Bitcoin pioneer gave away over US$100m in virtual coins

Mr Jeff Garzik became the third-biggest contributor to bitcoin's code and remained so through 2014.
Mr Jeff Garzik became the third-biggest contributor to bitcoin's code and remained so through 2014.PHOTO: JEFF GARZIK/FACEBOOK

Jeff Garzik does not regret act but says what matters is that digital currency is still around

Mr Jeff Garzik started writing software code for bitcoin after reading a blog post about the digital currency in July 2010. At the time, he was working remotely for open-source powerhouse Red Hat from a vehicle parked in an empty lot in Raleigh, North Carolina.

He soon became the third-biggest contributor to bitcoin's code after the cryptocurrency's anonymous creator Satoshi Nakamoto and developer Gavin Andresen, and remained so through 2014. Looking back 10 years after its creation, Mr Garzik said he is proud, even though bitcoin is not what he envisioned it would become.

"As a father, I enjoy watching my kids grow up, even as they make mistakes or grow in ways that I wouldn't expect," said Mr Garzik, who has given away bitcoin valued at more than US$100 million based on current prices.

During the initial period, Mr Garzik, 44, worked directly with Nakamoto, corresponding via private e-mail and the Bitcointalk forum, until the token's creator abruptly disappeared in 2011.

Since then, former collaborators and journalists have been guessing who he or she or they were - a matter of importance since Nakamoto controls about one million bitcoins, and could impact the cryptocurrency's market price.

"My personal theory is that it's Floridian Dave Kleiman," Mr Garzik said in an phone interview.

"It matches his coding style, this gentleman was self-taught. And the bitcoin coder was someone who was very, very smart, but not a classically trained software engineer."

NOT WHAT WAS ENVISIONED

It is an organism, it's something that evolves... It hasn't evolved in the direction of high-volume payments, which is something we thought about in the very early days: Getting merchants to accept bitcoins. But on the store-of-value side it's unquestionably a success.

MR JEFF GARZIK

Mr Kleiman, a former sheriff's officer who ended up becoming a computer forensics expert, died in 2013. His estate is suing Australian Craig Wright, who has claimed to be Nakamoto, for allegedly seizing billions of dollars worth of bitcoins and intellectual property from Mr Kleiman. Mr Wright denies the claim.

Nakamoto's vision of bitcoin as private money has not come to fruition. Its use in commerce is actually falling, according to a recent analysis from researcher Chainalysis. Instead, speculators and investors have treated it as an asset like gold.

That's fine with Mr Garzik.

"It is an organism, it's something that evolves," said Mr Garzik, who worked for crypto payment processor BitPay and still sits on its board, as well as the boards of blockchain technology company BitFury and the Linux Foundation.

"It hasn't evolved in the direction of high-volume payments, which is something we thought about in the very early days: Getting merchants to accept bitcoins. But on the store-of-value side it's unquestionably a success."

Mr Garzik continued coding for bitcoin until 2016, when he shifted focus to his own ventures amid bickering among developers and miners over how to scale the network.

Bloq, a start-up he co-founded, has sought to carve out a niche serving enterprise clients. Bloq, where Mr Andresen sits on the advisory board, now has 30 employees and clients among Fortune 50 companies, as well as cryptocurrency-focused firms.

Today, bitcoin is worth about US$6,500 - a far cry from last December's high of almost US$20,000, but way more than when Mr Garzik first started working on the project. He remembers a party to celebrate bitcoin hitting US$1 back in 2011.

Mr Garzik declined to disclose his current holdings, but said he gave away 15,678 bitcoins about seven years ago in developer bounties to spur work on the software. They would be worth more than US$100 million at current prices.

He has no regrets about the giveaway, and said what matters is that bitcoin is still around. "It was a question whether this thing would survive at all," Mr Garzik said. "And there's no question of that today."

BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on November 12, 2018, with the headline 'Bitcoin pioneer gave away over US$100m in virtual coins'. Print Edition | Subscribe