The Significance of Satoshi Nakamoto’s Coins

Satoshi Nakamoto’s bitcoin holdings have long been a subject of speculation. How can the creator of Bitcoin never actually spend any of his coins? Why is it that no single unit has been moved in longer than 12 years? Could it be that Satoshi Nakamoto is dead? Or could he be the strongest HODLer of all times, as he understands the value proposition a lot better than everybody else?

In this article I will present three significant perspectives on Satoshi Nakamoto’s bitcoins. In a sense, they are complimentary. But for the sake of clarity, I am going to take each one of them and expand the arguments:

– it’s Satoshi’s private property so we should no longer care, as the project has moved on and he is free to do whatever he wants with his money;

– Satoshi’s coins are a huge honeypot for hackers, and every moment when they’re still untouched proves that the Bitcoin network securely stores value;

– Satoshi’s coins are a constant reminder for Bitcoin Core developers, which tells them that they should be conservative and never make changes which would compromise Satoshi’s private property;

1. Satoshi’s coins are his property, so we shouldn’t care

Satoshi Nakamoto has mined his coins after the network got launched, in a time when bitcoins had no value on any market. We’re talking about 2009, when there were no BTC exchanges, there were very few miners, and one could easily mine some coins with the computer CPU.

The members of the cryptography mailing list already knew about Bitcoin’s launch, and people such as James A. Donald, Ray Dillinger, and Hal Finney have provided technical feedback to improve Bitcoin’s security. All of this happened in November 2008, when “crypto” stood for cryptography, there was no cryptocurrency market, and there definitely wasn’t a “blockchain industry”.

After this early introduction, Satoshi launched version 0.1 of the Bitcoin software on January 8th 2009. He was the network’s first miner, and kept the network alive during a time when nobody else seemed interested in collecting the 50 BTC as a reward for block discovery.

This is what the website looked like in January 2009

For the pre-mine apologists out there, who enjoy justifying their unfair pre-market token distribution by highlighting how Satoshi Nakamoto was the only miner for months and in a way “pre-mined” his bitcoins, it should be mentioned that Satoshi obtained his BTC fairly after the network launched. He played by the network’s rules and kept it alive while there was nobody in the world who would trade goods or services in exchange for bitcoins.

The network was still in its early days, there were still bugs to fix. As a matter of fact, somebody exploited a massive inflation bug in August 2010, when two addresses received 92.2 billion BTC each. At the time, the most significant transaction happened two months prior and involved a certain GPU miner named Laszlo. He famously sold 10.000 bitcoins for two pizzas.

So yes, Satoshi did earn his coins fairly and his mining cannot be labelled as a pre-mine since everybody on the cryptography mailing list knew about Bitcoin’s whitepaper and launch. Furthermore, lots of fans of Chaumian ecash, egold, liberty dollar, and other similar projects jumped on board during the early days. Maybe that their effort to acquire bitcoins (in fiat money and labor terms) was lower in those early days, but they also took a greater risk by accepting that an experimental computer project can be real money.

Now that we took ownership and fairness out of the way, we need to make it clear that Satoshi’s coins belong to him and we must respect his decision to do whatever he wants. 12 years after the network launched, the market demand is great enough to buy his coins if he decides to sell. The Bitcoin project has grown beyond Satoshi’s influence, he has no control over the network or market, and there are plenty of enthusiasts who would gladly buy Satoshi’s bitcoins.

2. Satoshi’s coins are a huge honeypot for hackers

This about it: the Bitcoin network is an open ledger which allows you to see how many coins are stored in every address. While we don’t know for certain which addresses belong to Satoshi, we can find the blocks that he mined and associate the reward addresses with his identity. Analysts estimate that Satoshi owns about 1.125.150 BTC, and he’s spent the coins from 19 of the blocks he mined (the first one being block no. 9, whose reward he used to make the first ever transaction to Hal Finney).

So there are more than 22.500 blocks whose rewards Satoshi Nakamoto has collected, but never spent. You can see them on the public ledger, you can verify that they were never moved, and then realize that nobody was able to break Bitcoin’s cryptography to steal any of the BTC.

The reality is that Satoshi’s coins are a honeypot for hackers. Who wouldn’t want to gain access to at least 50 BTC (about 2 million USD at today’s rate) for finding a vulnerability in the Bitcoin code? It’s a no-brainer, really.

As long as Satoshi Nakamoto’s coins don’t move, we know that the network is secure and you can’t break the cryptography of a wallet by exploiting some bug. It’s a guarantee that it’s safe to store wealth on the Bitcoin network and no unwanted third party can break the wallet’s encryption. However, this doesn’t mean that you should be reckless and it’s recommended that you assess your threat model to know how to respond to other types of attacks (to your computer, to your phone, or to your physical integrity).

How can we know that the coins move due to Satoshi’s direct action and not because his wallets were hacked? Well, that’s a pretty tough question. If Satoshi ever decides to sell any of his coins, we should expect him to leave a message on one of his known accounts. There is no reason for him to act quietly, as the spending would leave the suspicion that his wallet got hacked and Bitcoin may not be as secure as we thought.

The Satoshi we know is fair and transparent about his actions in relation with the Bitcoin network. So to avoid any kind of negative speculation about the network’s security, he would sign a message from his PGP, access his Bitcoin-Talk account, or send an e-mail from his known addresses (vistomail and gmx).

3. Satoshi’s coins push for conservative Bitcoin development

Bitcoin is built on the basis that private property matters, and the network will cryptographically guarantee your ownership as long as you can sign a transaction with the right private key.

If the Bitcoin network was to undergo some kind of hard fork that would change the addresses or even redistribute the “lost” coins, it would infringe the property rights of the creator. And if not even the creator can safely store value on the Bitcoin blockchain for a long time, then nobody’s wealth is really safe and the floodgates for arbitrary confiscation are open by a terrible precedent.

Satoshi’s coins have the role of keeping Bitcoin developers in check while making them responsible for protecting the wealth of the person (or group of people) who created the system. As long as they are there, developers must guarantee software compatibility with old address formats and systems that Satoshi used in 2009 and 2010. It’s a huge responsibility that every Bitcoin developer inherits and must take very seriously to insure the fairness and functioning of the system.

Sure, the developers can’t change anything by themselves and network participants have learned to become conservative in relation to every proposal for new software. New optimizations and refinements are made with every version of the Core client, but it’s up to the sovereign node operators to decide whether or not they run the code. In this truly decentralized system, the developers only make proposals with open source software – and community members choose whether or not they accept them.

So the community must also learn to understand the sanctity of private property and never get greedy in regards to Satoshi’s coins, by pushing the developers to write code which redistributes them. This is also a slippery slope that can lead to a dystopian version of Bitcoin that we really don’t want to materialize.

The existence of Satoshi’s coins makes us all responsible for keeping the system fair and respecting everyone else’s private property. And the longer they remain unmoved, the stronger this culture of respecting property becomes.

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Vlad Costea

I'm here for the freedom, censorship-resistance, and unconfiscatability. What about you?


  1. Bora Horza Gobuchel Reply

    What is wrong with you Vlad?

    Read the WP.

    It is e cash. A medium of exchange. A way to buy coffee beans online. That is what he wanted. All of your conclusions seem to be locked into what btc is now and not what Satoshi designed.

    You are blinded by the valuation.

    Remember those days? Finding a good stealth vendor, the thrill? That was what btc was for….now? It’s so valuable we make up these stupid fantasies. He’s dead. Not a saint. Dead.

So, what do you think?

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