Dr. Craig Wright on monetary law and blockchains

Blockchain forks aren’t a bad thing – they’re part of the design of the original Bitcoin. Dr. Craig Wright, Chief Science Officer of nChain, provides a blog post on blockchain forks and how they interact with monetary laws in an effort to dispel some of the mistruths being presented by certain members of the cryptocurrency community, as well as clarification on coin mixers and why they are becoming targets for their illegal activities.

To get started, Wright offers guidance on forks and orphan blocks, explaining that the latter is a “game-theoretic signaling device” that doesn’t have much importance to the end user. Whether the transaction is placed in Miner A’s discovered block or Miner B’s block, the result is the same from the user’s point of view. Wright adds the difference “… merely concerns those seeking to gain fees as they compete to incorporate your transaction in a block they find. The lie propagated about orphans being a problem in Bitcoin is designed to enable parasitic systems that provide money-laundering evasion and facilitate security scams.”

Bitcoin is a transaction-verification system – this is what gives it its value. What’s important is that the transaction completed and registered on the blockchain now will be the same 20, 30 or even 100 years from now. Provided blockchain products are able to keep this premise in mind, they are working within the confines and definition of Bitcoin; when they start to stray and incorporate unnecessary systems, such as Bitcoin Core’s (BTC) Segregated Witness, they lose their attachment to Bitcoin – and, as a result, cryptocurrency – completely.

Wright adds, “When they do so to help facilitate the use of my invention to promote crime and money laundering, then I get really upset. Such is what people around both BTC and BCH [Bitcoin Cash] are seeking. They seek to make the new version of a criminal money-laundering coin.”

The Bank Secrecy Act was created to ensure that money exchanges met criteria related to anti-money-laundering procedures, measures that have been reiterated and enforced through the FinancialCrime Enforcement Network (FinCEN). It has been accepted by virtually all countries around the world and Bitcoin was never meant to be used outside the scope of the Act.

A recent article on CoinCenter tried to argue that coin mixers are fine, that they are operating legally. However, Wright points out that, according to FinCEN Section 4.5.1(a), “anonymizing services provider is a money transmitter under FinCEN regulations.” As such, anonymizing services are definitely required to adhere to the guidelines.

As a result of that revelation, it appears that CoinCenter is willing to try and perpetuate the misguided belief that coin mixers like CoinJoin and others are operating within the scope of international law. This brings Wright to the conclusion that “… pseudo organisations such as Coin Centre are simply there to hide facts and allow criminal activity to continue longer than it should.”

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.

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