Did Satoshi Nakamoto Exploit Bitcoin in 2009?

Bitcoin was likely attacked in its early days by entities suspected to be Satoshi Nakamoto.

Key Notes

Early Bitcoin miner Patoshi conducted a 51% attack on Bitcoin.Considering the sophistication and level of access, many believed Patoshi is Satoshi Nakamoto.The attacks at the time were not for financial gains.

New research suggests that pseudonymous Bitcoin BTC $60 019 24h volatility: 2.1% Market cap: $1.19 T Vol. 24h: $43.51 B creator Satoshi Nakamoto may have launched a 51% mining attack on the network in its first year of existence.

The 51% attack is an exploit on a crypto project by any entity or group that controls more than 50% of the network. Such high control gives the entity the liberty to alter the blockchain.

Deciphering Relationship between Patoshi and Satoshi Nakamoto

Recent speculation rose after an in-depth data review of 2009 blocks mined by “Patoshi.” Patoshi is a nickname given to a frequent miner who embedded a non-standard use of ExtraNonce within Coinbase transaction data. The review showed that hash power was likely used to reorganize Bitcoin’s blockchain.

According to the explanation offered by Bitcoin historian Pete Rizzo, Patoshi periodically took breaks from mining. Whenever this happened, it was discovered that their computer restart was “so powerful that the miner [Patoshi] simply overwrote blocks found by other miners in their [Patoshi’s] absence”.

This sounds like a 51% attack in which an entity tries to overthrow miners and gain control of new transaction confirmation. Unfortunately, no other miner could complete enough hashing work to prevent them from returning and taking back control during Patoshi’s break from mining.

On the flip side, a few observers in the crypto community have reasons to think Patoshi and Satoshi Nakamoto are the same person. For perspective, both entities were actively mining Bitcoin in 2009. At this time, it was likely that only Satoshi Nakamoto owned the computer connected to the network.

Another detailed study by Wicked Smart Bitcoin suggests that Patoshi probably conducted a 51% mining attack in 2009. Wicked’s research builds on earlier work by Sergio Demian Lerner.

Nakamoto’s 51% Attack Was Not for Financial Gains

It is worth noting that this suspected 51% attack from 2009 was not initiated for financial gains but as a stress test.

This is because BTC had no value at the time. One could say that the term “51% attack” is a poor categorization of the event.

“While Satoshi shepherded Bitcoin through its first year of existence, it looks like he may have conducted some real-world stress tests such as the reorgs in May 2009 and purposefully orchestrated downward difficulty adjustment in May 2010,” Wicked stated. “None of these acts seemed malicious in nature but were rather to check the integrity and robustness of the system he had built.”

While the veracity of Satoshi Nakamoto’s 51% attack on Bitcoin has yet to be established, crypto analytics firm Coin Metrics already stated that a recurrence is not likely. In February, the firm published the results of its research, noting that it won’t be viable for nation-states to conduct 51% attacks on the Bitcoin and Ethereum blockchains any further.

Coin Metrics cited the astronomical costs of conducting such attacks, adding that they are not viable. This season, it estimated that orchestrating a 51% attack on Bitcoin would require a massive 7 million ASIC mining rigs, amounting to an estimated cost of around $20 billion.

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