Bitcoin’s Mystery Creator
Since the beginning of Bitcoin, the identity of its creator, working under the pseudonym of Satoshi Nakamoto, has been a mystery. This has been the cause of much speculation and outright conspiracy theories.
Satoshi was active in the community and working with developers of blockchain technology from 2008 to December 2010, with some private messages maybe attributable to him in April 2011.
Beyond the mystery, it matters to this day because this would make the man behind Satoshi one of the richest on Earth, with 1.1 million Bitcoins still located at addresses linked to him. This would be worth more than $63B at the time of writing this article.
So it is probably no surprise that there was quite a buzz ahead of the announcement of an HBO documentary titled “Money Electric: The Bitcoin Mystery” claiming to have solid proof of Satoshi’s true identity.
Bitcoin History
Bitcoin was the first cryptocurrency and still remains to this day the dominant one. In a decade and a half, there have been quite a few key turn-points in its history.
Source: TechGig
The Beginning
After Satoshi revealed his concept, the first active Bitcoin network was launched in 2009. This was famously when some of the first “real” transactions using Bitcoin took place, notably the purchase of 2 pizzas for 10,000 bitcoins by software developer Laszlo Hanyecz.
Soon after, other cryptocurrencies using different codes would be launched in 2010, and later, among which Ripple, Litecoin, and Ethereum would be among the largest.
It would take until 2013 for Bitcoin prices to surge above $1,000, before crashing down.
This would open a turbulent period culminating in 2014, notably with the hack of Mt Gox, leading to 850,000 Bitcoin being stolen, and the sentencing to life in prison for the founder of the Silk Road website used to sell illegal drugs.
Ecosystem Growth
Perceived limits about Bitcoin design triggered a boom in “altcoins”, especially with the launch of Ethereum in 2015.
The Ethereum technology of smart contracts allowed for further applications of blockchain technology, opening its use in finance and virtually every sector imaginable.
Ethereum also allowed it to build crypto projects on top of its blockchain, leading to a somewhat chaotic explosion of new tokens.
Source: Crypto.com
ICOs & Exuberance
ICO (Initial Coin Offering), a term mimicking IPO (Initial Public Offering) became a popular option for startups to raise funds, especially in the crypto/blockchain space.
The ICOs, altcoins, and alternative tokens led to a hodgepodge of serious & useful projects mixed with Ponzi schemes and outright scams.
The enthusiasm about crypto started to expand way beyond the initial tech and hacker groups to the greater public, creating a massive wave of speculation and get-rich-quick schemes.
Maybe more symbolic than anything, the bubble in price value of NFT (Non-Fungible Token), reaching global awareness in 2017, would come to be remembered as one of the most outrageous aspects of the bubble.
Source: Fungible Apparel
In the midst of money flowing into the sector, Bitcoin prices hit $20,000 in 2017. Bitcoin itself would split in 2 with the fork of Bitcoin Cash.
By 2018, the uncontrolled bubble would pop, leading to the second “crypto winter”.
2018 Onward: Re-Focus On Real Use Cases
The downturn cleaned up the blockchain and crypto space of its most outrageous abuse. It is also when more institutional money started to look at the space, unable to ignore 100-1,000x returns of the past decade, mostly confined to “dumb money” in the view of finance experts.
For example, $17B in institutional money flew into the crypto space in 2021 alone. The first Bitcoin ETF was authorized in Canada in 2021 and in the USA in 2024.
Bitcoin might even become a more politically important currency, with Donald Trump announcing his intention to create a strategic national bitcoin stockpile, probably inspired by El Salvador embracing Bitcoin and crypto strongly.
Instrumental to that “mainstreamization” of Bitcoin in finance and among retail investors was the support of Cathy Wood’s ARK Invest funds, which also push heavily for investment in disruptive technology, from EVs & autonomous vehicles to AI, space tech, and advanced biotech (multiomics). ARK Invest would also cash in massive gains from its early investment in Coinbase.
Source: ARK Invest
Elon Musk’s purchase of Bitcoins through Tesla and tongue-in-cheek endorsement of Dogecoin also helped.
Other crypto and blockchain projects than bitcoin, with solid use cases, kept maturing in this period, from IoT connectivity to logistics agriculture, real estate, green energy, agriculture, decarbonization, etc.
Meanwhile, Bitcoin price would “quietly” recover and regularly hit new time highs throughout the 2020-2024 period.
Source: Kriptomat
Regulation
Throughout the development of Bitcoin, its regulation has been controversial.
On one hand, free market absolutists did not even want crypto projects to be regulated by financial authorities, as the very essence of the project was to create an alternative parallel currency and even a banking system.
On the other hand, national regulators and financial institutions were very wary of uncontrolled, unregulated speculative instruments gathering hundreds of billions of dollars.
Many countries have tried to outright ban cryptos, including at times China & Russia, with limited success to say the least.
For the American SEC (Securities and Exchange Commission) the first question was to decide if Bitcoin and cryptos are commodities (like currency & bulk goods: euros, oil, corn, etc.) or securities (like a stock or bond).
Overall, the tendency is to consider “pure” crypto like Bitcoin as commodities, and tokens used in ICO as securities.
Still, ambiguity still reins in the details, with members of the SEC disagreeing about some rulings, and the rules still blurry in edge cases, like with crypto stacking and crypto exchanges.
This creates a lot of uncertainty on what is authorized or not, making it difficult for large investment funds or banks to interact with the crypto ecosystem.
Overall, it is becoming clear that regulator decisions will have a serious impact on Bitcoin and crypto, probably larger than the arrival of ETFs or Bitcoin halving, whether its users like it or not.
Source: Pixelplex
Investing In Bitcoin
Resilience To Crisis
It is not an accident that Bitcoin emerged in 2008, amidst the largest financial crisis in decades. Overall, the concept of cryptocurrency and blockchain is to make money more reliable again, after decades of fiat money, while adding anonymity to transactions.
We explained in further detail in our article “Investing In Bitcoin (BTC) – Everything You Need to Know”, but here are a few reasons to invest in Bitcoin:
- Protection against inflation and currency devaluation.
- Resistance to arbitrary decisions by regulators through decentralization and immutability.
- Anonymity and transparency.
MicroStrategy Incorporated (MSTR +3.28%)
MicroStrategy Incorporated (MSTR +3.28%)
Now for several years, MicroStrategy has been pilling up an impressive bitcoin stash. This is on top of Microstrategy’s software business registering double-digit revenue growth for subscription services.
By early 2024, it had reached a total of 214,400 BTCs, worth about US$13.6 billion. Its total Bitcoin holding represents almost 1% of Bitcoin’s total circulating supply. This has made the stock a favorite of traders, who started to consider it as a proxy for Bitcoin itself.
The fact that the company is publicly traded made it also popular among investors unwilling to manage the self-custody of their own coins.
In a way, this made MicroStrategy a Bitcoin derivative, a growing category of investment product with the emergence of Bitcoin ETFs. You can read more about Bitcoin ETFs in “Bitcoin ETFs Are All the Rage. Here Are Ways Investors Can Get Smart Exposure to Crypto”.
You can also read about how AI can help manage risk in crypto investments in “Bitcoin ETFs Are the First Step for Institutional Crypto Trading; AI Will Take It to the Next Level”.
HBO’s Satoshi: Peter Todd
The HBO documentary claims that Satoshi is actually Peter Todd.
He immediately went on to deny it, with exchanges on X summarizing the problem with any potential identification of Satoshi:
Source: X
Todd also criticizes the HBO documentary when contacted by them:
“I’ll warn you, this is going to be very funny when you put this into the documentary and a bunch of Bitcoiners watch it. I suspect a lot of them will be very happy if you go this route because it’s gonna be yet another example of journalists really missing the point.
“The point is to make Bitcoin the global currency. Hoback and others trying to unmask Nakamoto are distracted by nonsense.”
Source: DL News
If this is true, it would make Peter Todd one of the richest man on Earth.
In itself, this might be the best argument against any Satoshi identity that is still alive, as it is hard to imagine someone with a $63B net worth not using at all. Not even to help propel to new highs the blockchain technology, in the case they would be that dispassionate about money.
Is It Him?
Todd was certainly active early on in the nascent Bitcoin community. Notably, he contributed to early Bitcoin code development and interacted with Satoshi. And he is still an important developer of blockchain to this day.
This is during one of these interactions with Satoshi that the HBO documentary claims Todd “responded to himself” with the wrong account, revealing himself.
Frankly, this is a very flimsy “proof”, with many pointing out countless other similar interactions between Todd and accounts other than Satoshi’s. The fact that Todd was a university student at the time and that Nakamoto posted more frequently during summers is hardly strong proof either.
Ultimately, short of a decisive proof discovered on a 2008 hard drive or computer, we might never be 100% sure of who Satoshi Nakamoto was.
It is however equally likely that he might have passed away, or at least lost access to all of its coin stash, as he has been silent and inactive for 14 years by now. This is in large part why for example, Len Sassaman was often considered as a good option, as the cryptographer died in 2011, despite technical details maybe indicating he was not Satoshi.
Who knows, maybe the truth is in the middle and Satoshi is truly Todd, but has lost all his Bitcoin somehow…
Conclusion
Whether Peter Todd is Satoshi Nakamoto or not will be hotly debated from now on. The evidence trail is not so compelling, but this will not stop speculations.
It is also maybe somewhat irrelevant beyond the fate of Satoshi’s coins. It can even be said that Satoshi’s real identity is clearly something the man behind the pseudonyme did not wish to see revealed, so there is some moral question is essentially “doxing” him. And Bitcoin has now evolved beyond the control of any creator or any individual.
In any case, the enthusiasm created by the documentary illustrates that we might be entering a new phase of enthusiasm for Bitcoin and crypto in general. This would mimic previous periods, where the rise back to all-time highs a few years after a crash is often ignored, at least until it reaches a boiling point.
If it is so, it could be a post sign on the way to a new speculative wave, maybe triggered by a definitive clarification of SEC’s rules and the mass adoption of Bitcoin ETFs and crypto for secured transactions, including transnational exchanges.