Craig Wright: Bitcoin Is Not Anti-bank

Wright

Bitcoin creator and nChain chief scientist Dr. Craig S. Wright, explains in detail the Bitcoin white paper he wrote in October 2008 under the pseudonym Satoshi Nakamoto. In the series “Theory of Bitcoin,” the Bitcoin inventor and Engineering Head of tokenization entity smart wallet at the Bayesian Group and Money Button founder Ryan X. Charles discuss line by line the white paper entitled, “Bitcoin: A Peer-to-Peer Electronic Cash System.

Starting with the title and abstract, Charles goes through each of the sentences and Dr. Wright then explains their meaning, including how some of the phrases in what is essentially the theory of Bitcoin were misconstrued over time to mean something else. Dr. Wright starts off by explaining what cash is as it relates to the phrase “electronic cash system.”

While cash is something tangible you hold and own without any “fiduciaries” or intermediaries, the electronic cash that you use in banks is something that the bank owes you. In this sense, your cash is being held by the bank and not by you. Furthermore, creating transactions with the physical form of cash is more final than its electronic counterpart.

Cash is something that is purely yours. When you put money into a bank, you no longer have cash at all. What you have is debt. The bank owes you that money. So, your account is actually a debt owed by the bank,” Dr. Wright said.

Dr. Wright mentions the many problems the banking system may have during the discourse, and Bitcoin can provide transparency to it through its immutable public ledger. One interesting point he raised is how Bitcoin is not anti-bank as many believe it to be. It is an electronic cash system that does not intend to replace banks.

Number one, it’s a cash system. And that doesn’t mean a money system that replaces banks or anything like that. It means cash, and that’s an incredibly important distinction…. Cash doesn’t replace anything. Cash doesn’t replace the world’s money…. Now, you can tokenize and build things on top of Bitcoin, but that is completely separate, that’s something else, that’s another layer on top of Bitcoin” Dr. Wright explained.

Dr. Wright further explains the key distinction between gold and Bitcoin that makes the latter a huge improvement of the former, not in the sense of its value, but through its security.

The difference with gold is you actually know how much Bitcoin is available and it is verifiable, etc. With gold, people actually don’t know how much there is. Now, it is an incredibly difficult and expensive process to audit gold,” Dr. Wright clarified.

On top of being easily auditable, Bitcoin also has the essential properties of both physical and electronic cash—Bitcoin can both be purely owned in a finalized sense without having someone else hold it for you and it is also in electronic or digital form.

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Featured image: Metro

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