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Satoshi said Bitcoin wasn’t originally designed for investment

Satoshi was reluctant to call Bitcoin an "investment", according to an email exchange by one of Bitcoin's early developers that recently went public.

Posted March 1, 2024
Last updated March 6, 2024

Satoshi nakamoto Bitcoin statue
Satoshi nakamoto Bitcoin statue

Recently, Martii Malmi, one of the early developers of Bitcoin, released a batch of emails he exchanged with Satoshi Nakamoto, the enigmatic inventor of the cryptocurrency.

The emails reveal how Satoshi launched the Bitcoin network in the early days, and what he thought about its potential and challenges. To some people’s surprise, Satoshi was reluctant to call Bitcoin an “investment.”

In June 2009, Satoshi wrote to Malmi: “I’m uncomfortable with explicitly saying ‘consider it an investment.’ That’s a dangerous thing to say and you should delete that bullet point. It’s okay if they come to that conclusion on their own, but we can’t pitch it as that.”

How Satoshi’s response affected the Bitcoin’s price

Despite Satoshi’s negative-sounding response, Bitcoin price has been stable around $50,000, a price label that Satoshi may not have expected to be given to his creation.

Interestingly, prices of crypto assets are usually sensitive to any news or events that have anything to do with the asset or the organisations it has affiliations with.

Illustration of blue bitcoin on dark background

We’ve come to expect that controversial comments from a product’s founder about itself can lead to price drops. But not for Bitcoin — it seems that the market is not bothered by Satoshi’s comments.

Could this be a sign that Bitcoin is truly decentralised and independent of its inventor?

Satoshi is a unique figure in the crypto space, as we know very little about him, except for some clues from his publicised emails and the Bitcoin whitepaper.

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The whitepaper reveals the most about his vision and motivation for creating Bitcoin, and Satoshi has been consistent with it throughout his communications. 

He wanted to create a peer-to-peer electronic cash system that does not rely on trusted third parties or intermediaries, but on cryptography and network consensus. This is the core idea of Bitcoin, as stated in the first sentence of the whitepaper.

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Bitcoin buyers think differently about Bitcoin

Bitcoin buyers view the cryptocurrency as an investment, even though its creator never intended it to be one. 

It’s unsurprising, and this seems to be because of two of Bitcoin’s inherent features — its limited and verifiable supply, and its unchangeable monetary policy.

These features allow Bitcoin to at least grow in value, in comparison to fiat currencies that can be printed and devalued at will. According to the law of supply and demand, if the demand for Bitcoin increases faster than the supply, the price should rise.

But if becoming something to be traded and speculated was not Satoshi’s original vision for Bitcoin, what was it then? 

Bitcoin was born out of the 2008 financial crisis, which exposed the vulnerability and corruption of the traditional banking system.

Satoshi wanted to create a decentralised, peer-to-peer, digital cash system that would not depend on any intermediaries such as banks or governments. It’s meant to be open-source, transparent, and censorship-resistant, giving users more freedom and control over their own money.

Satoshi explained this in his whitepaper, where he wrote: “What is needed is an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party.

Transactions that are computationally impractical to reverse would protect sellers from fraud, and routine escrow mechanisms could easily be implemented to protect buyers.”

The official Bitcoin website also reflects this vision, stating that Bitcoin is an innovative payment network and a new kind of money. It does not mention anything about Bitcoin being an investment or a speculative asset.

Bitcoin is pseudonymous, not anonymous

Easy Crypto is very careful about how we market Bitcoin. We say it’s pseudonymous, not anonymous, because it’s not completely impossible to track the real identities of Bitcoin users.

Being anonymous means that your identity is hidden, while being pseudonymous means that your identity is obscured. To reveal who you are in Bitcoin, you need some key information that links your real identity to your Bitcoin address.

With Bitcoin, there’s no credit card number that hackers can steal from you. In fact, you can always send a payment without revealing your identity, almost like with cash. However, you should be aware that you need to take some steps to maintain your privacy, such as using multiple wallets for different purposes.

Satoshi Nakamoto wanted to make sure that users understand the nature of public blockchains. He said that if people thought that Bitcoin was anonymous, they would be disappointed if they found out that it was not.

Therefore, it’s not true to say that you can never know who owns a Bitcoin wallet. If you bought Bitcoin from an exchange, the exchange has your personal information (your email and government ID) and your wallet address, and they can link them together.

However, if you exchanged Bitcoin for cash, that link would be very hard to trace, and that would be very private. Easy Crypto does not accept cash, because we follow the regulations for financial services here in New Zealand.

So, is Bitcoin an investment?

Many people view Bitcoin as an investment, similar to how they view gold. Both have some common features that make them attractive as a store of value. Gold is often seen as a hedge against inflation, but it also has practical uses in jewellery and electronics. 

Over the past 40 years, the price of gold has increased against fiat currencies due to its limited supply. The narrative that gold is an investment vehicle has propped up its price for so long, and a similar narrative may be developing with crypto assets like Bitcoin.

Bitcoin, unlike gold, cannot be used for physical purposes. However, Bitcoin offers a different kind of value: it enables fast and cheap cross-border transactions.

Even if Bitcoin is only used as a temporary medium of exchange, the cost to send Bitcoin is not determined by the amount, but by the network fees (mining costs). This gives Bitcoin an advantage over traditional banks, which still charge high fees for remittances, and often charge by a percentage of money transferred.

But even if you don’t agree with using Bitcoin as a long-term store of value (an asset), you have to acknowledge that Bitcoin is fulfilling its original vision as a border-less medium of exchange that can operate without a trusted intermediary.

Further reading: Explore more topics on all things crypto.

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Disclaimer: Information is current as at the date of publication. This is general information only and is not intended to be advice. Crypto is volatile, carries risk and the value can go up and down. Past performance is not an indicator of future returns. Please do your own research.

Last updated March 6, 2024

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