finbold.com
Newly released emails have provided insights into the early days of Bitcoin (BTC) and its capabilities, as perceived by its anonymous founder, Satoshi Nakamoto.
In these emails, Nakamoto and his early collaborator, Martti Malmi, discussed the cryptocurrency’s potential concerning the traditional financial system.
The 120-page email correspondence, released on February 23, includes Nakamoto’s bold assertion that “there is only one global chain.” He compared Bitcoin’s transaction volume potential to the existing Visa (NYSE: V) credit card network, which, in May 2009, processed approximately 15 million Internet purchases daily worldwide.
Nakamoto asserted that Bitcoin could already scale much larger than Visa with existing hardware and at a fraction of the cost. He expressed confidence in the scalability of Bitcoin, noting that it would not hit a scale ceiling.
His rationale was rooted in Moore’s Law, predicting that hardware speed would increase tenfold in five years and a hundredfold in 10. Even with rapid adoption, Nakamoto believed that computer speeds would outpace the number of Bitcoin transactions.
Satoshi's vision for Bitcoin was lots of L1 transactions paying small fees (1-2 cents).
— Nikita Zhavoronkov (@nikzh) February 24, 2024
He had no problems with 15 million txs a day (~50 MB blocks) in 2009! He understood adoption wouldn't happen overnight, so Moore's law would help.
Maxis will try to hide this knowledge. pic.twitter.com/nhNodVhngo
Addressing Bitcoin fees
Addressing concerns about potential fees, Nakamoto foresaw that fees might not be necessary in the near future. However, he suggested a mechanism where nodes could process transactions with fees, allowing the market to determine the minimal acceptable fee. This decentralized approach would let individual node operators decide the fees they accept, creating a dynamic market based on supply and demand.
Nakamoto highlighted an essential aspect of Bitcoin – its security grows with the size of the network and the value it protects. While acknowledging vulnerabilities in the early stages when the network is small, he emphasized that the potential value that could be stolen would always be smaller than the effort required to steal it.
Additionally, Malmi’s emails reveal Satoshi’s astute grasp of anonymity’s nuances and the potential risks of misinformation for Bitcoin. Satoshi suggested de-emphasizing the anonymous aspect, cautioning that using Bitcoin addresses instead of IP addresses doesn’t automatically ensure anonymity.
The email also foresaw the emergence of blockchain forensics, warning about potential backlash if users were not informed to take precautions against exposing supposedly anonymous information during transaction history scrutiny.
Satoshi on Bitcoin power consumption
Furthermore, reflecting on the intersection of technology and sustainability, Satoshi considered the environmental impact of Bitcoin, acknowledging the tension between economic freedom and ecological preservation, particularly with the proof-of-work (PoW) system.
Despite criticism of its power draw, Satoshi argued that Bitcoin would be more energy-efficient than traditional banking systems. If it were to consume significant energy, Satoshi believed it would still be less wasteful than the resource-intensive conventional banking activities it aimed to replace, citing a cost order of magnitude lower than billions spent on banking fees and infrastructure.
Amid these revelations, the true identity of Satoshi Nakamoto continues to be a subject of speculation within the cryptocurrency and blockchain community. The emails were initially introduced as evidence in a London court case involving the Crypto Open Patent Alliance and Craig Wright, who has controversially claimed to be Nakamoto.