Understanding the Mission of Satoshi Nakamoto
“Many people automatically dismiss e-currency as a lost cause because of all the companies that failed since the 1990s. I hope it’s obvious it was only the centrally controlled nature of those systems that doomed them. It is our first time trying a decentralized, non-trust-based system.”
– Satoshi Nakamoto
The greatest mystery in the tech world today is not how bitcoin works but who is the creator of bitcoin. On October 31, 2008, someone Satoshi Nakamoto published a nine-page whitepaper on a cryptography mailing list. That event changed the history of money and left us all wondering about the mastermind behind it. On January 3, 2009, Satoshi mined the first Bitcoin block, the “genesis block.” This particular event ushered in the era of a decentralized financial system. There is a hotly debated topic on the actual identity of the presumed pseudonymous person. Earlier investigations on Bitcointalk suggested that this mysterious individual (or group) was an eloquent British figure, as seen throughout the conversation logs found within the forum. However, apart from the remnants of Satoshi’s online communication, little is known about Bitcoin’s founder (BTC).
Uncovering Satoshi Nakamoto
Satoshi Nakamoto’s last interaction in the forum was seen in April 2011, two years after the network came into existence. Throughout the years, numerous conspiracy theories and claims about the real Satoshi Nakamoto existed. As Bitcoin gained traction worldwide, multiple mainstream and cryptocurrency media outlets have picked out various individuals as the Bitcoin founder. These alleged or self-proclaimed individuals include but are not limited to Dorian Nakamoto, Craig Wright, Nick Szabo, the late Hal Finney, the CIA, and even the Reptilians.
Perhaps there is a good reason Satoshi Nakamoto preferred his/her identity to be kept a secret. After all, this invention could potentially disrupt the global financial system and hinder the government’s surveillance of its people. Satoshi’s safety might be compromised by those entities who felt threatened by the creation of the cryptocurrency. Regardless of how the big reveal of Satoshi Nakamoto may unfold in the future, the vision of Satoshi will likely greatly revolutionize the concept of money in the years to come.
Remedy for the ill economy
The original intent of Bitcoin was to abolish quantitative easing, create a more stable currency with a finite supply (21,000,000 BTC) and eradicate government surveillance through an individual’s fiat asset. Based on the whitepaper written by Satoshi Nakamoto, it was evident that the creator wanted to experiment with the theory of a cryptographic chain mechanism and how it could create a better and more secure form for the exchange of unique tokens could potentially be used as a currency. The purpose of Bitcoin is to create a global currency that allows people to control their assets more and unite the world at a deeper level. Fiat currencies are susceptible to artificial inflation and an unlimited supply, which could result in hyperinflation, as seen in countries like Zimbabwe and Venezuela.
Political instability and mismanagement of a country could adversely affect its economy and national currency, and a relatable example would be Zimbabwe’s hyperinflation. In September 2019, the Zimbabwean dollar collapsed against the United States dollar (USD) on the country’s black market, as confidence in the local currency hit rock bottom, pushing many Zimbabweans towards Bitcoin as a form of ‘liberation tool.’ Remarkably, Bitcoin saved the people and the country from the collapsing national dollar.
The importance of a decentralized money
As described in the previous paragraph, the traditional standard of a centralized system may not work in an ever-changing world plagued by numerous political and socio-economic issues. Many trusts are required based on the standard centralized system in the financial world today, wherein the people’s money is handled through a third-party entity such as the government or a financial institution. People would have no control over their financial assets.
Equifax, one of the world’s largest consumer credit reporting agencies, faced a massive data breach in September 2017, affecting millions of banking users as their banks had shared their data with Equifax with no opportunity to opt-out in the middle of the crisis. Such scenarios have revealed a major flaw in the current system, that a centralized system would not only exploit users of unnecessary fees for the storage of their funds but also exposeexpose its users to risks such as the data breach incident in 2017.
The standard system could also result in a central point of failure since transactions are processed and stored in a centralized cluster of data centers. The entire financial system could be at stake if these data centers are infiltrated online or offline, adding to the security concerns of the existing financial system.
On the contrary, Bitcoin is a trustless and decentralized solution with no accounted single point of failure. Along with other cryptocurrencies, Bitcoin was designed as an asset that shifts the power of control back to the hands of the people, offering a truly transparent and free economy for the people. Transactions are distributed across a decentralized network that prevents foul-play and security compromises to these transactions. This makes Bitcoin more robust as a financial asset, freeing the people’s money from the control of an unpredictable central authority.
Use cases of Bitcoin
During a product presentation at MIT Bitcoin Expo in 2019, Abra CEO Bill Barhydt shared with his audience that “the single best use case for Bitcoin over the next five years is the collateralization of real-world assets to facilitate banking.” Today, Bitcoin is mainly used for remittances, limiting exchange rate risk, inflation protection, and as a new form of currency. It will likely remain as a banking tool until the blockchain technology is ready to enable real-world payments where it is accepted as a new form of mainstream payment.
According to a 2017 Global FIndex Report by the World Bank, there are about 1.7 billion unbanked adults globally. Most of the unbanked come from low to medium-income economies, and they do not fulfill the banking criteria for account openings, with China having the highest unbanked population globally. More often than not, a significant number of immigrants who work overseas and therefore require a remittance service (such as Western Union) to facilitate the transfer of money to their loved ones in the native country. However, these remittance providers often charge an exorbitant fee and could take up to 5 business days to successfully process the transfer. The long processing time brought inconvenience to not only the recipient but also the risk of exchange rate volatility in the time. Until recently, the unbanked population introduced a better alternative – Bitcoin. They realized that with Bitcoin as the new mode of payment transfer, users would no longer be susceptible to exchange rate risk.
Aside from Bitcoin being the alternative option in place of remittance services, the cryptocurrency could also protect users from inflation. As mentioned earlier, a failed economy could trigger high inflation and volatile currency swings, as seen in countries like Zimbabwe and Venezuela. Another country that suffered a similar fate is Argentina. Based on projected econometric data by TradingEconomics, the Argentina inflation rate is projected to trend around 31.00 percent in 2021 and 27.00 percent in 2022. Currency fluctuations could happen in days, weeks, and months, wiping out a substantial amount of the people’s wealth and confidence in the country’s currency.
While Bitcoin prices also fluctuate in the speculative cryptocurrency market, Bitcoin could serve as an ideal alternative for countries with far more volatile national currencies in play. As the demand for Bitcoin grows on multiple spectrums in the market, the cryptocurrency will permeate through the world’s economy over time as the new asset class that could establish itself in favor of fiat currencies as the people’s choice.
Bitcoin as a driver for the new era
It is without a doubt that Satoshi Nakamoto has single-handedly introduced to the world a legacy that could potentially revolutionize the global financial system, and Satoshi’s anonymity only further enhances the level of faith in the system. If Bitcoin succeeds, it will shift the power from governments and institutions to the hands of the people. In a hyperconnected world today, people’s right to privacy is more important than before. One can only hope that Bitcoin could drive cryptocurrency growth in the foreseeable future and, in turn, accelerate the adoption of blockchain technology as the new standard – of a decentralized system.