Blockstream having patents in Segwit makes all the weird pieces of the last three years fall perfectly into placeSome excerpts:
Based on Blockstream’s behavior in the Bitcoin community, I have become absolutely certain that Segwit contains patents that Blockstream and/or their owners have planned to use offensively. I base this not on having read the actual patents, for they can be kept secret for quite some time; I base this on observing Blockstream’s behavior, and having seen the exact same behavior many times before in the past 20 years from entities that all went bankrupt.
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first, let’s compress the last three years of dialogue between Blockstream and the non-Blockstream bitcoin community:
[BS] We’re developing Lightning as a Layer-2 solution! It will require some really cool additional features!
[com] Ok, sounds good, but we need to scale on-chain soon too.
[BS] We’ve come up with this Segwit package to enable the Lightning Network. It’s kind of a hack, but it solves malleability and quadratic hashing. It has a small scaling bonus as well, but it’s not really intended as a scaling solution, so we don’t like it being talked of as such.
[com] Sure, let’s do that and also increase the blocksize limit.
[BS] We hear that you want to increase the block size.
[com] Yes. A 20 megabyte limit would be appropriate at this time.
[BS] We propose two megabytes, for a later increase to four and eight.
[com] That’s ridiculous, but alright, as long as we’re scaling exponentially.
[BS] Actually, we changed our mind. We’re not increasing the blocksize limit at all.
[com] Fine, we’ll all switch to Bitcoin Classic instead.
[BS] Hello Miners! Will you sign this agreement to only run Core software in exchange for us promising a two-megabyte non-witness-data hardfork?
[miners] Well, maybe, but only if the CEO of Blockstream signs.
[Adam] *signs as CEO of Blockstream*
[miners] Okay. Let’s see how much honor you have.
[Adam] *revokes signature immediately to sign as “Individual”*
[miners] That’s dishonorable, but we’re not going to be dishonorable just because you are.
[BS] Actually, we changed our mind, we’re not going to deliver a two-megabyte hardfork to you either.
[com] Looking more closely at Segwit, it’s a really ugly hack. It’s dead in the water. Give it up.
[BS] Segwit will get 95% support! We have talked to ALL the best companies!
[com] There is already 20% in opposition to Segwit. It’s impossible for it to achieve 95%.
[BS] Segwit is THE SCALING solution! It is an ACTUAL blocksize increase!
[com] We need a compromise to end this stalemate.
[BS] Segwit WAS and IS the compromise! There must be no blocksize limit increase! Segwit is the blocksize increase!
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With that said, Blockstream has something called a “Defensive Patent Pledge”. It’s a piece of legal text that basically says that they will only use their patents for defensive action, or for any other action.
Did you get that last part?
That’s a construction which is eerily similar to “terrorism and other crimes”, where that “and other crimes” creates a superset of “terrorism”, and therefore even makes the first part completely superfluous.
Politican says: “Terrorism and other crimes.”
The public hears: “Terrorism.”
What it really means: “Any crime including jaywalking.”
The Blockstream patent pledge has exactly this pattern: Blockstream will only use their patents defensively, or in any other way that Blockstream sees fitting.
Blockstream says: “For defense only, or any other reason.”
The public hears: “For defense only.”
What it really means: “For any reason whatsoever.”
Let’s assume good faith here for a moment, and that Greg Maxwell and Adam Back of Blockstream really don’t have any intention to use patents offensively, and that they’re underwriting the patent pledge with all their personal credibility.
It’s still not worth anything.
In the event that Blockstream goes bankrupt, all the assets – including these patents – will go to a liquidator, whose job it is to make the most money out of the assets on the table, and they are not bound by any promise that the pre-bankruptcy management gave.
Moreover, the owners of Blockstream may — and I predict will — replace the management, in which case the personal promises from the individuals that have been replaced have no weight whatsoever on the new management. If a company makes a statement to its intentions, it is also free to make the opposite statement at a future date, and is likely to do so when other people are speaking for the company.
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The owners of Blockstream are the classic financial institutions, specifically AXA, that have everything to lose from cryptocurrency gaining ground.
