“Death of Satoshi Nakamoto” [pdf]

Section 1 is so strange I'm at a loss for words.

"...in the style of the massive wall of water resembling a menacing prolongation of Mount Fuji as depicted in The Great Wave off Kanagawa"

the fuck?

Section 2 defends BTC from being a Ponzi scheme. The public doesn't worry it's a Ponzi scheme so much as an instance of Tulip Mania.

Section 3 says that since Bitcoin is prone to getting ripped off, it needs to be insured. The SEC would of course argue that since it's prone to getting ripped off, it SHOULDN'T be insured.

Section 4 is just horse shit no one at the SEC is going to understand, let alone read. FUD.

Section 5 is a basic conclusion.

Anybody wondered whether the real Satoshi actually had a hard drive crash or something like that, and actually lost access to his wallet and PGP key?

Then making it impossible for him to claim his bitcoins or prove that he's the real Satoshi, thus will never claim to be Satoshi?

Sometimes, the most simple yet stupid explanation can be real

Note that all 5 of the letters written to the SEC in response to the proposal can be found here [0]

[0]: https://www.sec.gov/comments/sr-batsbzx-2016-30/batsbzx20163...

Centralized Bitcoin security effectively amounts to preying that you never get hacked because if you do -- there is still no way to limit what can be done with your private keys (and this is true regardless of whether the key is stored inside a hardware module or not.) The document here correctly notes that their security model amounts to little more than security through obscurity and further points out that their multi-sig signing is still at risk of collusion, mishandling of keys, blackmail, theft, and any number of unforeseen things.

With no concrete way to prevent a hack and no insurance if one were to happen -- I can only see this ending badly -- and quite frankly, given how little thought they've put into security I'm quite alarmed. Effectively, everything they've put forward to protect these Bitcoins has been known to be inadequate since 2012. We've seen that multi-sig was introduced and it still didn't help. We've also seen that multi-sig and hardware modules haven't been enough to prevent every inside job, hack, or scam.

In my view the only concrete way to handle Bitcoins as an exchange is to extend Bitcoin to allow coins to be locked up into a special clearing phase. You would have it so that coins could be spent after N confirmations but before then they could be transfered to a fail-safe address. This isn't my idea but its a simplification of what Emin Gün Sirer proposed with his Bitcoin vault idea (though I did think of something similar in the past.)

Because honestly, you can never, ever rely on fully preventing these hacks as the basis for a solid security model. Hacks. Are. Going. To. Happen. Regardless of how many walls you decide to build. Thus, the only effective security model for doing high-risk crypto-finance is to do something that offers us a plan B when they do. And that's what Bitcoin vaults are for -- they allow us to cancel / revoke coins during a clearing phase without breaking Bitcoins irrevocable nature (since you only treat coins as final after +6~ confirmations after the clearing phase.)

The simple truth of the matter is -- Bitcoin in its current form is inadequate for services like centralized exchanges (as evidence by numerous hacks) and the only reason why people continue to do business under this scenario is for opportunistic profit. If any of these companies really gave a shit about security there is absolutely no way they would continue to run a financial service with NO WAY to cancel fraudulent transactions. I consider this a pretty basic corner-stone of modern banking and as long as it can't be done in Bitcoin, EVERY wallet, Bitcoin exchange, and store that's handling Bitcoins is just waiting to be fucked.

How much coke was used to write this? O_o