Never-before-seen Satoshi Nakamoto emails add several details to Bitcoin’s origin lore


Private email correspondence between the pseudonymous Bitcoin creator Satoshi Nakamoto and an early contributor to the project, Martii Malmi, has shed further light on the origin story of the flagship crypto and its creator’s earliest thoughts about the future.

The emails were shared as evidence by Malmi in the Crypto Open Patent Alliance (COPA) vs. Craig Wright trial as part of his testimony. The trial has been ongoing since the beginning of February and will determine whether Wright’s claims of creating Bitcoin have any substance.

Never before seen emails

One group of emails concerns early conversations between Nakamoto and Malmi, who contributed to the Bitcoin website and project code starting in 2009.

The emails provide insight into Nakamoto’s earliest expectations regarding Bitcoin and its future growth. Based on the emails, he was aware of the challenges Bitcoin could face regarding its legal status.

In one email, he wrote:

There are a lot of things you can say on the sourceforge site that I can’t say on my own site … Even so, I’m uncomfortable with explicitly saying ‘consider it an investment’. That’s a dangerous thing to say and you should delete that bullet point. It’s OK if [Bitcoin users] come to that conclusion on their own, but we can’t pitch it as that.”

Whether cryptocurrencies and related offerings are investment contracts has been a critical point of contention between the industry and regulators, especially the US SEC.

After years of negative sentiment, Bitcoin has generally established itself as a commodity, with many considering it “digital gold.” This is primarily because it was initially issued through mining rather than investment contracts, although Bitcoin exchanges allowed users to purchase the crypto asset as early as 2010.

Incidentally, the emails describe the creation of one of the first Bitcoin exchanges. Nakamoto was looking for ideas for Bitcoin applications, and Malmi suggested a fiat-to-Bitcoin exchange.

Malmi went on to operate and register, as was previously known. However, the latest emails show that Nakamoto had been a key advisor for the exchange.

Nakamoto advised Malmi to initially operate the exchange individually instead of creating an “eBay-type” or peer-to-peer exchange. He also dropped his plans to incorporate an auction system in favor of Malmi’s idea for a set exchange rate.

Furthermore, Nakamoto secured a donation of $3,600, of which $1,000 was allocated to support the exchange’s initial operations.

Other topics included anonymity, mining profits, fees

Nakamoto also created the early distinction between anonymous and pseudonymous — or partially anonymous — transactions. He anticipated controversy around transaction analysis, now a major business for firms like Chainalysis and Elliptic.

Nakamoto wrote at the time:

“I think we should de-emphasize the anonymous angle … we can’t give the impression [Bitcoin is] automatically anonymous. It’s possible to be pseudonymous, but … If someone digs through the transaction history and starts exposing information people thought was anonymous, the backlash will be much worse if we haven’t prepared expectations …”

Nakamoto and Malmi also discussed other topics, such as mining profits, power consumption, and Bitcoin’s potential environmental impact. In response to the environmental concerns, Nakamoto wrote:

“Ironic if we end up having to choose between economic liberty and conservation.”

He told Malmi that “unfortunately,” the proof-of-work consensus method was the only way to ensure that Bitcoin could “work” without a trusted third party. He added that it was “fundamental” in preventing double-spending.

Nakamoto did not seem fazed by the idea of significant energy being dedicated to the Bitcoin network. He wrote that even “if it did grow to consume significant energy,” it would not be as “wasteful” as the resources spent on “conventional banking activity.”

He further stated:

“The cost would be an order of magnitude less than the billions in banking fees that pay for all those brick and mortar buildings, skyscrapers and junk mail credit card offers.”

Nakamoto had also been acutely aware that electricity prices would affect mining profitability. His analysis at the time did not take into consideration how quickly the mining industry would evolve after the inception of ASIC devices. However, the emails show that he was mindful of the pace at which technology could develop over the coming years.

“The value of bitcoins would be relative to the electricity consumed to produce them … If you run a computational task 24/7, not letting it idle, it uses significantly more power … The extra wattage consumed goes straight to your power bill, and the value of the bitcoins you produce would be something less than that.”

Another topic discussed by the two developers included the possibility of using Bitcoin time-stamping data. Later, Nakamoto’s own Genesis Block transaction famously included a financial headline.

The emails also revealed discussions around Nakamoto’s decision to initially “hide the transaction fee setting” because he felt the ability to customize fees would confuse users. He predicted that adjustable fees would not be needed until the “far away future, if ever.”

Nakamoto’s prediction was partially correct — average Bitcoin transactions cost just cents before 2017, but the cost has risen significantly over the years, and transactions have regularly cost several dollars recently.

Emails could disprove Craig Wright’s claims

Critically, Malmi’s emails contradict some of the claims Wright has made over the years in his attempt to prove he is Nakamoto.

Wright said that Malmi first approached Nakamoto starting in February 2009. However, email records show that Malmi approached Nakamoto months later, in May 2009.

Another contradiction pointed out by Malmi was Wright misspelling Malmi’s first name in court, which would be uncharacteristic of Nakamoto, who had known him very well.

Yet another contradiction comes from the fact that Wright misidentified Malmi’s nationality even though emails contained a Finnish email address ending in .fi — and, in one case, Malmi’s full street address, including his country.

Wright also claimed in an earlier case that Malmi created the dark net marketplace Silk Road. This supposedly led Wright (as Nakamoto) to leave Bitcoin publicly in 2010.

In his witness statement, Malmi called these allegations “ridiculous and false.” He noted that Ross Ulbricht was convicted years ago for creating and operating the illegal dark web operation.

CryptoSlate previously covered email submissions between Nakamoto and Adam Back, which were filed as part of COPA’s broader efforts to disprove Wright’s claims in court.

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