This blog is the third extract from our eBook, “A Short History of Bitcoin Myths”. You can download your copy here or read other extracts over here:

Part 1: A Short History of Bitcoin Myths

Part 2: The Genesis of Bitcoin

Part 3: Myth I - Crypto Anarchy

Part 4:Myth II - Bitcoin Offers Secrecy for Criminals

Part 5:Myth III - Bitcoin is Broken, Unable to Scale On-Chain

Part 6:Myth IV - Ethereum is a New and Improved Bitcoin

Part 7: Myth V - Bitcoin is a Speculative Asset

Part 8:Myth VI - The Lightning Network Will Bail Bitcoin Out

Part 9: The Rebirth of Bitcoin

The Socio-Economic Potential of Bitcoin

There are deep-seated issues embedded in our traditional financial system and overall societal structures. On organisational, national and international levels, financial accounting systems are non-transparent and almost impossible to audit with absolute accuracy. In practice, it means that those we entrust with financial record-keeping have plenty of opportunity to enrich themselves at the cost of society.

We've seen criminal organisations and interest groups take advantage of the murkiness by infiltrating banking systems or operating through off-shore channels to fund undemocratic interventions, criminal activities, terrorism and to launder the profits of their illegal businesses.

Proposals for improving our societal systems and power structures to prevent such manipulation and abuses deserve serious consideration. For Bitstocks, the philanthropic and socio-economic benefits of Bitcoin's immutable and transparent ledger system have been clear right from the start.

Experiments have suggested that the placement of additional lighting or CCTV camera equipment in public spaces could reduce criminal activity merely through its presence.

Could the same results hold if a light is shone on accounting ledgers and a permanent recording is made?

We believe that Bitcoin’s transparency and immutability are the keys to a fairer and more honest system!

Bitcoin Myth I: Crypto Anarchy

There are some within the cryptocurrency community who have latched onto Bitcoin as a solution of a different nature: the means to anarchy.

It's not difficult to see the appeal of the idea of cryptocurrency as our means to rise against socio-economic oppressors, a force that can replace the corrupted rule of the global pyramid of power with a law embedded in code for the sake of bringing about equality and justice.

And yet, don't let yourself be swindled! Those who propose anarchy through 'crypto law' reveal their personal political leanings and not the design of Bitcoin. Anarchy is simply not baked into the Bitcoin vision or protocol, yet it has infiltrated the community with the slyness of a parasite.

Parasites use enzymes to numb their host's nervous system and brain to make the host believe the parasite is part of itself. This prevents the host from launching an immune response against the parasite, instead convincing the host actually to protect the parasite. Once the parasite has been established in this comfortable position it sets in to maim, weaken and sometimes even kill the host.

If the idea of 'crypto anarchy' truly is a foreign invader and even a parasite within the Original Bitcoin Project, where and how did it infiltrate? Let's trace its origins.

The Cypherpunk Movement Co-opts Bitcoin

In 1994, Timothy C. May published "Cypherpunks FAQ", a statement that described the leanings of the cypherpunk movement, a campaign that started as a mailing list in 1992:

2.3. What's the 'Big Picture'?

Strong crypto is here. It is widely available. It implies many changes in the way the world works. Private channels between parties who have never met and who never will meet are possible. Totally anonymous, unsinkable, untraceable communications and exchanges are possible.

Transactions can only be voluntary, since the parties are untraceable and unknown and can withdraw at any time. This has profound implications for the conventional approach of using the threat of force, directed against parties by governments or by others. In particular, threats of force will fail.

What emerges from this is unclear, but I think it will be a form of anarcho-capitalist market system I call "crypto anarchy." (Voluntary communications only, with no third parties butting in.)

In 1998 Wei Dai & Nick Szabo came up with the ideas for "b-money" and "bit gold", drawing on the essence of the cypherpunk philosophy:

I am fascinated by Tim May's crypto-anarchy. Unlike the communities traditionally associated with the word "anarchy", in a crypto-anarchy the government is not temporarily destroyed but permanently forbidden and permanently unnecessary. It's a community where the threat of violence is impotent because violence is impossible, and violence is impossible because its participants cannot be linked to their true names or physical locations.

It didn't take long after the launch of Bitcoin for the cypherpunk movement to latch onto the project and appropriate it for their vision of crypto-anarchy.

Myth Busting: Crypto Anarchy

To unmask the actors that have tried to capture Bitcoin for their anarchic agenda, let's backtrack to Bitcoin's Genesis and what the design of Bitcoin reveals about the intentions of Satoshi Nakamoto:

Bitcoin is about the rebirth of sound money in digital form.

Bitcoin can do many things, but its primary focus is to create an alternative to the shady world of finance we presently have, where dodgy elements within organisations can manipulate ledgers to channel funds into their own pockets.

Bitcoin creates a system for those that seek to earn an honest living - the middle-class working person.

Satoshi's 'beef' wasn't with governing bodies and ruling organisations in themselves, but with the obscurity of their ledgers that allow dark actors to operate behind the scenes.

As part of a series of revelations made this year, the revealed Satoshi Nakamoto, Dr Craig S Wright confirmed this interpretation:

"Bitcoin is sunshine. It is the cure for the festering wound that is corruption, be that from government or from criminal groups."

Dr Wright has also come out to explicitly confirm that Bitcoin bears no relation to Bit Gold or its anarchist leanings:

"Bit gold is not a precursor to Bitcoin. Bit gold is a failed dead end that has no relationship to Bitcoin whatsoever, and they who think it has any relevance will simply fail to understand Bitcoin as Szabo did. He did not ever write on anything like Bitcoin because Bitcoin is nothing at all like the cypherpunk anarchist system that Bitcoin is designed to destroy."

What Bitcoin IS NOT about:

Bitcoin was not intended to be used as a tool of anarchy, and its underlying technology does not support that purpose.

What Bitcoin IS about:

The traditional banking sector and systems, in general, are rife with fraud. If these systems recorded their actions (transactions and otherwise) on Bitcoin’s immutable ledger, however, their deeds would be easy audit and impossible to manipulate - an immutable evidence system that offers clear sight of all actions to strengthen the arm of the law in its fight against corruption.

“The big error here (crypto anarchy) is thinking that Bitcoin without government does anything. Without government, Bitcoin doesn’t stop banking fraud and doesn’t stop fraud at all. Fraud is stopped when you have requirements to act under law and Bitcoin as an evidentiary trail. The point is, Bitcoin reduces the need for certain governmental controls when government exists. Central banks are not the issue; manipulation is.”

Dr. Craig S. Wright, Chief Scientist of nChain

Beware the Bitcoin Parasites!

It’s not surprising that the Utopian desire within many of us hoped that the narrative of Bitcoin as Messianic Ruler to judge and condemn the Unrighteous could be true.

Let's be clear: advocating for economic and social justice and working towards a fairer society is a noble mission. Adopting an anarchic stance, however, isn’t likely to achieve these goals.

Speaking at Bitcoin Wednesday on May 2019 in Amsterdam, Craig Wright pointed out why resorting to anarchic measures (specifically, the implementation of anonymity protocols) will not work in favour of Bitcoin's future, but is likely to backfire:

"People want to make this thing that they say will 'get around government'. You don't do it by walking up to a government official and kicking him in the (expletive) nuts. You do not make a system that will change the world by finding the big bad gorilla and kicking him in the (expletive) nuts. It's that simple.

How do you make something big? You grow it!"

To conclude, beware of the parasites who co-opt honourable causes for ulterior motives! Crypto anarchy is a myth of this nature: a foreign, unhelpful and even harmful invader to the true purpose and promise of the Bitcoin project.

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