On Friday, emails allegedly from pseudonymous Bitcoin developer Satoshi Nakamoto surfaced, courtesy of Martii Malmi, an early contributor to the flagship digital asset. The correspondence adds even more depth to Bitcoin's story, shedding light on its humble beginnings and Nakamoto's decision-making process.
These emails emerged during a legal dispute in London involving Australian scientist Craig Wright, who claims to be Nakamoto.
Why the Bitcoin supply is limited to 21 million
The exchange between Nakamoto and Malmi revealed that the decision to limit the supply of Bitcoin to 21 million tokens was not arbitrary but a conscious decision. Nakamoto described it as an “educated guess” aimed at aligning Bitcoin’s price dynamics with established currencies while acknowledging the uncertainty of future market conditions.
“My choice of number of coins and distribution schedule was an educated guess. It was a difficult decision because once the network is up and running, it is blocked and we are stuck with it. I wanted to choose something that would bring prices closer to existing currencies, but without knowing the future it is very difficult,” Nakamoto said.
Bitcoin total supply. Source: River Learn
Additionally, Nakamoto emphasized that 21 million BTC represents a fraction of global trade and ensures scalability for a global monetary system. This decision was made in anticipation that Bitcoin's valuation could fluctuate compared to traditional fiat currencies.
“If you imagine it being used for part of world trade, then there will only be 21 million coins for the whole world, so it would be worth a lot more per unit. The values are 64-bit integers with 8 decimal places, so 1 coin is internally represented as 100000000. When typical prices become low, there is sufficient granularity. For example, if 0.001 is worth 1 euro, it may be easier to change how the decimal point is displayed. So if you had 1 Bitcoin, it will now show as 1000 and 0.001 as 1,” Nakamoto added.
Read more: Bitcoin price prediction 2024/2025/2030
These revelations provide valuable insight into Bitcoin's early development and the considerations that shaped its core principles.
More revelations from Satoshi's emails
Beyond supply dynamics, the emails cover various aspects of Bitcoin. These include portrayal as an investment vehicle as well as concerns about energy consumption and anonymity. Nakamoto warned against characterizing Bitcoin solely as an investment, emphasizing the inherent risks and calling for an individual assessment.
“I'm uncomfortable saying specifically, 'Consider it an investment.'” That's dangerous and you should delete that bullet point. It's fine if they come to that conclusion on their own, but we can't say so,” Nakamoto said.
Additionally, Nakamoto acknowledged the potential for increased energy consumption as Bitcoin scales, but argued that it is still less resource-intensive than traditional banking.
“If it resulted in significant energy consumption, I think it would still be less wasteful than the labor and resource-intensive traditional banking activities it would replace,” Nakamoto explained.
Read more: 7 Best Crypto Exchanges in the US for Bitcoin (BTC) Trading
Bitcoin electricity consumption in 2023. Source: SPGlobal
Regarding anonymity, Nakamoto cautioned against overstating Bitcoin's privacy features, warning that transaction histories could potentially reveal users' identities. The pseudonymous BTC creator said: “Anonymous sounds a bit shady.” Additionally, the emails revealed that Nakamoto did not coin the term “cryptocurrency.”
“Someone invented the word 'cryptocurrency'. […] Maybe it's a word we should use when describing Bitcoin. “Do you like it?” asked Nakamoto.
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