For Coinbase Satoshi Nakamoto is a Risk Factor

[dkbit98]

Coinbase posted their S-1 filings with the SEC and they mentioned that Satoshi Nakamoto and his identity is a Risk Factor for their business.

You can see all their Risk Factors starting from page 15 and Satoshi is one of them on mentioned page 19:

- the identification of Satoshi Nakamoto, the pseudonymous person or persons who developed Bitcoin, or the transfer of Satoshi’s Bitcoins;

Other Risk Factors include breaches of security and privacy, market conditions, changes in liquidity, negative publicity, regulatory or legislative changes, fees and transaction congestion, economic and political conditions, reduction in mining rewards, quantum computing, software bugs and others.

We all know that Satoshi associated addresses have a lot of Bitcoins, but is Satoshi really deserving to be in Risk Factor category?

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[1714172732]

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[bitbollo]

Yes it has been published also by cointelegraph a couple of days ago and it's has been pointed out several times and probably this is one of the reason why SN is an anonymous person.

This is also something that has strongly differentiated bitcoin from other asset or even other product that we have seen in the past.
Personally I don't think SN will ever spends his bitcoin (at least blocks identified that have been mined in 2009-2010).

[AB de Royse777]

Coinbase are here for business only so I do not think anyone else care about what they think about their business.

Overall, bitcoin is not depending on a single hand, not even Satoshi Nakamoto. Say we find Nakamoto, and he decides to sell all of his holdings. The worse we will experience is a little price down. The market will recover eventually.

Haven't we seen it all these years?

[mk4]

The way I see it: let's say that Satoshi was unmasked and is still alive, and everyone learns that Satoshi is a supporter of a certain controversial politician(let's say, someone like Trump). The people who are passionately against Trump might end up dumping their coins or end up boycotting bitcoin because of that affiliation (even though Satoshi is NOT Bitcoin). Hence, probably ending up with Coinbase taking a hit on their trading volume.

[o_e_l_e_o]

The way I see it: let's say that Satoshi was unmasked and is still alive

Any proof of Satoshi would need to include signing from an early address or staked PGP key, among other things. If this was done, then it makes the chance of the 1 million or so coins linked to Satoshi suddenly re-entering the market rise exponentially. While I don't think such a thing would kill bitcoin, or necessarily even dump the price (as I don't think Satoshi, if still alive and with access to the relevant private keys, would try to dump their entire stash like this), what would happen would be thousands of newbies and weak hands panic selling at the news. This would dump the price, which would affect Coinbase's profits, and therefore their share price. It is only logical for them to disclose such a risk.

[mk4]

Any proof of Satoshi would need to include signing from an early address or staked PGP key, among other things. If this was done, then it makes the chance of the 1 million or so coins linked to Satoshi suddenly re-entering the market rise exponentially. While I don't think such a thing would kill bitcoin, or necessarily even dump the price (as I don't think Satoshi, if still alive and with access to the relevant private keys, would try to dump their entire stash like this), what would happen would be thousands of newbies and weak hands panic selling at the news. This would dump the price, which would affect Coinbase's profits, and therefore their share price. It is only logical for them to disclose such a risk.

Hmm. True. But I think it doesn't require Satoshi to be literally 100% unmasked to inflict such a damaging event to Coinbase(and to bitcoin's price temporarily). If we end up having a suspect with controversial views that the majority of the masses get convinced is Satoshi (regardless if it's true or not), the effect would be just as bad as the real Satoshi being unmasked.

[qwk]

We all know that Satoshi associated addresses have a lot of Bitcoins, but is Satoshi really deserving to be in Risk Factor category?

In the sense of a classical SWOT analysis, absolutely.
I've mentioned that before: Satoshi could be "the Chinese", "the Russians", "Dr. Evil".
And he/she/it/they could be waiting for a time when their re-appearance and the movement of their coins wreaks the utmost havoc.

I personally doubt that Satoshi's coins would actually move the market too much, we're basically able to consume that without any lasting damage, but in the short term, it's still a mentionable risk factor for any Bitcoin business.

[Clement Kaliyar]

We all know that Satoshi associated addresses have a lot of Bitcoins, but is Satoshi really deserving to be in Risk Factor category?

May be everyone who invested huge amounts and running a business are worried that Satoshi Naakamoto as a risk factor because of the huge amount of coins he is holding and his appearance after a decade might have a major say in the market if he ever returns and so is the reason you see a hostile attack on anyone claiming to be Satoshi so that the real Satoshi will stay away fearing the attack  .

[bclucho]

I think that Coinbase checks all possible scenarios, and of course one is that SN moves their coins to somewhere else. Probably the price will drop but life will continue and bitcoin will grow again and again.

[o_e_l_e_o]

If we end up having a suspect with controversial views that the majority of the masses get convinced is Satoshi (regardless if it's true or not), the effect would be just as bad as the real Satoshi being unmasked.

Possibly, but I don't think anyone would be able to convince the majority of users without being able to sign a message, which leads us back to my point above.

and so is the reason you see a hostile attack on anyone claiming to be Satoshi so that the real Satoshi will stay away fearing the attack

That idea has literally never crossed my mind before. The reason I attack imposters and fraudsters who claim to be Satoshi with zero proof or evidence is because they are criminals, identity thieves, scammers, and are trying to trick people in to thinking they are Satoshi for their own benefit. I'm sure most others think the same.

[mk4]

Possibly, but I don't think anyone would be able to convince the majority of users without being able to sign a message, which leads us back to my point above.

When talking about the sort of "real bitcoiners", it would definitely take a signed message to at least partly convince them. When talking about the masses though? You're probably giving them too much credit. I mean, we still got lots of people that thinks Bitcoin is a scam and that Bitcoin is centralized because "cHiNeSe MiNeRs". A famous "news site" putting out a not-so-convincing article about Satoshi being from China, and you'll get people believing it because it fits their narrative.

I hope you're right though.

[tsaroz]

The real identity of Satoshi Nakamoto is a risk factor for the price and status of bitcoin. During the absence of satoshi, we have idolized him/her/it. Satoshi did tried to keep the neutrality and flawlessness till it were active but finding the real identity of Satoshi would make many people sad.
Satoshi could be a good person but every human has its flaws. And as we follow someone too closely, words by words, they ought to make mistakes or hurt feelings of others. I'd love satoshi to be a mystery than a mortal.

[o_e_l_e_o]

When talking about the sort of "real bitcoiners", it would definitely take a signed message to at least partly convince them. When talking about the masses though? You're probably giving them too much credit.

You are probably right. I suppose it comes down to who is buying Coinbase stock, and therefore who would be holding stock which they could panic sell at the news of "Satoshi Revealed!!1!1"

People who actually understand bitcoin and the necessity of a signed message are far more likely to buy bitcoin, whereas I suspect there will be a lot of traditional investors who see Coinbase stock as a kind of surrogate for exposure to bitcoin itself. There are obviously bitcoin ETFs that also serve this purpose, but perhaps Coinbase will be seen as a kind of hedged asset, less prone to the big price fluctuations we see with bitcoin and bitcoin ETFs. You are probably right that these people will react to whatever hits mainstream news as opposed to what is actually going on, and we know from the last 10 years that mainstream news gets it wrong on bitcoin with a frequency approaching 100%.

Still, at the end of the day, if some Faketoshi causes Coinbase to lose a bunch of money, you won't see any tears from me.

[BlackHatCoiner]

We all know that Satoshi associated addresses have a lot of Bitcoins, but is Satoshi really deserving to be in Risk Factor category?

I would say no if Satoshi had spent his coins back in 2009-2010, but it seems really odd for a newbie that more than 50,000 bitcoins have remained untouched with their coinbase input. I imagine that if a million bitcoins suddenly entered the market, it'd be too many to handle. The price would drop, whether temporarily or not, and maybe Nakamoto could be unmasked. That would not have a temporarily effect on Bitcoin, IMO.

I would personally not like to watch the sequel "Satoshi's return" of the movie "Bitcoin: A peer to peer electronic cash system" if you ask me.

[pooya87]

I'm confused, why is a bitcoin exchange concerned about a massive spike in trading volume hence their earning potential?

That's essentially what would happen if Satoshi's coins were ever moved. A market wide panic sell which would increase the trading volume on all exchanges specially Coinbase which would give them a huge amount of money in trading fees.
Then again when price reaches a bottom, it will reverse back up and shoot up hence increasing the trading volume once again and giving another massive revenue to that exchange!

Unless Coinbase claims to have invested significantly in bitcoin themselves I don't see such a price swing being a risk for a bitcoin exchange service. And if they have such an investment, then we have to worry about them manipulating the market for their own benefit which is illegal!

[o_e_l_e_o]

Unless Coinbase claims to have invested significantly in bitcoin themselves I don't see such a price swing being a risk for a bitcoin exchange service[/b].

They still make most of their profits in bitcoin from trading fees, withdrawal fees, etc., and they charge a flat bitcoin rate for these things. If they take in 0.01 BTC in fees from a trade, then it makes a huge difference to their profits in USD if bitcoin is valued at $50,000 or at $5,000. Sure, there will be increased volume in the short term, but they could still realistically be concerned about a prolonged bear market lasting a few years due to the sudden influx of 1 million coins back in to active circulation and the panic among newbies that would create.

And if they have such an investment, then we have to worry about them manipulating the market for their own benefit which is illegal!

Coinbase don't really care much about the illegality of manipulating the market. They illegally manipulated the market during their launch of support for BCash, insider traded, and caused their customers to lose a lot of money for their own benefit. But they investigated themselves and found they did nothing wrong, so it's all forgotten about now.

[VanDeinsberg12]

I guess they are talking from business perspective and consider that satoshi's identity reveal could somehow shaken the market whether the effect is gonna be good or bad.
They're being cautious and although it seems kind of rude to consider bitcoin founder as a risk factor they are trying to list it as a possible scenario after all they're business that seek profit and heavily dependant on crypto which could go south if something like satoshi nakamoto identification occurs. remember they exist to seek profit and nothing more.

[Karartma1]

We all know that Satoshi associated addresses have a lot of Bitcoins, but is Satoshi really deserving to be in Risk Factor category?

I personally doubt that Satoshi's coins would actually move the market too much, we're basically able to consume that without any lasting damage, but in the short term, it's still a mentionable risk factor for any Bitcoin business.

The psychological mayhem that it would provoke far outweighs the clear capacity of the market to eat all those bitcoins.
Don't misunderstand me but if satoshi's coins would appear again that could pose a major risk to the overall game.
I hate to agree with coinbase risk analysis, but that is not a risk for them only, it's a risk for all of us.

[Obito]

The real identity of Satoshi Nakamoto is a risk factor for the price and status of bitcoin. During the absence of satoshi, we have idolized him/her/it. Satoshi did tried to keep the neutrality and flawlessness till it were active but finding the real identity of Satoshi would make many people sad.
Satoshi could be a good person but every human has its flaws. And as we follow someone too closely, words by words, they ought to make mistakes or hurt feelings of others. I'd love satoshi to be a mystery than a mortal.

It definitely is, remember the saying "Do not meet your heroes"? It is the same as this one, if we know who satoshi is, the mystery of the enigmatic personality that is behind the famous/infamous(depends on who you ask) bitcoin will be lost, many people will see satoshi as just some smart person with no flair behind him/her. It is as @tsaroz says, we will not be able to accept the fact that satoshi is just some person. The other risk is when satoshi wouldn't reveal his/her identity but satoshi will dump the 1 million bitcoin that is in his/her possession which would definitely be the biggest wave that the market and everyone will see.

[hatshepsut93]

The way I see it: let's say that Satoshi was unmasked and is still alive, and everyone learns that Satoshi is a supporter of a certain controversial politician(let's say, someone like Trump). The people who are passionately against Trump might end up dumping their coins or end up boycotting bitcoin because of that affiliation (even though Satoshi is NOT Bitcoin). Hence, probably ending up with Coinbase taking a hit on their trading volume.

I don't think it works that way, there are some people in open-source community that said or did very controversial things, and the world didn't stop using their software. And with Bitcoin, Satoshi wasn't a developer for more than 10 years, so it's not like he could force his politics onto Bitcoin protocol in a situation like this.

Satoshi's coins is the biggest concern, dumping 1 million coins and the implications of the creator losing faith in his creation could create a bearish market for many years.