Two computer scientists in Israel say a bitcoin transaction now worth more than US$1 million suggests a possible link between a creator of the virtual currency and Ross William Ulbricht, the 29-year-old accused of running the Silk Road underground online marketplace.
The 1,000-bitcoin transfer was found during an analysis of the movement of the Silk Road's bitcoins, according to a forthcoming research paper written by Adi Shamir and Dorit Ron of the Weizmann Institute of Science.
The finding suggests a partnership or investment in the Silk Road on the part of someone involved very early on in Bitcoin "but this is pure speculation," the researchers wrote.
The amount was transferred on March 20 from an account established just a week after the bitcoin network launched in January 2009. Early bitcoin accounts are believed to be controlled by Satoshi Nakamoto, a pseudonym for the person or group of people who created Bitcoin.
The receiving account has been linked to "DPR," short for "Dread Pirate Roberts," the operator of the Silk Road who authorities alleged is Ulbricht. The bitcoins were worth about $60,000 at the time, but the price of bitcoin has since surged.
"The short path we found suggests (but does not prove) the existence of a surprising link between the two mysterious figures of the Bitcoin community, Satoshi Nakamoto and DPR," they wrote.
Nakamoto's real identity has never been uncovered despite attempts to figure out who has the cryptography and mathematical skills to create such a system. He stopped writing posts on a bitcoin forum in 2010.
As many as 20,000 of the first groupings of transactions, known as "blocks" in bitcoin's public ledger, are believed to have been performed by computers controlled by Nakamoto, according to the paper. He may have accumulated up to 1 million bitcoins worth close to $1 billion today.
The bulk of the research paper focuses on the movement of the Silk Road's bitcoin commissions. Before it was shut down in October, the site collected as many as 633,000 bitcoins from its commissions, which ranged from 1.5 to 10 percent of the value a product sold on the Silk Road.
The U.S. Federal Bureau of Investigation seized 144,336 bitcoins from a laptop after Ulbricht's arrest on Oct. 1 in a San Francisco public library. Those bitcoins, worth around $28 million, were transferred in 324-bitcoin chunks -- which the researchers noted spells out "FBI" on a telephone number pad -- to an account the agency controlled.
But the amount the FBI seized is just 22 percent of the 633,000 bitcoins the Silk Road is believed to have taken in, they wrote.
Up to a third of the commissions were moved to new bitcoin wallets prior to Ulbricht's arrest. As to the whereabouts of the rest of the bitcoins, it seems likely that DPR "was simply using a different computer during these periods, which the FBI had not found or was unable to penetrate. "
Ulbricht, denied bail last week, is in pre-trial confinement in Brooklyn's Metropolitan Detention Center. He is facing charges in federal courts in New York and Maryland, including murder-for-hire, narcotics trafficking and computer hacking.
Prosecutors allege they linked Ulbricht to the Silk Road after tracing a few forum posts promoting the Silk Road, one of which contained an email address: "rossulbricht@gmail.com."
