Satoshi Nakamoto's Visionary Quotes
"The root problem with conventional currency is all the trust that’s required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust.”
In this comprehensive collection of quotes, we explore the thoughts and philosophy of Satoshi Nakamoto, the elusive genius behind Bitcoin. Each quote sheds light on different aspects of Bitcoin and blockchain technology, offering a glimpse into the mind of a person who envisioned a financial revolution.
On Bitcoin's Future Potential: "I’m sure that in 20 years there will either be very large transaction volume or no volume.”
The Genesis of Bitcoin: "The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.”
Bitcoin’s Immutable Core Design: "The nature of Bitcoin is such that once version 0.1 was released, the core design was set in stone for the rest of its lifetime.”
The Innovation of a New System: "I’ve been working on a new electronic cash system that’s fully peer-to-peer, with no trusted third party.”
The Value of Lost Coins: "Lost coins only make everyone else’s coins worth slightly more. Think of it as a donation to everyone.”
The Importance of Open Source: "Being open source means anyone can independently review the code. If it was closed source, nobody could verify the security. I think it’s essential for a program of this nature to be open source.”
On the Potential Adoption of Bitcoin: "It might make sense just to get some in case it catches on. If enough people think the same way, that becomes a self fulfilling prophecy.”
Bitcoin as a Global Database: "It is a global distributed database, with additions to the database by consent of the majority.”
The Issues with Banks: "Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve. We have to trust them with our privacy, trust them not to let identity thieves drain our accounts. Their massive overhead costs make micropayments impossible.”
Introduction to Bitcoin: "I’ve developed a new open source P2P e-cash system called Bitcoin. It’s completely decentralized, with no central server or trusted parties, because everything is based on crypto proof instead of trust.”
Bitcoin and Libertarianism: "It’s very attractive to the libertarian viewpoint if we can explain it properly. I’m better with code than with words though.”
On P2P Networks: "Governments are good at cutting off the heads of a centrally controlled networks like Napster, but pure P2P networks like Gnutella and Tor seem to be holding their own.”
Bitcoin’s Accessibility: "Bitcoin would be convenient for people who don’t have a credit card or don’t want to use the cards they have.”
Decentralized Control: "The result is a distributed system with no single point of failure. Users hold the crypto keys to their own money and transact directly with each other, with the help of the P2P network to check for double-spending.”
The Vision of Electronic Cash: "A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution.”
On Bitcoin’s Conception: "I’ve been working on bitcoin’s design since 2007. At some point I became convinced there was a way to do this without any trust required at all and couldn’t resist to keep thinking about it.”
Bitcoin’s Comparison with Stocks and Commodities: "Bitcoins have no dividend or potential future dividend, therefore not like a stock. More like a collectible or commodity.”
The Simplicity of Cryptographic Proof: "With e-currency based on cryptographic proof, without the need to trust a third party middleman, money can be secure and transactions effortless.”
On the Failure of Centralized E-Currencies: "A lot of people automatically dismiss e-currency as a lost cause because of all the companies that failed since the 1990?s. I hope it’s obvious it was only the centrally controlled nature of those systems that doomed them. I think this is the first time we’re trying a decentralized, non-trust-based system.”
The Challenge of Money Supply Adjustment: "There is nobody to act as central bank or federal reserve to adjust the money supply as the population of users grows. That would have required a trusted party to determine the value, because I don’t know a way for software to know the real world value of things.”
On Bitcoin's Limited Supply: "Eventually at most only 21 million coins for 6.8 billion people in the world if it really gets huge. But don’t worry, there are another 6 decimal places that aren’t shown, for a total of 8 decimal places internally. It shows 1.00 but internally it’s 1.00000000. If there’s massive deflation in the future, the software could show more decimal places.”
The Role of Transaction Fees: "In a few decades when the reward gets too small, the transaction fee will become the main compensation for nodes.”
On the Cost of Production and Value: "The price of any commodity tends to gravitate toward the production cost. If the price is below cost, then production slows down. If the price is above cost, profit can be made by generating and selling more. At the same time, the increased production would increase the difficulty, pushing the cost of generating towards the price.”
The Distribution Plan for Bitcoin: "Total circulation will be 21,000,000 coins. It’ll be distributed to network nodes when they make blocks, with the amount cut in half every 4 years. first 4 years: 10,500,000 coins next 4 years: 5,250,000 coins next 4 years: 2,625,000 coins next 4 years: 1,312,500 coins etc... When that runs out, the system can support transaction fees if needed. It’s based on open market competition, and there will probably always be nodes willing to process transactions for free.”
Bitcoin's Comparison to Precious Metals: "In this sense, it’s more typical of a precious metal. Instead of the supply changing to keep the value the same, the supply is predetermined and the value changes. As the number of users grows, the value per coin increases. It has the potential for a positive feedback loop; as users increase, the value goes up, which could attract more users to take advantage of the increasing value.”
On the Utility of Bitcoin: "It’s the same situation as gold and gold mining. The marginal cost of gold mining tends to stay near the price of gold. Gold mining is a waste, but that waste is far less than the utility of having gold available as a medium of exchange. I think the case will be the same for Bitcoin. The utility of the exchanges made possible by Bitcoin will far exceed the cost of electricity used. Therefore, not having Bitcoin would be the net waste.”
Bitcoin’s Fundamental Properties: "The main properties: Double-spending is prevented with a peer-to-peer network. No mint or other trusted parties. Participants can be anonymous. New coins are made from Hashcash style proof-of-work. The proof-of-work for new coin generation also proof-of-workers the network to prevent double-spending.”
On Inflation and Money Supply: "The fact that new coins are produced means the money supply increases by a planned amount, but this does not necessarily result in inflation. If the supply of money increases at the same rate that the number of people using it increases, prices remain stable. If it does not increase as fast as demand, there will be deflation and early holders of money will see its value increase. Coins have to get initially distributed somehow, and a constant rate seems like the best formula.”
The Strength of Proof-of-Work: "Proof-of-work has the nice property that it can be relayed through untrusted middlemen. We don’t have to worry about a chain of custody of communication. It doesn’t matter who tells you a longest chain, the proof-of-work speaks for itself.”
The Market's Rational Pricing: "A rational market price for something that is expected to increase in value will already reflect the present value of the expected future increases. In your head, you do a probability estimate balancing the odds that it keeps increasing.”
Adjusting to Computing Power: "As computers get faster and the total computing proof-of-worker applied to creating bitcoins increases, the difficulty increases proportionally to keep the total new production constant. Thus, it is known in advance how many new bitcoins will be created every year in the future.”
The Future of Bitcoin Transactions: "The design supports a tremendous variety of possible transaction types that I designed years ago. Escrow transactions, bonded contracts, third party arbitration, multi-party signature, etc. If Bitcoin catches on in a big way, these are things we’ll want to explore in the future, but they all had to be designed at the beginning to make sure they would be possible later.”