Maths v Law: To Fork or Not To Fork, That Is The Question

Maths v Law: To Fork or Not To Fork, That Is The Question

A few years ago, in a debate over encryption, the Prime Minister (Malcolm Turnbull) defined that, in his country, that mathematics comes in second place to law. When asked how this could be achieved, he said:

“Well the laws of Australia prevail in Australia, I can assure you of that. The laws of mathematics are very commendable, but the only law that applies in Australia is the law of Australia

Well, the mathematical near-certainty of cryptography and the complexity of blockchain is now the subject of a number of legal challenges. At the core of the current set of challenges are: who really invented Bitcoin; the ownership of the copyright of the Bitcoin whitepaper; and claims for a stake on various Bitcoin wallets. A fundamental question, though, appears … who really has the power? The cryptographic process (and its near mathematical certainty) or law?

Is Craig Satoshi?

As far as Craig Wright is concerned, he is the creator, and it was him alone. And so there is a courtroom battle going on, and which questions if Craig was the sole creator of Bitcoin, and/or whether he partnered with others:

Craig’s defence is that he created Bitcoin on his own, but many do not believe these claims — often claiming that he did not have the technical skills to implement such as solution.

Craig v Bitcoin Developers

While defending himself from claims that others have a share in the rights to Bitcoin, Craig has been moving to release billions of dollars from a wallet that was part of the Mt Gox hack:

The claim focuses on the wallet that was used to take receive funds from Mt. Gox hack, and which still lies untouched:

Overall, it contains bitcoins worth over $5 billion. Craig says that he had the keys to this wallet, but that they were stolen from him in 2020. The UK-based legal claim is that Bitcoin developers could enable a piece of code that would release these coins, and allow Craig to have access to them.

Maths v Law?

And so it is a maths v law argument, where the certainty of the digital signature could be overruled by law. But how? Without the private key, it is almost impossible — to recreate it from the public key signature — — and would require virtually all the energy in the world, and more to reveal it. We also cannot reverse the ECDSA signature. The only likely solution to this is to hard fork the Bitcoin network, and create a new coin: Bitcoin Classic (Craig’s new coin); and Bitcoin BTC. A Bitcoin Classic would then have to have a value, in order for Craig to benefit in a significant way.

This forking of the ledger previously happened on the Ethereum network, and where a hack led to a fork into: Ethereum Classic; and Ethereum. Since then, the two cryptocurrencies have sustained their value, but have different transaction ledgers. A hark fork can also happen when there is a major update, such as in Dec 2019 when Ethereum 2.0 was adopted [here].

Up to now, Bitcoin has not required a fork and has been run fairly well with the nodes resisting any changes. The recent upgrade to SegWit — supporting a larger block of 4MB — has taken a while to be adopted, so there would be no guarantee that the network would adopt the required fork.

Craig, himself, has also raised legal actions on the copyright to the Bitcoin white paper, and say that he is the one who created Bitcoins.

Conclusions

So, who really has the power in the digital world? Can a UK court force non-UK based Bitcoin developers to write code that forks Bitcoin? The rule of law can often release funds from banks, but can it be done for a distributed ledger?

So it’s Maths v Law. The power of software to overcome our borders and their legal scope increases by the day, when created as something that does not have any real ownership, it becomes difficult to define the legally responsible entity.

If you trace it all back, perhaps it was the fault of Euler and Fermat in defining the equations that were used within public key encryption that should be in the dock, and for even public key to be allowed to be used at all? For me, I just love the science of cryptography, and I could have a whole lifetime of learning, and never even to have scratched the surface of this amazing topic!

Interesting times!