A resurfaced email from Satoshi Nakamoto, dated November 8, 2008, reveals the Bitcoin creator’s firm stance that Bitcoin is immune to inflation, unlike traditional fiat currencies.
Satoshi made the statement in response to early criticism suggesting that Bitcoin’s system could suffer 35% annual inflation due to advances in computing power increasing mining efficiency. His explanation, however, debunked that notion entirely — highlighting Bitcoin’s self-adjusting design and predictable supply model.
Bitcoin’s Proof-of-Work Prevents Inflation
In his message, Satoshi explained that Bitcoin’s proof-of-work mechanism was specifically engineered to prevent inflationary effects. As computing power across the network increases, the mining difficulty automatically adjusts upward, ensuring that blocks are still produced at a consistent rate — roughly one every ten minutes.
“If the network’s computing power increases, the difficulty simply rises so that the number of blocks created per hour remains steady,” Satoshi wrote.
This means that even as technology evolves and miners deploy more powerful machines, Bitcoin’s issuance rate remains stable and cannot spiral out of control, unlike fiat systems where central banks can print unlimited money.
A Predictable, Scarce Monetary System
Satoshi emphasized that Bitcoin’s monetary policy was hardcoded and transparent from the beginning. The rate of new coin issuance is predefined and steadily declines until the total supply reaches 21 million BTC — a cap that can never be exceeded.
He argued that the introduction of new coins doesn’t automatically create inflation unless supply growth outpaces user adoption. Conversely, if demand grows faster than supply, Bitcoin’s value could experience deflationary pressure, strengthening its scarcity narrative.
“New coins must be distributed somehow at the start,” Satoshi noted, calling a constant issuance rate “the most fair method.”
This design ensures Bitcoin remains resistant to arbitrary expansion, setting it apart from central bank currencies that can be inflated at will.
Bitcoin’s Built-In Scarcity: The Ultimate Hedge
Satoshi’s early insights continue to shape how economists and investors understand Bitcoin today. In an era marked by aggressive money printing and rising debt levels, Bitcoin’s algorithmic scarcity is increasingly viewed as a hedge against fiat devaluation.
More than 15 years later, his words ring truer than ever: Bitcoin is not just digital money—it’s digital scarcity, a system mathematically engineered to resist the very inflationary forces that erode fiat currencies.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Always Do Your Own Research (DYOR) before making any investment decisions.