Sunday, October 2

Interview with Satoshi Nakamoto, creator of Bitcoin

Key facts:
  • We conducted an imaginary interview with Satoshi Nakamoto from 2012, a few months after leaving Bitcoin

  • Before Bitcoin, centralization doomed digital currencies and will do so again.

This article contains versions and excerpts of real documents of Satoshi Nakamoto, taken from the compilation of: Champagne, Phil. Satoshi’s Book ( Edition): Downloadable from: Blockchain book.

This January 3, 2022 marks 13 years since the Bitcoin network was launched. But our guest’s calendar marks January 3, 2012, just three years after its launch. For this interview, we managed to establish a brief connection through space-time to chat with Satoshi Nakamoto, the creator of the world’s first decentralized digital currency.

-Reporter: Greetings Satoshi. Thank you for accepting the interview.

-Satoshi: It’s a pleasure.

-Reporter: Although this interview will be broadcast in 2022, where many know his name, by way of introduction I would like to recall that our guest, Satoshi Nakamoto, is recognized as the author of the Bitcoin whitepaper and the first versions of its software. However, the last known communication of Mr. Nakamoto with developers of the Bitcoin project, occurred on April 26, 2011. It has been 8 months since he retired to dedicate himself to “other projects”. Hence, our first question. Why did you abandon the development and management of Bitcoin?

-Satoshi: If in 2022 Bitcoin works according to its design, it will be clear that I remained as a founding leader for as long as it was necessary. When the community involved identified and owned the concept, Bitcoin ended up becoming a collective and truly decentralized open source project. There is no need for a single leader. Completely without confidence.

-Reporter: Do you mean that retiring was always your plan?

-Satoshi: At the end of 2010, debates were already taking place in the forum that would not have been possible with the intervention of a maximum leader, since its weight would have ended the initiative of the developers. In November of that year, for example, was questioned that the project was P2P, open and collective. But, it was not necessary the intervention of a maximum leader in that discussion.

On the other hand, governments are good at cutting heads off centralized networks like Napster, but pure P2P networks like Gnutella and Tor have shown themselves to stand up.

-Reporter: However, your last message on the forum, in December of that year, was not a goodbye. He gave the impression that he was still working hard on the Bitcoin software.

-Satoshi: It was. Until I was able to leave bitcoin in good hands.

Satoshi Nakamoto said goodbye to Bitcoin’s closest developers in April 2011, to pursue “other projects.” So he handed the code accesses to developer Gavin Andersen and disappeared without a trace.

-Reporter: Was there a political goal in creating Bitcoin, like to supplant central banks?

-Satoshi: The root of the problem with conventional currency is all the confidence that is required for it to work. The central bank must be trusted not to degrade the currency, but the track record for fiat currencies is littered with breaches of that trust. Banks must be reliable in keeping our money and transferring it electronically, but they lend it in credit bubbles with just a fraction of reserve. We have to trust them for our privacy, trust them not to let identity thieves clean our accounts. Its massive overhead costs make micropayments impossible.

Before strong encryption, multi-user shared computer systems had a similar problem. Then, secure encryption became available to the masses and trust was no longer needed. Data could be secured in a way that was physically impossible for others to access, no matter the reason, no matter how good the excuse, no matter what.

It was time we had the same for money. With digital money based on cryptographic evidence, without the need to trust an external intermediary, money can be safe and transactions can be carried out effortlessly.

-Reporter: So it seemed feasible to solve political problems with crypto?

-Satoshi: Maybe not. But, yes we could win a great battle in the race and conquer a new territory of freedom for several years. And it is now evident that you have come to interview me about Bitcoin since 2022.

-Reporter: However, by 2022 his invention has become so popular, that Bitcoin custody companies proliferate that require us to trust them. In addition, traditional banking, which has not changed anything in 10 years, is also interested in using bitcoin to offer derivative products to its customers, what do you think about it?

-Satoshi: It surprises me. I was confident that after 10 years it would be common to use electronic currency in some way, now that we know a way to use it that is not going to fall apart when a trusted third party loses interest.

Precisely, electronic currency was discarded by many people as a lost cause, due to all the companies that failed since the 1990s. But, I hoped it was obvious that only the centralized nature of those systems was what doomed them.

I think, with Bitcoin, it was the first time that we tried a decentralized system, not based on trust. If the system has been maintained, then the key to success is decentralization.

Unlike the current monetary system, in which money is printed to regulate its value, the Bitcoin monetary system was designed so that its value was determined by demand and not by issuance. There will only be 21 million coins.

-Reporter: Why create a monetary system with such a limited supply?

-Satoshi: To prevent the issue of coins from determining their value.

I explain. In this system there is no one to act as the central bank or federal reserve to adjust the money supply as the user population grows. That would have required a trusted party to determine the value, or actively manage the money supply to tie it to something.

Bitcoin is more comparable to a precious metal. Instead of changing the supply to keep the same value, the supply is predetermined and the value changes. As the number of users grows, the value per coin increases. This creates a positive feedback loop; As users increase, the value increases, which could attract more users to take advantage of the increase in value.

-Reporter: In fact, this has happened. In 2022 bitcoin has more than 70 million users and its value in US dollars is around 50,000. So does your theory explain why you haven’t moved the mined coins in 2009?

-Satoshi: As with lost coins, immobile bitcoin wallets only make other people’s coins a little more valuable. Think of it as a donation for everyone. Since what someone called “natural deflation” occurs. There will also be a natural deflation due to payment errors and data loss. Currency creation would eventually be slow enough to be overtaken by natural deflation and we would have net deflation.

-Reporter: Let’s talk about privacy. How “anonymous” is Bitcoin?

-Satoshi: The possibility of being anonymous or pseudo anonymous depends on not revealing any identifying information about oneself that relates to the bitcoin addresses that are used. If you publish your bitcoin address on the web, then you are associating that address and any transactions made from it with the name under which it was published. If you have posted under a pseudonym that has not been associated with your real identity, then you remain pseudo anonymous. For more privacy, it is best to use bitcoin addresses only once. However, a higher level of anonymity can be achieved by connecting through TOR.

Satoshi Nakamoto compared the energy expenditure of Bitcoin to that of gold. In his opinion, the energy consumption of the cryptocurrency was as justified as that of gold, since its utility is much greater than said expense.

-Reporter: In 2022 its high energy consumption remains one of the main criticisms of Bitcoin. Do you think that your invention justifies such “waste” of energy?

-Satoshi: It is the same situation of gold and gold mining. The marginal cost of gold mining tends to stay close to the price of gold. Mining for gold is wasteful, but that waste is far less than the utility of having gold available as a medium of exchange. I think the case would be the same for Bitcoin. The utility of Bitcoin-enabled exchanges far exceeds the cost of electricity used. Therefore, not having Bitcoin would be the net waste.

-Reporter: To finish, I have to ask you the question that everyone asks. Who is Satoshi Nakamoto? Will you ever reveal your identity?

-Satoshi: Well, definitely, I’m not Dorian Nakamoto. But neither would I claim this pseudonym in court. From what you have mentioned, Bitcoin is doing well in 2022 as an open source collaborative system. So, for the continuity of the project, the identity of Satoshi Nakamoto is irrelevant. Before withdrawing from Bitcoin I made sure to remove that name of the copyright statements. So it would belong to the group of developers. They would all be Satoshi.

-Reporter: Curious that I say it now. Since 2015, the slogan “We are all Satoshi” has become popular among bitcoiners.

-Satoshi: I’ll keep it in mind.

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