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The Greatest Disappearing Act: Satoshi Nakamoto

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Bitcoin (BTC)
Savl
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One could evoke the fictional movie character Keyser Soze when speaking of Satoshi Nakamoto whose greatest trick may have been convincing us that he doesn’t exist.

Satoshi Nakamoto is the pseudonym for the creator of Bitcoin, but what's often overlooked is Nakamoto’s decision to walk away from the project and the reasons behind that choice.

The blueprint for Bitcoin was entitled Bitcoin: A Peer-to-Peer Electronic Cash System and released into the wild in 2008. To this date Nakamoto’s identity is not known. There are no traces.

The Satoshi Nakamoto Institute has archived all of the messages Satoshi left behind, providing insight into their motivations for creating the cryptocurrency. His decision to step away from Bitcoin in 2010 was significant and has had a lasting impact. (We refer to Nakamoto as ‘he’ but some believe that Satoshi Nakamoto may be more than one person.)

A Selfless Decision

When Satoshi left, Bitcoin was still a curiosity, but many think this helped it become a trillion-dollar asset. Bitcoin's value comes from being decentralized and resistant to censorship. This would be threatened if Satoshi held too much power. Satoshi could have easily crashed the price alone.

Satoshi mined 1 million bitcoins, over 5% of the current 19 million total. The maximum cap of 21 million is expected in 2140. One person controlling such a significant proportion of the supply could easily dissuade other investors. This is because they have the ability to tank the price by dumping their holdings.

When Satoshi exited, the price of Bitcoin was around $0.20. At that time, the value of their estimated mining rewards would have been a mere $200k. However, the value of those coins has changed dramatically over the years. In 2021, at its all-time high, they were worth around $68bn.

Over time, the increasing dormancy of the coins believed to have been mined by Satoshi has given investors assurance that whoever holds them has no intention of moving them. Given the high stakes involved, the relevant addresses are tracked permanently.

The Satoshi coins pose a constant threat to Bitcoin. Their value is so high that whoever controls them, and their family, could have everything they desire. Therefore, the longer these coins remain unused, the less likely it is that they will ever be spent.

Did Satoshi’s Exit Ensure Bitcoin’s Survival?

If Nakamoto had stayed involved and active, every communication of his would have been forensically analyzed to understand both the explicit meaning and underlying sentiment. To understand just how much influence Bitcoin's creator could have on social media, consider the impact Elon Musk has had on Bitcoin, despite having no direct connection to it.

The impact Satoshi could have had on the price of Bitcoin is not as significant as his influence on the direction of the technology and philosophy. Would Bitcoin be as decentralized and censorship-resistant if it had a visible founder?

With that said, Bitcoin's closest competitor, Ethereum, has a market cap of around half a trillion dollars and is led by a clear founder, Vitalik Buterin. It is unclear how much of Ethereum's progress is due to Buterin's influence or in spite of it.

Although it's impossible to answer, if you value the quality of decentralization, then Satoshi's absence can only be interpreted as a positive for Bitcoin.

If the adoption of Bitcoin continues, with more countries like El Salvador giving it legal tender status, Satoshi's decision to remain completely disconnected from its creation could be seen as one of the greatest acts of altruism in history, similar to the creation of the World Wide Web by Tim Berners Lee in 1990.

He created these three foundational technologies in 1990:

  • Urls: Uniform resource locators - website addresses
  • Http: Hypertext transfer protocols - a method for linking web resources
  • Html: Hypertext markup language - a language for building web content

Lee, along with colleagues at Cern, realized early on that placing trademark and copyright restrictions on the technology might hinder its development and innovation. Therefore, the technology was made open-source and royalty-free. The same ethos was employed by Nakamoto in respect to Bitcoin.

Anonymous Philanthropy

While leaving such a vast potential wealth untouched and essentially bequeathing Bitcoin to its users might rank as one of the most selfless acts in recent history, one of Satoshi's last messages suggests elements of self-preservation and pragmatism.

Satoshi viewed Bitcoin as a community since many individuals contributed code and ideas, while actively using the new peer-to-peer cash system.

Regardless of the motivation for walking away, most people believe that Bitcoin is much stronger because its creator/s, Satoshi Nakamoto, chose to disappear.
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