If past is indeed prologue, BSV users upset with Dr. Craig Wright’s ongoing legal actions need to think long and hard before forking the chain into the great unknown.
Bitcoin expert Joshua Henslee (@cryptoAcorns) has a new YouTube video titled On Forking Bitcoin in which he addresses a number of issues currently animating discussion in the BSV ecosystem. These issues include some vocal dissatisfaction with Dr. Wright’s efforts to use the courts to facilitate the return of over 111,000 Bitcoin tokens that were stolen following a hack of his computer in February 2020.
Wright is seeking to compel developers of the BTC, BCH, BCH ABC and BSV blockchains to acknowledge their fiduciary responsibility in assisting the return of stolen assets to their rightful owners. This has caused consternation in some crypto corners, as it flies in the face of the belief that Bitcoin transactions are truly immutable and thus immune to the edicts of courts, governments or any other central authorities.
Henslee’s video opens with the question of whether the judicial system is currently capable of addressing questions involving the ownership of digital assets. Within the Bitcoin community itself, there’s fierce debate over whether possession of a private key equates directly to ownership of a digital asset, a question that becomes even thornier given the “huge gap” in judicial understanding of the digital currency sector.
Henslee expresses unease at the potential fallout from allowing a court to direct miners to reroute certain UTXOs to an individual who’s demonstrated ownership of purloined assets. Once that cat’s out of the digital bag, what’s to stop governments from seizing assets from critics of their policies or actions?
Yet Henslee acknowledges that without some judicial recourse for victims of theft or fraud, chances are slim that Bitcoin will ever break out of its current digital ghetto and attain its deserved status as a truly global currency. There’s no Solomonic solution that is likely to be praised by all parties with a stake (direct or indirect) in the outcome.
Manslaughter: Not murder, but still a crime
From the day Wright launched his legal action to regain his stolen coins, his motives have been assailed by certain vocal factions of CryptoVille, including many of the BTC/BCH developers who are being asked to facilitate the return of Wright’s assets. Ironically, it’s the actions these same developers have taken over the years that may lead to a token-retrieval scenario that both the courts and the general public will recognize as legitimate. Block head Jack Dorsey recently established a legal fund for the centralized protocol developers that have a fiduciary responsibility to the networks users.
Wright’s recent legal victory over Ira Kleiman revived discussion of Bitcoin’s nLockTime function and how it can be combined with smart contract scripts to secure Bitcoin in an automated trust, like the Tulip Trust in which Wright is said to have secured the vast stores of Bitcoin that Satoshi mined in Bitcoin’s early days. Such an arrangement allows the token holder to intentionally discard the private keys to further secure the assets against unauthorized access.
Henslee notes that many of the centralized protocol developers currently resisting Wright’s request for help in recovering his stolen coins were among those who made changes to Bitcoin’s original protocol following Satoshi Nakamoto’s post-2011 absence from the spotlight. Some of those changes invalidated nLockTime, rendering unspendable any coins that happened to be lying in this state of suspended animation.
With BSV having restored the Bitcoin protocol to its original state, nLockTime functionality remains intact. Assuming Wright is able to regain control of these coins, Wright’s ability to spend the BSV coins—and demonstrate that the hashes and UTXOs are the same on the other chains—would give a major boost to his ownership claims.
Henslee says Wright will have a strong argument to make in court that the code changes made by the BTC/BCH developers have effectively seized property belonging to others. Henslee said it doesn’t matter if this misappropriation was achieved accidentally—it’s why the legal system recognizes manslaughter as distinct from murder—because at the end of the day, actions have consequences, requiring other actions to remedy the damage done.
Bitcoin Spork Vision
Regardless of the righteousness of his cause, Wright’s numerous legal cases have left some in the BSV community frustrated. These individuals see Wright’s ongoing presence in the courts as a distraction from the focus that should be on BSV’s technical prowess, resulting in a loss of liquidity that has discouraged more developers from giving the chain a proper look.
Some of these restless BSV’ers are now publicly musing about forking off into a new Craig-free chain that would retain all the best bits of BSV while hopefully purging itself of its negative PR and legal baggage.
Henslee says he sympathizes with some of this group’s concerns—although he notes that the coordinated shunning of BSV by exchanges such as Binance and Coinbase bears much of the liquidity blame—but he suggests these individuals may want to think twice before they make a decision they can’t undo.
As Henslee notes, forking requires a significant supply of hash power behind it to work. When BSV left BCH behind, Calvin Ayre was able to bring his significant resources to bear to support the fledgling chain. Who will support a new BSV fork to the degree necessary to ensure malicious actors can’t treat the chain like their personal re-org rec room?
Henslee also warns forking fans to recognize that the experience of previous forks doesn’t bode well for increasing the number of developers working on the technology. Forks split communities, forcing developers to choose sides. Time is wasted tweaking products to conform to a new reality, time that would be better spent innovating. Many apps don’t survive these distractions.
In short, Henslee’s view is that the net negatives of a fork vastly outweigh the potential positives, particularly given the additional tweaks the software tends to undergo along the way.
Henslee claims that there is no current version of Bitcoin that reflects what Satoshi created—and that includes BSV (which still retains the difficulty adjustment algorithm and ForkID changes that were introduced into BCH back in the day). Henslee argues that this is the result of every developer’s self-assured insistence that Satoshi got it wrong and that significant alterations to Bitcoin’s original code are required to right these wrongs.
Henslee claims every other digital currency introduced after Bitcoin’s arrival is based on the assumption that Satoshi built something that couldn’t scale. BSV, which most closely resembles the original Bitcoin protocol, has disproven this assumption. As such, Henslee cautions that would-be forkers should look carefully before they leap, lest they discover too late that their new development team feels the ‘S’ in ‘New BSV’ should stand for SegWit.
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