Monthly Archives: December 2013

Estimates of the Bitcoin holdings of the network’s anonymous designer, Satoshi Nakamoto, seem to indicate he owns a minimum of 5-10% or the current issuance. He doesn’t seem to have “spent” them as the addresses known to belong to him have not seen activity — this can be checked in the blockchain, Bitcoin’s public transaction ledger.

If he’s not thrown away the keys in a spring clean, he effectively controls the currency. His holding is a multiple of daily volumes on all exchanges, so he could easily intervene on the markets to cap the price (like a regular central bank) and introduce a fixed or capped USD/BTC rate. He wouldn’t even need to spend much, just announcing “I’m Satoshi Nakamoto and I’ve decided to cap the rate at this value” would do it, as nobody has anywhere near comparable firing power so a successful challenge seems unlikely.

The market cap of Bitcoin-derivatives being even smaller, by extension he can also control the entire alttcoin movement.

If the protocol doesn’t fall apart, his capacity is still notionally limited as he can’t issue new Bitcoins — he’s surrended control of the algorithm long ago. But even then, he may have enough buying power to bribe enough nodes to be able to control the network if he so wished. He could similarly sell his stash at a discount to someone else who wants to control Bitcoin, easing the exit problem he has should he want to convert his holding to real world claims.

Overall that’s more power than any central banker — who have a monetary policy committee to contend with and can be removed by their parent government sponsor — has. If estimates of his holdings are correct, this “decentralised” currency is in effect an absolute monarchy, with an absentee, and so far benevolent, king.