Two years ago, billionaire entrepreneur Peter Thiel suggested he met the person or group of people using the Satoshi Nakamoto pseudonym. Thiel came close to claiming knowledge of Satoshi’s precise identity, saying he met an individual involved in creating Bitcoin during a Financial Cryptography conference in Anguilla 23 years ago.
Those rumors have come to the surface again after Thiel’s colleague Balaji Srinivasan recently predicted that bitcoin will be worth $1 million.
It’s possible Thiel did know Satoshi. After all, Thiel ran in the same circles as them — from working with Elon Musk, meeting the founders of E-Gold, being a member of the PayPal Mafia, and befriending Srinivasan and the founder of the first Bitcoin magazine, Vitalik Buterin.
But how deep do these ties go? And how likely is it that Thiel knows who Satoshi really is?
Peter Thiel and E-Gold
At a conference in Miami in 2021, Thiel told the audience he has considered who Satoshi might be. “My sort of theory on Satoshi’s identity was that Satoshi was on that beach in Anguilla,” he said.
“I met them on the beach in Anguilla in February of 2000. We were beginning the revolution against the central banks… We were going to make PayPal interoperable with E-Gold and blow up all the central banks.”
During that February 21-24 conference in the year 2000, Thiel met with the founders of E-Gold. At the time, he was still working for PayPal, which he co-founded. He had expressed interest in integrating E-Gold with PayPal.
E-Gold ended in 2007 when the US Justice Department closed the project and arrested its founders for unregistered money transmission. E-Gold’s fall-out and forfeitures lasted for over seven additional years.
In any case, the Financial Cryptography conference is one of the longest-running conferences for cypherpunks. Researchers from that conference would have given Nakamoto plenty of ideas for Bitcoin, publishing papers like “Electronic Cash – Technology Will Denationalise Money” or “Efficient Electronic Cash with Restricted Privacy.”
Thiel believes that Satoshi was on that beach in Anguilla and learned lessons from E-Gold’s failure. For example, Thiel believes that Satoshi learned about the importance of anonymity (to this day, Satoshi is indisputably the world’s most anonymous billionaire).
Also, Thiel believes that Satoshi learned how a formally organized corporation would be vulnerable to a government seizure or forced closure. Satoshi carefully chose MIT’s open source license for Bitcoin and never incorporated, setting Bitcoin up for long-term success.
Peter Thiel and the PayPal Mafia
Thiel’s involvement in Bitcoin dates back to the 1990s when cryptographers became disenchanted with banks.
At the time, Thiel and most of the couple dozen members of the PayPal Mafia — a name formed in the early 2000s and emblazoned across the cover of Fortune magazine by 2007 — were working on various fintech startups. Most of Thiel’s friend group acquired multi-generational fortunes through dot com startups and IPOs in the early 2000s.
For example, one member of the PayPal Mafia, Elon Musk, is occasionally referenced as a co-founder of PayPal. Specifically, Musk co-founded X.com, originally meant to become an online bank. Eventually, X.com merged with Thiel’s Confinity Inc., a mobile payments and cryptography company. Confinity launched PayPal in 1999, the year before its merger with X.com in 2000.
Ebay acquired PayPal in 2002. Musk and Thiel took their share of the payout and presumably went their separate ways. Thiel went into venture capital and Musk famously sank his cut into Tesla, Solar City (which was later acquired by Tesla), and SpaceX. However, they both maintained an interest in digital payments.
In 2021, Musk directed Tesla to purchase bitcoin as well as to accept it as a form of payment for electric vehicles. As the richest man in the world at the time, those moves gained significant media coverage for Bitcoin.
Of course, Musk soon moved past Bitcoin in favor of various altcoins, including his pet project, Dogecoin. Musk’s criticisms of Bitcoin’s energy usage was one of the contributing factors to Michael Saylor’s creation of the Bitcoin Mining Council to refute false and misleading claims about Bitcoin’s environmental impact.
A former SpaceX intern fanned the rumor that Thiel may have known Satoshi Nakamoto by suggesting that Musk himself created bitcoin. That intern cited similarities in Satoshi’s and Musk’s writing styles, including crutch words and phrases, as well as some circumstantial evidence.
For example, the software for Musk’s X.com and Satoshi’s Bitcoin were both written as “monolithic software” in the C++ programming language. In any case, Musk has denied being Satoshi.
Balaji Srinivasan bets on Satoshi becoming a trillionaire
Balaji Srinivasan, although not technically a member of the PayPal mafia, is friends with many of its members. Srinivasan previously served as Coinbase’s CTO and a general partner at Andreessen Horowitz (a16z), Silicon Valley’s highly influential venture capital firm. He also invested in digital assets like Bitcoin, Chainlink, Ethereum, and Solana.
Most recently, Srinivasan is back in the news for making a large bet that the price of one bitcoin could soar to $1 million. Although seemingly outrageous, many people have taken his prediction seriously out of respect for his prescient warnings about COVID-19 as early as January 2020.
Srinivasan is certainly not the first person to make a bold prediction about bitcoin’s price. John McAfee famously thought it could go to $500,000 by 2020, and James Altucher called for $1 million that same year. Both lost those bets.
Granted, Srinivasan’s prediction has more to do with the US dollar hyper-inflating than bitcoin rallying in isolation. He also chose a round number for easy media coverage. Satoshi famously mined approximately 1 million bitcoin. If the price of one bitcoin were to go to $1 million, Satoshi would become the world’s first trillionaire. That assumes, of course, that Satoshi is a single person.
Srinivasan’s bet is likely just another publicity stunt. But some wonder if he knows something the rest of us don’t.
Balaji Srinivasan and Peter Thiel
Srinivasan cited Peter Thiel as a longtime investor with similar interests. The Thiel Fellowship awarded a $100,000 grant to Ethereum’s Vitalik Buterin in 2014, a move defended by Srinivasan in a 2022 tweet.
Buterin was the founder of the first and most popular printed magazine about Bitcoin, the aptly named Bitcoin Magazine. Today, the magazine is owned and operated by Bitcoin Inc.
Srinivasan extolled Buterin as one of several individuals who could succeed without a college degree. “It’s complicated,” Srinivasan said when asked about Thiel’s interest in buying a controlling interest in the companies he invests in. “He wants to turn the ship around.”
Srinivasan seemed to believe that Thiel admired the America of decades ago, when it was still capable of doing big things like putting men on the Moon. The problem? The last men left the Moon in December 1972 and no one has been back since. Many of Thiel’s inner circle are working on space travel companies, including Musk.
The failure of US astronauts to return to the Moon and press on to even more distant worlds like Mars, in Thiel’s view, could symbolize America’s inability to boldly tackle big, “not because it is easy, but because it is hard” projects.
Srinivasan is taking an extremely negative bet on the resilience of the US dollar and, by proxy, its government and economy. He has begrudgingly allowed that the US could right its course. However, he cites many problems, including the way laws are passed by Congress — “tested in production” — as well as the limited ways to respond to rapid challenges to US dollar hegemony.
Beyond their disdain for the US banking system, Srinivasan and Thiel could have bonded over mutual interests like seasteading. Srinivasan discusses seasteading in a chapter of a book he authored, The Network State. Thiel provided $1.7 million in funding for The Seasteading Institute — but has subsequently admitted that creating a financially and ecologically sustainable seastead is “not quite feasible.”
Another thing the duo seemed to agree on: The Bitcoin community needs a place where it can thrive. Crackdowns on Bitcoin force participants to stop contributing or hop to other countries. As China’s on-again, off-again relationship with digital assets indicates, bitcoin mining security still largely depends on governments’ willingness to tolerate it.
According to Srinivasan and Thiel’s reasoning, most of this issue could be solved if Bitcoin had a sovereign nation behind it — and that nation might not be El Salvador. Thiel might have tempered his enthusiasm for seasteading but that doesn’t mean he gave up on the idea of a community evolving into a sovereign nation of like-minded individuals.
As Thiel told Business Insider, “A key concept [to start a new country] is to go cloud first, land last — but not land never — by starting with an online community and then materializing it into the physical world.”
BitNation and various other projects have attempted to form virtual nations recognized by the United Nations. All have failed. At this point, Thiel likely understands that a sovereign nation will not persist without territory in the physical world.
Peter Thiel and the banking system
Bitcoin is an entirely new financial system that many hope could one day displace or even supplant the traditional banking system. Indeed, Satoshi Nakamoto considered the financial industry’s problems their primary reason for creating a peer-to-peer payment protocol that bypasses trusted intermediaries altogether. Satoshi inscribed a news headline about Great Recession bank bailouts into Bitcoin’s genesis block: “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.”
History tends to repeat. This year’s government bailouts of Silicon Valley Bank (SVB), Credit Suisse, Signature Bank, and others vary from 2009 only in minor details.
Unsurprisingly, early Bitcoin community members like the PayPal Mafia were quick to sidestep this year’s bank run. Thiel’s Founders Fund prophetically moved billions of dollars out of SVB just days before its calamitous bank run. Right before the FDIC’s coordinated bailout alongside the US Treasury and Federal Reserve, Founders Fund executives and their portfolio companies wired out funds to safety.
Then, after they had expressed concern about the venture capital-friendly bank, other companies rushed to submit withdrawal requests.
Eventually, the bank ran out of cash. As the nation’s second-largest bank failure, the government considered SVB systemically important and bailed out depositors, making everyone whole as a one-time courtesy.
Unofficially, rumors swirled that Founders Fund deliberately worsened SVB’s dire situation due to a secret grudge with the bank. Thiel denied he had anything against SVB’s bank run and reiterated that he kept $50 million of his personal fortune in the bank.
Perhaps that was wholehearted; perhaps it was his alibi. That $50 million vote of confidence in the bank’s ability to stay solvent — large when considering that the FDIC caps deposit insurance at $250,000 per bank account — could have avoided deeper inquiries into his banking relationships.
Does Peter Thiel know Satoshi Nakamoto?
Thiel might have known Satoshi Nakamoto, or at least participated in the same social circles as Satoshi since co-founding PayPal. Thiel worked with Elon Musk, met the founders of E-Gold, is a member of the PayPal Mafia, and befriended Balaji Srinivasan and the founder of the first Bitcoin magazine, Vitalik Buterin.
Some discredit Thiel’s claims altogether. Others point to reports that Thiel sold his bitcoin. Whether or not he still owns much bitcoin nowadays, he certainly was part of the early Financial Cryptography community. He also continues to criticize banks; at the 2022 Bitcoin Miami conference while lambasting the banking system, he very publicly ripped up $100 bills while describing his distrust in the US dollar.
During Thiel’s highly critical riff against legacy finance, he called Warren Buffett part of the “finance gerontocracy.” Buffett — who refuses to invest in bitcoin — has a history of bailing out big banks.