Bitcoin: Not an Investment, But What Is It?

In a series of emails between Bitcoin’s creator, Satoshi Nakamoto, and Finnish computer scientist Martti Malmi, Nakamoto debunks the idea of Bitcoin as an investment. He cautions against labeling it as such, emphasizing the risks involved.

Bitcoin’s Early Development

Malmi published email correspondence between himself and Nakamoto, dating back to 2009-2011. These emails provide detailed insights into Bitcoin’s early stages, before the term “cryptocurrency” became widely accepted.

Nakamoto’s Response to Malmi’s Proposal

Malmi offered his technical expertise to support Bitcoin’s growth. Nakamoto requested detailed FAQs describing Bitcoin’s intricacies, functionality, and potential use cases.

Malmi’s Emphasis on Bitcoin’s Profitability

Malmi highlighted Bitcoin’s profitability, suggesting it would increase in value as its economy gained prominence. He urged individuals to consider Bitcoin an investment and start running a node immediately.

Nakamoto’s Discomfort with Labeling Bitcoin as an Investment

Nakamoto expressed unease with categorizing Bitcoin as an investment, acknowledging that people could draw their own conclusions. He advised against explicitly stating it as an investment, deeming it dangerous and instructing Malmi to remove that bullet point.

Nakamoto’s Endorsement of Malmi’s Definition of Bitcoin

Nakamoto endorsed Malmi’s definition of Bitcoin as a peer-to-peer (P2P) network facilitating seamless money transfers over the Internet, free from central authority or third-party control. He coined the term “The P2P cryptocurrency” for Bitcoin, describing it as an interesting and fitting slogan.

Malmi’s Explanation of Bitcoin’s Value and Security

Malmi explained Bitcoin’s value based on its ability to facilitate exchanges similar to traditional currencies. He also revealed that new Bitcoins were generated when a network node successfully solves a mathematical problem on the blockchain. Additionally, he emphasized the importance of users creating adequate backups of their coin keys and employing strong passwords to protect their digital assets.