Should Satoshi Nakamoto be awarded the Nobel Prize?

A few days ago Lex Fridman relaunched on Twitter the idea of ​​giving a Nobel Prize to Satoshi Nakamoto, the creator of Bitcoin.

Satoshi Nakamoto should win the Nobel Prize.

— Lex Fridman (@lexfridman) October 10, 2022

His proposal received many positive comments, including one from Michael Saylor. 

The idea of awarding Satoshi Nakamoto with a Nobel Prize starts circulating

From a strictly technical point of view, a Nobel Prize cannot be given to either an anonymous person or a deceased person, so under the current rules, it would not be possible. However, the proposal has a solid basis, so much so that some official posthumous recognition could be considered for the inventor of Bitcoin. 

Truth be told, although he has been missing since 2011, it is not certain that Satoshi is dead. There are still several speculations circulating that he may be alive somewhere in the world, although the fact that he never moved any of his known BTC really suggests that he may be deceased. It is hard to believe that after all that has happened he has managed to keep it all to himself and never and in any way come out into the open. 

In reality, there are many who argue that behind the pseudonym Satoshi Nakamoto might not be a single person but a group of people, although the two main hypotheses about his true identity (Hal Finney and Dave Kleiman) lead precisely to two deceased people. 

Be that as it may, the current rules do not allow the awarding of a Nobel Prize to either an unknown or an anonymous person, so to date it seems just impossible for such a thing to happen. 

Why do some people consider Satoshi’s work worthy of a Nobel Prize? 

We are obviously talking about the Nobel Prize in economics, because the Bitcoin protocol developed by Satoshi Nakamoto could in some ways be equated with a mathematical study of global finance. 

There are two aspects in particular that are very striking about Satoshi’s work: the technological and the financial. 

The technological innovation

From a more strictly technological point of view, the Bitcoin protocol is by far the first in the entire history of humanity that has made possible the creation and sustainability of a truly decentralized system for managing a currency. 

Indeed, although the Bitcoin protocol is totally devoid of a single reliable source of information, the information regarding transactions recorded on its blockchain is absolutely reliable. 

Bitcoin makes it impossible to counterfeit tokens, i.e., money, and at the same time allows anyone in full and total autonomy to verify the correctness of all transactions, without having to rely on anyone (i.e., it is trustless). 

Never in all of human history had such a thing been possible before 3 January 2009, which was the day Satoshi mined the first block of Bitcoin’s blockchain. 

While this specifically technological aspect does not necessarily have to do with economics and finance, in reality its main application is precisely financial. This is why the idea is circulating that the inventor of Bitcoin would be worthy of receiving a Nobel Prize in economics. 

The financial revolution

From a financial point of view, Satoshi’s idea is revolutionary. In fact, there has never existed until now a fiat currency, meaning without collateral, that could not be produced in arbitrary quantities by those who issue and manage it. Actually, before Satoshi’s invention, there never even existed a fiat currency that was not managed by humans, but by a fixed, rigid and effectively unmodifiable computer protocol. 

While on the one hand a currency with fixed supply, or at least with inflation of the money supply fixed, immutable, and tending toward deflation, might cause some problems as a means of payment, on the other hand, placing it side by side with classic fiat currencies with variable and arbitrary supply can have its advantages. 

Central banks can in fact now theoretically create as much currency as they want, even if it causes inflation, because a currency with virtually fixed, unchanging supply and deflationary nature is there. A currency like Bitcoin may not be a good means of payment, since fiat currencies inevitably tend to devalue over time favoring spending instead of saving, but for the same reasons, it can be a good means of saving instead, in theory. In other words, fiat currencies are as bad a means of saving as Bitcoin, on the flip side, is a possibly good one. 

It is enough to recall that when the central banks in 2020 began their last major QE, by which they created a huge amount of new currency out of thin air, Bitcoin’s value was about half of what it is today. And it was probably the central banks’ QE that caused it to rise. 

For this reason, namely for inventing the first real alternative in all of human history to classic fiat currencies, many believe that Satoshi would be worthy of receiving a Nobel Prize. 

Since the Nobel cannot be awarded to him, however, perhaps some other kind of recognition should be imagined, not least because in light of all this it is really hard to argue that he does not deserve it. 

The beginnings of a new era: Bitcoin

Moreover, Bitcoin has been around for more than 13 years now, and in addition to always having increased its value on average over the years, it continues to always function perfectly from a technical point of view, far better than any other payment system humanity has ever invented. 

It is worth remembering that Satoshi created a technology, which then in turn gave rise to a financial asset. Throughout 2009 the market value of BTC was effectively zero, because it had no market. It began to be commonly tradable in fiat currency only in mid-2010, which was a few months before Satoshi disappeared. 

If, as is assumed, Satoshi later actually passed away, it would mean that he created a technology from which only after his demise was a real financial asset born. 

Incidentally, recently Jim Blasko was able to find on SourceForge the first version of the Bitcoin software created by Satoshi Nakamoto, namely version 0.1.0 of what at the time was simply called Bitcoin and acted as both node and wallet as well as miner. 

This version was apparently long lost, but Blasko managed to dig it up thanks to a little browser hacking. 

It is a program made entirely by Satoshi Nakamoto, and used by him on 3 January 2009 to mine the first block of Bitcoin’s blockchain. 

On 8 January 2009, which was the day before the second block was mined, Satoshi sent the Cypherpunks crypto mailing list a link to the file Bitcoin.v0.1.rar, which, however, was later lost. 

The files uncovered by Blasko on SourceForge refer to that very same v0.1.0, although they were not uploaded until 30 August of that year. So this is precisely the original program written by Satoshi and used to mine the first blocks of the Bitcoin blockchain.