BREAKING NEWS: Unknown Bitcoin founder, Satoshi Nakamoto, who is believed to own in excess of 1 million Bitcoins valued at over US$2.5 billion, has been found dead in his penthouse apartment in central Tokyo. The cause of death has not been revealed by authorities investigating the murder. Wait, that last sentence didn’t make sense… in fact, neither did the first one… if Satoshi Nakamoto is unknown, how do we know he lives in Tokyo, let alone that he may or may not be dead? How do we even know he’s a “he”?
In truth, we don’t know if the mysterious Satoshi Nakamoto is a he, she, or a group of individuals operating under a pseudonym. All we know is that he/she/they created what may prove to be the most revolutionary technology in decades: Blockchain. The blockchain is nothing more than a digital record of transactions. What makes it unique is its secure peer-to-peer system of validating new blocks without a central authority to verify transactions, enabling digital records to be transferred without an intermediary.
This can be used for many purposes, but the one most people are familiar with is Bitcoin, the digital currency that threatens to shake up the banking sector. There are currently around 16.5 million Bitcoins in circulation out of a total 21 million that will be released via a digital ‘mining’ process over the next 100 years or so.
Via the blockchain, Bitcoins can be transferred more or less instantly, and without the exorbitant transaction fees charged by banks (there are transaction fees, but they’re relatively small). International transactions in particular are far cheaper, and recipients can have access to their funds in minutes rather than days.
This offers a liberating alternative to the increasingly oppressive banking system that steals wealth from society though inflation. Best of all, anyone can open a Bitcoin account, enabling literally millions of people to gain access to the most basic banking service (money transfers) without onerous identification requirements.
What does any of this have to do with the FAKE NEWS death of Satoshi Nakamoto? Well, Satoshi, whoever he/she/they are is said to own over 1 million Bitcoins, around 6% of the total supply. His death poses an interesting question and exposes a small but significant flaw: what happens to his coins?
Perhaps someone can verify this, but I’m told that an account with a million or so Bitcoins (presumably the account of Satoshi Nakamoto) has been untouched since inception. For all we know, he could be dead. Presumably there are other early adopters that have thousands, tens of thousands or even hundreds of thousands of coins that they are saving for “payday” when the price hits a new high. But what if some of these people have been hit by a bus, fallen critically ill, or even just lost their codes?
Well, quite simply, their coins just sit there occupying a few bytes on the internet forever, ‘locked’ in cyberspace and inaccessible to anyone. Over time, more and more ‘keys’ will undoubtedly be lost, and as each one disappears, the supply of Bitcoin shrinks until there simply isn’t enough to facilitate the function of a currency. If Satoshi Nakamoto is dead, a very large chunk of that supply may already be gone.