• Bitcoin creator Satoshi Nakamoto warned in an email in 2009 that Bitcoin could become energy-intensive.
• Proof-of-work (PoW) is at the core of Bitcoin’s security, but its energy consumption is a topic of debate.
• Satoshi foresaw non-financial use cases for blockchain and expressed concerns about legal oversight.

Satoshi Nakamoto warned that Bitcoin could become energy-intensive, according to an email released by Martii Malmi, an early Bitcoin collaborator.

The emails were released in connection with a lawsuit over whether Craig Wright is the creator of Bitcoin.

“Proof of work is the only solution I’ve found to make e-cash work with peer-to-peer transfers without a trusted third party,” Satoshi wrote in May 2009, adding that PoW It calls it “the basis for coordinating networks and preventing double spending.”

PoW is a consensus algorithm used in crypto assets (virtual currencies) such as Bitcoin that protects the network and prevents double spending by requiring miners to solve complex calculations.

PoW has sparked a debate over Bitcoin’s power consumption. Criticism has focused on miners’ power consumption, although the crypto industry points out that miners use renewable energy and electricity not used elsewhere.

As a result, Bitcoin mining has been suspended in states such as New York and British Columbia due to its high power consumption.

“Even if Bitcoin were to consume large amounts of energy, we believe it would still be less wasteful than traditional banking, which consumes large amounts of labor and resources,” Satoshi wrote.

“The cost would be orders of magnitude less than the billions of dollars in bank fees for fancy buildings, skyscrapers, and unsolicited credit card offers.”

According to a 2021 study by Galaxy Digital, Bitcoin consumes half as much electricity as banks and the gold mining industry.

Non-financial use cases

One of the non-financial use cases Satoshi sees for Bitcoin technology is that blockchain acts like an open source notary, allowing users to prove their existence at a particular point in time. Securely timestamp documents.

“Bitcoin is a decentralized, secure timestamp server for transactions,” Satoshi said.

“With a few lines of code, you can create a hashed transaction for anything that requires a timestamp.”

legal concerns

Satoshi was also concerned that treating Bitcoin as a type of investment would open him up to legal scrutiny from authorities.

“There are a lot of things that I can say on[open source software download site]sourceforge that I can’t say on my own site,” Satoshi said.

“Still, I’m reluctant to explicitly say, ‘Think of it as an investment.’ That’s dangerous and should be removed. I don’t mind them coming to that conclusion on their own, but I don’t mind presenting it that way.” I can’t do that.”

In fact, since then, the U.S. Securities and Exchange Commission (SEC) has been engaged in a lengthy legal battle over the use of the term, classifying cryptoassets as securities and cryptoasset exchanges as places that handle unregistered securities. there is a possibility.

｜Translation/Editing: CoinDesk JAPAN Editorial Department
｜Image: Shutterstock
｜Original text: Satoshi Anticipated Bitcoin Energy Debate in Email Thread With Early Collaborators