Rights and Tracing – nChain
Identification of ownership rights in Bitcoin and assets on the Bitcoin blockchain through payments and mixtures would be an exercise in tracing. Lord Millett in Foskett v McKeown gave the reasoning for using tracing rules rather than following in such a scenario when he said:
It will be easy to show the false narrative created from Bitcoin Core (BTC) when court orders start requiring the seizure of coins in the next 12 months. Many money launderers, people smugglers, drug dealers, and others will find that the promise of money which cannot be taken by government is not one that Bitcoin delivers. It isn’t one that was ever given when I was posting as Satoshi. Rather, it is a narrative that has taken hold as those fleeing the sinking ship of Liberty Reserve and e-gold and others have piled on and sought to change Bitcoin into something that it was never designed to be.
Freezing Assets
One possible scenario includes the ability for a court to order a particular UTXO or address to be frozen, which could be achieved without knowledge of the real person or parties behind a theft or fraud, and would allow asset freezing prior to a transactional process that could occur on the blockchain. Such a process would require an order issued on and implemented by the miners and exchanges of the Bitcoin protocol.
The classic argument that was designed to fool regulators and law enforcement and which has been promoted by those in BTC camps is that they are a decentralised system of nodes and all nodes need to vote on the protocol. It is exactly the system that James Donald wanted, which is exactly the opposite of the system I created, and it is one that cannot be implemented with the blockchain, no matter what you do.
The jurisdiction of the English courts to grant freezing injunctions in respect of overseas assets is derived from section 37(1) of the SCA 1981, and was recognised in Derby v Weldon (Derby & Co Ltd v Weldon (№6) [1990], 1 W.L.R. 1139).
Nodes
What people fail to understand is that home users are not nodes. I posted about it two years ago — explaining what I created and how I listed the required steps in the white paper. It was one of many posts I’ve written. But the simple truth here is that Bitcoin is a proof-of-work system. Nodes act only when they are validating a transaction AND providing a proof-of-work demonstrating that they did so correctly. It is an important point. A node demonstrates that it is verifying transactions through a costly signalling method, the creation of a hash. In biological terms, the hash is the equivalent of a peacock’s tail.
Read the full post here.
Published at Fri, 06 Sep 2019 08:47:41 +0000
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