You have been deceived. However, rest assured that you are not alone in this predicament. It is a common occurrence where a factoid is repeated frequently by numerous individuals, leading our mammalian brains to take the cognitive shortcut of accepting it as truth, given that many others have also accepted it as such.

Today, one of the most widely accepted truths about digital currency has been debunked: Bitcoin is now recoverable.

Surprising as it may seem, lost or stolen bitcoins can now be recovered through a legal process, which contradicts one of the most fundamental principles that "crypto" advocates have been advocating for the past 12 years.

But how is this possible?

In truth, it has always been technically feasible. The challenge was in practically getting all the block producers to enforce the rules and do so in a manner that is compatible with existing legal systems. Without legal backing, merely performing the technical aspect would be tantamount to theft.

Last week, the Bitcoin Association for BSV, an open, non-profit organization for Bitcoin advocacy, released software called Blacklist Manager, which can facilitate coordination between miners (those that produce blocks) to enable coins to be frozen by court orders issued by authorities and digitized by a registered notary service.

This implies that if one has been a victim of digital currency theft, a legal process can be pursued to claim the stolen coins, culminating in the coins being frozen on the blockchain and rendered immovable. This is comparable to features available on centralized ledgers such as Tether or XRP, which frequently freeze accounts based on reported hacks.

 

Until now, proponents of virtual currency have maintained that the decentralized nature of the public blockchain system renders it impossible to freeze native tokens. However, recent developments have proven this belief to be unfounded. The perceived obstacle was not the decentralization of the system, but rather the lack of coordination among block creators. The introduction of new software has simplified and automated this coordination process for miners.

Despite the fact that some technical advocates have previously demonstrated the possibility of "supervisory oversight," the digital currency community has consistently argued that the existence of non-mining nodes operated by numerous independent parties on the Internet would prevent miners from attempting to freeze coins. This is due to the self-censorship of passive nodes, which would refuse to relay any transactions altered by miners in this manner, thereby removing them from the legal chain.

However, this threat has never been realized in practice, and the underlying premise has always appeared somewhat tenuous, akin to idle threats made by someone threatening to jump from a ledge.

Ultimately, a threat to withdraw from a system by means of jumping is tantamount to a boycott, a form of protest that is recognized by every astute capitalist. However, like a boycott, it is only effective when a significant economic majority acts in concert to implement it.

Therefore, it is evident why previous idle threats by BTC movements, such as the "UASF" group, have expended considerable time and effort in promoting and influencing public opinion to attract more adherents to their cause. They have even gone so far as to transform Bitcoin from a system maintained by miners who support the network to one where "users" are in control, a notion that is reminiscent of Marxist ideology.

Ultimately, the only threat they pose is the possibility of public backlash on social media platforms, which could impact miners' bottom line by tarnishing their online reputation among potential customers. This threat is only effective on miners because they are in fierce competition with one another, and none can afford to lose any ground to their rivals.

As a famous space fish in a space movie about space wizards once exclaimed, "It's a trap!"


In the end, it was essentially a psychological operation designed by those who stood to benefit the most from the belief that Bitcoin transactions, and even theft, are irreversible, untraceable, and therefore a free-for-all currency that is immune to state intervention.

Like many utopian stories, this utopian dream was a dystopia in disguise, as anyone who has read Orwell can attest. While we were being warned not to trust the authorities' ability to freeze coins, we were also being cautioned not to question a company that does not even have a registered office to freeze an entire blockchain due to what they arbitrarily deemed a hack.

While certain exchanges and projects may take it upon themselves to bypass the law, assuming that the public views their actions as more secure than those of the authorities, they are quick to criticize said authorities and courts for possessing the same power to halt the movement of stolen coins. This displays a clear hypocrisy, but the question remains: why?

If we all share the belief that theft and criminal behavior should not be rewarded, then it should be universally agreed upon that the proceeds of such crimes cannot be permitted to circulate freely. In fact, if there existed a miraculous button capable of reclaiming ill-gotten gains and returning stolen coins to their rightful owners, it would undoubtedly be hailed as a monumental advancement for the digital currency economy.

This innovation, spearheaded by the Bitcoin Association, is precisely that miraculous button. It is truly perplexing why certain parties vehemently oppose it, arguing that it undermines the concept of decentralization. One is compelled to ponder whether those who resist measures that hinder the use of digital currency for illicit activities are, in fact, beneficiaries of such activities themselves. This situation brings to mind the tale of King Solomon's wisdom, where he had to discern the true mother of a baby.

The individual who demonstrated the willingness to sacrifice in order to preserve life emerged as the true protagonist. Genuine intentions invariably surface when there is a potential loss at stake.

Jerry Chan

NOTES:
[1] The authenticity of decentralization as a concept is a subject that will be examined in a forthcoming article.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.