Bitcoin coin abstract background of cryptocurrency

Ripple CTO David Schwartz lectured again by Dr. Craig Wright

The heated Twitter debate between Bitcoin inventor Dr. Craig Wright and Ripple CTO David Schwartz is not yet over. We have covered the first round, and the next one is in full swing already.

Schwartz mentioned the Introduction of the Bitcoin white paper and highlighted some sentences:

Bitcoin is a commercial system

That tweet from Schwartz was a response to Dr. Wright saying that he—as Satoshi Nakamoto—never mentioned Bitcoin as being outside of the reach of governments.

Let’s see: do the passages highlighted by Schwartz have anything to do with Bitcoin being outside of the reach of governments? The whole cited passage of the white paper starts with the word “commerce.”

The Introduction of the Bitcoin white paper is about commerce. Not about governments. Schwartz shows in another tweet that his understanding is an interpretation of the words—as what he claims is not mentioned literally in the Introduction of the Bitcoin white paper:

So we are discussing Schwartz’s interpretation now, not what the Introduction of the Bitcoin white paper actually states. We get Schwartz’s point. He seems to say financial transactions that could be reversed by governments would need trust in governments.

Pay attention: Schwartz is referring to “trusted third parties,” while Dr. Wright explains that not all trusted parties are trusted third parties:

What does Dr. Wright mean by differentiating between ‘trusted parties’ and ‘trusted third parties’?

Bitcoin is not a trustless system. With Bitcoin, Satoshi Nakamoto solved the electronic cash puzzle. Part of that puzzle was the problem of anonymous observers in payment systems that could not be trusted—due to their anonymity.

In Bitcoin, nodes are the observers—but are deanonymized by economic incentives. So we still have trusted parties in Bitcoin. However, these are not third parties. They are within the Bitcoin network, not outside of it.

Dr. Wright explained this in his article Solving Double-Spending:

Consequently, bitcoin was designed as an economically saleable token. By premising the security on an economic process where the individuals are doing the work to validate transactions—when tokens are paid—a commercial system can be built where economically incentivised nodes compete to validate solutions, deanonymising such observer systems.

Again, commercial system. That has nothing to do with governments per se. Neither does it state anything for, nor against governments – it simply is about commerce. That is why Satoshi Nakamoto did indeed refer to the banking system because the banking system is a part of the commercial system.

Ripple’s CTO Schwartz is interpreting the Bitcoin white paper instead of understanding the details of Bitcoin as a solution to the electronic cash puzzle. In Dr. Wright’s article Solving Double-Spending, Schwartz can delve into the academic history of digital cash systems that have been discussed since at least 1994.

Satoshi Nakamoto did not wake up with the idea of Bitcoin all of a sudden—it was actually just the opposite. It was the result of an academic approach to the electronic cash discussion.

Bitcoin is not against governments; it is not even against banks!

We have mentioned that Bitcoin as a technology is not and cannot be a solution to political problems. See what happened with the Canadian Trucker Protests and Bitcoin.

No, Satoshi Nakamoto did not say that.

Schwartz clearly mistrusts governments, I do understand. History books give a quick overview of what governments are capable of. However, show me the technology that solved problems with governments.

Governments can adapt to any technology, so go figure. If you want to change governments, maybe do not cite the Bitcoin white paper, as you would also not cite the PayPal (NASDAQ: PYPL) terms of services to vote in a new government. Technology, politics—words have meaning.

Furthermore, governments are not trusted third parties as it concerns Bitcoin. They are not even trusted parties in Bitcoin. Simply because governments are not primarily designed to be partakers in commerce but to ensure the lawful conditions of commerce (as in the free market).

Further information:

Bitcoin is not made for crime or to tear down government, it is made for you and me

Is Ripple CTO David Schwartz ‘in it for truth’?

I think the Ripple business model is about settlements, is it not? However, I am not sure Ripple CTO David Schwartz understands what cash is. Bitcoin is complex cash. Bitcoin settles payments at low cost with privacy at scale.

Nobody said it was easy to understand Bitcoin. Maybe David Schwartz is trying to understand it, but from what I can tell, he is not willing to dig deep enough. Dr. Wright is literally handing out free educational courses with his tweets.

But it is more convenient to simply interpret something instead of studying it. That is why the tweets between Dr. Wright and Schwartz go back and forth with no conclusion. One of them is studying, while the other one is defending a personal interpretation.

What is science? Finding truth. What is interpretation? Claiming truth.

Watch: How Bitcoin works as the base layer for other blockchains

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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