Satoshi

Over a Hundred 10-Year-Old Bitcoin Addresses Signed: Message Calls ‘Craig Wright a Fraud’

25/05/2020 by Idelto Editor

Not too long ago, news.Bitcoin.com reported on Craig Wright’s recently submitted bitcoin address list that contained at least three spent blocks. Following the court filing, on May 24 a pastezone dump of 144 addresses, some of which are also represented in Wright’s list, contained a verified message that notes “Craig Steven Wright is a liar and a fraud.” The addresses verify the private keys belong to the messenger and Wright may have some issues in court explaining why this happened.

OG Bitcoiner Signs 144 Bitcoin Addresses from 2009 and 2010

On May 24, 2020, someone who possesses the keys to 144 different bitcoin addresses wrote a message with the corresponding address keys calling Craig Wright “a liar and a fraud.” Wright is the Australian native who has claimed to be Satoshi Nakamoto for years now, but has yet to prove it to the greater crypto community. The reason the person used 144 addresses and created a message calling Wright a fraud is because the addresses he or she used to sign, were filed in the Klieman v Wright lawsuit on May 21. The addresses were publicized via platforms like Courtlistener and Pacer and the crypto community had access to the list for days.

News.Bitcoin.com leveraged our message verification tool, in order to double-check the validity of the signed message. The message shows that the author is the owner of many of the 144 separate addresses leaked via the Debian pastezone platform. The message reads:

Craig Steven Wright is a liar and a fraud. He doesn’t have the keys used to sign this message. The Lightning Network is a significant achievement. However, we need to continue work on improving on-chain capacity. Unfortunately, the solution is not to just change a constant in the code or to allow powerful participants to force out others. We are all Satoshi.

Bitmex Research Samples 20 Addresses Claims None of Them Were Allocated to the Dominant Miner in the ‘Patoshi Study’

Armchair sleuths and onchain detectives have been trying to figure out whether or not the signed message stemmed from the creator of Bitcoin. Anyone can cross-check the pastezone addresses with the one’s Wright filed in court as well. The crypto community has been discussing the subject at great length on Monday afternoon. Bitmex Research has tweeted that the organization studied 20 different addresses and none of them resembled Satoshi or “Patoshi blocks.”

“We took a random sample of 20 of them,” Bitmex Research said. “None of them were allocated to the dominant miner according to our allocation, using Sergio Demián Lerner’s non-overlapping extra nonce slope analysis.”

Crypto Community Members Look Forward to Seeing ‘Damage Control’

Redditors on the r/btc forum jokingly laughed at Wright’s recent attempt to submit addresses and now he will have to explain this incident. “This gets really hilarious,” one Redditor wrote. “I can’t wait for the damage control from the Craig shills, my bet is on that Craig will just write on Slack how he made that message to deceive non-believers or something retarded cult-like sh** like that.” Most of the crypto community discussing the subject on Twitter and Reddit were pleased to find out that Wright has some explaining to do.

What we know so far is that the anonymous message posted to the Debian pastezone was signed by private keys and the coinbase transactions correspond with addresses created in 2009 and 2010. A number of the 144 addresses dumped on Monday were provided by Wright and his legal team on May 21. The message tied to the addresses calls Wright a “fraud” and each address provides a corresponding signature. The pastezone news also follows the recently spent Bitcoin Block 3,654, which was created one month after the network launched.

What do you think about the person who signed a message using 144 different bitcoin addresses? Let us know in the comments below.

The post Over a Hundred 10-Year-Old Bitcoin Addresses Signed: Message Calls ‘Craig Wright a Fraud’ appeared first on Bitcoin News.

Wild Satoshi Theories: The Curious Case of Bitcoin Block 3654 from 2009

21/05/2020 by Idelto Editor

On Wednesday, 50 bitcoin mined on February 9, 2009, was moved from the original address to a new address. The movement of coins caused a great commotion throughout the cryptocurrency community, as some individuals assumed it may have been the mysterious Satoshi Nakamoto. However, skeptics believe that even though the coins stemmed from an address a touch over a month old from the time Nakamoto bootstrapped the Bitcoin network, it may have been someone else who mined alongside the creator.

The Incredible Fascination With Bitcoin Block 3,654

The creator of Bitcoin and early cryptocurrency mining, has been a topical conversation on Wednesday. The reason is because 50 BTC from February 9, 2009, was moved from the original block reward address to another address. This has made people break out their notes, analyze the blockchain, and become armchair sleuths hot on the trail for whoever the person might be. Various theories have come into play, as people have thought that maybe it was Hal Finney’s wife, one of the Kleimans, Craig Wright, Marti Malmi, someone who may have mined alongside Satoshi Nakamoto, or possibly even the creator.

One of the first issues at hand is how many people were mining bitcoin in 2009. Some people believe a few others had access to Satoshi’s software around that time. There are instances where Satoshi told the public that the software was given to others for peer review. A mailing list response to James A. Donald on Nov. 17, 2008, explains that Satoshi gave files to possibly a few people before the launch on January 3, 2009. A bitcointalk.org member dubbed “Cryddit” told the public he had access to early software. Prior to block 3,654, Satoshi Nakomoto also said he distributed the software to a few other people and thanked two people named “Dustin” and “Nicholas” for their feedback.

Sergio Demián Lerner’s Patoshi Pattern

Coin Metric’s executive, Nic Carter, also discussed the 50 BTC coins from 2009 moving on Wednesday. “Early non-Satoshi mined coins are periodically awakened, just not frequently,” Carter said. “Keep in mind it’s basically impossible to prove that Satoshi ‘didn’t’ mine these coins, but the best research we have suggests that Satoshi mined a specific set of blocks, of which this is not one.” At this point, Carter is discussing the research done by RSK Labs chief scientist Sergio Demián Lerner. “Here’s a visualization of the Patoshi pattern with the block that was just spent. The blocks believed to be Satoshi have a specific pattern in the nonce, which this block does not have,” Carter stressed on Twitter. Other bitcoin advocates came up with the same hypothesis using Sergio Demián Lerner’s “Patoshi” pattern research.

Wild Satoshi Theories: The Curious Case of Bitcoin Block 3654 from 2009 — Chart: Nic Carter, via Twitter

That particular research shows that there is strong evidence to suggest that a single miner or very small group of miners (5 CPUs) could have mined 22,000 blocks. One person asked software developer Jameson Lopp if he “thought the ‘Patoshi Pattern’ is an exhaustive list?”

“IIRC the pattern drops off after block 50,000 or so,” Lopp replied. “That’s all it is, though – a pattern. The list is exhaustive in that it’s what matches the pattern; the real Satoshi might have mined other blocks with another setup,” the developer added. The RSK Labs chief scientist wasn’t the only one who studied early patterns in Bitcoin history as another person in 2017 tried to unravel the clues.

A Single Intel CPU: 1 Miner, 5 Miners, Or 20?

Evidence suggests that back in the early days of bitcoin, around the same time block 3,654 was produced, there was only a small amount of hashpower pushing the chain forward. A blog post from eklitzke.org shows that between the birth of the Bitcoin network in January 2009 and the two months that followed, the hashrate was around 4-8 megahash per second (MH/s). We all know that an old Antminer S9 could blow that hashrate away, but back then Satoshi used a central processing unit.

“I find it reasonable to assume that most of the hashing power in the first year or so of Bitcoin’s existence came from Satoshi Nakamoto,” the blog post details. “If real users were actually joining and leaving Bitcoin, one would expect the hash rate to have varied a lot more, particularly in the first six months.”

The report also shows that the hashrate could have been kept up with a single computer. “The few months have a consistent hash rate of about 5 MH/s [and] would it have been feasible for Satoshi Nakamoto to have solo mined with 5 MH/s in 2009?” the researcher asked. The report’s author continued by adding:

The answer is yes, and in fact, it’s possible to achieve this hash rate using a single Intel CPU. The linked Bitcoin wiki page gives a 5.1 MH/s hash rate for the Core i5-650 CPU, which was released in January 2010 with a 3.2 GHz clock speed. The Intel CPUs available in 2008 when Satoshi Nakamoto created Bitcoin would have been slightly earlier generation Core 2 processors. Those would have been nearly as fast as a Core i5-650. In fact, the highest-end desktop processors available when Satoshi Nakamoto started mining Bitcoin would have been much faster than that. The wiki page shows that a Core 2 Quad Q6600 (released January 2007) would have been capable of achieving 11 MH/s. The numbers for AMD CPUs in this era are similar.

Malmi Denies Involvement and Links to the Kleiman v. Wright Case

The early Bitcoin developer, Marti Malmi, has explained on Twitter that it probably wasn’t him either, when he was recently mentioned in a Cointelegraph article. “Nope,” Malmi tweeted. “Bitcoin was announced on the cryptography mailing list in January 2009 and many people could have tested it. I found Bitcoin around April.”

Then there was also the Twitter conversation involving Craig Wright, the Australian native who claims to be Satoshi Nakamoto. “I followed some of the output of that transaction from the old wallet,” explained one sleuth on Twitter. “It led to this wallet, 966 pages back 100 BTC was transferred last fall (it has 4800 transactions in it). Not sure if you can tell anything from this or where that 100 came from.” Craig Wright’s friend Calvin Ayre responded by saying:

I think you will find this to not be Craigs, or at least not Craig doing it…who owns this is for the courts maybe.

“It traces back to block 9. This is definitely Craig’s address as he signed from it in 2015 and in 2017 on the @satoshi handle,” another person replied to the conversation with Ayre. Some speculate that one of the addresses used in the Kleiman v. Wright court case is somehow involved with the 50 BTC movement on Wednesday.

Twitter is now going crazy about the speculation that the coins may have been the very creator’s bitcoins. However, many people are already dismissing the movement by simply referring to onchain blockchain analysis and data. Despite the debunkings, cryptocurrency enthusiasts have always been fascinated with Satoshi Nakamoto’s lore and alleged treasures.

What do you think about the 50 bitcoin from 2009 moving? Let us know in the comments below.

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Next Step Mobile Surveillance: How You Walk, Your Heartbeat – Why Bitcoin Matters to Combat Government Privacy Invasion

26/02/2020 by Idelto Editor

It may sound like something from a dystopian cyberpunk movie, but payment providers could soon be validating transactions by the way users walk, their heartbeat, veins, and more. Mastercard has recently revealed they “have been testing heartbeat, vein technology, and the way people walk to authenticate people.” The high tech proposal, designed to fight hackers and increase convenience, could be a serious issue for people viewing such measures as unnecessary and invasive, where Bitcoin solves many of the challenges facing online finance already.

Also read: Wikileaks Gathers $37M in BTC Since 2010 – Over $400K Sent After Julian Assange’s Arrest

Mastercard to Map Your Walk

Mega payments provider Mastercard recently revealed to financial news outlet Marketwatch that “We are working with transport organizations where your face or gait will authenticate you.”

While facial recognition software is becoming more and more widely utilized in security, and the field of biometrics continues to evolve rapidly, most everyday people still haven’t considered that something like their gait, or style of walking, could be a means of identification. The tech will ostensibly be able to utilize CCTV, amongst other means, for allowing services such as boarding of public transport.

The president of cyber and intelligence solutions for Mastercard, Ajay Bhalla, told the news outlet:

The way you hold your phone, which ear you use, and how your fingers touch the buttons are all unique to you. We have been testing heartbeat, vein technology, and the way people walk to authenticate people.

For those that think they’ll be able to outsmart this type of tech if it falls into the wrong hands or is abused, they may want to think again. As coronavirus fear grips China and residents are required to wear masks for protection, Chinese AI startup Sensetime has already announced the rollout of new tech which can read 240 facial key points, allowing identification of individuals even if they’ve donned a mask.

Demonizing and Ignoring Bitcoin

The Mastercard exec also told Marketwatch that “The world is changing at a fast pace. Hackers are figuring out how to attack individuals to get their credentials.”

This narrative of payments becoming increasingly electronic and the need for greater online security is not new. In fact, the United States Federal Reserve announced last summer they are developing a new, fast and secure payments system called Fednow. Federal Reserve Board Governor Lael Brainard stated at the time, “Everyone deserves the same ability to make and receive payments immediately and securely, and every bank deserves the same opportunity to offer that service to its community.”

MasterCard: your personal stalker

“The way you hold your phone, which ear you use, and how your fingers touch the buttons are all unique to you.We have been testing heartbeat, vein technology,and the way people walk to authenticate people”#PrivacyFirst https://t.co/ZrZzF7vIHh

— Olga Ukolova [LNP/BP] (@OlUkolova) February 14, 2020

The thing is, we’ve already got that. It’s called bitcoin. Not able to be hacked if stored non-custodially, and not subject to centralized censorship at a protocol level, Satoshi’s creation is one of the most secure payment networks there is. Further, transactions can be obfuscated for greater privacy.

The real issue at hand becomes apparent when a critical common thread between narratives from China, the Fed, and companies like Mastercard emerges: the promotion and cultural whitewashing of unmitigated, highly invasive surveillance.

Often, when solutions like bitcoin are presented as viable options to the authoritarian class, the response is the same: users of bitcoin are criminals, because who else would want to use money that isn’t centrally controlled? U.S. Treasury Secretary Steven Mnuchin has even gone as far as making the absurd claim that U.S. dollars are not used for criminal activity, stating:

I don’t think it’s been successfully done with cash. I’ll push back on that. We’re going to make sure that bitcoin doesn’t become the equivalent of Swiss-numbered bank accounts.

Anti-money laundering narratives have become the central focus for global financial regulators, and are putting more and more users of crypto out of business and out of wealth. All this when the latest report from state-connected blockchain forensics group Chainalysis shows that less than 1% of crypto usage centers on darknet market activity.

Contrasted with governments’ nasty track records of money laundering, drugs and human trafficking, debasement of currencies, and outright murder euphemized as ‘collateral damage’ in warfare — all financed mainly by the fiat shitcoin known as USD — bitcoin appears to be about as threatening as a toy poodle. It’s important to remember, though, that it does have teeth.

Regarding crypto’s threat to centralized systems like Fednow, former congressman from Texas, Ron Paul, remarked in August: “This will be bad for consumers and real-time entrepreneurs but good for power-hungry Federal Reserve bureaucrats who will no doubt use Fednow to help ‘protect’ the Federal Reserve’s fiat currency system from competition from crypto currencies.”

Why Bitcoin Matters to Fight Surveillance

Biometrics provides some great opportunities for security and convenience, affording free market actors cutting edge solutions for their businesses and everyday lives. When it comes down to brass tacks, however, less invasive payment solutions such as bitcoin are not favored by lawmakers, as they’ve stated explicitly that the decentralized and immutable nature of crypto threatens the very stability of the global economy itself.

According to a research opportunity posting from the U.S. Office of the Director of National Intelligence: “Many cryptocurrency enthusiasts predict that either a global cryptocurrency or a national digital currency could undermine the U.S. dollar … The U.S. should prepare for scenarios that threaten to undermine the U.S. dollar as the world reserve currency and determine how those scenarios could be overcome, protecting our status in the global economy.”

The real question about all the surveillance coming down the pike is an easy one. Namely, whether these measures will be voluntarily assented to, or whether they will be forced on people. For example, will someone still be able to open a bank account or board a train if they don’t want their vascular tissue analyzed? It’s an uncomfortable reality most don’t want to look at, but ultimately, when it comes to ensuring compliance the state has but one tool, and it ain’t reasoned verbal persuasion.

Bitcoin is very different from any Fednow service, digital Yuan, or Mastercard payment system because the user — and not some third party — controls it. That’s what really seems to get the goat of lawmakers. How far people will go to fight for this financial privacy bitcoin affords them remains to be seen, but let’s hope the shift is more of a philosophical one than is brutal.

What are your thoughts on Mastercard’s proposed verification systems? Let us know in the comments section below.

Op-ed disclaimer: This is an Op-ed article. The opinions expressed in this article are the author’s own. Bitcoin.com is not responsible for or liable for any content, accuracy or quality within the Op-ed article. Readers should do their own due diligence before taking any actions related to the content. Bitcoin.com is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any information in this Op-ed article.

Images courtesy of Shutterstock, Reuters, fair use.

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How to Hide Your Bitcoin – Opsec, Anonymity, Cold Storage, Brainwallet, Dexes and Non-Custodials

25/02/2020 by Idelto Editor

In an era of increasing economic uncertainty, surveillance, specialized cybercrime and hacking, knowing how to hide bitcoin safely has become a paramount concern for crypto holders. Whether it’s by way of taking wise opsec measures, utilizing noncustodial tools, leveraging a DEX, or even storing seed phrases in your brain, there’s no shortage of measures that can be taken to protect your stash. This article seeks to detail some of the best ways anyone can use to ensure their coins remain safe from bad actors.

Also read: Get Ready for the Bitcoin Halving – Here Are 9 Countdown Clocks You Can Monitor

Safekeeping for Sats

A “satoshi” is the smallest unit of bitcoin, and when it comes to the popular cryptocurrency, keeping one’s stash safe down to the last sat is important. For those new to the space — and perhaps even for more experienced hodlers who’ve overlooked certain security precautions and tips — what follows is a list of ways to ensure your stack of satoshis remains in good hands: your own.

Opsec Best Practices

Opsec, or operational security, is highly important when securing crypto holdings. It’s not sufficient just to have any old two-factor authentication (2FA), for example, as some variants of the measure like SMS-enabled 2FA can still leave easy attack vectors. SIM jacking is one example of this, and all that’s required is an overly cooperative and friendly customer service worker at a cellular provider.

When it comes to hacks like SIM jacking, where an attacker swaps your device data to a new SIM card by way of social engineering, phone number 2FA won’t help, and gives an infiltrator keys to whatever account is secured by that means. Instead, using a 2FA app such as Google Authenticator — and not a phone number, is a better bet. Be sure to disable SMS 2FA on sensitive accounts — especially crypto exchanges — and switch to a more secure option. When a phone number can serve as a key to your crypto safe, hiding bitcoins behind such info is a bad idea.

For account passwords, usernames, pseudonyms, and other such information used for accounts, be sure to use unique and secure choices. Though you may be a huge Guns n’ Roses fan, having “Axl6969” as a password for everything probably isn’t a good idea. Trusted and verified password managers can make maintaining even a long list of unique and strong passwords fairy easy, and quality services allow users to keep their master password stored locally, and not on any central server.

Anonymity and Social Awareness

Where anonymity is concerned, be sure all records, memos, or other account information which might tie your real identity to accounts and usernames are encrypted. Phone numbers should not be given out publicly, and a secure virtual number service can be used to route public calls to your personal device. The more you secure sensitive information, the less likely it is a bad actor or social hacker will be able to connect the dots and gain access to your bitcoins.

Further, simply knowing when to keep quiet is a great tool for keeping bitcoins secure. As mentioned above, sharing a phone number publicly is not a good idea. Nor is exclaiming to the whole bar on karaoke night that you just made huge gains on Binance and are buying everyone a round. The more people know about your holdings, the more potential interest can be piqued in malicious actors who seek to gain as much info as possible to access accounts. This type of openness can even endanger personal safety, as one of the quickest ways to get to someone’s device for criminals may just be to steal it.

Cold Storage

Cold storage refers to storing bitcoins and their private keys offline for greater security. With private keys never being exposed to the internet, the security levels of cold storage options can be significantly higher than other avenues. Examples include hardware wallets such as Trezor and Ledger, which allow funds to be spent without private keys leaving the device, paper wallets created offline, and even more extreme options like fireproof seed phrase capsules. Perhaps most James-Bond-like of all the choices is storing a wallet in something hopefully not cold, but undeniably secure: your own mind.

Known as a “brainwallet,” storing a bitcoin seed phrase in your brain is definitely secure, as long as you don’t forget it or get mixed up. Using a mnemonic device such as a colorful, vivid story, particularly sharp bitcoiners can retain a 12-word seed phrase entirely in their heads. As with all such measures though, there’s a trade off. If you’ve got to run from a bad actor or flee the country and can’t take anything with you, this option is undeniably appealing. But beware: once forgotten, no customer service group on the planet is going to be able to help you retrieve the lost mental bitcoins.

Leveraging DEXs, Noncustodial Options

While popular centralized exchanges like Coinbase, Binance and Kraken can make getting into bitcoin easy, and even storing it for day-to-day transactions, it is never advisable to leave bitcoins sitting around online when not trading. Exchanges have been hacked multiple times, are subject to governmental regulation and technical difficulties, and as such are not secure for stashing sats. Once such an exchange is shut down, hacked, or frozen, so is your money.

Better options include decentralized exchanges (DEXs) with open source code and where software and network data is stored locally. Also, such networks allow for greater anonymity with minimal to no registration requirements, and can afford features such as encrypted chats for P2P trade and blind escrow. The Bisq network is one example of such an exchange. Local.bitcoin.com, another, is a peer-to-peer bitcoin cash marketplace where users need only to enter an email to trade BCH privately for a variety of traditional assets.

Where crypto wallets are concerned, noncustodial options (wallets where the private keys are solely in the user’s possession and are not centrally stored) are always best, as a seed phrase can restore the wallet if an accident happens or a device is lost. When it comes to custodial wallets, however, once the provider is compromised, so is the user. Always be sure to verify any wallet you are using is noncustodial, as the whole point of bitcoin is for you — and nobody else — to be in control of your money.

The Less Trust, the Better

Trust between humans can be a beautiful thing, but when it comes to stashing bitcoins, the less trust, the better. Satoshi himself cited this as the central issue concerning traditional financial systems. The Bitcoin creator noted “the inherent weaknesses of the trust based model” in the Bitcoin whitepaper, and developed the cryptocurrency in answer to these challenges.

When hiding your bitcoins, then, it’s always paramount to remember the reason for the asset in the first place: so you don’t have to trust any central entity to keep your money safe. At the end of the day things like customer service laziness at AT&T, human forgetfulness, and having to trust certain tools or developers may always be an issue, but the closer we can get the trust level to zero, the better.

How do you recommend hiding and securing your bitcoins? Let us know in the comments section below.

Disclaimer: This article is for informational purposes only. It is not an offer or solicitation of an offer to buy or sell, or as a recommendation, endorsement, or sponsorship of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

Images courtesy of Shutterstock, A.PAES, fair use.

Did you know you can buy and sell BCH privately using our noncustodial, peer-to-peer Local Bitcoin Cash trading platform? The Local.Bitcoin.com marketplace has thousands of participants from all around the world trading BCH right now. And if you need a bitcoin wallet to securely store your coins, you can download one from us here.

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Overwriting Satoshi: Kraken Exec Says Bitcoin Wasn’t Built for Payments, Isn’t Peer-to-Peer

06/02/2020 by Idelto Editor

As Director of Business Development for popular crypto exchange Kraken, when Dan Held speaks, people listen. As such, his recent 46-tweet diatribe on why the “payments narrative” for bitcoin is flawed grabbed the attention of many, tickling the ears of hardcore Lighting Network fans and bitcoin core maximalists alike. His argument is prima facie absurd, not to mention misleading.

Also Read: Craig Wright’s ‘Bonded Courier’ Allegedly an Attorney Who Can’t Communicate

Held Says Bitcoin Wasn’t Meant Primarily for Payments

While constantly proselytizing folks about the “true meaning” of the bitcoin whitepaper is a waste of time, there comes a point where an interpretation emerges so wildly misinformed and grossly inaccurate it deserves an address. Enter Held’s recent Twitter storm.

For the purposes of this breakdown, Dan Held‘s broad assertions that bitcoin was not created to be a competitive payments system, or peer-to-peer cash, will be addressed according to his major claims.

Claim 1: Bitcoin Was Built to Be a Store of Value

Held writes: “Bitcoin was purpose-built to first be a Store of Value (SoV).” Yet the very first line of Satoshi’s bitcoin whitepaper reads:

Bitcoin: A Peer-to-Peer Electronic Cash System

“Bitcoin: A Store of Value System,” isn’t there. Held misconstrues Satoshi Nakamoto’s well-known comparisons of bitcoin to gold, and takes them to mean the SoV narrative is most important, payments be damned. But it’s critical to note that any relatively sound, widely utilized means of payment will eventually become a store of value. Satoshi understood this well, as his own words will later demonstrate.

Gold is more sound than government fiat money, it’s just harder to transact with in modern times. Satoshi’s “purely peer-to-peer version of electronic cash,” that “would allow online payments” (again straight from the bitcoin whitepaper) was created to solve this problem, effectively creating spendable, digital gold.

Held’s next several tweets attempt to prove, however, that Nakamoto didn’t view BTC as cash. He quotes Nakamoto from some of his well-known forum posts:

In the above quote Satoshi does compare bitcoin to gold in terms of scarcity, but emphasizes: “And one special, magical property: can be transported over a communications channel.” So the whole magic of bitcoin is exchange. Nakamoto goes on to note in the same post that use as cash for payments could be what gives bitcoin its value in the first place:

Maybe it could get an initial value circularly as you’ve suggested, by people foreseeing its potential usefulness for exchange.

Claim 2: Bitcoin Was Not Designed to Replace Payment Systems Like Visa

In some of the very forum posts Held references, Nakamoto writes:

The root problem with conventional currency is all the trust that’s required to make it work … We have to trust them with our privacy, trust them not to let identity thieves drain our accounts. Their massive overhead costs make micropayments impossible.

Satoshi is clearly presenting bitcoin here as an alternative to conventional currency, and not as some weird store of value built without a use case. He even goes so far as to mention micropayments. One would be hard pressed to find the last time gold was suggested for such a thing.

Tweet 10 of Held’s exposition finds the exec making leaps in logic which would impress even the most limber of mental gymnasts. He quotes Nakamoto pointing to scarcity as a value proposition, and then runs wild. The logic is as follows: Bitcoin has scarcity — Visa does not — thus bitcoin was not meant to be a payment system like Visa.

But why does scarcity rule out something being an effective payments system, especially when bitcoin is digital and divisible? Most of Satoshi’s antipathy toward the banking system which Held himself acknowledges repeatedly is targeted at this very same lack of scarcity and security, engendering corruption.

Held concludes this section:

With the 2008 financial crisis, trust had been lost in a world that ran on trust. Bitcoin was launched in a time of absolute necessity, Satoshi planted the seed at precisely the right moment. The world didn’t need a new VISA, they needed an alternative to banks.

Claim 3: Bitcoin Is a Bearer Asset, Cash Just Means “Money Box”

Now Held just begins inserting his own definitions into the whitepaper. Cash is no longer cash, in the common sense, but we’ve taken an etymological dive into the French roots of the word and been shown it simply means “money box” which is, duh, a store of value. Checkmate, payments enthusiasts.

The problem here is further exacerbated by a strange comparison of bitcoin to a bearer asset. As legal operations specialist Rob Henham pointed out back in 2016:

Holding bitcoins does not give that bitcoin holder any rights against the issuer of bitcoins (the bitcoin protocol) or to any other underlying asset. Although bitcoin is extraordinary in many ways, it is just a plain asset whose value is determined intrinsically, rather than by reference to another underlying asset.

Held then steps back, takes a deep breath, and prepares for his final show of flips, somersaults, balance-beam cartwheels and swirling, colorful ribbons by claiming that bitcoin isn’t peer-to-peer, and should have been made inflationary.

Claim 4: Bitcoin Isn’t Peer-to-Peer, Should Have Been Inflationary If Meant for Payments

In tweets 22-25 Held quotes creator of litecoin Charlie Lee as saying: “Bitcoin isn’t ‘peer-to-peer.’ Payments are sent from sender to miners, who record it on a distributed ledger … Lightning network payments, on the other hand, are p2p payments. They are sometimes direct p2p, sometimes indirect p2p. LN payments have to be sent from p2p to get from the sender to the recipient. Both have to be online, just like other p2p networks like BitTorrent.”

Apparently the goal is now for there to be trusted third parties in the middle of transactions again, who can drop out unexpectedly just like banks and other payment services. Because, reasons, and Satoshi. The bitter irony wasn’t lost on all readers of the thread, one of whom commented:

Held fails to note that miners are not payment processors in any sort of traditional sense. They merely record things into the network. @zbingledack retorts:

This is confused. Reality: Bitcoins are sent from user to user. Miners merely record the transaction. The moment a merchant hands you a transaction template and you sign it and send it back to the merchant, the transaction is legally complete. Miners merely record it.

In tweet 31, Held makes the stunning claim that “If Satoshi wanted Bitcoin to first be used as a medium of exchange to purchase goods and services, he would have made it inflationary. People don’t spend deflationary currencies when they can make the same purchase in infl. curr.” In other words, “just use a credit card, bro.”

Claim 5: Store of Value Precedes Medium of Exchange. Satoshi Knew This but Used the Payments Narrative Anyway

If one were take a time machine and ask Austrian School economist Carl Menger about Held’s ideas, he may have been shocked. After all, gold became a strong store of value after millennia of use as a commodity and money, not the other way around. Payments, in other words. Held says bitcoin doesn’t work as a medium of exchange right now, but it will at some point in the future. “People pushing the MoE narrative at this moment in time are counterproductive to adoption,” the Kraken exec claims.

He then posts a graph showing a steady rise in merchant adoption until BTC’s momentum as cash was effectively killed by congestion, high fees, and refusal to increase the block size. None of this is mentioned in the thread, of course. Like most exercises in sophistry, the ramble goes on to confidently pretend this was always the design from the start, claiming Satoshi simply advertised bitcoin as a medium of exchange to garner support:

Conclusion

To sum up: Satoshi Nakamoto knew bitcoin couldn’t be a medium of exchange, but decided to pitch it exactly as that anyway. “Cash” really means “store of value” in English because that’s what the root word means in French. “Peer-to-peer” really means a settlement layer depending on third parties who must always be online. Bitcoin was never meant to contend with payment systems like Visa, even though Satoshi mentioned micropayments and directly said himself:

The existing visa network processes about 15 million Internet purchases a day worldwide. Bitcoin can already scale much larger than that with existing hardware for a fraction of the cost. It never really hits a scale ceiling.

Whatever motivations Held had for posting this thread, it certainly is remarkable, and seems further evidence of how far some tribalist narratives can stretch, complicating even the simplest of ideas, in praise of the almighty Lightning Network and maximalist religion.

What are your thoughts on Held’s Twitter storm? Let us know in the comments section below.

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