In one of the most prescient exchanges in the correspondence, Satoshi warned Malmi about how Bitcoin’s privacy properties were being described on the website and in promotional materials:
I think we should de-emphasize the anonymous angle. With the popularity of bitcoin addresses instead of sending by IP, we can’t give the impression it’s automatically anonymous. It’s possible to be pseudonymous, but you have to be careful.
Satoshi elaborated on the potential consequences of overpromising privacy:
If someone digs through the transaction history and starts exposing information people thought was anonymous, the backlash will be much worse if we haven’t prepared expectations by warning in advance that you have to take precautions.
This exchange is historically significant for several reasons. Satoshi clearly distinguished between anonymity (complete identity concealment) and pseudonymity (using an alternate identity that could potentially be linked to a real identity through analysis). His warning proved remarkably prescient, as blockchain analysis later became a major industry, and many early Bitcoin users who assumed complete anonymity had their transactions traced.
The note about “sending by IP” refers to an early Bitcoin feature where transactions could be sent directly to an IP address. As the network shifted to address-based transactions, the privacy model changed in ways Satoshi felt needed to be clearly communicated.
Source: Published by Martti Malmi on GitHub in February 2024 as part of his testimony in the COPA v. Wright trial. The full correspondence archive is available at mmalmi.github.io/satoshi/.