Martii ‘Sirius’ Malmi, an early contributor to Bitcoin’s code, recently unveiled a trove of emails in which Satoshi Nakamoto, the mysterious figure behind Bitcoin, cautioned about the cryptocurrency’s potential energy consumption.
This revelation coincides with a legal battle involving Craig Wright, who is being sued by the Crypto Open Patent Alliance (COPA) to establish his claim as Satoshi Nakamoto.
In a May 2009 email, Satoshi emphasized the importance of Proof of Work (PoW) as the key to facilitating peer-to-peer electronic cash transactions without the need for a trusted third party. PoW, a consensus algorithm used in cryptocurrencies like Bitcoin, involves miners solving complex puzzles to validate transactions and add them to the blockchain, thereby preventing double-spending.
The debate over Bitcoin’s energy usage revolves around PoW, with industry proponents highlighting miners’ use of clean or orphaned power, while critics raise concerns about its overall energy consumption. Some jurisdictions, such as New York State and British Columbia, have imposed restrictions on Bitcoin mining due to its high energy demands.
Satoshi defended Bitcoin’s energy usage by contrasting it with the resource-intensive nature of traditional banking activities, suggesting that Bitcoin’s energy consumption is comparatively less wasteful. Research from 2021 by Galaxy Digital indicated that Bitcoin consumes half the energy of the banking and gold mining industries combined, prompting Satoshi to ponder the ironic trade-off between economic liberty and conservation.
Beyond its financial applications, Satoshi envisioned non-financial uses for Bitcoin’s blockchain technology, such as serving as an open-source notary to securely timestamp documents. However, he expressed legal concerns about labeling Bitcoin as an investment, fearing regulatory scrutiny from authorities like the Securities and Exchange Commission (SEC). Satoshi cautioned against explicitly marketing Bitcoin as an investment to avoid potential legal implications surrounding securities regulation.
