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“I find that phenomenally offensive.”

Newsweek’s Editor-in-chief Jim Impoco is not happy that we’re questioning his magazine’s huge Bitcoin scoop. “This was textbook reporting,” Impoco insists.

It’s Friday night at Austin’s South By Southwest festival and Impoco is standing in the lobby of Newsweek’s “LongLivePrint” relaunch party.  The magazine is back in print after a 14 month hiatus, during which the 81-year-old magazine was acquired by digital media startup IBT Media.

Impoco is surrounded by exactly the mix of San Francisco Glassholes and New York media types that you’d expect to find at a venue called the “Samsung Blogger Lounge.” The former contingent is here for the free bar, and most seem oblivious to the fuss surrounding Newsweek’s alleged outing of Bitcoin’s creator. But at least some of the reporters in attendance, ourselves included, are here to soak up the schadenfreude.

The question being whispered over free margaritas and crab cakes: did Newsweek reporter Leah Mcgrath Goodman get the wrong guy?

Earlier in the evening, Impoco had taken to Twitter to respond to Pando’s Adam Penenberg who was “disturbed by Newsweek not even admitting the possibility that its Bitcoin story could be wrong. It’s all the wrong kind of stubborn.” Impoco’s response was firm: “We said we stand by the story. What more is there to say. If we are wrong nobody has made the case.” Impoco also confirmed in a video interview for IBT that there is “not a thing” he’d change about the story.

In person, though, Impoco sounds less resolute.

“There were so many things that led up to [finding Nakamoto],” Impoco said. “We eliminated every other possible person.”

But he also insists that Newsweek did not claim it had definitively, without a doubt, found the man behind Bitcoin. “We hedged in the article and explained what we knew for sure… We’re ready to admit that we were wrong if someone can prove it.”

Regarding the less-than-slam-dunk evidence outlined in the piece, Impoco explains that he and Goodman had grappled with how much transparency about the reporting process they should offer in the story. Perhaps ironically, Impoco says he and Goodman were concerned about distracting from the core of the story.

Distraction is one possible word for what what followed the publication of the story. Another is shitstorm. The loud, furious criticism of the piece — from rival media organizations and thousands of social media users and commenters — has been remarkable for what is, essentially, a business story.

Impoco says he thinks the media criticism is partly fueled by professional jealousy. But what about the apparently genuine anger from readers?

Impoco pauses at the question. Goodman, he says, has received death threats. Newsweek has hired security to shadow her.  “We can’t afford that,” Impoco says. “But I couldn’t live with myself if anything happened to her.”

Both Goodman and Newsweek have also suffered numerous attempted phishing attacks, prompting them to ask Twitter, WordPress and others to provide additional security support. [Pando contacted Twitter and WordPress at 10:50am PT, Saturday for confirmation of any support they provided to Newsweek. We will update this piece if we hear back.]

The obvious follow up question: Newsweek is taking steps to ensure the safety of its reporter, but what about the safety of the man they identified as Satoshi Nakamoto? Speaking to Business Insider yesterday, Nakamoto’s brother, Arthur, said “[Goodman is] destroying my eldest brother…. this is sick.”

Impoco wasn’t buying. “The security defense is thin,” he says. “Who’s going to come after him?”

So abundant caution for the Newsweek staffer, but an assumption of safety for the subject of the piece?

“It’s a completely different case,” Impoco insists. “Our reporter is getting death threats.”

Impoco also makes the somewhat implausible argument that Newsweek’s story might actually make  Nakamoto safer — assuming he really is the creator of Bitcoin. Impoco’s theory: with all his wealth and infamy, Nakamoto was always in danger, given his name was available in public records. At least now if he’s harmed, the police will know a possible motive.

Also, the fact that Nakamoto is the inventor of Bitcoin — same assumption — makes him a public figure in Impoco’s eyes. “You’d write about the Enron guys. Why not this guy?”

Impoco’s defense will have more merit, of course, if Nakamoto is ultimately proved to be Bitcoin’s creator. But as of press time (ours and theirs) that is still far from clear. Some of Newsweek’s critics, including Pando’s Paul Carr, have suggested that the story was served half-baked because Impoco and his colleagues wanted to make it their big relaunch splash. It’s a suggestion that Impoco strongly refutes, arguing that Nakamoto’s apparent verbal confirmation gave them all they needed in order to go to print. There was no need for additional reporting.

Other staffers, however, are more willing to acknowledge the traffic benefits of the controversy around the story’s accuracy, and how happy Newsweek’s owners are with the resulting coverage.

“They are ecstatic,” says Kate Gardiner, IBT’s director of social media and audience engagement. Gardiner is standing at the bar, and has clearly been celebrating her tremendous good fortune. The attention garnered by the story, she says, will encourage IBT to “fund more independent journalism.”

It will also likely wake the company up to the power — for good and ill — of social media. Historically (which in Internet years, means until a few months ago), Newsweek’s traffic came from search and direct links. Social didn’t play a significant role.  In fact, the company’s social media team is just Gardiner and two other staffers. “[Newsweek] is a major brand,” she says, “but we’re also a startup… We don’t have the resources to be like OMG Internet!”

Asked about the general reaction to the story within Newsweek, Gardiner showed no signs of the embattled frustration, but was cognizant of the serious fear for Goodman’s safety expressed by Impoco.

Despite this, her and the edit staff are excited about the story. Says Gardiner: “The other reporting staff feels like, ‘Yay! We kick ass! We won!’”

[Image credit: Newsweek]