Calvin Ayre’s Predictions for 2023: Innovation on BSV Blockchain Will Win

2023 will be the year when politicians, regulators and law enforcement agencies finally kill “layer 1” fraud at the heart of “crypto”, after which they will target deeper, more insidious “layer 2” fraud that threatens far greater damage.

Tis the season to dust off the crystal ball and play forecast for the year ahead. Compared to this time last year, you’ll find far fewer bulls predicting tokens topping $100,000 in 2023. The few diehards still braying “to the moon” are mainly bottom-feeding influencers whose gullible audiences don’t handle pessimism very well.

Someone who definitely does not fall into this camp of evergreen optimism is John Reed Stark, former head of the US Securities and Exchange Commission’s (SEC) Office of Internet Enforcement. Stark’s predictions for 2023 sound like a doctor delivering a stage 4 cancer diagnosis: more regulatory investigations, more enforcement of existing securities laws, more targeting of tax evaders, and the collapse of crypto villains like Binance and Tether (possibly thanks to damning revelations from Sam Bankman Stekt).

The lobbying campaign that SBF has mounted over the past two years made US politicians, regulators and law enforcement agencies look downright foolish and asleep at the switch. The embarrassed Poles will hardly forget this insult. But getting revenge on SBF and his FTX/Alameda friends won’t be enough to quench their thirst for revenge—and their desire to at least see you later to take their supervisory and consumer protection roles seriously.

Binance seems like the logical place for them to start their revenge tour, especially given the revelation before Christmas that Binance US – the supposedly independent, regulatory compliant US-facing operation – was routinely transferring billions in customer funds to and from wallets linked to Binance’s international operations. Tether’s role in supporting the crypto scams targeting consumers is likely to come under even greater scrutiny in markets around the world, leading to calls for actual audits that inevitably expose the reserves as so much vaporware.

Stark is correct in his belief that a regulatory tsunami is about to crash over crypto, but he is so focused on “layer 1” fraud that he misses the far more damaging “layer 2” fraud perpetrated by the mainstream payment companies and the Silicon Valley tech bros who support them. Only when this fraud is exposed and curbed will the true promise of the Bitcoin White Paper be realized.

Mastercard of dolls

Crypto’s fall in 2022 was inevitable, given the laws of gravity and the reckless speculation that has plagued the sector ever since the Bitcoin block size wars. Intended as a low-fee peer-to-peer electronic cash system, Bitcoin was amputated by Bitcoin Core developers and their Blockstream partners. The resulting crippled protocol known as BTC was thus forever condemned to sit there, inert, under a sign declaring “Digital Gold!” The rampant speculation and get-rich-quick schemes began in earnest shortly after.

Satoshi envisioned that Bitcoin could handle a level of transactions that would surpass Visa, which at the time handled around 15 million online transactions per day. Instead, BTC maxed out several hundreds of thousands per day. This forced mutation from Bitcoin to BTC served Blockstream’s interests, particularly through its ‘sidechain’ projects such as the Lightning and Liquid networks.

But there were higher powers at work here with their own agendas. As Kurt Wuckert Jr. has so thoroughly documented on this site, Barry Silbert’s Digital Currency Group (DCG) – an early Blockstream investor – was born in 2015 by a group of major financial institutions, with Mastercard taking the lead role in DCG’s initial funding.

Satoshi may have only referred to Visa in his transaction forecasts, but Mastercard clearly recognized the threat that the original Bitcoin model posed to the credit giants’ comfortable duopoly. A functional, speculative digital Beanie Baby they could live with; what they couldn’t live with was a low-fee rival that promised serious benefits to sellers and customers alike.

The credit giants have tried to mask their bad intentions by partnering with exchanges like Binance to allow users to use crypto-assets in retail transactions via special debit cards. But this is simply an intermediary who earns fees for converting crypto to fiat before the transaction is completed. By itself, BTC and other “digital pet rocks” are still as useless as ever for conducting transactions.

BSV: the deadly threat

When Dr. Craig Wright was named as Satoshi in 2015, the groups conspiring to hobble Bitcoin entered into a new conspiracy to discredit Wright in the public eye. It simply wouldn’t do for Satoshi to reappear and destroy those who had tampered with his vision, like a furious Odysseus returning to Ithaca after 20 years to discover that Penelope’s future suitors had turned his home into a Dionysian kegger.

This effort to reduce Wright’s influence gained new urgency in 2018 with the debut of Bitcoin SV (BSV), which honored the original Bitcoin protocol through an unlimited capacity to scale the blocks on the blockchain. In short, BSV began processing millions of transactions in a single block, handling tens of millions of transactions per day – just as Satoshi promised.

The Mastercard/DCG/Blockstream cabal soon unleashed an army of keyboard warriors, with active support from the deep-seated founders of Twitter and Facebook, to paint Wright as a fraud and, by extension, BSV as the product of a fraud. Make no mistake: this was an organized, concerted effort to strangle BSV to bed before the promise of realizing Satoshi’s vision could take hold in the public consciousness.

This is the “layer 2” scam I talked about earlier. While the ‘Tier 1’ fraudsters have done significant damage to millions of retail investors around the world, the damage pales in comparison to the damage done to society as a whole from ‘Tier 2’ fraud. Because this larger scam threatens to hold back progress in the form of Web3 projects that would allow individuals to wrest control of their online data from today’s Web2 giants and the payment infrastructure that supports them.

BSV’s demonstrated capacity to enable millions of nanopayments with fees measured in fractions of a cent makes BSV the only blockchain capable of taking advantage of the exponential growth in IP addresses that the introduction of the IPv6 standard will bring.

The fact that BSV is the only blockchain capable of handling all this additional Internet traffic is why the Institute of Electrical and Electronics Engineers (IEEE) welcomes Dr. Wright’s input and why the IPv6 Hall of Fame recently inducted Dr. Wright for having made a valuable contribution to the development and deployment of IPv6.

The financial giants and their Web2 allies don’t want you to know any of this. That is why they are trying to use the courts to keep Wright off balance and tarnish his reputation. Fortunately, Wright and BSV are made of sterner stuff.

Everyone gets up

The success of the attacks on Wright is reflected in the widespread perception that Wright is the instigator of the lawsuits he is involved in. But with rare exceptions, Wright has been a defendant in these legal battles, beginning with the lawsuit filed in 2018 by Ira Kleiman, Wright’s brother late friend/colleague Dave Kleiman. Ira attempted (unsuccessfully) to enrich himself off the sweat of others, notably by laying claim to Bitcoin mined by Wright in the period immediately following the technology’s debut in 2009.

Wright is/was involved in two defamation cases, one brought against Wright by Norwegian Twitter troll Magnus ‘Hodlonaut’ Granath. Wright was the plaintiff in a defamation case against British podcaster Peter McCormack, but Wright only sued after McCormack literally asked him to do so via a series of inflammatory Twitter posts.

Wright was the (successful) plaintiff in a Bitcoin white paper copyright case against the anonymous Twitter troll Cøbra. Wright is a defendant in a lawsuit filed by the Crypto Open Patent Alliance (COPA), which seeks to deny Wright’s authorship of the white paper. COPA consists of Blockstream, Mark Zuckerberg’s Meta, Jack Dorsey’s Block, Michael Saylor’s Microstrategy, Coinbase, and the Kraken exchanges, among countless others determined to keep alive the speculative token-flipping model by crushing BSV.

I find it incredibly ironic that the “not your keys, not your coins” crowd who so enthusiastically preach the doctrine of self-ownership are so eager to condemn Wright for defending his authorship of the White Paper. Or that they would be surprised that he would vigorously defend himself against scathing public attacks on his character.

Wright is a plaintiff in a lawsuit filed against the developers of a number of blockchains to recover over 111,000 Bitcoins, the private keys of which were stolen from him in a 2020 hack of his computer. But his lawsuit is intended to force those developers to acknowledge the “high level of power and control” they exercise over their respective chains, and that they have a fiduciary duty to help victims of theft recover their stolen property (provided that a court is sufficiently convinced by evidence of the theft to issue a court order).

In other words, Wright is trying to establish a precedent that those who want control over blockchains have obligations similar to those required of regular financial entities. Bitcoin’s original design included a “notification key” intended to alert Bitcoin miners to freeze stolen assets, but this was permanently disabled by the BTC Core developers.

Again, I find it incredible that Wright is being dragged through the mud simply because he is trying to drag this industry screaming and kicking towards anything resembling compliance with common law. I strongly suspect that governments around the world, if forced to choose between ‘code is law’ and ‘law is law’, will side with Wright’s view every time.

The way forward

The declining fortunes of yesterday’s crypto-kings means they’ll have fewer discretionary funds to pass on to minnows like Granath and McCormack, so I guess Wright will be forced to endure fewer of these nuisance suits in 2023. COPA will also struggle to maintain an overall front as their respective businesses struggle to survive the “crypto winter” (which isn’t ending anytime soon).

The days of “numbers add up” seem well and truly behind us. The exposure in 2022 of so much crime at the heart of this atrocious economy has virtually guaranteed that there won’t be another influx of public (ie pacifier money) anytime soon. And without a steady flow of fresh funds, Ponzi schemes cannot – and will not – survive. Good riddance.

With regulators, politicians and law enforcement finally waking up to the scammers preying on consumers, the end of these long-standing scams is near. Even better, the thinning of this herd will allow the market to see BSV for what it is: a regulatory-friendly and legally compliant blockchain that can serve as both the backbone of the Web3 revolution and an environmentally friendly data store without peer. A little late, in my opinion, but better late than never.

Buckle up, folks. 2023 will be a year you won’t soon forget.

PS: If you want to argue any of the above with me, I will be at London’s QE II Center from 31 May to 2 June 2023 for the London Blockchain Conference. I’ll grab a pint and regale you with the story of how Craig Wright, Stefan Matthews and I saved Bitcoin over a three-day strategy session in 2015. (It’s not quite Lord of the Rings but it involves one chain to rule them all.)

Watch: London Blockchain Conference 2023 Brings Government Business into the Blockchain

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