How the Satoshi Nakamoto Institute is Paying Homage to Bitcoin’s Founder
In the future, it will be easy to access all of the contributions made by the creator of Bitcoin, Satoshi Nakamoto. An organization called the Satoshi Nakamoto Institute has compiled the entirety of Satoshi's quotes, emails, code, and forum posts.
Although the real identity of Satoshi remains mysterious, this initiative seeks to immortalize his knowledge. The database encompasses all the developments since the first release of the Bitcoin whitepaper on a cypherpunk mailing list in October 2008.
The inadequacies of the fiat monetary system are one of the major reasons for the establishment of Bitcoin. The introduction of Bitcoin coincided with the infamous financial crisis of 2008 that was brought about by the unregulated printing of money and uncouth investment practices.
As per Satoshi Nakamoto, people trust banks to hold their money and transfer it electronically, yet these institutions lend the funds without leaving suffice amounts in reserve accounts for contingency purposes. Moreover, people trust the banks to uphold their privacy and protect their funds form identity thieves. Regardless, banks still charge exorbitant overhead fees, making micropayments impractical.
According to Satoshi Nakamoto, the primary cause of the challenges in the fiat system is the overreliance on trust for it to function. For this reason, Satoshi devised a novel monetary system based on cryptography to solve the money crisis. In this system, the cryptographic proof would replace trust, enabling two parties to transact directly in the absence of an intermediary. The irreversibility of such transactions would protect sellers from fraud. On the other hand, escrow mechanisms would be deployed to protect buyer funds.
Unlike fiat currencies, which can be printed at the volition of central banks, Bitcoin has a fixed supply and a fixed rate of mining. Regarding this, Satoshi said that the total amount of Bitcoin in circulation would be 21,000,000 coins. This amount would be distributed to network nodes when they create new blocks, with the amount halving after every four years.
After this cycle is over, the system can support transaction fees if needed. However, this will be based on open market competition, meaning that some nodes will be probably processing transactions free of charge.
In due course, the value of Bitcoin will surge as a result of an increased number of users. The continuous addition of new coins through mining means that the supply will increase, but it would not cause inflation. If the supply increases at a similar rate as the adoption of Bitcoin, the price would stabilize.
Alternatively, if adoption increases faster than the supply of new coins, the demand would increase, causing the value of Bitcoin to increase. The best formula for the sustainability of Bitcoin is producing new coins at a constant rate.