Craig Wright on Bitcoin and the reactionary response to a revolt

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With the recent price downturn in the digital asset markets, inexperienced investors face a tremendous loss of money. The affected only recently have started to ask the question: what kind of a so-called digital currency have I actually bought? Is there any value to it, or have I been scammed?

This is a result of the democratization of finance, which is depicted as solely positive. It indeed has positive sides, but the negative ones are barely mentioned at the moment.

What democratization of finance means is the easy access to financial services. That in itself can be a progress. However, on the way to these financial services, the easy access opens the door for certain people to take advantage of others, primarily via information asymmetry.

Dr. Craig Wright warned in 2019

Digital assets were and still are a handy tool for financial crime of all sorts. With a lot of social media marketing effort and techno-babble, investors who have not even read the Wikipedia article on blockchain started to deploy noticeable amounts of their net worth into ICOs, NFTs, and so-called “cryptocurrencies.” 

More than three years ago, Dr. Craig Wright published an article titled The wheel of time is not on an axis. In the article, Dr. Wright described the democratization of finance as a revolt—with a reactionary response to it to be witnessed in the future. 

For anyone unfamiliar with these terms: a revolution usually means a sudden change in political or socioeconomic structures, and a reactionary response to that is the backlash of people who are—in their eyes—negatively affected by these changes. 

In his article, Dr. Wright states:

Every revolution (anonymous coins, silly ideas of democratising finance) has a reaction. No reformation can occur without a revolution that is strong enough to create a reaction.

Bitcoin doesn’t democratise finance. ICOs don’t. (…). The reason why we have a concept of qualified investors is to protect people without access to information from those who prey on the weak. The creation of ICOs is simply a means to bypass informational controls, a means for those without something of value to take money they have not earned. It’s just something that people use to bring back penny share scams, pink sheet scams, and web-IPO scams. None of them are new, and none of them require blockchain.

This was written in 2019 when ICOs were a trend. Not much has changed nowadays, though, as ICOs are still a thing, and many useless NFTs have gained traction. 

To be clear, easy access to financial services is indeed progress. The question is whether the people finally having easy access actually enjoy the progress or not. For most, the digital asset sphere has not been a blessing. The ICO and NFT issuers, on the other hand, are in general sitting on financial gains, though. 

Bitcoin seems to have started a revolution and could be key to the reactionary response as well

The problem is not solely about who makes profits with Bitcoin and other digital assets, but who comes out with a loss. For example, some digital asset exchanges have handled KYC and AML regulations loosely, benefiting criminals, not the allegedly “now financially freed” people. 

Dr. Wright has pointed out countless times that Bitcoin was not made to work outside existing laws. Furthermore, Bitcoin was not invented to have inexperienced investors get scammed. In the article mentioned above, Dr. Wright said:

It was never the goal of Bitcoin. Bitcoin does help organisations and companies maintain their records. It helps them pay their tax. It helps them maintain compliance with the law. It helps them maintain shareholder registries. You see, Bitcoin helps corporations.

Bitcoin had been developed and designed before Occupy and the associated idiocy started protesting against banks and companies, and was never intended to attack banks or corporations. Bitcoin does bring honesty to such systems.”

We see that the real progress would have been to actually help the existing financial system be more transparent and honest, and not circumnavigate it by retreating to unregulated and shady digital asset exchanges. 

What is the reactionary response to the problems in the digital asset sphere?

The reactionary response to all of the current digital asset mess is Bitcoin and law. It is that simple. Bitcoin is a tool to track financial crime. Existing laws fully applied help with the rest. 

We will start to see more and more questions from exchanges concerning the source of funds. We are going to hear about lost and stolen Bitcoins being recovered and handed back to the rightful owner. While there is no identity in Bitcoin itself, identities can be tied to Bitcoin from outside of Bitcoin. Developers of digital assets and their promoters have liabilities. 

The reactionary response to the revolt will be to bring order into the chaos. All of this is not a catastrophe, though. We seem to need both the revolt and the reaction to it, and then we might end up with real progress. 

 No reformation can occur without a revolution that is strong enough to create a reaction, Dr. Wright wrote in The wheel of time is not on an axis.