Initial distribution process of Bitcoin was the most “equitable” one, study claims
This year has seen a bearish trend in the cryptocurrency market after witnessing the intoxicating highs of last year. But crypto enthusiasts are not flustered with this downturn and expect a rally led by Bitcoin by the end of this year. Bitcoin has been the flag bearer of the cryptocurrency world and it continues to do so. As its popularity soars, there are few skeptics who have cast doubts regarding the distribution of Bitcoin in the earlier stages of development.
Debunking all these theories, Dan Held, co-founder of Interchange, has propounded a theory on Thursday about the perceived fairness of Satoshi Nakamoto’s initial distribution of Bitcoin.
Held says in his Medium blog that Satoshi Nakamoto’s distribution of Bitcoin in the initial stages was the most equitable and transparent process undertaken by any cryptocurrency before it is launched to the public.
He says, “Satoshi didn’t premine. Satoshi gave everyone a two month heads up before mining the Genesis block, reaching out to the only other people who would possibly be interested in experimenting with a sovereign digital currency at the time, the cypherpunks (via a public e-mail list). The whitepaper was published on October 31, 2008, then Bitcoin 0.1 software was released on January 9, 2009.”
Bitcoin mining was not a profitable venture during the early days
The code to mine Bitcoin was available on the day Satoshi began mining and it’s a known fact that he was not the only one as Hal Finney had started mining one day after the launch.
The Medium blog goes on to add:
“For the first year of Bitcoin’s existence, Satoshi and other miners couldn’t muster enough hashrate to mine more than 144 blocks/day and trigger an upwards difficulty adjustment. Satoshi mined because the network required a miner, he turned them off when there was a stable network that didn’t need his mining power. He reduced his % of the hashrate in a slow and steady manner.”
This proves that Satoshi’s way was the most equitable and in no way meant to benefit him individually.
There are also some who say that Satoshi mined something in the range of 1 million coins. But dispelling any such rumors, held points out to recent research done by Bitmex which say that Nakamoto mined something in the region of 70,000 Bitcoins in 2009.
The post also goes on to add that Bitcoin was a worthless asset then and anyone who was mining it was wasting time, money, and energy doing so. He points to the faucets that were set up during the early days that gave away lots of bitcoins, such as “the 10k BTC faucet set up by Gavin and other Bitcoiners who donated funds.”
Satoshi wanted the project to be judged on its own terms
Satoshi was trying to “signal to everyone” that Bitcoin was not simply a “scam,” Held says.
He says that the coin was never meant to be a Ponzi scheme and it never promised high returns.
“It is an open source and anyone can review the code, anyone can contribute to the code, anyone can run the software voluntarily and participate in the network, and anyone can use the network without permission. The entire history of all Bitcoin transactions is visible to anyone in the world too, which totally contradicts the whole premise of a Ponzi scheme,” he adds.
Held concludes by saying that Satoshi wasn’t perfect, but Bitcoin’s release was the most even-handed distribution process one could have built, given the constraints and the innovative nature of the technology, which is in total contrast to how the crypto world operates now.
Image via Shutterstock
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