Throughout the majority of my life I have been passionate about open-source software. Over the last five years or so this passion has been laser-focused on blockchain technology, which I see as an evolution of the open-source ethos. I have a lot of thoughts on this topic, so here we go…

Craig Wright, who has been asserting since 2016 that he is the man behind the pseudonym Satoshi Nakamoto (the inventor of Bitcoin), has began pushing for modifications to Bitcoin Core that are crafted to benefit Craig personally.

His recent proposal is designed to allow governments to freeze tokens on Bitcoin, and in future versions add the ability to reissue the frozen tokens to a new owner. To most this idea should be outrageous. I found myself wondering why the so-called Bitcoin creator would present an idea that is so obviously out of touch with the crypto community at large. I believe there is one answer that could easily explain it.

Bitcoin robbery

During a burglary at his home in 2020, Craig alleges that someone deleted the private keys needed to access the 111,000 bitcoin he owned. These bitcoin are worth approximately $2.5 billion at today’s prices.

This is a wild claim by itself. The man who claims to have designed and built Bitcoin had 2.5 billion dollars worth of bitcoin in an unbacked up wallet on his personal home computer connected to the internet. This immediately triggers many red flags to me:

1) Wallets of any size should have their mnemonic phrases, the keys that give you access to the wallet, backed up in physical form. For many this involves a paper wallet, personally I use metal mnemonic wallets.

2) For any substantial amount of cryptocurrencies, especially those that are likely to remain dormant for a period of time, hardware wallets should be used. Ledger is a company that produces affordable hardware wallets which have been around as early as 2014.

3) Without access to a hardware wallet (you should get one they’re awesome), an air gapped computer should be used for generating a new wallet and signing transactions offline.

I don’t want to spend too much time on wallet security because that’s not the point of this post, but these concepts should be very familiar to people working on blockchains.

Assuming that Craig did actually own the lost bitcoin and that he is Satoshi himself, it should be obvious that these tokens would and should be lost forever.

There’s no way to recovery the private key or mnemonic phrase for a Bitcoin wallet

This has got to be one of the first lessons everyone learns when getting into crypto. Assuming complete responsibility for your own finances has many benefits, but it also comes with strict new responsibilities. Unlike a bank where if funds go missing from your account you can call the local branch and they’ll usually return the funds with little effort, Bitcoin has no undo function. All transfers are irreversible, and lost wallets are simply lost. This is a fundamental, understood and accepted fact of Bitcoin, and is true with just about every other blockchain in existence.

Craig wants to change this. His proposal would allow him to basically “call” his local Bitcoin developers and have them seize then reissue the 111,000 tokens to a new wallet owned by, you guessed it, Craig Wright.

The blacklist manager

Unsurprisingly Craig has already convinced his Bitcoin fork, BSV, to implement the proposed mechanism called the blacklist manager. To request a blacklist users most follow a convoluted and bureaucratic process that I will detail below.

The first step is obtaining a court order, from which court and jurisdiction is anyone’s guess. The user affected by the hack would then commission a notary who can operate a notary tool. The notary converts the court order into a machine-readable format and transmits it to the blockchain. Miners of the blockchain are expected to take action to freeze the relevant coins as per the order. If they refuse to comply with the order, they will violate the network rules, their blocks may be orphaned or rejected, and they may face contempt of court for not obeying a court order. More details on the process can be found here.

If you have BSV, there are people who can freeze and spend your coins.

@rot13maxi on Twitter

This mechanism is highly controversial and has been met with strong opposition from the Bitcoin community. It goes against some of the core principles of Bitcoin, like decentralization, censorship-resistance and trustlessness. The blacklist manager also establishes a dangerous precedent that someone could utilize to jeopardize the security and privacy of users.

No person is above the law of Bitcoin, as it should be

This proposal proves to me that it doesn’t matter if Craig Wright is Satoshi or not, he’s attempting to permanently modify Bitcoin to give himself access to a large amount of money. This is an unmistakably clear example of a conflict of interest, and the right thing to do would be to step aside and let the Bitcoin community decide how to handle these cases as it always has.

While there are many possible theories as to why he may want to recover the funds and what he would do with them once he had them, one thing is for certain: it would be a terrible idea.

---

^{For more evidence on why Craig is full of crap, check this Reddit thread. This is not even half of it.
Stable Diffusion was used to generate the random images throughout the post, I just wanted an excuse to experiment with the technology.
Disclaimer: Information presented in this personal blog post is subject to errors, inaccuracies, and omissions. The author does not guarantee the completeness or accuracy of the information presented.}