Development in the Era of Honest Money
TLDR Summary: Craig Wright, Ryan Charles, the Tokenized team and others in the BitcoinSV community are providing developers with the knowledge and best practices to implement what Craig calls Honest Money. This knowledge transfer was fully on display during CoinGeek 2019. Developers must take care when writing transactions to the chain to maintain fungibility and prove that the source of funds is legitimate. As a concrete example, when creating a business transaction, you should include metadata about the purpose of the transfer, purchase order, invoice etc. When you fully document the source and purpose of your money and you sign it properly you are protecting your money and your client’s money. I cannot say why yet, but suffice it to say that you should always be prepared to prove that your money was legally obtained and the concepts presented at the conference will help with that. When we use best practices to create honest traceable money then we drive the criminals out of our chain and make money that is safe and valuable.
Edit: A great read from Craig. Ensuring Honest Money
I write this post on the heels of the CoinGeek 2019 BitcoinSV conference. Ostensibly a scaling conference, the content held a theme unexpressed in the headlines: that of Honest Money. I went to CoinGeek seeking technical knowledge but left with something more important – an appreciation for and the theoretical foundation to implement Honest Money. This article summarizes what honest money means to me and some of the knowledge that developers will use to implement it.
Other chains seek to add anonymity to their coins under the guise of privacy. They prey on our fear of an oppressive overreaching government to add anonymity to their coin, as if to say “we will protect you from the bad actors in government by letting you shield your activity”. What this does in fact is create a coin for criminals to use. Anonymous money is not an antidote to government malfeasance. Untraceable money enables more criminality in society. Only honest money can be the foundation for an honest society. We will use honest money to spearhead honest behavior in society including our government. It is our value system.
The following lists some attributes of honest money and how the content of the conference pertains to the concept. Keep these concepts in mind as you review the conference content. I have added links to additional content under some categories where appropriate to provide context. If the content seems jumbled it is because the concepts are inter-related and it is more of a braindump than anything else.
1. Honest money is fungible. This is the most important point of this article. As Craig has warned us, fungibility has a strict legal definition. https://medium.com/@craig_10243/i-am-sorry-that-you-fail-to-understand-fungibility-905b7554b8a6 and https://medium.com/@craig_10243/institutional-madness-6f4fade7b9fc
In short, always record the context of a transaction (invoice, purchase order) within the transaction to prove the source of funds.
At the conference, Craig introduced his topic as “inventing things that will make legal use of bitcoin better.”
Attestation means you sign things in order, properly witnessed with video and/or a document associated with a transaction.
He also discussed Knowledge Proofs and checking signatures in script. Kung-Fu ninja crypto stuff. Proving an external calculation and using that knowledge on chain.
The order of digitally signing a transaction is important to make the transfer legal. Understand how to order digital signatures using OP_CODESEPARATOR. Prove the order of signing to make a transaction legal.
2. Honest money uses the immutable blockchain that encourages traceability by linking transactions.
Take a look at nchain’s proposal for MetaNet protocol. They take great pains to tell you to link your OP_RETURN back to the parent transaction. In other words, maintain traceability between your transactions.
3. Honest money is not anonymous.
See what Ryan is doing with identity systems and Paymail.
“Keys are not identity”. Understand this.
Privacy is good. Anonymity is bad.
4. Honest money is legal.
See everything that Tokenized is doing to record activities onchain.
In his talk, Craig speaks of creating an evidence trail.
Adding evidence to the blockchain, the opposite of anonymity, will strengthen your claim to funds and avoid potential “externalities”.
Craig ends his speech with “I want a world where we are going to help law enforcement collapse all of the scams.”
I have missed many other instances of content that relates to the theme of honest money. Please add them in comments if you can think of them.
Developers are tasked to create systems that implement honest money and we have a responsibility to know how to correctly document our transactions. The systems we build should add context to the transaction to keep money fungible. That means that we should be adding reference information (purchase orders and invoices) to transactions to make it legal and auditable. The opposite of anonymity will protect you in the era of honest money.
Craig, nChain, Ryan, Tokenized and the rest of the BSV community are giving us developers the foundation for working with honest money - for the betterment of society.
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