Why Bitcoin Could Go Straight To Zero.
The billion dollar person, Satoshi Nakamoto
Good morning investors,
Could you imagine would it would be like to wake up one day and see that the entire crypto market is in chaos and heading straight to $0?
Yes, I know that bitcoin recently has taken a tumble, but that compares very little to the effects of what would happen if the anonymous creator of bitcoin was ever revealed.
Today we are going to talk about Satoshi Nakamoto, the pseudonym given to the founder of bitcoin, and how his unmasking would be very bad for a lot of people.
Who is Satoshi Nakamoto?
Well, nobody knows, but this is what we do know:
Bitcoins’ white paper (which can be found at Bitcoin.org) was published on October 28th, 2008, and the first coins were minted on January 3rd, 2009. Marking the birthday of this crypto.
Currently, there are a finite 21 million coins in circulation. Satoshi owns around 5% of them at 1,000,000 coins and mined the first ever block called “the genesis block”. That puts his net worth at around 21 billion dollars at the time of writing this article. Giving this anonymous creator not only a vast fortune but a lot of power.
One of the reasons bitcoin has gone up millions and millions of percent since its creation is its deflationary properties. This means the twenty-one million bitcoins are all there ever will be; no more will be minted, unlike the US dollar, where it gets printed and devalued every day.
Right now, 90% of bitcoins supply has been mined. So for one person to own 5% of all of the coins is a pretty big deal.
How BTC could go to $0
As I mentioned above, Satoshi Nakamoto owns a little over 1,000,000 of all the bitcoins in circulation.
If for any reason, this anonymous creator wanted to liquidate his holdings, it would cause a colossal supply spike causing demand to fall along with the price drastically.
Something kind of similar happened to the cryptocurrencies Terra and Luna. It was an algorithmic stable coin that was meant to be kept at $1. However, the majority of people started exchanging Terra for Luna, and that caused a big supply spike in Luna, and the price crashed to zero in two days.
That example was very different than bitcoin in many ways. However, if there was ever to be a huge supply spike caused by the creator selling their coins, in almost 100% certainty, the price would start crashing.
Bitcoin being decentralized is another vital element that led to much of its success. No one person or institution can control the blockchain. For this reason, if the creator was ever unmasked, there would then be a single (centralized) authority. Basically, one of the largest reasons people bought bitcoin in the first place would be taken away, causing another selling panic.
With these two explanations in perspective, it is a very real possibility that if the creator of bitcoin, Satoshi Nakamoto, was ever revealed. Anyone investing in cryptocurrency would be in for a world of hurt. Bitcoin is the most dominant of all cryptos on the market, so seeing the giant coin tumble would be very disheartening for all other coins.
I hope you found this article both informative and interesting. As I said in my last posts, The Money Matters Letter will no longer be posting new articles on Fridays. Instead, we will be taking the extra time to make higher-quality youtube videos for our visual and auditory learners. Thank you for being so understanding, and please leave all questions in the comment section below.
As always, have a great day, and remember to live in the moment : )
