The July 2016 Dinner with Mr Mike Hearn
As I mentioned above, under cross-examination Mr Hearn was the subject of robust challenge by Lord Grabiner KC on three points relating to this dinner: first, whether he requested to meet Dr Wright in 2016, or whether the initiative came from Jon Matonis; second, whether he was aware that the business for which he worked in 2016, R3, was a competitor of nChain and third, what occurred at the dinner. These challenges were developed in some detail in Dr Wright’s closing.
My note made on the day Mr Hearn gave evidence was to the effect that Mr Hearn’s evidence was clear, in no sense overstated and that he had recalled matters which were important to him and he had less recall about other matters. However, I have reconsidered the position in the light of the submissions made by Counsel for Dr Wright in their closing on these three points.
To assess them, it is necessary to say a little more about Mr Hearn’s evidence.
First, he contacted Satoshi in April 2009 because he had a lot of questions about how Bitcoin would work out in the future. He corresponded with Satoshi between 12 April 2009 and 23 April 2011. He has posted ‘almost all’ of his emails with Satoshi on his website, so they have been publicly available for some considerable time. He was referred to the brief mentions of him in Wright1, but observed that all those events had been documented by him publicly.
Second, on searching his email inbox he found he had exchanged emails with Dr Wright in 2014 and 2016. The email exchange in 2014 (which Mr Hearn had forgotten about until the emails popped up from his search) related to funding for support of the core Bitcoin system. Essentially, Dr Wright had asked: ‘can I fund you?’. This was not an unusual issue at the time as a common question was: ‘how do we support the core system?’. Mr Hearn responded saying he could but heard nothing further.
Third, the key points in Mr Hearn’s witness statement in relation to the dinner were as follows:
Jon Matonis wanted Mr Hearn to meet Dr Wright so Mr Hearn could reinforce Mr Matonis’ belief that Dr Wright was Satoshi.
During the dinner Mr Hearn asked Dr Wright about things he had always wanted to know the answer to in relation to Bitcoin that only Satoshi would know, in respect of which Mr Hearn said ‘He failed all of my check questions’.
One of the specific points which Mr Hearn recalled asking about was what the SIGHASH_SINGLE mode was for in the signing protocol. He said it was easy to work out what it did, but why it was there and what it was intended for was much harder to work out. Mr Hearn said that was one of the answers where Dr Wright struggled and said ‘I got the impression he didn’t really know’.
Mr Hearn also said that some of Dr Wright’s answers were in the general area, but garbled. ‘I didn’t get the sense he knew that he was talking about.’ And
‘…I got the sense that he was routinely talking about things he didn’t deeply understand. I think there were additional technical questions I asked, I can’t remember the exact details, but I remember feeling like the answers I got back were only slightly better than Star Trek-style technobabble in some cases. I was like, I don’t get the sense at all that this guy designed the thing (Bitcoin) otherwise he’d be able to give a much more clear discussion of them.’
As for Stefan Matthews, Mr Hearn found him a bit of an enigma, saying ‘he didn’t talk very much except to shut up Craig when he started struggling, well my perception was to give him an excuse to stop talking when he was about to dig himself a hole.’
After the dinner, Jon Matonis said something to him along the lines of ‘I think this guy is Satoshi, I want to know what you think..’. Mr Hearn responded along the lines of ‘I didn’t get the impression I was talking to Satoshi, to be honest.’
So the central issue which arises on the discussion at the dinner was whether Dr Wright struggled with some of the details which Mr Hearn would have expected Satoshi to explain, at which point Mr Matthews intervened, or whether Mr Matthews’ interventions were to prevent Mr Hearn probing into technical details which were the subject of existing or future patent filings. In support of the latter interpretation, Dr Wright asserted that Mr Hearn had refused to sign an NDA prior to the dinner. Mr Hearn was asked in cross-examination whether he signed or was asked to sign a NDA before the dinner and he responded: ‘Not that I can recall’ and ‘No, I don’t think so’ {Day14/11:2-6}.
Mr Hearn was asked by Bird & Bird for the purpose of preparing his witness statement how the dinner at Wild Honey, which took place on Saturday 9 July 2016, came about. Mr Hearn said he was speaking at a conference in London and Jon Matonis approached him and said something along the lines of ‘Oh it’s great you’re in town, Craig Wright is too and he’d like to meet you’. Mr Hearn exhibited the resulting email chain which starts with an email on Friday 1 July from Mr Matonis to Dr Wright and Mr Hearn, in which he said ‘Hi Craig, I just met with Mike Hearn in central London. He asked if I could make an introduction. …’
Further emails were exchanged on 1, 4 (in which Dr Wright introduced Stefan Matthews as the person who ‘handles everything I don’t’) and 6 July, with the dinner being arranged for Saturday 9 July. Mr Hearn was leaving London the next day.
Mr Hearn’s recollection (both in his witness statement and in the witness box) was to the effect that Jon (Matonis) wanted him to meet Dr Wright and he was like ‘fine, whatever’. This alleged ‘inconsistency’ was developed into a major point because it suited Dr Wright’s case to characterise Mr Hearn as wanting the dinner to take place so he could pump Dr Wright for information which would be of advantage to the company he was then working for, R3 (i.e. on the second and third points of challenge).
In Wright11, having seen Mr Hearn’s witness statement, Dr Wright stated that Mr Hearn’s company R3 was a competitor of nChain. In his usual style, Dr Wright devoted a number of paragraphs to putting some technical detail behind this allegation, much of which concerned the use of SIGHASH flags. Dr Wright also cited a particular GB application (which had been filed only weeks before the dinner) and said ‘R3 was investigating and filing similar research’ and made reference to an application which he said was filed by Mr Hearn with a priority date of 22nd August 2016, which he said claimed a method which overlapped with an application filed by nChain with a priority date of 29th July 2016. This document was not put to Mr Hearn in cross-examination, although in closing US11,205,162 B2 was produced, in which Mr Hearn was one of the inventors and the applicant was R3 Ltd. That patent concerns a decentralised distributed ledger in which transactions are recorded by parties to the transactions without the use of a blockchain.
There was insufficient time (and, probably, inclination) at Trial to get into the detail of the alleged competition between R3 and nChain. Mr Hearn didn’t think they were competitors but said he didn’t really know what nChain’s business was. This last point is not a surprise because one would have to conduct a detailed analysis of nChain’s patent filings to understand where its business interests lay and the patent filings might cover a wide array of blockchain related subject-matter. It was put to him that one area of competition between the two entities concerned the scalability of blockchain transactions, but his response was that any company which makes software has to be concerned with scalability, which seems to me to be correct.
However, Mr Hearn’s principal retort to the notion that he was trying to interfere with nChain’s patent filings was this:
12:17 A. Well, I was asking questions that didn't -- didn't
18 appear to me to involve any IP. I was asking questions
19 about the core Bitcoin System, which of course is not
20 patented. But, yeah, that was the justification
21 I recall him giving for not answering any of my
22 questions, yeah.
18:19 A. Well, from my perspective, it was about Bitcoin. From
20 his perspective, perhaps he felt it was related to
21 patents they were filing, but I could not have known
22 that at the time, so I think this is just a difference
23 of opinion.
19: 5 A. Well, Craig seemed to be stuttering, or struggling to
6 answer and then he looked at Stefan, and Stefan was sort
7 of like, "No, don't answer", and then I believe they --
8 they said this thing about the patents. "Patents",
9 sorry.
23: 1 A. …….I was
2 confused by his refusal to respond, because I didn't
3 believe you could really file patents on -- sorry,
4 "patents" on, you know, things that have been published
5 already, like Bitcoin had many years previously, and
6 certainly Satoshi had never expressed any interest in
7 patents to me previously, when I've communicated with
8 him, so it didn't really occur to me that I might get an
9 answer like that at all, to be honest.
The dinner occurred just under 8 years prior to the evidence at Trial, but some 7 years after the Bitcoin system had been launched. Mr Hearn’s recollection was consistent with the passage of time since the dinner: he said parts of the dinner are a bit hazy, but the important parts that he remembered were the conversations about Satoshi and Bitcoin {Day14/10} and, I infer, the impressions he formed about Dr Wright. By contrast, some of the matters which Dr Wright said were discussed at the dinner in Wright11 were unusually specific.