After more than 11 years since it was first introduced, Bitcoin still has difficulty being understood, even by some of the most adept tech geeks in the business. Dr. Craig Wright has dedicated a lot of time clearing the air lately in an attempt to put cryptocurrency back on its rightful track, and has just published a new blog post that is directed at a fundamental error some in the crypto space are making. Wallet keys need to be better protected and should follow the design as originally laid out in Bitcoin’s white paper.
Wright points to a project that he was asked to review a few weeks ago at the CC Forum in London. Ballet, a wallet alternative created by Bobby Lee, would make using crypto easier and give it a better “feel” by printing a paper wallet on a “piece of metal.” This has a flaw at its core, though, that shows there is a gap between how Bitcoin was meant to operate and how it has been interpreted.
According to the original Bitcoin white paper, “[A] new key pair should be used for each transaction to keep them from being linked to a common owner.” Putting a wallet address on a piece of metal is counter to this assertion and could never allow for the keys to change, since the addresses would have been printed.
According to a Financial Action Task Force (FATF) report from the 1990s, electronic cash had already been attempted and two versions introduced—one for ecommerce purchases and the other for face-to-face digital transactions. Ballet, according to Wright, attempted to serve both aspects, but falls short in both instances.
Wright explains in his post, “I’m starting to come to the belief that individuals seeking to create such products are actively engaged in creating solutions for the purpose and market of money laundering. In effect, it would be the only market for such a product. But, the product fails for the same market, too.” He adds, “I seek to try and believe that people are not doing such things maliciously and that they’re doing them out of ignorance. Either way, the mere development of such a product demonstrates a fundamental misunderstanding and incomprehension as to the nature of Bitcoin.”
Bitcoin was never meant to be “digital gold.” It is simply supposed to be an electronic cash system that uses “digital coins that are based on a template, which is saved on each transaction to the blockchain.” In conjunction with that design, the number of users per key needs to be minimized in an effort to increase security. Wright adds, “Bitcoin can act as the foundation layer for many systems, but natively, it is not designed to be digital gold. Importantly, the concept of any large address being treated as an account can be used to demonstrate a fundamental misunderstanding and the sheer ignorance as to the nature of Bitcoin.”
Read Dr. Craig Wright’s latest blog post, A Fundamental Misunderstanding, here.
New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin—as originally envisioned by Satoshi Nakamoto—and blockchain.