Coinbase wants Satoshi Nakamoto’s identity to remain a mystery

Written by: Ali Raza
February 27, 2021
  • Coinbase says the unraveling of the Satoshi mystery is a risk to its business.
  • The majority of the exchange’s revenue in 2020 was made from Bitcoin and Ethereum transaction fees.
  • Coinbase hopes Satoshi’s identity should remain a mystery for the sake of its business.

San Francisco-based cryptocurrency exchange Coinbase has been planning to go public exchange since last year. On Thursday, it filed a prospectus with the U.S. Securities and Exchange Commission (SEC), detailing some problems that may affect its business negatively. One of those issues listed was the likely reappearance of Satoshi Nakamoto, the person adjudged to be the founder of Bitcoin.

Satoshi’s identification is risky for Coinbase

According to Coinbase, the future identification of Nakamoto could plummet the price of Bitcoin, which is a big risk factor to the growth of its business.

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It has been well documented that Satoshi was the creator of Bitcoin after he published a white paper titled “Bitcoin: A Peer-to-Peer Electronic Cash System.”

Many people have tried to unravel his identity, but Satoshi’s true identity is still unknown. No one knows whether he is still alive or dead.

If he is identified in the future or decides to reveal himself, several scenarios could play out for Bitcoin. There’s no doubt that his appearance will lead to a major market shift, but it depends on who the individual is.

As Satoshi is believed to hold 1.1 million Bitcoin from a total of 21 million Bitcoins that exist in the world, his reappearance will have an immediate socio-economic impact. As a result, Coinbase has listed Satoshi’s appearance as a risk to its business.

The crypto exchange hopes that Satoshi’s mystery stays the way it is for the sake of its business.

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Coinbase’s business is tied to the Bitcoin market

Coinbase explained on the prospectus that its business is tied directly to the existence of the Bitcoin market. The majority of its net revenue in 2020 was made via transaction fees on both Ethereum (ETH) and Bitcoin (BTC).

Apart from the mystery of Satoshi, Coinbase also listed negative market perception of Bitcoin and Ethereum as part of its risks.

Coinbase’s IPO filing also notes that any “negative perception of bitcoin or Ethereum” could be another factor that affects its pricing.

The exchange also stated that the crypto-economy may be adversely affected if Bitcoin’s and Ethereum’s market deteriorates or if their prices decline. Coinbase also identified other factors that are sources of risks to the profit and existence of its business.