Did bitcoin's creator take a cue from the founding fathers?
Lawmakers and pundits rarely mention bitcoin without exaggerating its relation to crime, fossil fuels, radical politics, and “crypto”—the wider space of cryptoassets that gain legitimacy from their affiliation with bitcoin. But peel away the rhetoric and what do we find? Bitcoin promises to do for money what American democracy has done for political power. Both aim to decentralize power to increase fairness and prevent abuse. Not only does bitcoin’s anti-authoritarianism seem quintessentially American, but its founder, too, seems to have embodied the values of our nation’s founding fathers.
I don’t mean that bitcoin’s creator deserves a spot on Mount Rushmore or, heaven forbid, on the dollar bill. Instead, I mean that like the United States itself, bitcoin’s success owes largely to the special circumstances of its origin. Bitcoin’s founder recapitulated, in miniature, the brilliance, bravery, and humility of several founding fathers. On this July 4th, I thought it fitting to outline these similarities, not to aggrandize bitcoin’s founder, but to underscore bitcoin’s uniqueness as a global, credibly neutral monetary asset that Americans needn’t fear but, instead, celebrate.
The Founding Fathers were anti-authoritarian. They rebelled against centralized power, created an alternative system to distribute power, nurtured the system, and then surrendered their power to help it succeed. Whatever their flaws, we can admire their creation and unselfish commitment to its success.
For example, in 1807, then President Thomas Jefferson informed the New York legislature that he would refuse a third term. He cited his “illustrious predecessor” — George Washington — as setting precedent. Relinquishing power was, for each of Washington and Jefferson, the culmination of a career aimed at building a nation without lifelong rulers. Apart from their efforts in the Revolutionary War, they had already helped craft the Constitution, which limited their level of power in the first place. And, decades earlier, Jefferson drafted the Declaration of Independence against a hereditary monarchy.
Two hundred years later, another anti-authoritarian created a new monetary system with distributed powers. He nurtured the system and then relinquished his power over it. This series of events began on Halloween 2008, when someone under the pseudonym ‘Satoshi Nakamoto’ published the bitcoin whitepaper on the internet. This was Satoshi’s declaration of independence—not from a single political ruler but from monetary rulers the world over. He first describes problems with “trusted third parties” — the monetary princes that occupy positions of power on our financial railways. Worldwide, these princes imperil our privacy, charge high fees, censor transactions, block accounts, and discriminate against minorities, whistle-blowers, journalists, and activists. The bitcoin whitepaper then outlines a novel system for payments without princes, one which distributes the power of financial settlement across a network of computers.
Satoshi then waited two months for the world to digest the whitepaper before open-sourcing the software that fulfilled its promises. He pursued no patents, claimed no equity, and, unlike 99.99% of other cryptocurrency projects, held no public or private sale of tokens prior to launch. He instead included a newspaper headline in the first block of transactions to prove that he hadn’t given himself bitcoin before anyone else had the chance to earn bitcoin for themselves.
The bitcoin genesis block, from January 2009.
Bitcoin’s software and the Constitution serve similar roles. Both encode checks and balances for reaching consensus. Whereas the Constitution aims for just political consensus, bitcoin’s software aims for just financial consensus about who has which amounts of money. The checks and balances within bitcoin work through clever incentive design. The software lures people to compete for bitcoin in a way that secures bitcoin’s global ledger and hence the very bitcoin they compete for.
The Founding Fathers adhered to the Constitution that they themselves designed. Likewise, Satoshi mined bitcoin like any other miner. By protecting the fledgling network as an early miner, Satoshi earned, at recent prices, tens of billions USD worth of bitcoin. But thanks to bitcoin’s transparent design, we have good evidence that Satoshi (i) mined bitcoin with an identifiable marker so that we’d know how much he had, (ii) mined fewer bitcoin than he could have, and (iii) has never spent any of this bitcoin.
Both Washington and Satoshi withdrew from their leadership roles under similar circumstances. Washington left office in part because he feared that staying would exacerbate the partisanship of the nascent political parties. He writes in 1799 that he is “thoroughly convinced” that he would “not draw a single vote from the Anti-federal side.” Tensions similarly began to flare in the nascent bitcoin community in 2010 about Satoshi’s role in bitcoin development. Rather than entrench himself as the dictator of development and risk further division, Satoshi left in Spring 2011, never to be seen again. In his final update to the software, Satoshi quietly transferred the copyright to “Bitcoin Developers,” an unofficial group with no membership requirements.
Satoshi discovered how money could operate without central authorities, encoded the discovery into software, freely gave it to the world from behind a mask, bootstrapped a community devoted to its success, relinquished control, and—vanished. Now, anyone in the world with internet access may send, receive, or store value on a network with more volume than Paypal and better uptime than Fedwire—all without tanks, diplomats, or a board of directors. And, with the Lightning Network, users can transact worldwide both quickly and cheaply.
The Founding Fathers democratized political power. If bitcoin succeeds, Satoshi will have democratized money. Like Washington and Jefferson, Satoshi realized that his system’s success required his departure from it. Like Madison, Hamilton, and several other founding fathers, Satoshi wrote under a pseudonym. But, somehow, he’s remained hidden and resisted the temptation to capitalize on his accomplishments.
Bitcoin stands alone among digital assets, in part, because it exists for its users, not its founder. Bitcoin boasts the world’s most open and inclusive monetary network. And without war, sanction, or censure, it erodes the power of tyrannical rulers, irresponsible banks, and rent-seeking intermediaries. Although I don’t want to exaggerate Satoshi’s place in history, I’m grateful for what he’s given the world—a lifeline for those who, by choice or chance, will never enjoy American citizenship or easy access to the U.S. Dollar. The Founding Fathers had flaws, undoubtedly. But they sought the good of future generations at great personal cost. They inspire us. Perhaps Satoshi will inspire our children and grandchildren in a similar way.