Craig Wright: BTC and BCH are using Bitcoin database illegally

Dr. Craig Wright has issued a strong warning to the BTC Core (BTC) and BCH communities: stop using my work as your own, or face legal consequences. He added that this year he intends to take “charge and control” of the system he created, and is ready to fight for that right.

The BTC and BCH networks may also be operating in violation of several criminal codes, he added, under the terms of Bitcoin’s original EULA and MIT License.

Wright means business

In a detailed post on his personal blog, Dr. Wright laid out the legal rationale behind his opinion, and reminded all that Bitcoin is not a system designed to avoid government. It began on an ominous note to his opponents:

Those involved with the copied systems that are passing themselves off as Bitcoin, namely BTC or CoreCoin and BCH or BCash, are hereby put on notice. Please trust me when I say that I’m far nicer before the lawyers get involved.

He and others close to Bitcoin development are in the process of moving their “trust and related companies” to U.K. residency status. “Senior partners within Core and ABC” reside either in the U.K. or the European Union, he said, putting them within jurisdictional reach.

Dr. Wright has made several threats in the past to take legal action against those who’ve hijacked the Bitcoin project to suit their own ends and business models.

However two things are different in 2020: One, Bitcoin v1.0.0 is activated, locking the protocol in its original form with the capacity to scale to global proportions. Two, it’s possible he may have received information vital to proving his claim to have created Bitcoin under the Satoshi Nakamoto pseudonym. With those two pieces in place, Wright is freer to follow through on his warnings.

The ledger as database, as property of its creator

Dr. Wright’s key argument is this: while the original Bitcoin protocol was released under the MIT License (a free software license that permits code reuse). The Bitcoin units and distributed ledger that records transactions is something different, and remains the sole property of its creator—himself.

Thus, a new team could copy the software and start a brand new ledger from scratch (as Litecoin and Ethereum did) but not use the database that is Bitcoin’s ledger.

Dr. Wright argues that Bitcoin “coins” (or “tokens”) are just a verbal representation of 21 million units (each divisible by 100 million) Bitcoin issued the moment it started running. In releasing the Bitcoin protocol software, Satoshi Nakamoto created a database as a “unilateral contractual offer” to agents (nodes) acting on the network.

Bitcoin’s creator (himself) is bound by this unilateral contract with those nodes to “issue” Moreover, it grants the database’s creator sui generis (or unique) ownership rights—and “database rights” are property under U.K./E.U. laws.

These arguments would need to be tested in, and enforced by, a court of law. In issuing his warning and publishing the post, Dr. Wright is stating clearly that he intends to do just that.

It will be necessary to legally clarify the definitions of several key terms and concepts in Bitcoin, in order to make the case. These include the meanings of database, coins/tokens, issuance, and distribution. He would also need to prove, in court, that he was in fact Satoshi Nakamoto—something he has vowed in the past to do, but until now had not given details as to how.

Dr. Wright also referenced a number of potential criminal law issues, including trespass and misuse of a public database. He cited the Ryanair Ltd. v. PR Aviation BV case in Europe. A court ruled that a database owner may dictate the terms under which the information can be used by others.

People have noticed this issue before

The issue of Bitcoin’s MIT License has appeared before, if in obscure places. In 2011, a curious Bitcoiner posted a question on StackExchange, saying: “Given that an open, transparent, distributed p2p network is a central element of Bitcoin project it seems unusual that it is licensed under the MIT license which allows proprietary closed source derivitives.”

While responders to the question talked more about derivative software (eg: wallets), they may not have considered that using the Bitcoin ledger itself may require a license. Before 2017, that wasn’t an issue since there was only one ledger calling itself Bitcoin. 

Now there are at least three—and operating one that isn’t Bitcoin SV could be unlawful without negotiating license terms.

Is BSV ‘litigious’? No

Many opponents of Bitcoin, or supporters of derivative blockchain projects, have complained that “BSV supporters are litigious”. This claim is quite laughable, since at press time there have never been any lawsuits or trials directly concerning BSV.

Currently, the most prominent legal issues tangentially relevant to BSV are: the Ira Kleiman lawsuit over ownership of early Bitcoins (in which Dr. Wright is the defendant, not the plaintiff) and suits brought Dr. Wright brought against individuals who made libelous accusations against him on social media. Even high school-level Legal Studies students learn that public accusations that damage business interests and reputation are actionable, so it’s hard to claim the suits cannot be justified.

Dr. Wright is justified in wanting recognition for his life’s work, and especially in not wanting that work to be used as an attack against his further work and reputation.

“Rather than seeking licences, they have sought to attack my character and impugned me. This year, I am taking charge and control of my system,” he wrote.

Moreover, there are good reasons courts exist, and two of them are to settle disputes or redress damage done. Targeting an individual (and their supporters) with daily attacks and attempting to hijack their life’s work, then crying “litigious” when they attempt to fight back, is high-level chutzpah.

In previous years, the battle for Bitcoin’s soul happened mainly in chat rooms, bars, and developer meetings. In 2020, it looks set to move into the courts—and that’s serious business.

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