Wisdom Engine

When contrasting contractual principles, it is clear that unless a contract is required to be in writing (Columbia Law Review, Apr., 1929 Pp. 497–504; Columbia Law Review, Jun., 1907, pp. 446–449; McKendrick, E, 2005, p 184), that little additional uncertainty could be created where the contract is completed electronically. In fact, electronic evidence must hold greater weight than verbal evidence (Lord Justice Auld, Sept 2001, Cpt 11). What is not clear is the extent of the weight attached to the various forms of electronic evidence. The strength of a digital signature algorithm and the security surrounding the mechanisms used to sign an electronic document will respectively influence the weight associated with any piece of electronic evidence. The nature and form of the signature will also influence the weight that the court attaches to it. Attached signatures would clearly be simpler to attribute and hence hold a greater evidentiary weight.

When contrasting contractual principles, it is clear that where a contract is not required to be in writing (Columbia Law Review, Apr., 1929 Pp. 497–504; Columbia Law Review, Jun., 1907, pp. 446–449; McKendrick, E, 2005, p 184), that little additional uncertainty could be created where the contract is completed electronically. In fact, it is clear that electronic evidence must hold greater weight than verbal evidence (Lord Justice Auld, Sept 2001, Cpt 11). What is not clear is the extent of the weight attached to the various forms of electronic evidence. The strength of a digital signature algorithm and the security surrounding the mechanisms used to sign an electronic document will respectively influence the weight associated with any piece of electronic evidence.

“Evidence is hearsay where a statement in court repeats a statement made out of court in order to prove the truth of the content of the out-of-court statement.”[[1]](file:///D:/Data/Publishing/Book%20-%201%202007%20-%20CHFI/Appendix%20B/#_ftn1_3105) An example of hearsay evidence would apply where a suspect has sent an e-mail purporting to have committed a crime. Law enforcement officials would still need other evidence (such as a confession) to prove this fact.

The laws of negotiability (Miller v Race, 2) allow us to say that at the instant of delivery, the underlying obligation or debt is satisfied in full, and the recipient of the currency is left with a full legal entitlement to the monies received.

The important thing to understand is: law is law. Code (programs and algorithms) in any form is merely evidence. Bitcoin was designed to work within a common-law framework. I studied law to a point where I completed my master’s degree in international commercial law from Northumbria University, UK in 2008. At that point, I was still not a lawyer in any sense. I’m a member of the Society of Legal Scholars now, and I have taught law in the past. Subsequent to my Masters of Law (2012), I did training to be a barrister and training to be a solicitor, although I never completed the practical experience or worked as one. I’m now doing my doctor in law.

Bitcoin is the most efficient system, and will help us to stamp out dishonesty and fraud. I did not create Bitcoin to make another underground drug currency. E-gold and Liberty Euro (a digital currency offered on Liberty Reserve) both existed and worked well for such a misguided purpose; they do so better than any blockchain ever can. What few people understand is that any system run by an individual or a group has a head that can be targeted. If Hydra has heads that are visible, like those of Monero, they can be cut off and the individuals punished. In time, the pain gets to be enough that those seeking to breach the law and bring destruction move to different pastures.

Bitcoin is not a bearer-bond system. It may be what Blockstream and others are selling, but it’s illegal. Money has a long history in law. When you’re taking other people’s funds, whether from Bitcoin or from non-chattel systems including electronic bank accounts or database entries, a key is not proof. Today, we have many systems based on dematerialised assets. Shares are traded through online databases using tokenised exchanges, and such has been the case since the early 90s. Real-world proof trumps crypto proof. If you sign up for an account with ETRADE and buy 10,000 shares of Apple, and someone attacks the database and ETRADE and changes your ownership record or takes your account and uses it to sell your shares, you have a claim for the shares. It is the same with Bitcoin. One of the problems at the moment is the cypherpunk element seeking to make the possession of a key a right to and proof of ownership. It isn’t.

Bitcoin is a set of individual and indivisible tokens. It does not consist of an account, and they cannot be fractional tokens. Bitcoin is constructed in a manner that does not allow fractions of tokens to be transmitted. People get confused because they see a mere right to transfer. The right to transfer is attached to the ownership of the tokens. But, the ownership of the token is the same as any ownership of a digital right. In some ways, the scenario is analogous to the recent case of Armstrong DLW Gmbh v Winnington Networks Ltd [1], where the courts extended the notion of carbon trading units to be property even though they’re not things in action [2]. Bitcoin is simpler in the sense that it can be taken as a chose (thing) in action if you understand that it is a tokenised form of intangible digital property. More importantly, the peer-to-peer exchange in Bitcoin represents the transfer or exchange.

“Forking” a software branch is allowed under the MIT License. Both Litecoin (LTC) and Ethereum (ETH) present “forked” codebases, derived from Bitcoin. CoreCoin, BTC, differs in the sense that it both copied the database [3] and sought to pass off the new system as the old or original.

The law does not need to prescribe legal adaptions for cyberspace. In common law, analogies are used to relate changes in technology and society, and have been used from the formation of the system. In a well-studied case, Entores v Miles Far East Corp [2], Lord Denning introduced communications by telex using the analogy of two people communicating at a distance. He argued that there would be no contract when two people shouted across the river until the acceptance was heard by the offeror. If, for instance, a noise occurred at the moment the acceptor was shouting an agreement, the offeror could not assume a contract as the acceptance had not been heard. Here, he applied a reasoning that would allow us to apply contracts to all forms of communications which are instantaneous, or virtually instantaneous. The scenario differs from one of communicating by postal telegram, where there is a delay in the exchange of a message. Telex was regarded as falling into the category of instantaneous communication, and Lord Denning held that the acceptance by telex took place where it was received, rather than where it was sent.

Bitcoin is an electronic property right in the nature of other digital assets such as carbon credits (Armstrong DLW GmbH v. Winnington Networks Ltd. [2012] EWHC 10). Each transfer effectively presents the creation of a new asset. Bitcoin creates a ledger of input and output conditions. The currently unspent transaction is replaced with a new template when it is transferred to another user. Generally, a user with an unspent transaction that they control signs digitally (or otherwise authorises a transaction exchange based on the input transaction conditions) for the transfer to a new output script. The script transfer can be as simple as the exchange between one public key and another or much more complex, including programmatic exchanges based on input conditions. In effect, a ledger is updated to say that one entry has been moved to the control of another party. Only the final unspent transactions remain as assets. The spent transaction remains in the ledger as evidence of the transfer, and is no longer property as such.

It is bad enough that the deception is promulgated by those who adhere to anarchy and socialism. The utilisation of false propaganda using a truly neo-Trotskyite methodology would make Orwell’s Big Brother in 1984 green with envy. And yet, it is far worse when officers of the court promote such lies as told by the developers supporting the falsely named digital platform associated with BTC. When law firms acting for digital currency groups falsely promote the concept of cryptocurrency and lie about the concept of nodes to a court, it not merely presents contempt; it is a complete disregard for the court and society.

The Decentralized Nature of Blockchain Networks: Blockchain networks operate in a decentralized manner, where no central authority has full control. This decentralized nature can create hurdles in implementing AML controls effectively. Decision-making processes, regulatory compliance, and enforcement become more complex in the absence of a centralized governing body or regulatory framework (Laroiya et al., 2020).

Abstract. Cybercrime has become a pervasive and complex issue in today’s interconnected world, posing significant threats to individuals, businesses, and governments. This paper aims to provide a comprehensive overview of the diverse aspects related to cybercrime, including its historical context, demographic and geographic dimensions, environmental influences, and preventive strategies. This review provides a holistic overview of the multifaceted dimensions of cybercrime. By understanding its historical context, demographic and geographic aspects, environmental influences, and preventive strategies, policymakers, law enforcement agencies, and researchers can work collaboratively to combat cyber threats effectively. Such a comprehensive approach will help create a safer digital environment and protect individuals, organizations, and societies from the adverse impacts of cybercrime. Moreover, through ongoing research and collaboration, it is possible to develop innovative solutions and adapt to the evolving landscape of cyber threats, ensuring a secure and resilient digital future.

Now that it seems clear that Moore’s Law will reach its end, what will happen? Whether the predictions are of minor or major changes, different processing paradigms will surely emerge. Software presents problems distinct from the challenges of hardware. The key to predicting the future may lie in our recognition that economics and energy limit human innovation. However, innovation has a history as old as humankind, and the innovative possibilities for computing are limited only by our imaginations.

Further concerns extend the focus to the relationship of parties. Case law has grown to encompass Web based transaction engines that act as third parties during the process of offer and acceptance. This interaction can complicate the formation of contract. The integration of electronic contracts and digital cash only extends this. The result ([Debenhams Retail Plc v Customs and Excise Commissioners [2004]](http://swarb.co.uk/revenue-and-customs-v-debenhams-retail-plc-ca-18-jul-2005/)) is that it is necessary to determine the legal standing of the third party when the court seeks to answer questions of contract law. The third party could be a party to the contract, an agent or one of the two contracting parties, or may just be an ancillary facilitator or medium, across which, and through whom the contractual bargaining occurs (McKendrick [1], 2005, Pp163–164).

Bitcoin is not a pure system; it has what most mathematicians and computer scientists see to be flawed. That said, these “flaws” are what makes bitcoin strong.

A little-known fact is that even Bitcoin is a security. The mistake is thinking that this is the issue. Bitcoin is a security that is outside of the S.E.C.’s bailiwick. Bitcoin falls within a few extremely narrow exclusions in the law. These came about as the U.S. Congress “did not intend to provide a broad federal remedy for all fraud” [1]. Although Bitcoin is a security, the S.E.C. is constrained as to what it can act against [2]. There are securities, and there are securities that must be registered. Bitcoin, at least in the form of cash, is a currency and whatever may be created within it and the scripts it allows leaves Bitcoin itself as fundamentally an excluded security.

From Simmons v. London Joint Stock Bank [1]; the House of Lords overturned the lower court on appeal to set the definition of a negotiable instrument. This form of security is one, the property in which is acquired by any one who takes it “bona fide” and for value. This is perfected notwithstanding any defect of title in the person from whom the receiver took the instrument.

It is significant to note that the general rule and the exceptions can be altered through agreement and by assignment [ss 35(3),97(3),98(3),179]. As a consequence, a company can commission a work where the company requires the author of the report to sign an agreement that the company owns the copyright. It is possible to assign Copyright ownership through written contract. As a result, it is unwise to make the assumption that the owner of a copyright will be either the creator of the work in question, the company who commissions a work or even the creator’s employer. Before jumping to conclusions, it is essential to check ownership and this should be checked in each particular case.

Now, it is generally taken [1] by rational economists without an agenda (and even most of the honest ones with an agenda) that unlike any expenditure being beneficial, that is, it miraculously leads to an increase in the source of “aggregate demand”; that rather than as Lord Keynes promoted in saying any expense is good (in effect even war) that:

Quite simply, this is false and is basically “rot”. It is a comment that demonstrates a true lack of awareness of numerical infinity. It excludes the range of an issue. For instance, there are an infinite number of separate non-integer values in the range of real numbers from 1.00… to 2.00… Although there are an infinite number of values in this mathematical range, there is no value that will or can ever equal 3.00. Nor will any ever be discovered. This is deductively provable based on the laws of algebraic mathematics.

The exchange of bitcoin for other currencies clearly comes under existing AML[[1]](#_ftn1) regulations, and where an exchange[[2]](#_ftn2) has been used as a part of this process, KYC[[3]](#_ftn3) requirements will still apply. The various requirements attributable to bitcoin across each of the jurisdictions with respect to the requirements that are associated with both AML and KYC[[4]](#_ftn4) will differ, but, the laws of money and exchange remain valid.

The courts generally seem willing to apply conventional fault-based tort principles to weigh up the behaviour of intermediaries. The instances in which comparatively egregious conduct has ended in the liability of the intermediary are few,[[3]](file:///D:/Data/Publishing/2010%20PhD/2011%20PhD%2011%20-%20SECAU%201/#_ftn3_5031) and the majority of cases conclude with the absolution of the intermediaries from blame.[[4]](file:///D:/Data/Publishing/2010%20PhD/2011%20PhD%2011%20-%20SECAU%201/#_ftn4_5031) Those circumstances that have resulted in a decision by the court that in effect declare that the intermediaries hold considerable accountability for the behaviour of any primary malfeasors have mutually in the EU and the US Congress resulted in the respective parliaments acting to overrule the decision through the legislative conceding of expansive exemptions from liability to the intermediaries.[[5]](file:///D:/Data/Publishing/2010%20PhD/2011%20PhD%2011%20-%20SECAU%201/#_ftn5_5031) “The paths share not only the reflexive and unreflective fear that recognition of liability for intermediaries might be catastrophic to internet commerce; they also share a myopic focus on the idea that the inherent passivity of internet intermediaries makes it normatively inappropriate to impose responsibility on them for conduct of primary malfeasors. That idea is flawed both in its generalization about the passivity of intermediaries and in its failure to consider the possibility that the intermediaries might be the most effective sources of regulatory enforcement, without regard to their blameworthiness”[[6]](file:///D:/Data/Publishing/2010%20PhD/2011%20PhD%2011%20-%20SECAU%201/#_ftn6_5031).

I will discuss the current state of play in ICOs. In my posts, I will demonstrate categorically that no token sale is new, and that this myth and lie of “decentralisation” is completely unrelated to an ICO. The reason is that an ICO is just a means to engage in a securities offering that bypasses the law and regulations ILLEGALLY and fraudulently.

For example: Person A has a written contract to sell a piece of real property to person B. A may then turn around and sell the house to C. The law requires that the house go to B.

The sole reason why some argue Bitcoin cannot scale and that it requires half-baked solutions such as the Lightning Network is directly related to the one thing Bitcoin does: more than anything else, it provides an immutable evidence trail that is admissible in court. Sidechains, Lightning, Plasma, and every other half-baked attempt to alter Bitcoin all boil down to one simple thing; they seek to delete records.

Bitcoin is an immutable evidence system, it provides the rule of law universally to all. It applies to people, corporations, and the state. In making all things available, auditable, and able to be reviewed, Bitcoin creates a framework that can lead to an honest system. Yet, a framework alone cannot create a sound system, for all people need to be vigilant.

In Silk Road and other dark-web operations, it is by nature not a concern. In such an exchange, you cannot form a valid and enforceable contract. It is very simple, as illegal contracts cannot be enforced. In other words, a contract to engage in an illegal or criminal activity is void ab initio. Hence, you cannot legally enforce a contract to buy illicit drugs. Such has been the goal of all seeking an anarchist and anonymous coin. Unfortunately for such people, it is also what Bitcoin was designed not to facilitate. With an immutable evidence trail, Bitcoin creates a system that acts within the law.

The law of tracing is important to Bitcoin. Many of the issues associated with eCash derived directly from the inability to trace blinded eCash. In Law of Tracing (L.D. Smith, Oxford, 1997), the requirements for money to be traced under law are thoroughly investigated.

At this stage, I was still deep in disputes with the Australian tax office. My two companies that I’d formed in 2009, Information Defense and Integers, were beyond saving. As with everything in my past, it was the intellectual property I fought to keep, not the money. Nothing has changed now. Even the battles in the early days of nChain were about keeping control of the direction and vision I seek. Unfortunately, we even had a few people wanting to research Ethereum and other coins and other consensus mechanisms. I handle such things better now than I did.

You see, ownership of the key is not proof of anything other than the possession of a key. The call to have a precedent based or derived on or from a key signing is dangerous to say the least, and any competent judge would not base law on such basis. We are not talking about a registered digital signature, and even if, there is no such thing as non-repudiation. I have said so many many times before. It is a key aspect of law, no matter what someone claims: an individual always has the opportunity to repudiate. I won’t cover all the details of it here as it is really about evidence law and goes into far more detail than my post shall.

In order to clear up some areas around my history as the creator of Bitcoin for people, I need to point out a few fallacies. Firstly, there is the fallacy that Satoshi acted in a particular way. The reality is that as Satoshi, I interacted with people who held views that differed from mine. In creating Bitcoin, I sought to create an honest and legally enforceable cash system. To be cash, that is to be money, Bitcoin needs to be neutral. It is not a system that is friendly to crime but a system that is friendly to most people. Such are people who act across the law in a variety of ways.

It is all an economic system; it is possible to target crime and yet not be able to bypass or break the privacy proffered to the average individual. Where sales have been conducted that lead back to tainted bitcoin, law enforcement officials can question the holders of different coins on exchanges and other on-ramps. Blockchain is designed such that at scale, the use of a network like Tor adds enough layers of complexity and inefficiency that allow the system to be brought down.

Bitcoin isn’t some immutable system that acts outside of the law. Such is what criminals want, and it is not what I developed. If you think blockchain helps you make a criminal system, one that cannot be stopped, then you are absolutely stupid. Bitcoin is about the same as having a bunch of law enforcement officials that are incorruptible walk behind you every step of the way any time you want to create a crime. When you’re acting responsibly and within the law, they are not there. When you seek to scam people, to engage in fraud, it is a system that will record your actions.

In today’s post, I will go back to 2012: Panopticrypt had been running since 2011, and I was ready to start moving some of my research into the mainstream. I’ll detail Strassan PL in a later post, as it was fairly separate to Hotwire and related companies. In September of the same year, I started moving forward with consolidating assets that I had in a number of overseas companies and intellectual property that I was developing within Australia. I used a number of law firms back then as I do now. Problems generally occur when you put all your eggs in one basket for services. I don’t have all the records that I used to have, and it’s been quite some years, but we have been digging through old records because of the existing cases.

I don’t need to do what a bunch of cypherpunks told me to do. Evidence has nothing to do with a bunch of idiots who say how keys should be managed because they want anonymity. Evidence is something that is set in law and has been for hundreds of years. I built Bitcoin to be an honest immutable system that wouldn’t suffer from the same problems that ecash, Liberty Reserve US Dollars, and all the rest of the scam systems had.

If you choose to abuse people and say that they must respond to you, you are using force. When you lie and slander others, it is a form of force. It is an illegitimate force and one generally used by criminals. We have a system that has been developed over many decades and centuries. The process of deciding on evidence in a court is well and truly founded and based on reality. Bitcoin is not about changing reality, as some seem to think. You don’t prove anything with the signing of a key. And you don’t do so publicly. If you think so, you have no idea what Bitcoin is about. Then again, the majority of people listen to Core-coin (BTC) developers and are misled by the lies about anonymity. That is, the lies they used to create a system that is friendly to crime. It’s that simple: the same developers are creating a system that is designed in a manner that will allow ransomware to run and pay the developers through an automated system. It is designed to allow untraceable drug sales. It’s designed to provide terrorist funding.

The Bank Secrecy Act (BSA), as amended and implemented by regulations passed by FinCEN (Financial Crime Enforcement Network), requires CVC (which addresses most businesses that handle cryptocurrency, including individuals in peer-to-peer networks who exchange money even over something like local bitcoin) and many otherwise unregulated financial institutions to be registered with the government. Such organisations are required, by law, to implement anti-money laundering procedures. They must immutably maintain data and logs of transactions with the individuals involved, and from there they must report certain transactions and other data. In particular, mixer systems and ‘anonymised’ coins, including ones using systems like Schnorr, are covered by such provisions.

Anti-money laundering rules apply to Bitcoin and other cryptocurrencies (such as BTC). What people fail to see is that money-laundering protections require exchanges to capture your identity. If they are not doing so, they are a criminal organisation and will be shut down. If you’re using a criminal exchange, you can expect it to be seized and your funds to vanish. In other words, your investment will become worthless in moments. Anti-money laundering provisions apply even when we’re talking about peer-to-peer exchanges (such as the mythical unicorn, a DEX). The reality is that they are simply money services providers that are run by criminals seeking to avoid regulation and law. It is not only an unfair advantage for the illegal actor, but is also an incredibly risky strategy if you’re an investor. All such exchanges will be seized, and all the funds on them will disappear in the same way that e-gold or Liberty Reserve US Dollar vanished in an instant.

Anarchist anti-government and anti-law promoters of Bitcoin will tell you that if you don’t have your keys, you don’t have your bitcoin. Unfortunately for them, keys are not law. Private keys make access to funds difficult. They don’t prove ownership of property rights, which never was the intention of Bitcoin. I’ve been writing on electronic contracts in matters of law and code for nearly 20 years now, and one thing I’ve always noticed is that the code side of the argument always says that non-repudiation will be possible. Let me make it clear: non-repudiation cannot exist in law.

International law contains many provisions for the redemption of funds and the seizure of criminal assets. Bitcoin does not remove the ability to seize assets, but it does require some level of international cooperation. A worldwide freezing order and a subsequent action of asset seizure would require enforcement actions in multiple jurisdictions. The requirement, of course, limits the types of orders and actions that can be done. Every small government seeking to abuse the rights of their citizens will not be able to use Bitcoin in order to seize assets. Where crimes are heinous enough in multiple jurisdictions, as are major drug trafficking, people smuggling, high-level money laundering, and other crimes, we will find that multiple jurisdictions can act simultaneously.

In today’s post, I will use one of the more critical foundations of Western culture in explaining the origin of law and why anarchy fails. Aeschylus was a Greek playwright who authored three tragedies that are often grouped under the name of the Oresteia. To start, I will examine aspects of Aeschylus’ works in order to detail issues with the philosophy of law and jurisprudence. The plays collectively presented in the Oresteia demonstrate how vital law and lawbreaking can be.

As with all things, the reason behind something, the why is important. With lawbreaking in the form of civil disobedience, there are reasons why it is important. It matters not so that some individuals benefit at the expense of others, but so that we can challenge the laws and seek to redress the inequitable aspects of society.

To give an analogy, the Bitcoin software that was released as an implementation is an open-source software under the MIT License. Linux and OpenOffice are each open-source products. If I was to write a novel using Linux as the operating system and OpenOffice as the editing platform, the software remains open-source, but the product of my work does not. In other words, I retain the copyright in the works I create using the open-source software. Bitcoin is a distributed registry. Tokens are not distributed as they reside in individual wallets, that are controlled by individuals around the world that use the Bitcoin system. The tokens are distributed in a peer-to-peer manner, from individual to individual. The registry of the movement is a separate peer-to-peer network, that acts within the hybrid system that is Bitcoin. The registry [4] presents the distributed ledger. And the distributed ledger is a database.

As the sole creator of Bitcoin, I own full rights to the Bitcoin registry. People can fork my software and make alternative versions. But, they have no rights to change the protocol using the underlying database. I was explicit when I said so by putting forward reasons not to fork the database. Yet, both Bitcoin Core (Core) and Bitcoin ABC (ABC), global partnerships under law, have sought to use my database without authority. Rather than seeking licences, they have sought to attack my character and impugned me. This year, I am taking charge and control of my system [5]. Those involved with the copied systems that are passing themselves off as Bitcoin, namely BTC or CoreCoin and BCH or BCash, are hereby put on notice. Please trust me when I say that I’m far nicer before the lawyers get involved.

Bitcoin is a distributed database [10] with database rights governed by the Copyright, Designs and Patents Act 1988 (CDPA) and the Copyright and Rights in Databases Regulations 1997 (Databases Regulations 1997). As such, the distributed database [11] exists as personal property. The distributed database defined by Bitcoin may correspond to a “property right (“database right”) [that] subsists […] in a database if there has been a substantial investment in obtaining, verifying or presenting the contents of the database [12]”.

The tokens in Bitcoin are not stored on the blockchain, they are registered there. That is, tokens are exchanged between users and eventually registered on the blockchain, which acts as a distributed clearing house and registry or ledger. All changes are journaled, although multiple changes can apply before being written to the ledger. Where an individual or group exchanges Bitcoin tokens (bitcoin), property rights are also exchanged, but until it is registered on the blockchain, a risk remains that one party could ‘double-spend’ and take away the tokens from another.

Bitcoin tokens are property. Following the purchase of bitcoin where you haven’t met customer due diligence (CDD) and know your customer (KYC) requirements and recorded the identity of the person you’re attempting to buy from, you face a scenario where good title does not pass. If stolen bitcoin are passed into a Lightning channel, the purchaser in the Lightning channel does not gain good title. Equivalently, the civil rule of nemo plus iuris ad alium transferre potest quam ipse habet, or, “one cannot transfer to another more rights than he has”, means that it does not matter whether you send bitcoin to a Lightning channel; if the bitcoin are stolen, they cannot be transferred.

What we are looking at here is an investment fraud. Bitcoin is property, and when it is being used in certain speculative gambling systems, it is being traded on a commodity market and being pumped and manipulated by people who are basically criminals. It is a huge market, with lots of people ripping many individuals off. It is not uncommon to find people who are gullible. In doing so, such scumbags perform fake technical analysis designed to promote sales decisions on assets, without any real evidence or process or basis in reality. Right now, CoreCoin (falsely called Bitcoin), BTC, is not used as cash. It is but a speculative asset.