In the most recent attempt to uncover the identity of Satoshi Nakamoto, both Wired and Gizmodo released information this week that they claim points to Australian entrepreneur Dr. Craig Steven Wright. Their accounts have already been disputed, and many questions linger. But the most relevant question is: does it matter who Satoshi is?
The identity of Satoshi Nakamoto is one of the great mysteries of the 21st century, and every honest Bitcoin fan will admit at least a little curiosity regarding the creator of the cryptocurrency. After all, he (or she or they) is responsible for one of the greatest technological and economic advances the world has ever seen. Who wouldn’t want to know more about its creator? Who wouldn’t want to spend an afternoon picking his brain, trying to learn more details about why and how he created Bitcoin? And many Bitcoiners want to know who Satoshi Nakamoto is simply to thank him.
1 Million Bitcoins Going Once…
But how important is it to know Satoshi’s true identity? According to Time, it matters because Satoshi is believed to own over 1 million bitcoins, and if he were to dump them on the market, it could cause the price to crash. They even make this grandiose claim:
“Should Wright cash out and make off with a more widely-accepted currency like dollars, Bitcoin may never recover from the price shock triggered by the sudden glut in supply. Thus, the destiny of a supposedly decentralized currency may rest in the hands of one person — exactly the fate it was created the [sic] avoid.”
But Time (and others like it) clearly misunderstand Bitcoin and how it works. If Wright or someone else were to sell off a large number of bitcoins – even a million (currently about 1/15th of all bitcoins in circulation) – it would certainly affect the price in the short-term, but there is no reason to believe it would have a long-term impact. Putting that many bitcoins on the open market would actually cause more bitcoins to be in active use and most likely would result in more people possessing bitcoins. Long term, the dump of 1 million bitcoins now wouldn’t really matter five years from now. After all, whether the maximum number of bitcoins available is 21 million or 20 million is of little importance when one compares Bitcoin to government-issued currencies that have no upper supply limit.
The End of Consensus?
What about the management of the Bitcoin protocol – would the re-involvement of Satoshi matter for that? Perhaps. Some have argued that if Satoshi were to re-insert himself into today’s debates (block size, etc.), the arguments would be resolved more quickly and more amicably. Others worry that the decentralized network would quickly become centralized around one person.
Satoshi obviously would have a great deal of influence in current debates were he to insert himself into them – and rightly so. Anyone who has read the known writings of Bitcoin’s creator knows that he has a brilliant mind and an insightful understanding of both technology and economics. So his involvement would be welcome. Fears that he could become a centralized dictator of the project are unfounded, however.
First, we know from his previous involvement that his personality doesn’t match that of a despot. After all, he gave up control of the project and hasn’t made any effort to return even as the influence of Bitcoin has skyrocketed. Second, the entire Bitcoin project is governed by consensus (which is how Satoshi designed it). So if the real Satoshi started to push through unpopular changes to the protocol, users can always vote with their money – simply stop using Bitcoin and move to another, more decentralized, cryptocurrency. That’s the beauty of Bitcoin: unlike government-issued currencies, it is valued based on its merits alone, and no one is required to use it. No one person can force changes that the user base doesn’t want, without negative consequences. Not even Satoshi.
If there is anyone who deserves the fruit of his labor, it is Satoshi Nakamoto. Whatever he wants to do with his stash of bitcoins is his business. Further, he has earned the right to any future involvement with Bitcoin that he wants to engage in. But to think that his reemergence could fundamentally change Bitcoin underestimates both the design of Bitcoin and the growth and influence that Bitcoin has gained in the years since he disappeared. Bitcoin is beyond any one man now – even the one who created it.
What do you think? Does the identity of Satoshi matter? Would his reappearance help or hinder Bitcoin – or have no impact? Let us know in the comments below!
Images courtesy of Business Insider, The Guardian, Pixabay