Most people involved in the digital currency space for a few years have either directly experienced or know someone who has experienced a hack or loss of private keys.
The effects of these incidents can be devastating; more than a billion dollars were stolen from Bybit, and holders routinely lost everything to phishing scams and wallet hacks.
When it happens, victims are typically told that nothing can be done. Industry leaders tell us that digital currencies are cash systems, and transactions are irreversible. However, it doesn’t have to be this way. Blockchains can be rolled back, as in the Ethereum DAO hack of 2016, and transactions can be reversed if full nodes coordinate and agree to amend the ledger.
While the idea seems to go against what ‘crypto’ stands for, I’ll argue that civilization requires Digital Asset Recovery to survive. Without it, we revert to the law of the jungle, and all economic, technological, and social progress made since the Enlightenment will reverse into anarchy, chaos, and darkness.
Property rights are the bedrock of Western civilization
If you live in a Democratic Western nation, there are probably a few things you take for granted. Rule of law, enforceable contracts, property rights, and systems you can depend on to enforce them impartially are some of the benefits many who live in North America, Europe, Australia, and parts of Asia take for granted.
Yet, it isn’t like this everywhere. These concepts are rooted in Western philosophy and norms promoted by philosophers like John Locke, who believed in natural rights. Locke identified life, liberty, and property as natural rights and argued that government exists only to protect them. These rights existed before the government, he argued, and therefore, governments are subservient to them.
“Every man has a property in his own person… The labour of his body and the work of his hands… are properly his.” – John Locke, Second Treatise of Government.
At the time, this idea was radical. Locke argued that property is not granted by kings or governments but by natural law. Therefore, it becomes theirs when someone mixes their labor with the natural world, e.g., by farming or building. Even the king can’t claim dominion over it—that was a radical idea in the 17th century!
Arguing that governments derive their legitimacy from protecting these natural rights, Locke implied that, by failing to do so, the people had a right to overthrow them. In other words, if property isn’t protected, civilization is illegitimate.
Locke’s ideas heavily influenced British common law and the U.S. Constitution; property rights are considered sacred in both systems. It’s no coincidence that the Industrial Revolution, capitalism, and global trade began in nations with strong property rights. Locke’s philosophy made them possible.
Code is not law, and it never should be
In the blockchain space, the mantra ‘Code is law’ is all too familiar. BTC maximalists and others argue that property should not be protected by laws but by cryptography and that the laws of man are powerless in their world. Immutability and decentralization are sacred in the BTC maximalists’ world, not legal property rights won in blood and written in ink.
Aside from the fact that this idea has been proven false numerous times, such as when coins were seized by law enforcement or when companies like Coinbase (NASDAQ: COIN) and Binance agreed to comply with regulations, it’s also fraught with downsides. Lost keys mean wealth is irrecoverable, hacks and scams leave victims with no recourse, and headlines about exchange hacks and internet drug lords using BTC put people off embracing it.
Ask any people who have lost their digital currencies to a hack, scam, or loss of keys if they would like a mechanism to recover their property, and the answer will almost certainly be yes. Even Luke Dashjr, a prominent BTC maximalist, went to the law when he lost a significant amount of BTC and had every right to do so. Even the loudest maximalists run to the real-world authorities when it’s their coins at stake!
The slippery slope to communism or anarchy
Satoshi Nakamoto designed Bitcoin to be a peer-to-peer digital cash system capable of micropayments at scale. He said that full nodes would end up in data centers and that Bitcoin never hits a scaling ceiling. He intended it for mainstream use, even saying directly how it could rival Visa (NASDAQ: V) on transaction throughput.
However, Bitcoin could never be used in any mainstream application like payments unless it fits into the existing system of property rights and laws. Satoshi would have known that, and indeed, he designed Bitcoin so that Digital Asset Recovery was possible (more on that later).
If property rights are not enforced, Bitcoin would only ever be an underground tool for paranoid criminals and the ultra-tech-savvy. Normal people would never get involved in any serious way, and institutions would not, or even could not, use it in any meaningful sense. In a system where might makes right, everything falls apart; whoever has the keys wins, and central actors like dev teams and protocol designers can take assets without legal restraint.
Nobody of serious mind would build anything on such a system. If it were to underpin society, civilization would come undone. Without formal ownership, there is no capitalism, and without capitalism, there is no Western civilization as we know it.
A better path: rule of law on the blockchain
The architects of most blockchains have ignored all of what I have said so far, and in due course, that will cost them dearly. Just as big players like BlackRock (NASDAQ: BLK) are entering the space, one blockchain offers an alternative: BSV.
BSV is the original Bitcoin protocol restored. With the block cap removed and the opcodes reinstated, it can process 1 million transactions per second (TPS) for fractions of a cent, and myriad transaction types are possible on it. Since the blocks are unbounded, not everyone can run a full node, but this is as Satoshi intended, and this architecture makes property rights enforceable.
Since BSV blocks are large and will only become larger, nodes will end up in data centers run by professionals. It is impossible for nodes of this size to remain completely anonymous—their electricity use alone would make them traceable, and corporate entities will likely own them. Given that they can be identified, they can also be served with legal notices and, in coordination with other nodes, can make amendments to the ledger.
In the BSV system, if a firm has a million dollars in stablecoins stolen, it can file a case with a court, which will then notify the network nodes, which are then legally compelled to freeze the coins and reassign them back to their rightful owner when instructed to do so by a judge. Of course, this can’t be done randomly; the party making the complaint must prove they are the rightful owner of the coins with sufficient evidence.
BSV is the only blockchain designed from the outset to comply with property rights and the law, and as we have seen, property rights are the bedrock of civilization. Without them, we slip into anarchy, where the strong dominate the weak, or communism, where property rights don’t apply, and those in power can abuse them to take whatever they wish.
This cannot be allowed to happen, for all the technological and social progress since the Middle Ages, from steam engines to computers to mass education to equality under the law, would stall and disappear if it did. If blockchain is to be part of the future, it must be BSV. None of the others scale, and the type of world they would bring about isn’t one in which the majority would wish to live.
Watch: Digital Asset Recovery takes token recovery seriously
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Source: https://coingeek.com/digital-asset-recovery-should-blockchains-enforce-property-rights/