Craig Wright: There are no participation trophies in Bitcoin

It doesn’t matter if you want to help the Bitcoin network or if you’re simply trying—you’re not a “node” unless you’re creating blocks. In a blog post, Dr. Craig Wright used the “cult of equality” myth prevalent in today’s society to draw parallels between transaction processors with actual skin in the Bitcoin game, and those merely spending their own efforts and money to no-one’s benefit.

It’s a reference to those in Bitcoin and other proof of work (PoW) networks who believe keeping a full record of the blockchain on their machines somehow makes the network more secure. The best known examples are the “Raspberry Pi” (and similar) non-mining nodes in Bitcoin Core (BTC) who operate in misguided pursuit of “decentralization” and “censorship resistance.”

‘You have the right to attempt to run a node’

“You have no right to run a Bitcoin node. You have the right to attempt to run a node. They are not the same things,” Dr. Wright said. This is similar to having the right to the pursuit of happiness in a society, often misconstrued as a right to happiness or success itself.

The “cult of equality” myth Dr. Wright refers to is the one that grants trophies to last place-getters in a running race, or awards for participating. Children are told it doesn’t matter whether they win or lose, but only if they tried. The dark side of making everyone feel good this way is that actual achievements are denigrated; real hard work and sacrifices downplayed in an attempt to inflate the egos of those who fail, or produce less value.

It’s similar to Marx’s Labor Theory of Value in economics, which posits that the value of a good or service comes from the work it took to produce it. Though Marxist/Marxian ideas have recently seen a resurgence in today’s economic and cultural mainstream, the reality remains that true value comes only from demand for that output—mainly, where people are willing to pay for it.

Bitcoin is designed along capitalist rules and incentives. Competition is an important facet of such a system. ASIC machines running Bitcoin protocol software and keeping full blockchain records compete to create blocks. Even those making a serious attempt to create Bitcoin blocks cannot be considered nodes if they fail to do so, even within a single 2,016 block difficulty period. Dr. Wright considers these operators “candidate nodes.”

Nodes are competitive. Competition is required because without it, there is no incentive to invest in the system. Any node on the Bitcoin network can be supplanted by another. In other words, just because you are the dominant corporation today does not mean you will be the dominant corporation tomorrow.

The result of this competition is that aspiring transaction processors must invest more and more of their time, money and work to stay in the game. Bitcoin “mining” competition began on desktop CPUs, then went to home-built GPU rigs, then to dedicated ASIC-based machines. Even ASICs eventually moved from independent operators to large industrial-scale processing operations. These days in Bitcoin, the focus is on professionalism—not only whether an operator can create enough blocks, but how well they do so and what service level guarantees they can offer.

Here lies the incentive to secure Bitcoin and enforce its “set in stone” protocol rules—those with most skin in the game, or those who’ve invested the most time and money, are the ones most motivated to keep the network functioning smoothly. These incentives make Bitcoin more powerful than the “decentralization” and “censorship resistance” mantras that many repeat as justification for keeping the (mainly BTC) network limited so its smaller participants can still operate.

One of Bitcoin’s oldest arguments

The “big blocker/small blocker” arguments have raged in Bitcoin since its earliest years, and eventually proved irreconcilable. They culminated in the hard forks that first split BTC and BCH in 2017, and BCH/BSV in 2018. Bitcoin was always supposed to scale on-chain by increasing the capacity of its transaction blocks, whether or not this pushed weaker nodes out of the competition.

Only Bitcoin SV and BCH follow the “big block” ethos, though only Bitcoin BSV is dedicated to following the protocol as originally written, and has block sizes limited only to what its processors allow. Competition between processors means the block sizes they’ll process has increased, and will continue to increase in the future.

Spend money on what’s secure enough, don’t waste it on redundancy

“The entire point of Bitcoin was to allow users to be users. If everyone must be able to run a node and to run data centres and maintain systems required to enable the exchange of small amounts of money, there is no purpose in having Bitcoin.”

The good news is it’s perfectly OK to let large processors compete for profits, while still making full use of a secure Bitcoin network. Dr. Wright often refers to simplified payment verification (SPV) as an adequate means to determine if a transaction is valid or not. Rather than keeping full blockchain records, SPV users keep records only of all transaction indexes, something that requires far less storage space and energy.

The Bitcoin whitepaper states that some businesses may wish to keep full blockchain records for their own security, though doing so does not make the network itself more secure. SPV records can show if the blockchain has changed, and thus whether an individual transaction is valid. As the blockchain grows exponentially larger, full blockchain record keepers who don’t create blocks are wasting money and energy on redundancy.

“In fact, the only time that a ‘non-network node’ can transmit a transaction to a network node is when the system is attempting to propagate a double-spend. Here, the hash of the transaction will be different to the existing transaction ID that is maintained on the network node, and the full transaction will be requested. The network node will then have a copy of the transaction with double-spent inputs. The network node will neither propagate it, validate it, nor ever add it to a block.”

Likewise, processing nodes (the only kind of nodes, as Dr. Wright says) don’t create or change Bitcoin’s rules, they only enforce them. This also means that, when BTC changed the rules to accommodate segregated witness (“SegWit”) in 2017, its argument that BTC is the “real Bitcoin” by having the longest chain became invalid.

There is only one Bitcoin, and only one chain. Just as time, money and effort invested in running a node doesn’t guarantee block-creation or profits, those same investments directed at any blockchain that isn’t Bitcoin doesn’t mean they are Bitcoin, or even worthwhile.

Only by competing and winning, and investing whatever it takes to do so, will create something lasting and useful. Either run a proper node or direct efforts to something more useful, because there are no participation trophies in Bitcoin… and nor should there be.

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.