There are a ton of myths and rumors around how Bitcoin was created and released, but it wasn’t until Dr. Craig S. Wright released his latest blog post that we really got to hear the explanation of how Bitcoin was created and released from the individual who is closest to the source— Dr. Wright aka, Satoshi Nakamoto, the author of the Bitcoin whitepaper.
In “Bitcoin as a Security,” Dr. Wright takes a deep dive into the history of Bitcoin as well as Bitcoin’s journey throughout different eras. Dr. Wright walks us through Bitcoin and the different stages it has had in its lifetime as well as the use cases it had at different points in time. Ultimately Dr. Wright explains why Bitcoin is not a security but is a commodity and in making that point, Dr. Wright tells us the things which Bitcoin is often falsely reported to be.
“For example, few people seem to recognise that even the widely promoted concept of ‘censorship resistance’ was never a component of Bitcoin’s design. Such terminology started in 2011, when a journalist and writer associated with the Electronic Frontier Foundation (EFF) falsely described Bitcoin,” says Dr. Wright
“Bitcoin and any derivative system are in no way cryptocurrency. Whilst it is commonly misreported and factually misrepresented, there is no encryption used in Bitcoin. Bitcoin transactions are transacted, sent, created, and signed without encryption at any point.”
Seeing Dr. Wright explain all of the things that Bitcoin is not begs the question, what is Bitcoin?
“Bitcoin is a commodity that is exchanged under standard contractual trade conditions,” says Dr. Wright. “Of course, as it is also used as money, it can come with different legal protections, but that’s a different issue, for a different post.”
What Bitcoin could have been
As we know, it took nearly a decade for Bitcoin to stay true to Satoshi’s vision for it, and along the way, there were many forks in Bitcoin’s path. But what fewer people know is that the Australian government almost became the owner of Bitcoin’s intellectual property and that Bitcoin’s use on the darknet was not something Satoshi had anticipated.
“Because I was setting up Australian companies designed to build solutions on top of Bitcoin, the financial benefits would be indirectly earned—not through the actions of other individuals, but through my own, and through the actions of the companies I was constructing. I set up multiple companies. Yet, the Australian Taxation Office (ATO) and I had many disagreements about the nature of what I was doing,” says Dr. Wright.
“In other words, if the ATO had managed to successfully file for my bankruptcy, the assets I personally held in trust would have been available for redistribution. It would have provided ownership of the intellectual property forming the basis of Bitcoin to the Australian government.”
Dr. Wright goes on to talk about Bitcoin being used on darknet marketplaces, and how that use case was in direct contrast to the work that Dr. Wright was doing as a lay pastor at the time. Afterward, Dr. Wright talks about his work in the online gaming world, why Bitcoin development is open-source, and why Bitcoin is not a security.
“So, Bitcoin is not a security because it is firstly a commodity system—defined without an account—and acts, even though digitally, as a fixed, static standard commodity offer. Ethereum is not. Ethereum is an account-based system and not a token-based system,” says Dr. Wright.
“Next, there is no requirement to invest money in a common enterprise, because Bitcoin nodes act competitively. The bitcoin I issued is distributed following my issue in 2009, under a set agreement where no profit ensues. Here, in part, lies one of the major reasons I did not keep any bitcoin or pre-mine. If I had done so, the result would have been a system where I would have profited from the efforts of a promoter or third party.”
To learn more about how and why Bitcoin was released the way that it was, why Bitcoin is not a security, and why the Australian government almost became the owner of Bitcoin’s intellectual property, read Dr. Craig S. Wright’s latest blog post, “Bitcoin as a Security,” on CraigWright.net.
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.