If anyone suggests Bitcoin is transforming the world rather slowly, Dr. Wright always says he’s not worried: he thinks long-term and will never give up. His record supports that. For instance, from the day he revealed the White Paper on the Cryptography Mailing List as Satoshi Nakamoto, back in 2008, he’s had to deal with claims that Bitcoin wouldn’t scale. It was the first comment on his proposal.
Dr. Wright’s insistence that Bitcoin will scale has been proved right with increasingly spectacular numbers. At the CoinGeek conference in Zurich last week, Steve Shadders, head of nChain’s Teranode project, gave a live demonstration, producing 50,000 transactions per second. As one report put it, at that speed “BSV will have finally realized the long goal of Bitcoin to surpass the VISA network in processing power.”
Although Dr. Wright had plenty to say in Zurich, he was never heard to utter the words “I told you so”—although he could have, and not just after the scaling demo. Events way beyond Zurich gave him plenty of other excuses.
Take the FBI’s recovery of $2.3 million of the $4.4 million paid to criminals after the ransomware attack on the Colonial Pipeline—which resulted in a six-day closure of a 5,000 mile pipeline distributing gasoline on the East coast of the United States. Colonial paid a ransom of 75 BTC, for which it received a decryption tool.
Dr. Wright has always said that because Bitcoin transactions are on a public ledger, it’s precisely the opposite of what anyone wanting to hide from the law should use. Sure enough, the FBI traced the money through multiple transactions and was eventually able to seize back some of it. Elvis Chan, an FBI special agent commented on the recovery operation to the Wall Street Journal in words that could have been Dr. Wright’s: “You can’t hide behind cryptocurrency.”
There was more. The Basel Committee for Banking Supervision—an influential body of central bankers and regulators—proposed that banks should be required to back any holdings in Bitcoin with funds of equivalent value to offset the volatility of Bitcoin. Evidently bankers have no confidence that Bitcoin has any intrinsic value: exposure must always be fully covered by other currencies.
Dr. Wright has always said that he didn’t envisage Bitcoin as a kind of ‘digital gold’. Instead, its value lies in its ability to perform small cash payments and to store data cheaply and accurately on its blockchain ledger. If the bankers’ proposal is accepted, it will constrain the use of Bitcoin as a store of value—which is bad news for BTC but won’t affect BSV, with its emphasis on data processing and microtransactions.
It’s Silicon Valley and Seattle—home of Microsoft and AWS—more than Wall Street, that the BSV enterprise blockchain is set to disrupt. Dr Wright complains about Silicon Valley’s “technocratic leaders” who “want to tell you how to live the life they think is best for you.” But while the idea of owning your own data through BSV sounds an appealing alternative, can users be weaned from ad-supported platforms like Google, Facebook and Twitter?
Well, maybe. Last month, The Economist joined Dr. Wright in warning the tech giants that their business model is under threat. Users are increasingly unhappy to contribute to the tech giants’ profits for no fees. BSV startups such as Streamanity, Relica and Twetch already offer users financial incentives for posting content. In The Rise of the Creator Economy, The Economist offers an upbeat account of similar businesses that use conventional payment systems. OnlyFans, Substack, Roblox and Patreon all pay content creators. Combine those kinds of business models with the ease of use of BSV and the revolution looks possible.
Finally, there was a serious Internet outage last week. Fastly, an Internet content delivery network unknown to most users, turned out to be a critical link in providing connectivity between millions of people and frequently used websites. The problem lasted less than an hour but one estimate was that Amazon alone was losing almost $7,000 a second.
The world learnt that when Fastly goes slowly, the Internet all but grinds to a halt for some users. Again, Dr. Wright has warned of the vulnerability of the online network structure. Bitcoin’s node network, by comparison, is strong because it is flexible. There’s no ‘single point of failure’. Instead, if a node drops out for whatever reason, others will take over seamlessly and additional nodes will be incentivised to join the system.
So, yes, things are coming right for Dr. 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.