The Satoshi God Complex: How a Block Hash Put the Magic Back Into Bitcoin

Bitcoin Reddit Photor/Bitcoin

There's never a boring day in crypto; Price volatility, Twitter feuds, John McAfee, ridiculous scams, silly apps like CryptoKitties or Satoshi's Place, mainstream FUD, and ridiculous shilling of coins that clearly have no purpose or future are all part of the norm. If a group of social scientists took a look at the dynamics of the cryptocurrency world without prior knowledge of the phenomena, they would be terrified, frightened, and intimidated by all the seemingly-irrational series of ordinary events.

Satoshi Nakamoto, the inventor of Bitcoin and the first person (or group of people) to implement the blockchain technology, has always had a Messianic or Prometheic status. He (or she, or they) took some of the greatest breakthroughs in the field of cryptography, game theory and computer science, put them together in a functional and comprehensive project which satisfies the cypherpunk ideals and ethos, and then abandoned the ship without revealing their identity.

On one hand, Satoshi has made the greatest and wisest decision to leave as it is key to Bitcoin’s decentralization. On the other hand, Satoshi’s decision to disappear before the project took off and became a global phenomenon in the world of finance has left the door open for many scammers, speculators, and frauds to make their ridiculous claims. In the religious terms these folks shall be referred to as "false prophets" or "Faketoshi"...

The Story of #00000000000000000021e800 c1e8df51b22c1588e5a624bea17e9faa34b2dc4a

On Wednesday night, a new block appeared on the Bitcoin blockchain, and it bore the hash identifier #00000000000000000021e800c1e8df51b22c1588e5a624bea17e9faa34b2dc4a. According to Twitter user coop_soup, who wrote an extensive Medium article, which raised more questions than it answered, the numbers are very similar to the Genesis Block and the probability of this event is extremely low. According to mathematics, in order for the block hash to be so similar between the two blocks, a super powerful quantum computer would be required. coop__soup implies that this can be a clear sign that Satoshi might be sending us a message.

The mathematical explanations are both fascinating and questionable to the point you'll be asking yourself why these hypotheses about Satoshi are being pointed out. The article suggests that Satoshi Nakamoto has mined the Genesis Block in 6 days, with a regular dual-core processor which didn't benefit from proper optimization and which offered a 17% chance of finding the block. This is where the story takes a Biblical twist, as the first block of the Bitcoin blockchain was mined on the same amout of days God created the world in the Old Testament. Feeling like this is becoming slightly ridiculous and overly religious for the purpose of the topic? Wait, there's more!

So what's the fuss about #00000000000000000021e800c1e8df51b22c1588e5a624bea17e9faa34b2dc4a? Well, the number of zeroes at the beginning resembles the Genesis Block. Also, 21e8 is presented as "important because it signifies an exceptionally simple theory of everything. Often referred to as “E8 Theory, it’s a physics preprint proposing a basis for a unified field theory, which attempts to describe all known fundamental interactions in physics and to stand as a possible theory of everything."

Then the post goes on to calculate the odds of having this succession of numbers randomly generated, it would take 2.5k years. Blake Miles thought it was significant as it is three times the current difficulty level. That's clearly yet another Biblical reference and a message that we're receiving from Satoshi Nakamoto himself, right? There are no mathematical coincidences, this must be a sign! Or maybe that someone is using a quantum computer or mining from the future in order to show us how great Bitcoin really is! We may even be living in a simulation and Satoshi Nakamoto is the creator…

The Criticism 

Sane Twitter commentators have pointed out to some rather obvious situations. First of all, when somebody posts something like this, you must take into consideration their role in the crypto industry and their special interests. In the case of coop__soup's article begins with a mention of a brilliant cryptographer named Andrew DeSantis, whose Twitter feed is rather difficult to comprehend and possibly cryptic on purpose. Then throughout the article you will find mentions of quantum computing and Satoshi Nakamoto's supposed involvement in the affair. But if you take a look at Andrew DeSantis' activities, you will discover that he's promoting DeOS - a supposed take on crypto quantum computing.

The likeliness of this being a coincidence is far lower than that of the 21e8 block being discovered. At least it’s a better marketing tactic than SaveDroidICO

Then the Cornell University computer scientist Emin Gun Sirer has written a series of tweets to explain that there really isn't anything special about 21e8, and blocks starting with the same numbers are mined every year! The analysis of coop__soup was called "numerology on the blockchain" for failing to provide any mathematical or scientific proofs for the claims and making strange assumptions just for the sake of sensationalism.

Satoshi the Alien Time-Traveler Who Uses Quantum Computing 

The more you say it, the dumber it begins to sound. The probability is definitely low, but slight chances don't turn beliefs into scientific facts. Conspiracy theories, fictional assumptions and superstitions aren't of much help either, and one would think we've moved past the days of black cats and broken mirrors.

The discovery is certainly interesting, calculating odds is always fun, but correlations don't imply the involvement of Satoshi. The bright side of this situation is that the crypto space is always weird and humorous. Reddit user Luka_Magnotta has written a funny time-travelling letter from the year 2025 in which he includes all the stereotypes and misconceptions about Bitcoin. Meanwhile, ironic tweets about the nature of Satoshi Nakamoto just keep on being posted, as members of the community discover the strange story and make use of their trusty memes to take it to greater lengths. We'll probably never know who Satoshi was, but we have yet to enjoy a day in crypto without strange events, its certainly great to have some of the magic put back into bitcoin.

BlockFi Updates Terms of Service for Its BTC and ETH Interest Accounts

On Tuesday (April 23), FinTech startup BlockFi announced new terms of service for its Bitcoin (BTC) and Ether (ETH) interest accounts, and said that it had made the BlockFi Interest Account (BIA) available in India.

BlockFi, which is based in New Jersey, United States, was founded in July 2017 by Zac Prince (CEO) and Flori Marquez (VP of Operations) and launched in August 2017. Among others, it is backed by ConsenSys Ventures, Fidelity subsidiary Deonshire Investors, Morgan Creek Digital, and Mike Novogratz's Galaxy Digital. 

In April 2018, BlockFi started offering USD loans collateralized by your cryptoassets (Bitcoin and Ether). Roughly six months later, it expanded the range of cryptoassets that it accepts as collateral to Litecoin and stablecoin Gemini dollar (GUSD).

Then on March 4, BlockFi launched the BlockFi Interest Account (BIA):

... users can securely store their Bitcoin or Ether at BlockFi and receive 6% annual interest, paid monthly in cryptocurrency. Interest earned in a BIA compounds monthly, delivering an industry-leading APY of 6.2%. The program has been in private beta since the beginning of 2019 and already holds over $10 million in assets from retail, corporate, and institutional crypto investors."

BlockFi said that this product offered the following advantages over competitors:

  • compound interest
  • institutional backing
  • interest paid monthly in crypto (i.e. in BTC if you have a Bitcoin interest account and in ETH if you have an Ether interest account)
  • no-notice withdrawals

We also found out via the FAQ section of the BlockFi website that although "there is no minimum or maximum deposit for the BlockFi Interest Account," only "deposits over 1 BTC or 25 ETH will accrue interest" and that "6% interest will only be earned on balances below 250 BTC or 7500 ETH."

Sadly, on March 20, some bad news was announced for holders of the BlockFi Interest Account with large balances (over 25 BTC or over 500 ETH). 

BlockFi said that since the launch of the BIA program, it had discovered that "approximately 75% of BIA clients have a balance of less than 5 BTC or 150 ETH," and that the "median account balance is $7,000 USD."

Furthermore, it had seen "unanticipated demand from businesses like crypto hedge funds and VC firms," and realized that these firms open large BlockFi interest accounts "as a way to bolster their returns." 

BlockFi added that "starting April 1st, only BIA balances of up to and including 25 BTC or 500 ETH (equivalent to roughly $100,000 and $70,000 respectively) will earn the 6.2% APY interest rate," while "balances over that limit will earn a tiered rate of 2% interest."

The second bit of bad news—this one affecting everyone not just BTC/ETH whales—was that from April 5, it will be "adding a flat withdrawal fee of 0.0025 BTC and 0.0015 ETH."  

In today's announcement, BlockFi had several interesting things to say:

  • As of April 2019, BlockFi is holding $53 million in crypto deposits for its clients in BIAs, and these funds are earning interest every day.
  • BlockFi is "retroactively" (as of April 1) reducing the minimum balance requirement for the Bitcoin BIA from 1 to 0.5 BTC. It hopes to reduce this minimum balance limit even further in the near future.
  • For Ether BIAs, from now on, only balances up to 250 ETH will earn the higher interest rate (i.e. 6.2% APY), whereas balances over this limit will earn only the lower interest rate (2% APY). BlockFi says that its "ability to pay interest to our clients is based on crypto market lending conditions," and since (1) it needs to "work with institutional counterparties to generate this yield" and (2) "demand for borrowing ETH has dropped" during the past month, its has no choice but to adjust "ETH tier rates" accordingly.
  • The BIA product is now available in India. This brings the total number of countries served by BlockFi to 65.

 

Featured Image Courtesy of BlockFi