Theory of Bitcoin

Theory of Bitcoin looks at how Bitcoin handles long-term document retention

YouTube video

The latest “Theory of Bitcoin” episode is all about keeping secure records—in business, you may need to retain documents for decades, and you need to make sure they’re untampered with. Since the digital age has actually made this more of a challenge, the world needs a new system to manage its data. Enter Bitcoin.

Host Ryan X. Charles points out that the line between analyzing Satoshi’s writings and Dr. Craig S. Wright’s writings is becoming blurred—which makes sense, given they’re the same person.

And document retention is something that has played on Dr. Wright’s mind a lot over the decades, particularly in the time he worked for an auditing firm. In the wake of the Enron and WorldCom corporate scandals, laws like Sarbanes-Oxley in the U.S. have imposed strict rules on what documents must be retained, and how.

Some laws (such as HIPAA) also require that the information within the documents be kept confidential, presenting an additional degree of difficulty. Additionally, how do you prove that no relevant “adverse” documents have been destroyed at some point?

This can now be done, Dr. Wright says, and it “could revolutionize litigation discovery.” The irony that document integrity has been central to his own personal examples of litigation discovery recently isn’t lost on him—and in fact he welcomes something that would make it easier.

The challenge is not always in deliberate tampering, either. Copying and transferring digital files can alter their metadata, making it difficult to secure them with hashes and similar proofs.

Dr. Wright and Charles explain how technological additions to Bitcoin variants, like segregated witness (SegWit) and Schnorr signatures, break the legal link between digital signatures and the data they verify—an important point that those in control of the protocol disregard or don’t care about. However, Wright says, “They will, in time.”

He also refers to the possibility of global trademark/patent registries, as well as the ability to find and transfer them easily. The world will need one system that everyone trusts, rather than trying to integrate multiple different systems (this is the “universal ledger of truth” concept often repeated in Bitcoin).

He refers to sCrypt’s work with Bitcoin Script and the methods that project uses to maintain a form of “state” across time on a blockchain, something that has also been hotly debated—mainly due to people arguing over what “state” means, or not understanding why it’s important. Charles points out that this will be a tough sell to those unfamiliar with the concepts, given that even explaining Bitcoin as digital cash over the past decade has been a challenge.

For more technical/mathematical viewers, this leads to a detailed discussion about the various ways the validity of a past transaction output could be verified, and what use cases these might find. Dr. Wright also explains the differences between the ways Bitcoin and Ethereum perform computation. Ethereum, he notes, could actually run within Bitcoin.

“Ethereum is only a subset of Bitcoin… sorry.”

To the uninitiated, it may sound as though the conversation veers off on many tangents, but Dr. Wright also notes that it’s important to use a multi-disciplinary approach to solve problems—something that’s lacking in today’s world of hyper-specialization. Even Charles confesses he’s “12 years behind” Wright in terms of understanding some of the concepts described.

While it would be great to have a high level understanding of the processes Dr. Wright describes, for those without the right training or education it’s enough to understand the lower-level ideas and the problems they might be able to solve. In this way, Theory of Bitcoin is still informative to all, even if there’s still a lot of detail to work through.

To watch previous episodes of the Theory of Bitcoin, check the Theory of Bitcoin YouTube playlist here.

New to blockchain? Check out CoinGeek’s Blockchain for Beginners section, the ultimate resource guide to learn more about blockchain technology.