Bitcoin is back on top. This week, the original cryptocurrency hit a new all-time high, boosted by new ETFs backed by BlackRock and others that have elevated its status as a mainstream investment. Of course, that doesn't mean Bitcoin is completely safe. Apart from historical volatility, Bitcoin is exposed to several unique risks that, while highly unlikely, could have devastating effects if they materialized. The biggest of which is the return of its pseudonymous creator Satoshi Nakamoto, who has controlled a vast Bitcoin trove since the currency's early days and who could shock the market in an unprecedented way. There is a gender.
It is widely assumed that Satoshi will never return, but recent events including a mysterious $1.2 million deposited into one of Satoshi's wallets and an ongoing trial in the UK that focuses on Satoshi's identity. reminds us that unlikely doesn't mean impossible. Here, we take a closer look at the possibility of Bitcoin's founder making a comeback and what it would mean if he did.
Satoshi's fortune
Satoshi Nakamoto first rose to fame in 2008 when he published a white paper summarizing the Bitcoin case. He or she was then active in his early online Bitcoin forums and emailed other developers regularly until 2011, when he or she went dark. Satoshi last briefly appeared in 2014 to refute a news article that promised to reveal their identities, but he's been a cricket ever since.
When Satoshi disappeared from the scene, he also left behind a large amount of Bitcoin wallets untouched. These were accumulated at a time when Bitcoin traded for less than $1 and every time a new piece was added to the blockchain, 50 coins were generated (the coins that will be generated starting next month are is 3 coins). The transparency of blockchain makes it possible to infer with great precision which wallets Satoshi controlled.
“Satoshi's funds are estimated to be a total of 1.124 million Bitcoins in approximately 36,000 wallets. That total has not changed over time,” forensics firm Chainalysis said. luck.
The company added that the wallet is “dusted down” from time to time in minimal amounts to reflect the fact that anyone can send Bitcoin because the wallet address is public.
However, in January, one of Satoshi's wallets received an apparently non-minimum gift: about $1.2 million worth of Bitcoin. The reason for the donation is a mystery. While it's possible that it was simply a tribute by a wealthy crypto enthusiast to commemorate Bitcoin's 15th anniversary, the scale of the gift gave government tax authorities legal grounds to issue a subpoena to trap Satoshi. Some speculate even more ominously that it may reflect an attempt to fit in.
But even if that were the case, the authorities would need to know that Who Issuing the subpoena raises long-standing questions about who Satoshi is. Fifteen years later, the topic still surfaces in the media on a semi-regular basis, most recently when an impersonator named Craig Wright is currently in court trying to get a British judge to rule that he invented Bitcoin. It became a hot topic. .
Although Mr. Wright is clearly not Satoshi, the lawsuit required early Bitcoin developers to provide hundreds of emails between him and Satoshi. Although the emails do not contain conclusive evidence regarding the latter's identity, they do provide a wealth of additional evidence in the form of timestamps and spelling and syntax quirks.
These additional clues likely reinforce the strongest existing hypothesis: Satoshi is the liberal polymath Nick Sabo, and he is likely the late cryptologist Hal Finney, whose body was cryogenically frozen. He may have created Bitcoin while working closely with him, and his interest in Bitcoin may have stemmed from his desire to access the money once he was brought back to life.
While mainstream speculation tends to ignore the Szabo-Finney theory in favor of better-known names (Elon Musk is the currently trending choice), most of those who have been involved with cryptocurrencies since the early days I quietly admit that this theory is true. However, among long-time Bitcoin believers, the topic is somewhat taboo. That's because they prefer to treat Bitcoin's origin story as a religious mystery, and because there is a consensus that nothing good will come of exposing Satoshi.
It is extremely unlikely that Satoshi would decide to come forward himself. Pete Rizzo, a Bitcoin historian and an early editor-in-chief of CoinDesk, said: luck The chance of Satoshi reappearing is about the same as “an asteroid colliding with the Earth,'' and the chance of Satoshi reappearing becomes even lower as time passes.
Rizzo is probably right for two reasons. The first is ideological. Satoshi is a big believer in decentralized monetary systems, and for Bitcoin to succeed he had to step away from that world. Returning would be the same as declaring oneself king, or worse in the eyes of crypto believers, central banker. Another reason Satoshi is highly unlikely to reveal his true identity is more pragmatic. That would attract criminals, eccentrics, and tax inspectors from all over the world. And who needs that?
However, the fact that Satoshi will not voluntarily reveal his true identity does not eliminate the risk that state authorities may try to force him or his associates to reveal the creator of Bitcoin. However, considering that 15 years have passed and the fact that Satoshi is far too smart to be caught like this, this scenario becomes unlikely.
Some have raised the possibility of Satoshi returning to control Bitcoin's core code. But given the way currencies are kept decentralized, that scenario is nearly impossible, and even if Satoshi were ideologically opposed to Bitcoin's evolution, they would have spoken out by now. This is for the simple reason that it is.
But all this doesn't explain the final wild card: Satoshi's eventual death.
Dead man's switch?
Satoshi may be a true believer in the decentralized finance project known as Bitcoin, but he's also a human being who very likely has a family and loved ones. And, like those with great wealth, he is likely to make arrangements for inheriting his wealth.
This raises the question of what will happen to all of Satoshi's Bitcoins after he passes away, an asset estimated to be at least $75 billion. Seth Gins, a partner at prominent cryptocurrency investment firm Coinfund, said he has thought about the issue for a while and has deduced the most likely outcome.
Gins said Satoshi likely controlled many other early Bitcoin wallets, which Chainalysis and other forensic firms have evaluated have not included them in the Satoshi-linked cluster. That's what it means. Gins suggests that Satoshi will quietly distribute these to his loved ones, and it is likely that he has already done so.
What if Gins' guess is wrong? What would happen if Satoshi chose to liquidate his entire stash now or after his death (“dumping the bag” in crypto slang)? More than 1 million Bitcoins would be dumped in bulk. If this happens, the market and tank prices will definitely be disrupted.
However, Gins predicts that the decline will make Bitcoin more decentralized, so the market will absorb the shock and gain more momentum over time. But he also raised another interesting scenario. That is, Satoshi has a so-called “dead man switch” that signals his death.
The idea of Dead Man's Switch is very simple. This can include monthly or yearly online activities such as sending emails, updating websites, etc. that, if not performed, trigger automated scenarios. In Satoshi's case, it could be an email from a long-abandoned email address, or an update on the original Bitcoin forum that he died and chose to burn the keys to his wallet.
If this were to happen, Gins said, the market reaction would be euphoria and a huge jump in prices, as investors now have certainty that Satoshi's vast fortune is gone forever.
Of course, this is all hypothetical, and at this point no one knows exactly who Satoshi is or what they plan to do with their vast stash of Bitcoin. However, the fact remains that when assessing the risk of holding Bitcoin, investors must take into account the future actions and death of Bitcoin's creator, as well as a potential $75 billion swing. There is.
