Self-proclaimed Satoshi Nakamoto Craig Wright’s own blockchain “blacklist manager” was introduced last October with the aim of helping recover stolen crypto in the event of a hacker attack.
Bitcoin devotees have been outraged that since last October, users of the Bitcoin Satoshi Vision (BSV) blockchain have been able to freeze and confiscate other users’ crypto, thanks to Craig Wright’s “blacklist manager,” which is used to recover lost or stolen coins. It begs the question whether when Satoshi Nakamoto, the creator of bitcoin, created BTC 13 years ago, he planned a similar “kill switch” feature.
Feel free to read the whole manual. It’s not long.
The takeaway is: if you are in a trusted relationship with a miner, there is now tooling in BSV that will let you freeze and spend other people’s coins.
If you have BSV, there are people who can freeze and spend your coins.
— Rijndael (@rot13maxi) January 13, 2023
An earlier deposit system idea by Satoshi is being misinterpreted by BSV supporters
To answer this, it is first important to understand what this “kill switch” function means. It is a tool that allows users to freeze and confiscate BSV coins upon presentation of legal documents proving ownership. Many see this as a violation of decentralization, but BSV proponents argue that the “blacklist manager” is very similar to Satoshi Nakamoto’s old escrow system idea.
“He’s not as far from Satoshi as some people think.” – wrote, for example, Wolfgang Lohmann, one of BSV’s supporters, on Twitter. In his tweet, Lohmann implies that Satoshi is another In his 2010 post described a system that would allow a buyer to lock bitcoin in an escrow account. BTC would only be released if the buyer confirmed receipt of the good or service, and the buyer might never withdraw the money. However, the buyer might keep the coins locked for an unlimited time, and this would be a kind of “kill switch” once morest fraudsters.
“Imagine that someone stole something from you. You can’t get it back, but if you might, if there was a remote kill switch, would you?” Satoshi wrote in a Bitcoin Talk post. “It would be nice if the scammers knew that there is a kill switch everywhere, and if they steal your crypto, it will be useless to them…”
Craig Wright, who impersonates Satoshi, claimed to have found himself in the same situation Satoshi described. In February 2020, Wright said hackers stole the private keys of two of his bitcoin wallets. According to Wright, one wallet contained 80,000 BTC and the other contained 31,000 BTC.
In 2021, the owner of the BSV blockchain filed a lawsuit once morest 16 bitcoin developers, insisting that they owe “compensation” to Tulip Tradingnek, to the Seychelles company owned by Wright. During the lawsuit, Wright sought to have the protocol rewritten or modified to allow Tulip Trading access to the 111,000 BTC controlled by the two wallets.
BSV’s “kill switch” function raises several problems
One of BSV press release says the network wants cryptocurrencies to receive the same legal treatment as traditional assets.
“In order for blockchain technology to become global, digital assets need to be legally treated like stocks, bonds and any other security.” – says the announcement, which quotes Marcin Zarakowski, BSV’s legal advisor.
“More than 3 billion dollars worth of digital assets have been stolen in the last two years, this is unacceptable. With this new feature, we want to get on the right track to solving this problem.” – reads the announcement.
And while such a feature may seem reasonable at first, BSV’s proposed “kill switch” raises several issues. On the one hand, it is not clear how disputes between users in different jurisdictions would be handled. On the other hand, many people may prefer a system bound by laws to a system bound by strict decentralization ethics. And thirdly, it doesn’t seem at all that Satoshi ever planned to introduce a similar “kill switch” feature. When he wrote regarding the new escrow system on Bitcoin Talk, he was probably just brainstorming before realizing the inevitable trade-off between decentralization and financial security.
“This is not implemented, and I probably won’t have time to implement it in the near future…” Satoshi wrote.
Wright’s story regarding stealing 111,000 BTC may be a scam
However, the creator of bitcoin created a warning system that allowed “power users” (such as Satoshi) to send network-wide alerts and even block transactions.
“There is no indication that the alert system was intended for anything other than to send a message to the operators of all nodes.” said Bob Summerwill. Summerwill is the Executive Director of ETC Cooperative and a long-time member of the Ethereum development community. “There was never any indication that this was intended to be an asset freeze or asset recovery.” he added.
Summerwill also pointed out that Ethereum had a similar system that allowed core developers to stop certain operations or transactions. However, this feature was removed from Ethereum following the 2016 Homestead update.
The head of ETC Cooperative, Craig Wright, also spoke regarding his attempt to recover the 111,000 bitcoins “stolen” from him:
“It cannot be a coincidence that CSW [Craig Steven Wright] claims that billions were stolen from him in the senseless hacking attack and that he is the only one in the world trying to get the court to “return” this wealth, while BSV is the only blockchain that allows blocking transactions and coins confiscation.” said Summerwill. “This is so once morest the spirit of bitcoin.”