On fiduciaries

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When a group of developers delegates their role and decision-making authority to a single entity, it is, by definition, centralisation, not decentralisation. Centralisation refers to the consolidation of control and decision-making authority into a single point or entity. In the context of software development, such as for a digital currency like Bitcoin, this would mean that a single group or entity would have the predominant influence or control over the development and decision-making processes.

In contrast, decentralisation is characterised by the distribution of control, authority, and decision-making across a diverse and independent set of actors. The case of Bitcoin’s original design exemplifies decentralisation because its development, maintenance, and decision-making processes involve a broad and distributed network of independent developers, miners, and users. No single entity has overriding control or authority, making the system decentralised.

If a single development group, especially one owned by a large corporation like Meta (NASDAQ: META), were to assume control over Bitcoin, it would represent a significant shift towards centralisation. This centralised control would be antithetical to the foundational principles of Bitcoin, which were built around the idea of a decentralised, peer-to-peer network without reliance on any central authority.

In the hypothetical scenario where a single entity like Meta controls Bitcoin, if this entity operates in a fiduciary capacity, it implies a legal and ethical obligation to act in the best interests of the stakeholders (which, in this case, could be the users or investors of Bitcoin). The entity would have to make decisions that are in the best interest of the system’s users rather than its self-interest. However, the centralised control by a fiduciary would still be a departure from the decentralised nature of Bitcoin as initially conceived. It would concentrate power and decision-making in the hands of a single entity, contrasting with the distributed, consensus-driven approach of blockchain technology.

The stability of Bitcoin’s fixed protocol plays a significant role in maintaining its decentralised nature. A predetermined and immutable set of rules governs all participants, ensuring that no single individual or group has the unilateral power to alter the fundamental aspects of the network. This aspect of Bitcoin’s design is crucial in preventing the centralisation of control, as it provides a consistent framework for all users, thereby mitigating the risk of power imbalances.

On the other hand, systems that are extensible and subject to ongoing development present a different dynamic. In such environments, the capability to modify or evolve the system can lead to the emergence of power dynamics. Individuals or groups with the authority to implement changes could potentially exert a significant influence over the system’s direction. This flexibility, while beneficial for innovation and adaptability, also introduces the possibility of centralisation if a select few control changes. The ability to alter the system can become a tool for influencing or marginalising other participants within the ecosystem.

The essence of decentralisation in blockchain technology, especially in the case of digital currencies like Bitcoin, is deeply intertwined with the immutability of its protocol. The resistance to unilateral changes ensures a democratic and consensus-driven approach to governance. It levels the playing field by requiring broad agreement for any significant modifications, thereby safeguarding against the concentration of power and authority in the hands of a few.

In essence, the immutable nature of Bitcoin’s protocol is a crucial factor in upholding its decentralised structure. It prevents the centralisation and power struggles that can arise in more flexible systems, where the rules and protocols are open to modification by a limited number of influential players.

Dr. Craig Wright’s full settlement offer to the Crypto Open Patent Alliance (COPA) in the Satoshi Trial (COPA v Wright) can be found here.