Bitcoin is back on top. This week, the native cryptocurrency hit an all-time high, boosted by new ETFs backed by BlackRock and other companies that have raised its status as a premier investment. This does not mean, of course, that Bitcoin is completely safe. Aside from its historical volatility, Bitcoin is exposed to some unique risks that are highly unlikely but could be devastating if they occurred. The biggest of these is the return of its pseudonymous creator, Satoshi Nakamoto, who has controlled a large trove of Bitcoin since the early days of the currency, and which could shock the market in unprecedented ways.
It's widely assumed that Satoshi will never return, but recent events — including a mysterious $1.2 million deposit in one of his wallets and an ongoing trial in the United Kingdom centering on his identity — are a reminder that unlikely doesn't mean impossible. Here's a closer look at the odds that Bitcoin's creator will return — and what it means if they do.
Satoshi's fortune
Satoshi Nakamoto first achieved fame by publishing a white paper outlining the issue of Bitcoin in 2008. After that, he or she was active in early online Bitcoin forums, regularly sending emails to other developers until 2011 before disappearing. Satoshi made a brief last appearance in 2014 to refute a news story claiming his identity had been discovered, but has been a cockroach since then.
By disappearing from the scene, Satoshi also left a large collection of Bitcoin wallets untouched. They were collected during a time when Bitcoin was trading for less than $1, and when each new coin added to the blockchain produced 50 coins (versus the three it will produce starting next month). The transparent nature of blockchain makes it possible to make a pretty good guess about which wallets Satoshi controls.
“We estimate that Satoshi’s total funds are 1.124 million bitcoins across about 36,000 wallets. This total has not changed over time,” forensic firm Chainalysis said. luck.
The company added that the wallets are “purged” in small amounts from time to time, which reflects the fact that since the wallet addresses are public, anyone can send Bitcoin to them.
However, in January, one of Satoshi's wallets received a gift that was decidedly not minimal — worth about $1.2 million in Bitcoin. The reason for the donation is mysterious. It was likely just a tribute from a wealthy cryptocurrency fan marking Bitcoin's 15th anniversary, but others have more seriously speculated that the size of the gift reflects an attempt by the government tax body to entrap Satoshi by giving authorities a legal reason to issue subpoenas.
But even if this is the case, the authorities should know from to the subpoena — raising the long-standing question of who Satoshi is. Even 15 years later, the topic appears in the media on an almost regular basis, most recently as a result of a protester named Craig Wright, who is currently in the midst of a trial seeking a ruling from a British judge that he invented Bitcoin. .
Although it is clear that Wright is not Satoshi, the trial required one of Bitcoin's early developers to provide hundreds of emails between himself and Satoshi. While the emails do not contain conclusive evidence as to the latter's identity, they do provide a heap of additional clues in the form of time stamps as well as quirks in spelling and syntax.
These additional clues are likely to strengthen the strongest hypothesis at hand: that Satoshi is the libertarian polymath Nick Szabo, who likely created Bitcoin while working closely with Hal Finney, the late cryptologist who cryogenically frozen his body — and whose interest in Bitcoin may have arisen in part because His desire to get money if he comes back to life.
While mainstream speculation tends to overlook the Szabo-Finney theory in favor of more well-known names (Elon Musk is a trendy choice right now), most cryptocurrency participants from the early days will quietly concede that the theory is correct. However, the topic is considered somewhat taboo among long-time Bitcoin believers — because they prefer to treat the currency's origin story as a religious mystery, and because of the consensus that nothing good will come from exposing Satoshi.
As for Satoshi deciding to come forward on his own, the chances of that are very unlikely. says Pete Rizzo, a Bitcoin historian who was an early editor-in-chief at CoinDesk luck That Satoshi would resurface is about as likely as “an asteroid hitting Earth” – with the odds decreasing further as time goes on.
Rizzo is probably right for two reasons. The first is ideological: Satoshi was a strong believer in the decentralized money system, and for Bitcoin to succeed, he had to remove himself from the picture. A return would be akin to declaring himself a king, or, worse in the eyes of crypto believers, a central bank governor. The other reason why Satoshi is unlikely to reveal himself is a more practical one: doing so would attract a global crowd of criminals, nerds and tax inspectors – and who needs that?
However, the fact that Satoshi will not voluntarily reveal himself does not eliminate the risk that a state authority will try to force him or one of his associates to reveal the identity of who created Bitcoin. But given that 15 years have passed – and the fact that Satoshi would likely be caught this way – that makes this scenario unlikely as well.
Some have also raised the possibility of Satoshi returning to gain control of Bitcoin's core code. However, this scenario is almost impossible given the decentralized way in which the currency is maintained, for the simple reason that if Satoshi had an ideological objection to how Bitcoin was evolving, they would have spoken out by now.
All of this, though, is not the final wildcard: Satoshi's eventual death.
Dead man switch?
Satoshi may be a true believer in the decentralized financial project known as Bitcoin, but he is also a human being who very likely has family and loved ones. Like anyone with significant wealth, he will likely make arrangements to transfer his wealth.
This raises the question of what will happen to all of Satoshi's bitcoins – a fortune estimated at at least $75 billion – when he dies. Seth Janes, a partner at popular cryptocurrency investment firm Coinfund, says he's given it some thought and guessed the most likely outcome.
According to Jaynes, Satoshi likely controls a number of other wallets from Bitcoin's early days that were not counted among the pool associated with him as assessed by Chainalysis and other forensic companies. Guinness suggests that Satoshi will quietly distribute this money to his loved ones, and it is likely that he has already done so.
What if Jens' guess is wrong? What would happen if Satoshi chose now, or after his death, to liquidate his entire stash (“dump his bags” in crypto-slang)? A mass dump of over 1 million Bitcoins would certainly turmoil market prices and treasuries.
However, Gaines expects that the market will absorb the shock and, over time, become stronger as the sell-off will lead to Bitcoin becoming more decentralized. But it also raised another interesting scenario: that Satoshi has what's called a “dead man's key” to announce his death.
The idea of replacing the dead man is very simple. It can involve a monthly or even annual online activity – sending an email, updating a website, or something else – which, if not performed, will trigger an automated scenario. In Satoshi's case, that could be an email from his long-abandoned email address or an update from the original Bitcoin forum who died and chose to burn his wallet keys.
If this happened, says Jeans, the market reaction would likely be euphoria and a massive rise in prices as investors received confirmation that Satoshi's vast fortune was gone forever.
This is all hypothetical, of course, because at the moment no one knows for sure who Satoshi is or what they plan to do with their massive stash of bitcoins. However, the fact remains that when assessing the risks of holding Bitcoin, investors must take into account the future actions of — and the death of — its creator — and potentially a $75 billion swing.
