Interview With Satoshi Nakamoto The Creator of Bitcoin

– Your identity has been a secret since 2008 when Bitcoin was created. Why have you decided for an interview right now?

– I’m here because of the political and economic turmoil that has plagued the world recently. I’m not here to talk about myself. Political turmoils, world health issues, raging inflation are all good enough reasons for BTC talk.

– One might say crypto doesn’t have a good reputation among the masses?

– It is true. Luckily with time we can observe growing crypto interest in societies thanks to ever growing publications & social media painting the real BTC picture and benefits to be gained from holding it. A lot of early articles saying BTC is a currency for conducting shady business is simply not true.

– Wasn’t BTC used then to purchase illegal substances from the infamous darknet’s website whose name I will not mention here?

– Yes, It was, together with other currencies like USD. The most significant misconception here wa a claim that Bitcoin transactions are anonymous.

– Aren’t they?

– To a certain degree. All transactions on the blockchain are entered into a publicly accessible ledger that holds data of all BTC transactions. The only Anonymous think about it, is the owner of the account which operate on a pseudonym level. However, establishing the identity of the account’s owner is not impossible. It can be done by examining transactions history and other available data.

– So what is the main difference between a USD and BTC transaction?

– The main idea behind BTC are direct payments in peer-to-peer system. It’s like a cash transaction without the need of physical presence. Such a transaction is carried out without the need for the third party or intermediary whose role in case of regular currency plays a bank. Due to this fact it cannot be slowed down, canceled or limited by any financial institution.

– If the main idea behind creation of BTC was the digitalization of cash payments, why some people claim it is worth to buy and hold BTC?

– To answer this question accurately one should be familiar with the basics of economy- role and function of money in particular. Any form of sound money must possess three main characteristics: it has to be easily divisible, easy to transport and hold its value into the future. No asset regarded as medium of exchange – money – will hold its value if it can be easily produced in large quantities and entered onto the market.

– Are you referring to excessive money printing and current inflation?

– It’s more about the overall picture. Take European merchants in the 16th century. When they visited western Africa, they noticed beads were the main form of money and started to import them on a mass scale from Europe. Currency of a given country will not collapse if its stock to flow ratio is slow and stable. Huge and sudden increases cause erosion in purchasing power and impoverish people who hold the given asset.

– Are you talking about something similar to a market bubble?

– Most definitely. Let’s take a look at copper. Let’s say there is a millionaire who wants to invest $10 million in it, what constitutes 10% of global annual production of copper. In such case the value of the asset will rise. In fact, more and more people will start investing in it, driving the price up even further. That will cause global production of copper to increase since the asset becomes much more lucrative especially for mining companies. Since copper as a raw material is practically unlimited, its mining velocity depends solely on the amount of time and money devoted to it. During the time when increased mining drives investors appetites up, the bubble is growing. The problem starts when most of the initial investors want to capitalize on their initial investment. This causes a domino effect that drives the reverse trend. As a result the price tanks below the initial value causing significant losses also for our millionaire investor.

– How can we protect ourselves from these types of trap investments?

– If you want to invest in the future we need to learn about monetary traps that come together with assets and goods whose production can be easily increased and introduced to the market.

– How about gold then?

– Exactly. The present gold stock in the world is so huge that over the span of the last few decades its annual growth didn’t exceed 2%. It’s safe to say it is impossible to mine such quantities of gold which would cause its price to drop. Gold cannot be artificially created and the mining process is very expensive, time consuming and toxic. That’s why lots of central banks keep gold reserves in their vaults. However, governments will very often manipulate quantities of fiat currencies in circulation on the basis of the current economic situation. In this scenario the extra currency that enters the market is not covered by the reserves like it is the case now with inflation. That’s why we often have to struggle with the devaluation of our currencies and watch our savings lose value.

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