Bitcoin founder tells you which is more valuable, Bitcoin or gold

Which is more valuable, Bitcoin or gold? Has Bitcoin's purported creator solved the question once and for all?

Last Wednesday, we brought you the story of Craig Steven Wright, who, according to Wired and Gizmodo, is Satoshi Nakamoto, the anonymous creator of Bitcoin.

After two articles pinpointed Wright as the mysterious founder behind Bitcoin, the Australian government took action, raiding the home of "Icy Wright" (as he is known to his neighbors). Australian police searched the house that Wright and his wife rented and investigated his business.

It’s clear that the Australian Taxation Office has been examining Wright, and according to multiple reports (and documents obtained by Wired and Gizmodo), a dispute arose between Wright and the ATO over how his Bitcoin holdings should be taxed while the ATO was examining him. Wright has received a great deal of attention after two articles were published last week claiming he is the creator of Bitcoin. While the ATO claims there is no connection between the “new” revelations about Wright’s identity in the two articles and the ATO’s raid on Wright’s house, the attention to Wright’s identity may have prompted the ATO to take action once and for all.

Now, the latest twist in this already bizarre story: As The Australian reports, in May 2013, Wright attempted to buy about $ 85 million of gold from Mark Ferrier, who was working on a deal that would have given his company, MJF Mining, 50% of a gold discovery by ASX-listed gold developer Paynes Find Gold .

It can be seen that Paynes needs machinery and Farrell is willing to provide equipment to Paynes through MJF in exchange for any future gold mines discovered by Paynes. According to The Australian: "Farrell told Wright that gold would be very safe if Bitcoin, a 'pseudo-currency', failed." What happened next is likely to be as follows:

Wright paid $38.8 million, or 245,103 bitcoins, in August 2013 for Siemens software and gold from Paynes. Wright then paid Farrell $20.3 million, or 135,100 bitcoins, in September 2013 for "core software" from Al-Baraka. Farrell was arrested in Perth in September 2013, and his gold partnership with Paynes was terminated.

In December 2013, Wright initiated proceedings in the Federal Court and the New South Wales Supreme Court to claim his share of the gold. Wright paid for the gold with Bitcoin, and he believed that the Bitcoin he paid was equivalent to $84.42 million at the market value at the time, so he needed to recover $84.42 million worth of gold.

Paynes' annual financial report for the year ended June 30, 2014, included the following statement regarding its partnership with Farrell:

The company terminated its mining services and profit sharing agreement with MJF on October 1, 2013. Mark Farrell filed a lawsuit in the New South Wales District Court, seeking compensation of $279,621 from the company for the loss of profit from small-scale mining. The company believes that his lawsuit is completely unfounded.

Here is an extract from a copy of an ATO meeting that tells part of the story (the following extract is from John Chesher, Wright’s accountant):

Craig Wright spoke at a conference in Melbourne. He gave his views on Bitcoin and mining. Then a man named Mark Farrell came to him. That's how their relationship began. Craig Wright told Mark Farrell that he wanted to set up a Bitcoin bank. Then they started exchanging emails. Mark Farrell told Wright that he knew someone who could help Wright set up a Bitcoin bank. This all happened in early June 2013. Things were done quickly - most of it was done within a week. Craig Wright agreed to buy banking software from Al Barkara with the help of Mark Farrell. Mark Farrell also convinced Wright to buy a gold mine.

Mark Farrell also offered Wright the services of Ian Farrell, Mark Farrell's father. Craig Wright did a lot of research on Farrell before deciding to use a new service, and in the end, everything turned out to be good. So essentially, Craig Wright wanted banking software, and Mark Farrell wanted Bitcoin. The time was around mid-July to August.

Craig Wright transferred funds to MJF Consulting from an entity in the UK. The funds were transferred from a server in West and Central Africa. Then in September 2013, Mark Farrell was arrested. Craig Wright took action to protect his rights. Australian Taxation Commissioner Des McMaster informed us that ASIC documents showed that Mark Farrell had only been a director of the company for one day. Craig Wright then contacted Pitcher Partners in Brisbane and asked them to explain the matter. We found that Mark Farrell had never been a director of the company. Mark's address on the ASIC documents was also false. Craig Wright had been able to obtain banking software and automated systems. But he had everything to set up a Bitcoin bank, except for the gold. Wright was supposed to receive the gold in 2015, but now that would not happen because the gold could not be delivered.

Craig Wright also contacted Ian Farrell. Ian Farrell said he had not spoken to Mark Farrell for two years and wanted nothing to do with him. We sued MJF Consulting in the New South Wales Supreme Court and the Federal Court. In the Federal Court, we sued Mark Farrell for deceiving us as an individual.

We had done due diligence before we decided to work with Mark Farrell. We had taken all the steps we could to protect ourselves. If you look at the transactions we had, you can see that every transaction was anchored to the currency exchange rate at the time of the transaction . Craig Wright had advised the ATO that the accounting principles for this type of business should be changed from cash basis to accrual basis. The company's accounts should be kept on accrual basis from the beginning of the 2013 revenue year. Craig Wright had previously notified the ATO of the situation. We had previously started dealing with ATO officials at various sites, such as some initial work was done in Sydney Hurstville and Brisbane. But then the Commissioner of Taxation Des McMaster made a decision that all audits would be done at Sydney Parramatta Taxation. The audit was then conducted by Celso. We had reached an agreement with Des McMaster on the previous audits, but he was re-examining them, which was very unpleasant for us.

For those who wish to know the end of this story, you can search for the word Farrell. We believe that more secrets will be revealed as time goes by, unless Craig Wright's story repeats the mistakes of other Satoshi stories (see Newsweek)

What’s interesting about this story is that while Farrell may not have “really wanted Bitcoin,” (quoting Wright), it seems that Wright really wanted, and still wants, gold.

Bottom line: If you believe Wright is Satoshi Nakamoto, then the creator of Bitcoin is clearly so skeptical of the intrinsic value of his currency compared to hard currency (gold) that he is willing to trade a large amount of his cryptocurrency for physical gold.