4 advice from Satoshi Nakamoto, the creator of Bitcoin

Charlie Taylor

The figure of Satoshi Nakamoto is still a mystery, but it is undeniable that the pseudonym was very intelligent and left, in addition to the Bitcoin software, a series of reflections and advice.The creator of the cryptocurrency did not simply present his project to the world and disappeared, as some may think. He founded the BitcoinTalk forum and was active until December 2010, answering questions and gathering contributors for Bitcoin to become increasingly decentralized and robust. On the Nakamoto Institute website, you can see all the public interactions of this anonymous developer on the page “The Complete Satoshi “. It is worth remembering that Bitcoin was still at another stage of development, and a lot has changed, but below we have collected four good pieces of advice from Satoshi that have immense value to this day.

1 – Accumulate some bitcoins

Still on the cryptography mailing list, cryptographer Dustin Trammell said that Bitcoin caught his eye because he did not need trusted intermediaries to carry out transactions, but the “real trick” would be to get people to really value bitcoins so that it becomes currency.

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In response, Satoshi stated that “(Bitcoin) could start in a narrow niche, such as reward points, donation tokens, game currency or micropayments for adult websites. (…) It can make sense just accumulate some if it works. If many people think the same way, it becomes a self-fulfilling prophecy. ”When it comes to money, we are inevitably talking about trust. Ultimately, Bitcoin ended up revenging as a successful currency because people believed it could come true. A person could only accept BTC as a form of payment if he saw that someone else would accept that asset as valuable in the future. Considering that this comment was made on January 16, 2009, when bitcoin coins did not yet have monetary value, “accumulate some ”has become excellent advice. But if Bitcoin's future is mass adoption, perhaps adding a few fractions is still a good suggestion.

2 – Do not reuse addresses

Contrary to what used to be said in traditional media, Bitcoin is a completely transparent network and transactions can be tracked, but there is not necessarily a link between addresses and identities – which makes Bitcoin pseudo-anonymous. In Bitcoin's introductory paper, Satoshi explained about address privacy. Even with all public transactions, Nakamoto says that “privacy can still be maintained by interrupting the flow of information elsewhere: keeping public keys anonymous. The public can see that someone is sending an amount to someone else, but without information that links the transaction to anyone. ”

“As an additional firewall, a new key pair must be used for each transaction to avoid being tied to a common owner. Some links are still unavoidable with multi-entry transactions, which necessarily reveal that your entries were owned by the same owner. The risk is that if the owner of a key is revealed, the link may reveal other transactions that belonged to the same owner. ”

As he summarized in a publication on BitcoinTalk, the important thing is to understand that "for greater privacy, it is better to use bitcoin addresses only once." That way, whoever sends you values ​​does not know your balance and you do not have the identity easily linked to the movements of all currencies together. The use of the Tor network, which makes it difficult to track your IP, was also advised by Satoshi for those people who run the full Bitcoin node.

3 – Is mining a waste of energy? Waste is not having Bitcoin

The claims that Bitcoin mining is just a waste are old. A post from August 2010 called “Bitcoin minting is thermodynamically perverse” was answered by Satoshi.

It is the same situation with gold and gold mining. The marginal cost of gold mining tends to be close to the price of gold. Gold mining is a waste, but that waste is much less than the usefulness of having gold available as a medium of exchange. I think the case will be the same for Bitcoin. The utility of exchanges made possible by Bitcoin will far exceed the cost of electricity used. Therefore, not having Bitcoin would be a net waste.

Proof-of-work, the protocol responsible for the high energy expenditure related to Bitcoin mining, fulfills a very important function, which is to keep the network safe and decentralized. And the higher the energy cost for producing new currencies, with the entry of new miners on the market, the higher the cost to attack the network with more than half of its computational power.See also: Bitcoin is not an enemy of the environment, as traditional media points out

4 – Do not trust third parties

His initial proposal has always been very clear, unlike other failed attempts to create a digital currency, such as DigiCash, Bitcoin has sought to become a means of payment from point to point, without the need for a trusted intermediary. so the money would be really safe. In a publication in the P2P Foundation, he says that “the root of the problem with conventional currency is all the confidence needed to make it work. The central bank must be reliable in order not to devalue the currency, but the history of fiat currencies is full of breaches of that confidence ”.

“Banks must be trusted to keep our money and transfer it electronically, but they lend it in waves of credit bubbles with only a fraction of the reserve. We have to trust them with our privacy, trust them not to allow identity thieves to suck our accounts, ”continues Nakamoto.

But when we are thinking about the current Bitcoin ecosystem, we see that a massive number of currencies are being held in custody with service providers such as exchanges, often targets of hackers. In addition, some users driven by greed give up custody to dubious schemes that promise high profits in a short time. The problem, however, is the possibility of never having access to their funds again. Do not neglect the security of your bitcoins, take advantage of the possibility of securing your own custody safely and avoid “the root of the problem” of traditional currency with Bitcoin.Read more: Twitter CEO raises R $ 14.5 million with a single tweet, see how

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