The vision for Bitcoin
This article was first published on Dr. Craig Wright’s blog, and we republished with permission from the author.
Over the last decade, I have been dragged into innumerable arguments and debates, going back to those with James Donald in 2008. They concerned scaling and other aspects of Bitcoin that some people would have disagreements on. While it is necessary to sort a few individuals out in court, I have no interest in fighting with people who have separate visions. Quite frankly, if people want to build a system that runs on Raspberry Pis, in their mum’s basement, I won’t stop them. My goal has always been to build a digital, electronic cash system that scales and can be used as a micropayment system.
I have no interest in arguing with people who don’t like what I said, and still argue that Bitcoin will end in data centres. Quite frankly, it has. I’ve noted it many times, but it is very easy to see that nodes, as I define them in my white paper, are limited in number, with only four nodes controlling even the BTC network. If you want to bury your head in the sand and believe something else, go for it, and I’m not stopping you. But, of course, if you misleadingly call systems like the BTC system Bitcoin, it becomes a different issue, one I will get to later.
I should start by defining the vision for Bitcoin. Like the protocol, it is set in stone. Such a vision will not change in the next year, decade, or century. The only thing that will change here is that the numbers will get more favourable to the consumer. After Bitcoin scales to billions of transactions, it will scale further. Hopefully, it will still get cheaper in the future, too.
The Vision for Bitcoin
The following four points form the base summary and vision for Bitcoin.
- I have a vision of a system that scales to billions of transactions a second.
- I have a vision of a system open to anyone globally.
- I have a vision of a system that costs no more than a thousandth of a cent for a standard transaction of 250 byte, no matter where you are in the world and no matter what you are doing.
- I have a vision of a system that is completely traceable and works within the existing legal structures.
If such is not your vision, it would be better if you had not used it and you should not be using Bitcoin.
The purpose of Bitcoin is not to take down banks or governments. Bitcoin is a tool. The aim of Bitcoin is to make a secure, robust electronic cash system that can provide micropayments and the ability to conduct transactions globally, for values as low as or lower than a thousandth of a US cent. Bitcoin is a competitive system, one that helps deliver value to the consumer. It is an electronic cash system, and should not be based on speculative use and gambling. The purpose of the system is to exchange value quickly, easily, and for very low fees.
Bitcoin will remove all dust limits in the coming year, allowing single-satoshi transactions and lowering the fee, forcing miners to increase defaults. In so doing, miners will not legally collude in charging a price and take a risk. For example, if a miner sets a fee for including a transaction at a level too low, it is not a concern. Yet, if it is too high, the miner will lose profit. As such, the system itself manages levels without external interaction.
There is no such thing as too large a volume. There is no such thing as spam. There is no such thing as a system that cannot be seized or frozen using a legally issued court order. And there is no such thing as a transaction within the law that should not be sent. Very simply, Bitcoin is a system designed to grow with transactions and allow the transfer of value globally, within milliseconds, without all the existing cost infrastructures that an expensive system like the Visa network or the Mastercard network brings with it.
Finally, Bitcoin is set in stone. The protocol is fixed. In other words, any transaction made today will work in a year and a decade or a century from today. If you write a transaction and sign it and hold it off-chain, the same transaction will remain valid and be processed by a miner without any need for resigning or alterations as long as the system is functioning. For instance, if Bitcoin is working 200 years from now, somebody writing a transaction today can expect and have a contractual right to have the transaction sent to the network and processed by a miner in two centuries from today. The protocol doesn’t change.
A fixed protocol means that developers can build anything they wish to and know that it will continue to work for not only weeks but decades to come. A fixed protocol means that people can build applications that incorporate long-lasting systems, including land and property registers. A fixed protocol means that long-term bonds and loans can be issued and recorded on the blockchain. A fixed protocol means that any transaction written today will work in ten or twenty or fifty or a hundred years from now—without resigning or reissuing or even the slightest change to the transaction.
The goals of Bitcoin lie not in taking down banks. Bitcoin doesn’t bank the unbanked. Bitcoin is electronic cash. Electronic cash does not give anybody a home loan, it doesn’t give them a business loan, and it doesn’t give them a way of raising capital. Rather, Bitcoin presents something more critical and important. Bitcoin is electronic cash that can be used globally for very low fees. Bitcoin is not focused on helping individuals move large quantities of money by bypassing the banks because they cannot access a bank account. Rather, the focus of Bitcoin is on digital cash and, as with cash, a different consumer base.
Bitcoin is for the world, and especially for those who are poor.
Bitcoin will open up opportunities for those who work in global markets where the remittance industry takes a large percentage of their money. Bitcoin will open up opportunities for those in poverty-stricken countries without access to banking services. Bitcoin will remove many of the problems associated with no longer having access to bank accounts and relying on payday lenders and check-cashing services that can take up to 30% of their already meagre income.
Bitcoin will help developers who can build long-term projects, knowing that their work will not be made obsolete by a protocol developer implementing a change that would make obsolete everything that has come before—which we have seen at least twenty times on the BTC and Ethereum networks.
Bitcoin will be completely traceable while protecting privacy. Such technology will aid in reducing corruption. If large-scale money transfers are linked to organised crime or other forms of corruption, the ability to trace, freeze, and seize bitcoin will enable the imposition of controls to mitigate money laundering and ensure that the Travel rule is enforced.
If you don’t want a system that enforces rules, you shouldn’t be using Bitcoin. Bitcoin was designed with the ability to trace transactions. Bitcoin was also designed to alert the network to invalid transactions and ensure that frozen coins are not spent. There is no cypherpunk ideology in Bitcoin. Bitcoin was never released using the Cypherpunks mailing lists, it had nothing to do with cypherpunk systems, and it is not designed to promote anarchy. On the contrary, it is designed to ensure that anarchy fails.
The purpose of the subsidy
The decreasing subsidy used in Bitcoin was designed to bring volume to the system. Miners are not paid for nothing. Rather, the subsidy has been designed to ensure funding to build an ecosystem based on volume. If Bitcoin doesn’t scale, it will simply cease to exist. By scale, we are talking about the ability to handle first millions, then billions of transactions per second. And we are talking about today’s technology—not what we expect to have in twenty years. In twenty years, it will be larger in scale. Right now, most of the subsidy has been wasted by most of the people running nodes. Which is a major mistake. In time, such individuals will understand the extent of the error they have made, but the simple answer is that the subsidy is designed to allow people to accept more transactions, including some that should be free.
The subsidy is part of a unilateral contract or, rather, a contract offered to the world. When I created Bitcoin, I offered a contract to the world. The unilateral contract in effect says that anybody mining bitcoin following the rules of the system will be paid for processing transactions. To make things more cost-effective and ensure that some free transactions are included, the subsidy was introduced. In effect, miners that ignore the necessity of including transactions are in breach of contract. Which has consequences.
What I want to see
I wish to see the majority of people on earth using Bitcoin to transact and to save evidence of the transactions they make. Thus, I see Bitcoin becoming a global commodity-based transactional system, one can be used either directly or following the issuing and creation of central bank digital currencies running on top of Bitcoin. I see the scale of the system somewhere in the order of billions of transactions a second and the cost of the system somewhere in the order of a thousandth of a US cent per transaction or below.
I see people on the lowest income on earth using Bitcoin. I see those people earning less than two dollars a day using Bitcoin. I see the people developing solutions aimed at helping those in the world’s poorest countries using Bitcoin. I see Bitcoin becoming global plumbing connecting all sorts of digital applications and removing the need to implement advertising-based solutions that create an Orwellian world destroying freedom, which we have seen being promoted by Silicon Valley-based companies, including Meta.
My vision is simple.
Incredibly low fees.
A set protocol that never changes, allowing developers to experiment.
The integration of Bitcoin with legal systems to help minimise criminal activity and corruption.
Those points form my vision for Bitcoin. If you don’t agree with them, you are free to take handouts from Mastercard and related companies that want to continue taking a percentage of every transaction we see being conducted using boondoggle solutions like the Lightning Network.
Note, the BTC system is not Bitcoin. Bitcoin was set in stone. The protocol of Bitcoin doesn’t change. Alterations relating to SegWit and all sorts of other things, including what enables the Lightning Network, are not Bitcoin. While I have no problem with other systems, including Ethereum, aimed at developing alternative methodologies, passing something off as something else is a form of deception; individuals pretending to maintain Bitcoin are deceiving investors and others using the network.
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