As the cryptocurrency industry exits its “wild west” immaturity, the true nature of digital currency is finally able to be understood, at least by some. There are still those that completely went off the deep end after reading Satoshi Nakamoto’s white paper on Bitcoin and bastardized the concept, but Dr. Craig Wright, who was recently recognized as Satoshi when he became the registered copyright owner of the Bitcoin white paper, has been spending a great deal of time trying to bring order to the Bitcoin chaos. He has published a new blog piece that hopes to shed even more light on what Bitcoin is really designed for, and where it finds its limitations.
Wright explains, “I did not create Bitcoin to make another underground drug currency. E-gold and Liberty Euro (a digital currency offered on Liberty Reserve) both existed and worked well for such a misguided purpose; they do so better than any blockchain ever can.” However, Bitcoin was able to add another layer to the economic process that the blockchain itself can’t – immutability. Wright asserts, “…[T]he significant distinction with Bitcoin lies in leaving behind an immutable evidence trail that is the blockchain. Bitcoin is designed in such a way that if you remove the evidence trail, you end up with problems as exhibited with Zcash.”
Those that have taken to altering the original design of Bitcoin are looking for a way to create a system that circumvents completely repudiation, the ability to deny the truth or validity of something. Wright points out that this is a “utopian dream” that isn’t possible in the real world. There will always be ways to validate data, which is exactly how it should be in a civilized, evolved society.
Wright adds, “In the future, with Bitcoin, individuals will create deterministic hierarchies of keys linked to their identity. Even so, it will only be evidence and not be proof. If a mere private key could be used as definitive proof and not merely evidence, we would implement a system far more draconian than forcing every person on earth to carry an identity card.”
Eventually, Bitcoin will take the place of systems that unfairly equate artificial assets to legitimate valuable and marketable goods. In referencing ways that governments and individuals have manipulated the system in the past for their own goals, Wright explains, “In countries such as Iceland in 2008, banks used fraudulent tricks to create capital out of nowhere. Alice would value her cat at $1 billion and sell it to Bob who would trade his dog that he valued with a capital value of $1 billion, and they would be held on loan between the two parties. The result was the creation of $4 billion worth of artificial capital.”
Those types of activities are still found today, even in the Bitcoin space. “[They are] the foundation for schemes like Tether, ICOs [initial coin offerings], and the bucket shops people call exchanges. All of them will end,” predicts Wright.
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.