Late in 2008, deep down one of the winding rabbit holes of the internet, a nine page document was uploaded to an obscure cryptography mailing list.
The document was titled “Bitcoin: A Peer-to-Peer Electronic Cash System“. The mysterious author, who wrote in English, went by the name of Satoshi Nakamoto.
The white paper outlined an idea for digital currency. The idea of a digital currency was not new, but there was something remarkable about this paper.
It solved the double-spending problem.
Digital technology enables perfect copies to be replicated infinitely. One song can be replicated millions of times. It can be replayed by millions of people who didn’t purchase it, and no one can tell who the original purchaser was. Copy #1, 294, 486 is just the same as the original.
This presents a problem for digital money. If you issue a dollar, what is to stop the recipient spending that same dollar a million times over?
The Bitcoin white paper solved this problem. It described a robust system of trust and public record.
This system is called a blockchain.
Meanwhile, back on the surface, a heaving global financial crisis was shaking the foundations. The global financial crisis of 2008 caused deep cracks beneath government and financial institutions, eroding public trust as elite bankers were bailed out by the state.
Bankers walked away from the mess they helped create, and Governments set their money printers to overdrive. If it wasn’t bad enough that your house might be foreclosed on, any savings you had were also plundered and devalued.
A decade before, Argentina had fallen into economic ruin as inflation spiralled out of control. In 2012, the Cypriot financial crisis meant savers would endure a “haircut”, with savers losing up to 60% of their bank deposits. The long shadow of leveraged debt cast a gloom over many countries and trashed their fracturing housing markets.
As safe as houses?
As safe as money in the bank?
Such phrases ring hollow.
Back down the rabbit hole, the Bitcoin paper outlined an inflation-proof feature. Supply of Bitcoin would be limited. There would only ever be 21 million bitcoin.
This limited supply was a feature of the gold standard and meant that bitcoin could never be subject to profligate money printing by governments. One bitcoin would always be worth one bitcoin. And 21 million Bitcoin were all the Bitcoin that there would ever be.
There is a lot of speculation as to why Satoshi chose 21 million.
In one of the few emails he sent in responses to questions, Satoshi stated “I wanted to pick something that would make prices similar to existing currencies”. This was in reference to global money supply, which at the time stood at 21 trillion. However, there were also numerological, mathematical and computational reasons for this number, but we are unlikely to ever know for sure, because soon after a few email interactions with other members of the list, Satoshi disappeared.
He hasn’t been heard from since.
His stack of Bitcoin remain untouched to this day. He mined over 1.1 million Bitcoin, which at today’s prices are worth over 31 billion. They lay dormant in the digital vault known as the blockchain. There they sit, between the genesis block #0, and block 36288.
Is Satoshi long dead? Who was he? Is he a he, or is Satoshi a pseudonym? If so, of whom? For what purpose?
Many have speculated as to Satoshi’s true identity. Perhaps it was Craig Wright, an Australian computer scientist. Or Nick Szabo, a decentralized currency enthusiast. Maybe Shinichi Mochizuki, a Japanese mathematician. Perhaps it was a double-bluff government scheme to introduce global transaction taxes.
There is a long list.
Most people deny involvement. Some claim to be Satoshi, and claim to have been involved in the development group, but have yet to do the one thing that would surely offer compelling proof.
Move Bitcoin from those blocks.
To this day, those first Bitcoin remain untouched.
And this is, in a way, poetic. For if you believe that Bitcoin transcends politics, governments, personality, country, banks and institutions, then the creator does not matter. Bitcoin, as outlined in the nine page white paper, is a concept and a set of mathematical rules, and those rules endure, flowing through the present and off into the future.
We have his creation. His creation is Satoshi.
Or perhaps he just lost his private keys.