Who Is Bitcoin Creator ‘Satoshi Nakamoto’?

“Bitcoin”, “blockchain” and “cryptocurrency” are words that most people have at least heard of since the industry exploded into the mainstream public consciousness in the last year and a half.

Over the course of this series of articles, we will delve into the basics of the industry, providing an introduction to crypto that will give you a solid grounding in the technology and its lexicon.

In short, it will be enough to understand what people are talking about and decide whether you want to learn more.

Read more from PYMNTS’ Crypto Basics series:

What is a blockchain and how does it work?

What is a crypto wallet and how can you avoid losing a quarter of a billion dollars?

How to lose crypto without getting hacked

Is Bitcoin Really Anonymous and How Can Law Enforcement Track It?

What is a consensus mechanism and why is it destroying the planet?

What is mining and why the Bitcoin business does not work

Tokenomics of Crypto

What is a permissioned blockchain and how does centralized decentralization work?

What is a Satoshi? Bitcoin’s Million-Dollar ‘Penny’

What is a Native Token, Non-Native Token and White-Label Crypto?

The real identity of bitcoin and blockchain creator Satoshi Nakamoto is a matter of eternal curiosity in the crypto community. There is also a $25 billion sword of Damocles hanging overhead.

And bitcoin owners may be about to get a preview of what could happen if it falls.

On July 6, the Japanese trustee for the long-bankrupt Mt. Gox cryptocurrency exchange — which was hacked for 850,000 bitcoins (BTC) in 2014 — is about to begin distributing the 141,686 BTC recovered to creditors, Bloomberg reported earlier this month.

Some of it has been sold for cash in a year-long process overseen by Japanese courts, so not all will be distributed. And presumably a good portion of the people who lost their bitcoins in the theft will hold on to them. But it’s still going to be a big dump that could send prices down. How far down is debatable: bitcoin’s 24-hour trading volume on Tuesday (August 2) was $28 billion.

Whoever the Bitcoin Whitepaper author behind Nakamoto is, it is widely believed that he, she, or they mined 1.1 million bitcoins in the project’s early days after the Genesis Block was published on January 3, 2009. And they have never been touched since they were first. extracted.

See also: Blockchain Basics Series: What is Bitcoin and How Did It Get That Way?

Which leaves two possibilities: whoever Nakamoto is no longer has the private key codes needed to send or sell them, or they choose not to for some reason. In the latter case, it can change at any time – for example, if the gigantic cache of bitcoins is inherited.

Nakamoto’s is not the only cryptocache. In 2017, blockchain computing firm Chainalysis estimated that between 2.8 million and 3.8 million bitcoins are lost – either the wallet or private keys needed to transfer a misplaced bitcoin. Much of it was mined well before bitcoin was worth very much. And about 30% to 40% of this is attributed to Nakamoto.

Price dump

While they are unlikely to be dumped on an exchange in one day, 1.1 million bitcoins at the August 2nd price of just over $23,000 is $25 billion, which could definitely put pressure on prices.

Additionally, it could have a much bigger short-term effect on investors, especially those who hold bitcoin futures or over-the-counter loans backed by bitcoin, as a price drop could lead to a lot of margin calls.

See more: Crypto Basics Series: How Decentralized Crypto Lending Works?

One reason bitcoin was considered an inflation hedge – digital gold – during its high-flying days in 2021 is that only 21 million can ever be mined, and about 19.1 million of those have been mined – the amount of coins mined with each block halves every four years, so the last bitcoin will not be mined until 2040.

Even with that, bitcoin is in very limited supply, and Nakamoto’s 1.1 million is more than 5% of that. Which is more than enough to distort the market – even without the psychological pressure of bitcoin’s creator coming out.

And since every bitcoin is traceable on the public blockchain – although the identities of its owners are shielded – it will quickly become known that Satoshi Nakamoto is back.

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