We will never know who created Bitcoin—and that’s a good thing

SO WHAT? A Web3 Digest for Executives

Must-know news and analysis from Web3 for busy executives. Brought to you by Terminal 3. Co-authored by Jon Russell and Gary Liu.

We will never know who created Bitcoin—and that’s a good thing

Anonymous creator is the ultimate proof that Bitcoin works

Jon Russell and Gary Liu

Oct 15, 2024

This past week has been dominated by Satoshi Nakamoto, after HBO released its long-anticipated documentary aiming to answer the question of who created Bitcoin.

No spoilers just yet, if you haven’t seen the show, but the truth is that we don’t need to know Satoshi’s true origin. In fact, it is essential that we don’t, as we explain today.

What’s going?

Bitcoin is across the news this month following the release of HBO’s Money Electric: The Bitcoin Mystery, a documentary tasked with identifying the anonymous creator of Bitcoin. Identifying the person beyond the name would be huge.

Here’s why:

Spoiler alert—although this won’t come as a surprise to anyone who knows Web3 or has read the news headlines—HBO couldn’t identify who the mysterious figure behind Satoshi Nakamoto is.

That might leave some people unfulfilled, let alone surprised given just how massive Bitcoin is today, but it is actually a good thing. Not only do we not need to know who Satoshi is, but the cloak of anonymity serves Bitcoin, and by extension all of Web3, as we explain today.

SO WHAT?

1. Focus on technology

The core tenets of Bitcoin are privacy and hedging the global economy. Satoshi’s identity is proof that Bitcoin can succeed in both of these goals.

Satoshi did a number of things that would usually make a person identifiable:

Online activity like this typically would leave a footprint through records, servers and more but Satoshi evaded detection. It is said he used Tor, the software for anonymous internet browsing, among other tools.

In addition, when one of his email accounts was hacked, the data that came out of that did not present any identifiable information.

That lack of figurehead has meant that it is the Bitcoin community that pushes development and deployment of technology. While it is true that this a community that’s rife with conflict, it ultimately means updates and additions are by, with and from the community rather than a single figurehead as is the case with Facebook, Google and other Silicon Valley companies.

This community-driven approach has led to the development of new technologies within Bitcoin, such as support for NFTs, memecoins, and other features that did not exist when Satoshi first launched Bitcoin. Its development is focused squarely on technology and the concept of decentralized financial systems. It is a product of and for its users, not one run at the behest of a management team.

Satoshi's anonymity reinforces the decentralized nature of Bitcoin. By not having a visible leader or figurehead, Bitcoin can be seen as a community-driven project, free from the influence of any single individual. This keeps the focus on the technology and the concept of a decentralized financial system, rather than on a personality. Bitcoin can thus evolve through collective consensus, independent of personal biases or influence.

2. The ultimate Bitcoin whale is best unknown

Adrian Chen, a journalist who had tried to contact Nakamoto in the early days of Bitcoin, once argued that knowing the man or woman behind the mask is essential because the wallets under Satoshi’s ownership are so vast and represent a huge percent of Bitcoin.

Writing in 2014, he said:

But the idea that Nakamoto’s identity is irrelevant is wishful thinking. Most obviously, Nakamoto’s identity matters because he is estimated to control four hundred and forty-eight million dollars' worth of bitcoin, which, if it were unloaded quickly, could seriously depress the value of the notoriously volatile currency.

Things have changed hugely over the last 10 years.

The price of Bitcoin is up 60X since that article was published and more wallets likely belonging to Satoshi have been discovered. Over that decade, the game has changed for Bitcoin too. Institutional capital has entered the cryptocurrency in a way that was unthinkable even just five years ago let alone when Bitcoin launched in 2009.

The introduction of Bitcoin ETFs in the US and other countries means that major financial institutions have exposure to Bitcoin. The rest of the Web3 market, including Ethereum and by extension Ethereum ETFs, adjusts to Bitcoin’s price, too, as we saw last year.

All of this progress makes Chen’s words more significant but, rather than needing to know the identity, Bitcoin needs Satoshi to remain anonymous.

Any identifiable individual would represent a single point of failure for all of Bitcoin. Since Bitcoin is a threat to currency and sovereignty, that person would be at risk from nation states and other actors.

3. Identity best unknown

Finally, Satoshi’s disappearance allows Bitcoin to stand out in a Web3 world that is so often about personality.

These figureheads no doubt help their respective organizations to maintain a high-profile, but there are plenty of downsides that come with the association.

Andreas Antonopoulos, an academic and author who has worked in the Bitcoin space since 2012, expertly explained why Satoshi Nakamoto’s anonymity is a positive benefit for Bitcoin:

As I have expressed many times in the past, I think the identity of Satoshi Nakamoto does not matter. More importantly I think it serves to distract from the fact that bitcoin is not controlled by anyone and is not a system of Appeal-to-Authority. Identifying the creator only serves to feed the appeal-to-authority crowd, as if SN is some kind of infallible prophet, or has any say over bitcoin's future.

The HBO documentary has also shown that intrigue around Satoshi’s identity is box office gold, too. That storyline is one way that a new audience might engage with Bitcoin for the first time, and grow the strength of the network and adoption.