Bitcoin started out as a cryptocurrency that was not pre-mined. In other words, when Satoshi Nakamoto first started using the Bitcoin protocol on 3 January 2009, no BTC tokens had yet been created.
The first Bitcoin created by Satoshi Nakamoto
The first 50 BTC tokens were created by Satoshi himself by mining the first block.
However, there are those who argue that because he was one of the very few Bitcoin miners at the time, he actually created many of the first BTC, as if he had “pre-mined” them. In other words, he would have mined them before a significant number of other people started mining them.
It is estimated that Satoshi Nakamoto mined more than 1 million BTC, which today would have a dollar value of more than 60 billion, although there is no record that he ever used them. In fact, Satoshi disappeared in 2011, and no one has heard from him since.
As far as is known, the one million BTC mined by Satoshi have never been used, and may never be used. Many are convinced that Satoshi is dead, and that he did not leave the keys to his Bitcoin to anyone, although there is an ongoing legal dispute between Craig Wright and Dave Kleiman’s brother to regain possession of the so-called “Tulip Trust” in which those keys are allegedly stored.
A few days after mining the first block, Satoshi began to mine others in sequence, and after a few days created the first transaction by sending BTC to Hal Finney, who is also now deceased.
The pre-mining of Bitcoin
At the time, there were so few people using and mining Bitcoin that the vast majority of blocks were mined by Satoshi himself. It is worth mentioning that at the time there was no platform to sell BTC for dollars or other fiat currencies. The value of individual BTC tokens was comparable to zero.
The sequence of all the blocks mined by Satoshi is called “Patoshi“, and some argue that this was in fact a kind of pre-mining, because Satoshi mined the vast majority of the blocks.
The acceleration of Bitcoin mining
Until November 2012, each block gave 50 BTC in prize money, so mining about one block every ten minutes could result in as much as two and a half million BTC in rewards in a year.
It is worth noting that as of 31 December 2009, just under 1.6 million BTC had been mined, meaning that there was no average of one block every ten minutes mined in that year.
This disproves the assumption by some that Satoshi accelerated the block-time in order to mine more, and reveals instead that he actually slowed it down, mining less than he could have done.
Satoshi didn’t pre-mine bitcoin, just look at the block timestamps.
Patoshi didn’t even “fast mine” bitcoin, but actually throttled down his miners. https://t.co/5DH1r9QL2s
— Jameson Lopp (@lopp) November 12, 2021
The following year, however, mining accelerated, and 3.4 million BTC were created. In total, 5 million BTC were created in two years, which is less than the 5.2 million that could have been created if the average block time had been 10 minutes.
In January 2010, there was a surge in the speed at which blocks were mined, and in May 2010, Patoshi ended. From July onwards, the speed returned to normal.
Why Satoshi didn’t do pre-mining
This seems to indicate that Satoshi was joined by some other large Bitcoin miner in 2010 and that perhaps Satoshi himself stopped mining from June onwards.
In light of this data, it seems very unfair to claim that Satoshi “pre-mined” a million BTC, although he was certainly the undisputed star of the first phase of Bitcoin mining, particularly in 2009.
Obviously, if a significant chunk of that one million BTC mined by Satoshi were to end up on the market it could have a major impact on the price, causing it to plummet. But since this has never happened to date, it seems unlikely to happen in the future.
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