Satoshi Matters, Because Stories Matter
Last week was one of those weeks when those of us who are involved in the world of Bitcoin and blockchains were bombarded by emails and text messages from friends and relatives. They all wanted to know if what they were reading was true: had the real Satoshi Nakamoto, Bitcoin’s pseudonymous creator, finally stepped forward to reveal himself? Or was it just a scam?
I wish I could answer that question definitively (though the evidence increasingly suggests the claims are extremely unlikely), but I cannot. Better yet, I wish I could honestly state — like some for whom I have a great deal of respect — that Satoshi’s identity does not matter. But it does.
Indeed, a narrative is now emerging that Satoshi’s identity matters because of a) the economic ramifications of this individual’s presumed control of over a million bitcoins, and b) potential to re-assume a leadership role in the Bitcoin software development and swing support between competing development teams and visions for the future of Bitcoin.
There is another reason I believe Satoshi’s identity matters: public perception and the role public perception plays in wider adoption of Bitcoin.
Many of Bitcoin’s proponents like to refer to it as being “trustless.” It is not. For most people, Bitcoin requires a LOT of trust: trust that the engineers reviewing the code caught any critical bugs; trust that the cryptography is sound; trust that their computer or phone hasn’t been compromised; trust that the value of this purely digital thing — which they cannot see or touch or smell, which isn’t issued or controlled by any government or institution, which they’ve mostly heard of in connection to drug trafficking and ransomware — won’t plummet tomorrow.
Compare that to the US dollar: something that you can hold in your hand; something that you feel confident in your ability to assess as valid just by looking at it; something that is backed by the full faith and credit of the most powerful nation in the world; something that you’ve used to pay for groceries, clothes, music, rent, tuition, and taxes.
Which do you think requires more trust?
It isn’t much of a stretch to describe any form of money, even the US dollar, as merely a symbolic, mutually shared illusion. Money has value because we agree it does. We suspend disbelief because it is useful to do so, because not having to barter every time we want to transact removes friction from our lives, and increases global wealth.
Whoever Satoshi Nakamoto was, he/she/they were wise to cloak themselves in a pseudonym and release the fledgling currency into the world as free as possible to find initial success or failure within its early community on its own merits.
As humans, our perceptions and experience of the world are mediated by stories, and origin stories are particularly powerful. Like it or not, whether you personally care or not, public opinion of Bitcoin is influenced by public opinion of Bitcoin’s creator. For those who lack the capacity or interest to understand the technical underpinnings or economic viability of Bitcoin, trust in the people and entities most closely associated with Bitcoin is the only way to assess whether they would want to use Bitcoin or any services built on top of it.
How much easier would it be for the average person to trust Bitcoin if they found out that “Satoshi Nakamoto” was actually a team of widely respected computer scientists and economists? How much harder would it be if they were told that Bitcoin was created by a scammer and a tax fraud? After they were already told it was an old Japanese man whose name actually was Satoshi Nakamoto?
Regardless of the background or status of the latest prospective Satoshi, a purely digital currency that can be transacted peer-to-peer without any intermediaries is a powerful concept. It’s one that already has millions of users, an aggregate value of around $7 billion, and great promise for future growth. I don’t think any of Bitcoin’s proponents want it to plateau here though. The evolution of Bitcoin’s origin story helps bend the odds of its continued success by influencing public perception and trust in its value.
The identity of Satoshi Nakamoto — or, at least, the narrative around Bitcoin’s origin — does matter, whether we want it to or not. Money can’t exist without stories, and the evolving mythology around Satoshi Nakamoto will forever be a part of the story of Bitcoin.
