary is based in Zug, epicenter of the Alpine nation’s Crypto Valley. Both firms are regulated in their respective jurisdictions and will address increased European demand.

Bitgo is a major player with global presence in the market for institutional grade security solutions for blockchain-based currencies. Its Bitgo Custody platform employs a multi-signature system to secure your digital assets including security tokens. It supports a total of more than 100 coins and tokens that can be held with the Bitgo Trust Company, a qualified custodian and liquidity provider, in a cold storage bank-grade vault.

The service implements various controls including multiple approvals, spending limits, and whitelists, Bitgo’s website explains. The company’s $100 million insurance policy covers crypto assets when the private keys are held exclusively by Bitgo Trust Company or Bitgo Inc., in the event of third-party hacks, copying, theft or loss of private keys, insider theft or dishonest acts by Bitgo employees or executives.

Bitcoin Suisse is a Zug-based company specializing in crypto-financial services offering cold storage for digital assets. The Bitcoin Suisse Vault has been built to provide institutional-grade and fully audited crypto asset custody. The platform caters to the specific needs of its clients allowing them to customize the multi-signing process and define who can view and withdraw the stored assets. Besides corporate users such as financial service providers and institutional investors, private investors can also use it to store a list of cryptocurrencies including BTC, BCH, ETH, XRP, LTC as well as ERC20/223 tokens.

Bitcoin Suisse Vault is based on a solution developed by Swiss Crypto Vault AG, a wholly owned subsidiary of Bitcoin Suisse AG. Clients can deposit funds into the Swiss Crypto Vault by sending the coins to a unique public address, and their holdings are never mixed with assets belonging to others. Withdrawals are initiated by filing a request through the online portal which has to be verified independently by the user, Swiss Crypto Vault and Bitcoin Suisse before its execution, which can still be canceled by controllers appointed by the client. Before a transaction can be broadcasted to the blockchain, it must also get the green light from approvers, again chosen by the account holder.

Craig Wright’s ‘Bonded Courier’ Allegedly an Attorney Who Can’t Communicate

04/02/2020 by Idelto Editor

During the first week of February, the Kleiman v. Wright lawsuit continues with more tales about the alleged bonded courier. In mid-January, Craig Wright revealed a third party provided him with the necessary information to unlock an encrypted file he could not access previously. Now Wright is claiming attorney-client privilege over 11,000 documents and he also claims the bonded courier is a lawyer who cannot share any information with the court.

Also Read: A List of Self-Proclaimed Bitcoin Inventors and Satoshi Clues Debunked in 2019

Defunct Businesses and Privilege Assertions

New court filings from the Kleiman v. Wright lawsuit in Florida have been published and as usual, there’s a slew of new information that thickens the plot. The infamous Craig Wright, who has relentlessly asserted he is Satoshi Nakamoto, is being sued by the family of his former business partner Dave Kleiman. The security expert Kleiman is now deceased, but his brother Ira believes Wright defrauded Dave of billions of dollars worth of bitcoin assets and intellectual property. The Kleiman family thinks Wright tampered and manipulated Dave’s inheritance after his death and the court case has been ongoing since February 2018. The reason the Kleimans may think that Wright and Dave had a partnership together that acquired 1.1 million BTC is due to articles published on December 9, 2015 by Gizmodo and Wired. Moreover, Wright has been telling the public he invented Bitcoin for well over four years.

Additionally, the Wired and Gizmodo articles, as well as documents filed in the Kleiman v. Wright lawsuit, shows the ostensible existence of a trust that holds the 1.1 million BTC. Wright has discussed the trust on various occasions in court and said that he was waiting on a bonded courier to unlock an encrypted file he could not access previously. This file allegedly holds all the BTC addresses Wright has owned and because the file was locked he could not share the addresses with the Florida court. The trust known as the “Tulip Trust” expired in January 2020 and the Judge gave Wright until the first week of February to await the “mysterious” bonded courier. Following the order from the Judge, a document filed on January 14 explained that Wright had met with a “third party.” Wright’s legal team stated:

“A third party has provided the necessary information and key slice to unlock the encrypted file, and Dr. Wright has produced a list of his bitcoin holdings, as ordered by the Magistrate Judge, to the plaintiffs today.”

Another document filed on Sunday shows that Wright has asserted privilege over 11,000 documents. “That number continues to grow, with 2,100 documents added just last week,” Kleiman’s legal council detailed. The number of privilege assertions stems from over a dozen firms Wright was formerly involved with or created. Kleiman’s attorney noted that the asserted privilege is not the only thing stopping them from analyzing the documents properly. “The vague descriptions of what is being withheld makes any meaningful analysis on a document by document basis impossible,” the latest court document’s notes assert. “But most troubling is the web of companies defendant has used to shield what will likely end up being tens of thousands of documents.” The Kleiman’s legal team Roche, Cyrulnik & Freedman LLP decided to make a list of all the companies Wright has used for privilege assertions. The lawyers write:

Based on that investigation, plaintiffs [has] determined that all but two companies and Nchain have already ceased to exist; and those two are in the process of being liquidated by an external administrator in Australia.

Mysterious Bonded Courier Is Allegedly a Lawyer Who Cannot Communicate Due to Attorney-Client Privilege

Further, the plaintiffs’ memorandum discloses that Wright claims the “bonded courier is an attorney and his communications are privileged.” Wright’s legal team submitted this information on January 28, 2020, and Kleiman’s legal team said they will challenge this new assertion shortly. In the last court filings, when the third party allegedly appeared in January, the plaintiffs said they deserve answers about the courier and cited that Wright had previously “forged documents, submitted false declarations and perjured himself in open court.”

Roche, Cyrulnik & Freedman had already requested “seven interrogatories about the courier.” The lawyers noted at the time that they want pertinent information in regards to “the bonded courier and his company.” Because of Wright’s recent privilege assertions with numerous companies and the fact that he insists the bonded courier is an attorney who cannot communicate, the plaintiffs’ legal team now “seeks relief.”

What do you think about Kleiman and Wright’s latest court filings? Let us know what you think about this subject in the comments section below.

Image credits: Shutterstock, Bitcoin.com, Twitter, Pacer, Court Listener, Wiki Commons, Fair Use, and Pixabay.

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