In response to the settlement between Bitcoin Association for BSV (“Bitcoin Association”) and Tulip Trading Ltd. (“Lifetime”) this week, Bitcoin Association has prepared a statement and answers to the most frequently asked questions that we and our representatives receive.
TL:DR;
- The Bitcoin Association has fixed the issue with TTL as we were already planning to release the requested software.
- The software was developed for the purpose of allowing miners to freeze coins that are determined by valid legal process to be lost or stolen, so that they can be returned to their rightful owner.
- The enforcement of valid court orders regarding digital assets on the BSV network would be the responsibility of miners. They alone would run the required software and comply with received orders applicable to BSV as they saw fit.
How did it all start?
On February 24, 2021, the Bitcoin Association was notified that TTL. (a company associated with Dr. Craig S. Wright) is suing the Bitcoin Association, claiming that the Bitcoin Association has duties under English law, as custodians of the Bitcoin SV Node software, to provide access and control to bitcoins that were stolen from Dr. Wright’s computer in February 2020 (For reference: https://bitcoinassociation.net/bitcoin-association-statement-concerning-legal-action-by-dr-craig-s-wright-tulip -trading-ltd/)
Settlement of a lawsuit
In June 2022, the Bitcoin Association decided to settle with TTL by agreeing, among other things, to release software that will allow a notary service provider to verify court orders asserting the rightful ownership of coins diverted in hacking incidents. , and broadcast them to mining networks in a machine-readable language to allow miners to freeze these coins.
Although the Association has already released the first part of the software package in October 2021 (Bitcoin SV Node software v. 1.0.9.) allowing the freezing of transaction outputs, we have agreed to do everything in our power to solicit a notary service. Supplier willing to perform the notarized aspects of the process as an independent entity within 30 days.
Why did the Bitcoin Association develop this software?
In light of the hacks the cryptocurrency industry has seen in recent years, for example:
as well as the BSV network double-spend attacks suffered in July and August 2021, Bitcoin Association, in collaboration with a software development company nChain, has developed a software solution to allow miners to enforce the legal rights of victims of criminal acts.
The module that allows miners to freeze coins as a countermeasure to double-spend attacks was already released in October 2021 (see: https://www.bitcoinsv.io/releases/bitcoin-sv-node-software-upgrade -to-v1-0-9-version).
The fact that Dr. Wright approached the courts to force the early release of additional tools and solicit a notary service provider at such short notice puts us under pressure, but does not defeat our purpose:
Equip the digital currency and blockchain industry with the technical mechanisms and industry best practices to provide remedies, based on valid proof of ownership and due process, to restore control coins lost or stolen from their rightful owner – just as there are remedies available for any asset or property (physical, digital, intangible or otherwise).
We believe the introduction of such solutions would help engender greater trust in Bitcoin among everyday users, businesses, and government agencies, and lead to wider adoption of Bitcoin’s innovative technology. This aligns with our association’s goal of building a legal digital currency ecosystem that leverages the capabilities of the Bitcoin public ledger to advance honesty, transparency, and accountability around the world.
How exactly would the software mentioned in the court document assign coins to the new scripts?
The software suite is to allow Bitcoin miners to freeze coins once they have established that a valid court order (or document of equivalent value) has been issued to that effect.
An independent notary service provider should be appointed to validate court orders, translate them into machine-readable language and disseminate them to minors. The notarial service provider would act by analogy with a bailiff with regard to conventional goods.
It is up to the miners to decide whether they install the necessary software modules, whether they trust the information received from the notary, whether they comply with the order and whether they give the order to freeze the coins.
Will the Bitcoin Association enforce the software suite?
Other than releasing the software, the Bitcoin Association will have no role in installing or implementing it ourselves. The onus of deciding whether or not to install the Bitcoin SV Node software version that contains functionality to freeze transaction outputs as well as act on court orders will be left entirely to network miners, as noted in the whitepaper. Original bitcoin. .
Which parties will be involved in the coin freezing and reassignment process?
The role of deciding the legal ownership of coins remains with the competent jurisdiction and the judicial system.
The plaintiff would then forward the court order to an independent and reputable notary service provider who would verify its validity and distribute it to the mining network using a so-called “notary tool”.
It would then be up to the miners to judge whether the court order is applicable to them, and to use the software to freeze the coins in question.
Which courts will adjudicate in disputes over coin ownership and who will interpret whether a court order is valid for all of Bitcoin?
Miners will have to decide whether a court order applies to them, much the same way a bank would.
At no time would the Bitcoin Association be involved in the enforcement of valid court orders regarding digital assets on the BSV network.
What is Craig S. Wright’s involvement with Bitcoin Association?
Dr. Wright is neither a member nor a member of the Executive Committee of the Association and therefore has no authority to issue directives or make motions of any kind regarding the business of the Association.
Moreover, despite the well-known friendship between Dr. Wright and Calvin Ayre (a member of the Association’s Executive Committee as well as a long-time advocate and strong supporter of BSV), the Association never received funding from Dr. Wright.
Will this affect the security and functional model of BSV?
No, the software described by the settlement would simply allow minors to securely receive court decisions and act on them if they so choose. The blockchain will continue to use the Nakamoto Consensus to extend the blockchain, as it always has and always will.
This software is a similar implementation of the alert system introduced by Satoshi Nakamoto in 2010. The alert system was used by trusted parties to communicate messages to network nodes. These messages could be processed or discarded by network nodes as needed.
Does this mean the Bitcoin protocol is changing?
No, this is in line with Satoshi Nakamoto’s Bitcoin whitepaper where the last line reads: “All the necessary rules and incentives can be applied with this consensus mechanism.
If you have any further questions, please contact us at: [email protected]
