Interview - Adam Back

"Now, institutions are racing to offer Bitcoin products"

It’s not every day you get to sit down with a living legend.

At Paris Blockchain Week—an annual event dedicated to, you get it, blockchain—paths cross quickly, sometimes fleetingly. The day before this interview, we exchanged a few words with Adam Back between two events. It was informal, brief, but it left an impression—one that lingers when you speak with someone who helped shape the very foundation of Bitcoin.

Fame, of course, is a relative concept, especially in today’s world. His name likely doesn’t generate as many Google searches as Lady Gaga, Donald Trump, or Stephen Curry. Yet in the world of cypherpunks and digital assets, Adam Back is, without exaggeration, an icon: a cryptographer, a builder, and a thought leader. In fact, he is the only individual personally cited in Satoshi Nakamoto’s Bitcoin whitepaper. His invention, Hashcash, became a crucial building block for proof-of-work and digital scarcity.

Despite all this, Adam remains approachable, inquisitive, and refreshingly grounded.

He gave us a full hour of his time. No entourage. No PR barrier. Just a deep conversation on the journey and future of Bitcoin—its evolutionary edge over fiat currency, and why decentralization is more than just a design choice: it’s a principle worth protecting.

Below is our full exchange with Adam Back—an unfiltered discussion on cypherpunk history, institutional adoption, market forces, innovation beyond the hype, and the long arc of Bitcoin’s destiny.

CoinShares: Why do you think Bitcoin is the first truly lasting cryptocurrency, despite earlier attempts like e-Gold or Bitgold?

Adam Back: Many earlier attempts, such as Way Dai’s B-money and Szabo’s BitGold, were never implemented. Others, like e-Gold, had millions of users but were centralized and faced regulatory challenges due to lack of KYC. I worked on Digicash and other early systems. After failures like Digicash, I developed Hashcash originally as a spam solution, introducing proof-of-work as a simplified e-cash mechanism. My own Hashcash laid the groundwork for future systems like Bitcoin. Bitcoin differs because it’s decentralized, uses bearer assets, and introduces the concept of digital scarcity, notably through proof of work. But these early efforts helped the cypherpunk community converge on the idea that decentralization was essential for success.

You didn’t reply to Satoshi’s message to you right away. When did his proposal capture your attention?

Satoshi first contacted me in August 2008. I think it was the first email I think he sent to anybody. We exchanged emails until January 2009 when Bitcoin launched. Hal Finney tested it early, he wrote some explanations and even speculated that Bitcoin could reach a $100–200 trillion market cap, hinting at $10M per coin. That ambitious vision prompted deeper interest. I had questions about its sustainability: it was in 2009, there was no exchange, no value. Earlier systems had failed due to centralization or unverifiable issuance, but Bitcoin’s decentralized model promised a better path. From those experiences, it became clear that decentralization was essential to succeed where others failed.

Looking back at Bitcoin’s 15-year journey, from hobbyist mining to nation-state reserves, are you surprised by its evolution?

Absolutely. The progress has outpaced expectations with fewer regulatory hurdles than anticipated. When we founded Blockstream in 2014, banks avoided the word “Bitcoin.”

They had blockchain R&D labs.

It was “blockchain, not Bitcoin.” 

Exactly. And now, it’s Bitcoin, not blockchain. Institutions are racing to offer Bitcoin products. They are trying to compete to get to market with Bitcoin offerings, Bitcoin derivatives, Bitcoin structured products, Bitcoin ETFs, Bitcoin savings plans, pensions, all kinds of things. Regulatory risk has been less severe than anticipated, with recent US administration moves improving the environment for Bitcoin’s institutional adoption. Even governments like the US now consider Bitcoin for strategic reserves. It makes it easier for institutional fund managers, people in pension funds, sovereign wealth funds, endowments: they can point to BlackRock, t to sovereign wealth funds in Abu Dhabi, it becomes much easier to introduce Bitcoin as a policy. 

During the 2017 block size war and hard fork, were you ever afraid for Bitcoin’s future? 

Yes, that was a critical moment. The block size debate was more about governance than technology. The market ultimately chose decentralization: what investors wanted prevailed. Ultimately, market forces decided. Futures markets signaled the outcome before the fork. The miner’s economic incentives aligned with the market, not with centralized change advocates. This event solidified confidence in Bitcoin’s free market foundation and immutability. People are still drawing strength from that. For example, Michael Saylor said that the market outcome of that event gave him very good confidence in the immutability of Bitcoin as a digital gold.

Do you hold a grudge against proponents of the big block fork?

Not really. While contentious, the episode made Bitcoin stronger. It proved that market resistance to centralized change is real. That resilience reassures investors. So I think that is actually very positive. And, for the most part, the people who wanted the bigger blocks were just trying to get more transaction throughput. They wanted to expand a use case. And layer-2 solutions like Lightning and Liquid have emerged to address transaction throughput without compromising Bitcoin’s guarantees. It gave people much more confidence that the fundamentals can't change, that the 21 million supply can't change. 

Don’t you think that concentration in large entities creates a systemic risk?

In the end, I do think that Bitcoin will inevitably be financialized, just like Hal Finney predicted.

He did mention Bitcoin banks back in the days. 

Exactly. And Saifedean [Ammous] wrote a book about the Bitcoin Standard. The world is going back to a gold standard but with bitcoin instead. In a human lifespan, we only really have the experience of a fiat currency world but before, for a short period of time, there was hard money and there is still a large allocation to gold: most governments have gold reserves. The last major currency to leave the gold down is actually the Swiss franc and they had a referendum to bring gold back, even mentioning bitcoin. The Swiss National Bank is quite an effective hedge fund: they are effectively managing sovereign wealth quite successfully and the Swiss Franc is a very strong currency, even though it's a country with a population of about 8 million individuals. Treasury strategies are a preview of the future: they are arbitraging a dislocation between the Bitcoin future and the current fiat world. If Bitcoin reaches its full potential, it will go to a $200 trillion market cap. Companies like MicroStrategy multiply their Bitcoin exposure through enterprise value. That model is sustainable while Bitcoin adoption grows. That implies full financialization and use of Bitcoin. New rails, new adoption, the asset class being in all kinds of places. And the treasury companies are showing that you can run a company using Bitcoin, the asset class.Competition and best practices like self-custody mitigate centralization risks. But self custody is not for everyone.

Is Bitcoin’s low on-chain activity concerning, especially for miners?

No, I don’t think so. On-chain activity will always oscillate due to capacity and fees. Retail payments have fast velocity, and while spending is less dominant than saving, that’s natural. Innovations like Lightning and Liquid offer scalable payment solutions. The broader, underserved market—like 50% of the global workforce that’s unbanked—is still untapped.

Because Blockstream is involved in many Bitcoin activities, such as mining, building hardware wallets, and launching satellites, it is sometimes criticized for contributing to centralization. What’s your response?

Adam Back: We are a Bitcoin mission company. We support both self-sovereign use (via hardware wallets, Lightning) and institutional needs (via Liquid, secure custody tools). Our work accelerates Bitcoin’s financialization and adoption across different demographics. We strive to decentralize through layered innovation, not impose control. If Bitcoin reaches its full potential, it will be used by everybody, including what some of the early adopters would consider, you know, the establishment that they were hoping to have self-sovereignty to protect themselves from. But I think ultimately, the game theory of Bitcoin, economic game theory, seems to be more scalable than you would expect. Having properly aligned incentives and dependable money is a positive driving force for human behavior.

The thing is that you’re one of the few companies to fund Bitcoin’s development and that might contribute to these critics. What do you think about the lack of VC funding for Bitcoin?

Yes, it is true that VCs have focused on altcoins. The VC allocation is also due to their risk appetite. Some of the big VC firms were heavy players in tokenomics, so they could get extremely discounted tokens. They could sell them early and then keep enough to ride and that was profitable for them for a while. I mean it's not really to build something: it's to cash out quickly, it's a way to make money.

But I think that phenomenon has started to suffer from saturation. You see people writing reports, or even from the altcoin ecosystem writing open letters to criticize this attitude in the current market. What really triggered that is there were 20,000 coins and the memecoin phenomenon with millions of them. The cycle has accelerated and it is very difficult for a retail investor to make money because the insiders are selling. It's a video game. So, yeah, the maximum extraction has hurt the sector. And now, VCs are coming back to a more conventional model. Bitcoin’s funding model, open-source grants, ETF and miner contributions, is maturing. There’s now better decentralization in Bitcoin development funding. Firms like Trammell Venture Partners are helping, or players like Chaincode, Brink, and some ETF issuers such as CoinShares supporting core development. 

You showed skepticism about the actual threat of quantum computing to Bitcoin. What do you think of the proposition to burn vulnerable coins? 

I think that the risk is further away than the news flow suggests because in reality, the technology is kind of at a physics experiment stage. This kind of pattern is being going on for decades: I remember this, in university like 3 decades ago, the industry was already talking about having a 2-bit quantum computer.  But, eventually that will start to compound. Bitcoin can adopt post-quantum signatures.Schnorr signatures paved the way for more upgrades, and Bitcoin can continue evolving defensively. It is true that if dormant coins don’t upgrade, attackers may take them. I personally favor proposals to burn such vulnerable coins, as a lesser evil. 

What do you think of the current state of Lightning Network? 

Lightning is growing fast. The liquidity in there is about 4,000 bitcoins, the velocity is improving as it gets more efficient. A new development called “nodeless Lightning” uses Liquid for backend swaps via submarine swaps. It offers Lightning-like UX without centralization risks. It allows offline receiving and more efficient channel management. Limitations exist, but it’s promising. Wallets like Aqua, Peach, Bull Bitcoin and Breeze are implementing it.

Even with Lightning, do you think that Bitcoin is private enough? 

Bitcoin’s privacy can improve. Lightning provides some privacy. Liquid introduces different privacy provisions: “confidential transactions,” hiding amounts and asset types. While input/output links remain visible, the amounts are concealed. This enhances privacy for practical use cases, such as private payments or asset transfers.

Is there anything Bitcoin should adopt from altcoins?

It's an interesting question because you would hope with the amount of capital deployed into the altcoins, so they found some innovation. And sadly, I think that the capital efficiency is quite low

But these altcoin budgets have funded useful R&D, especially in zero-knowledge proofs (zk-SNARKs, STARKs). That technology didn't exist when Bitcoin was released. These technologies could improve Bitcoin’s privacy and scalability, especially as they mature. Some are already appearing in Bitcoin Layer-2s or soft forks under development.

Flashround. Which altcoin would you keep?

None. I’d buy Bitcoin treasury companies. It’s not an altcoin, but it is still not Bitcoin. 

Fair enough. One cypherpunk who matters?

Ah, tough question. Hal Finney. He was a prototypical cypherpunk, philosophical, but he was also implementing things, writing and explaining things. A good guy. 

Worst idea you have ever seen in crypto? 

There are so many… There was a period when blockchain was a magical thing and was going to improve anything it touched. People wanted to put anything into a blockchain: medical images, PDFs, or voting. It's the wrong data structure. I think blockchain is really optimized for transactional use cases: payment, settlement, swaps, simple smart contract execution. There were a lot of bad ideas but in the end, they are narrowing to the core value and the core asset. 

Self-custody or ETF?

Both. I have done both actually. ETFs offer portfolio integration and borrowing advantages. You can mix it with your stock portfolio and get a cross collateral value, you can borrow against it at a low cost. But self-custody is crucial for maintaining decentralization and immutability.