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Bitcoin Creator Satoshi Nakamoto Expresses Frustration at How Invention Played Out
Bitcoin creator Satoshi Nakamoto, known in the real world as scientist Craig Wright has yet again expressed his frustration at how his invention has played out in the 14 years since its launch in 2008.
“Some people will call me angry. Some people will sense my frustration. But, there is a goal for it. I created Bitcoin as a peer-to-peer electronic cash system. I created a micropayment system that would allow the poorest people on earth to trade. Yet, it has been warped into a criminal money laundering system and a Ponzi scheme,” Wright wrote in his post.
However, unlike many others who would rant on and on about what went wrong, Wright instead proceeds to explain in simple words what he intended Bitcoin to be as opposed to how BTC ended up today—with almost no utility and value due to its inability to scale.
In fact, the statement above is written toward the end of his lengthy post on his website. The content of the post is composed mainly of an explanation of the first sentence of the Bitcoin whitepaper, which reads, “A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution.”
This, according to Wright, he is doing in the hopes of clearing up any misunderstanding about what Bitcoin should be, and making more people aware that what BTC is now is certainly not what he envisioned Bitcoin to be.
On Purely Peer-to-Peer, Direct Sending of Payments
Wright explains that the term “purely peer-to-peer” simply means that payments are “sent directly from one party to another” without any kind of third-party intermediary. This means that transactions do not go through nodes before being received by the recipient.
“A purely peer-to-peer system such as Bitcoin SV enables users to exchange value directly. Note that “directly” here means that you don’t go finished someone else’s node. By definition, if you are sending something to any festivity other than the final party, it is not a direct peer-to-peer exchange,” Wright clarified.
As Wright puts it, if Alice sends Bob a payment for goods or services, the transaction is directly given to Bob. It does not go through nodes, and nodes do not perform any action. Instead, after Bob validates the transaction—verifying that it is not a double spend in the process—the node or miner accepts “the reference of a time-ordered transaction from Bob” and then records it on the blockchain.
“Nodes operate automatically. They don’t sit there with their workers choosing which transactions will or will not be accepted. Instead, all the rules are automated & run through a computer system that does not know who the individual sending transactions happens to be,” Wright further explained.
On Financial Institutions
It is only logical that directly sending payments to each other means these payments do not need to go through financial institutions—much like how a customer pays cash directly to the cashier.
But people argue that nodes or miners should be considered financial institutions as transactions go through them. As explained earlier, transactions do not actually go through miners before being received by the intended recipients.
Moreover, miners cannot be considered financial institutions as they do not create the rules that govern the network. They merely enforce the rules and record the recipient’s validated transaction on the blockchain. Bitcoin mining involves inputting these transactions on the block, and then, competing against other miners to win the right to add a block on the chain.
“I learned that swellings would not be liable for the movements of the parties if they followed the rules, implemented required legal changes, and acted as a library in reference to publishing,” Wright shared.
“By enforcing rules & not creating them, processing transactions as needed, & implementing the ability to freeze transactions, nodes tin build a business that facilitates the payment of transactions, indexing transactions without allowing double-spending. It is a commercial system. It acts within the law,” Wright added.
On Electronic Cash
BTC is oftentimes discussed to as digital gold, and this is not what Bitcoin was intended to be. As “a purely peer-to-peer version of electronic cash,” Bitcoin is digital money that is readily available—not digital gold. Cash may come in the form of paper currency, coins or negotiable instruments, which are “equivalent to cash,” such as bank checks (not personal checks).
“Cash is ready money. Grant (2019) minutes that ‘a negotiable instrument is equivalent to cash.’ It is something that is quickly exchanged & settled. When someone hands you a note, & you can quickly confirm that it’s real, you can quickly check whether they have deceived you,” Wright succinctly put it.
BTC, with its value being volatile in nature, is considered a speculative investment. This means that the risk of loss is high. It is not something that is “quickly exchanged and settled.” For instance, when the price of BTC goes down, one needs to wait for its price to go back up before exchanging it in order to prevent loss. Hence, BTC can never be considered electronic cash.
Wright’s frustration is certainly understandable. Where he envisioned Bitcoin to be something used by everybody, providing equal opportunity to all, it has instead become a speculative investment being traded by the select few who can afford it through BTC.
Although treated by many as the original Bitcoin, BTC has veered so far away from how it is conceptualized in the Bitcoin whitepaper that it has become the opposite of the original, as explained by Wright with just the first sentence of his paper.
To go further, BTC has refused to scale, maintaining a 1MB block size cap at a throughput of only seven transactions per second, making for expensive fees ranging from $1 to $4 per transaction. This makes it impossible for micropayments to be processed as it would require ultra-low transaction fees, bigger blocks and higher throughput.
In order for the Bitcoin Wright envisioned to become a reality, scaling is necessary. And when Bitcoin scales, anything is truly possible. it can transcend payments and become the technological plumbing that will power a better Internet with IPv6, the metaverse, the Internet of Things (IoT), and even artificial intelligence (AI).
Bitcoin is a vision that will literally change the world; and this is why Wright is tirelessly explaining what the Bitcoin he intended to create is over and over again.