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Craig Wright: “Banks aren’t the enemy”

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"Chancellor on brink of second bailout for banks" – The Times, 3 January 2009.

Bitcoin's crypto-anarchistic pedigree goes back to before it was even created. Timothy May's 1994 Cyphernomicon inspired Bitcoin and others as much as it was inspired by earlier cypherpunk movements, while Satoshi Nakamoto and the concept of Bitcoin first appeared on cryptography mailing lists frequented by cypherpunk types.

Since its inception, Bitcoin has always been accompanied by a voice saying something that sounds an awful lot like "smash the state... strong crypto as the 'building material' for cyberspace".

This has been quite clearly reflected in the political leanings of current users and early adopters. Cryptocurrency as a whole has a distinctly libertarian vibe, especially among the digital cash communities. Plus, Bitcoin's one and only ironclad use case to date is buying drugs on the dark web.

It's been a point of friction as Bitcoin tries to grow up, and this reflexive anti-statism and anti-corporatism sentiment can be quite counterproductive, as computer scientist and businessman Craig Wright explained in a recent interview with Crypto Finder.

"Banks aren't the enemy that everyone seems to think they are."

Bitcoin's ideal is that everyone can be their own bank. But let's face it, being your own bank blows. Even just from a cursory security perspective, there's very little one can do to effectively secure own's own digital money in a way that hackers can't get to, while still ensuring it's not lost forever in the event of the unexpected.

"Banks have a role," Wright emphasises. "Banks aren't the enemy that everyone seems to think they are."

The problem isn't banks per se. The problem is that banks have been known to abuse their powers, that they've been known to engage in underhanded maneuvers and that there's historically been a lack of real accountability, even in the case of egregious transgressions.

Bitcoin isn't necessarily about toppling the existing financial infrastructure, so much as accentuating it in a way that the world can have its cake and eat it too, Wright says.

"The problem is whether banks are honest or corrupt, or whether they're debasing money, that sort of thing," Wright explains. "So the big difference, and what we have with something like Bitcoin, is going back to an earlier standard of banking, where people actually don't get to help terrorists move money or money launderers move money, [or suffer] higher fees."

The selective transparency offered by blockchain technologies such as the Bitcoin ledger is what can make it happen, he says.

It's a world "where everything is then auditable. Where there's no hiding things. And we've seen some of the world's largest banks involved in terrorist funding, or money laundering or any of these things, and they get a fine and a slap on the wrist. And that's it."

"But imagine there's a world where there's enough transparency so that anyone can actually drop someone in, and it can be traced back provably where all those funds for people selling blood diamonds can be stopped. Where people engaged in the illicit sex trade no longer have a means of funding any of their activities. That's what we changed banking to be, something where it's actually about the honest distribution of money, where people can get a home loan, start a business, etc."

"Chancellor on brink of second bailout for banks"

Often, people will point to the genesis block of Bitcoin as evidence that Satoshi Nakamoto created Bitcoin specifically as part of a crusade against banks. In the genesis block, Satoshi embedded a hash which translates to the Times headline of that day: "Chancellor on brink of second bailout for banks". Incidentally, physical copies of that newspaper are going for about $50,000, so it might be worth hitting up any British newspaper hoarders that you know of.

juicy crypto wordsThe passage is often regarded as evidence of Satoshi's distinctly counter-culture and pro-sound-money motive for Bitcoin's creation, but Wright doesn't think it's quite that easy.

"I think people got that wrong," he said. "I'm slowing coming to the realisation that people don't read past the first paragraph after the headline."

"I have this problem... because I do [it too]," he conceded.

But "if you actually read the Times article, you'll find that it's not anti-banking at all. It was actually about the fact that the Chancellor was threatening banks that if they didn't start spending the money that he was trying to push onto them, that he would nationalise them. So the British government and certain socialist aspects of it were threatening to nationalise the banks again. A little bit of a different take when you read the full article."

And no matter how you slice it, that's an accurate take on the story.

In this respect, it might be a question of accountability and bank behaviour, and whether your money is really yours when held in the hands of a bank whose sole priority is profitability even at the cost of the public good.

If there's one thing blockchain can do, it's imbue finance with a healthy level of transparency and accountability. Banks aren't the enemy – misbehaviour with money is.

Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade. Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

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