Bitcoin has earned a bad reputation over the years as the currency that can shield money launderers, drug dealers and human traffickers from the reach of the law. When Dr. Craig Wright launched Bitcoin, this was never the plan, and in his latest blog post titled ‘Rights and Tracing,’ he made this abundantly clear. However, this is all about to change as court orders start bringing the criminals to book by tracing their transactions and freezing their assets.
One possible scenario will be a court order demanding the freezing of a particular unspent transaction output (UTXO). Such an order can be executed even without the knowledge of the parties behind a transaction, Dr. Wright noted. This order would be “issued on and implemented by the miners and exchanges of the Bitcoin protocol.”
However, those opposed to the rule of law have peddled a false narrative over the years, Dr. Wright stated explaining: “The classic argument that was designed to fool regulators and law enforcement and which has been promoted by those in BTC camps is that they are a decentralised system of nodes and all nodes need to vote on the protocol.”
However, contrary to popular belief, home users are not nodes. Nodes act only when they are validating a transaction and providing a proof of work demonstrating that they did so correctly. A node demonstrates that it is verifying transactions through a costly signaling method, the creation of a hash.
And while some users will argue that they don’t need to comply, and rightly so, their non-compliance will be non-consequential.
Dr. Wright stated, “The end will be that miners and exchanges either comply or get shut down and participants either choose to rejoin the main network or find that they no longer have any assets. Because it’s only the main network that gives value.”
In the coming year, Dr. Wright predicts that there will be lost of seizures of large Bitcoin addresses that that have been associated with the proceeds of criminal activities.
He added, “Exchanges who refuse to act on orders will be shut down and the assets seized. Miners who refuse to act on court orders will be shut down and the assets seized. The result will be a consensus of miners, exchanges, and businesses that are willing to act within the regulatory and legal framework that already exists.”
The first target will be the SegWitCoin (BTC) ecosystem, the network that started this anti-government narrative. And while the international nature of BTC will make the process a bit difficult, there are crimes which are outlawed across multiple jurisdictions such as human trafficking and money laundering.
Dr. Wright designed Bitcoin to act within the law, not offer an escape route for criminals. And in the coming months, it will.
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