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I have been DCA with Swan for over two years. I started another DCA with Coinbits. In May/June time frame Swan pulls out of Prime and moves to Fortress, yet Coinbits does not. The bitcoin from Swan on PRIME was moved to Fortress and I was able to self custody it. My bitcoin at Coinbits is locked and I canโ€™t move it. Is it lost forever?

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It is centralized already. Core developers dictate rules that set out how people can and cannot use the database. Further, there are a small number of miners that consistently create blocks.

The beauty of the governance is that itโ€™s open so if we see bogus behaviour, we call it out. Either by moving to another network or by honest nodes following the longest block (itโ€™s in the white paper).

Decentralization is about how users interact. โ€œPeer to peer cashโ€ = confidently trade without encountering a double spend.

I ask again, if you lost access to your wealth, would you reject recovery technology?

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Your description does not reflect the section of the white paper that discusses the role of nodes. Nodes solve proof of work to add blocks. The end.

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โ€œNodes express their acceptance of the block by working on creating the next block in the chain, using the hash of the accepted block as the previous hash.โ€

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If a US court issued an order and there is a method to recover but US miners decide to not follow the order/follow the method, what happens to that miner? We consulted DoJ at a senior level so this isnโ€™t my opinion off in the ether. consider Ordinals and the ability to use bitcoin to secure any piece of data. Recovery options will aid adoption.

The nodes that create blocks matter (aka miners). I do not follow your miner and node distinction. Can you help me understand? What do you see as the difference?

Would you turn down a recovery option if you lost access by no fault of your own (eg. Theft or corrupted cold storage, etc)

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author

A "recovery option" introduces a centralized authority that has total control over who gets to own Bitcoin. This is completely antithetical to Bitcoin, which is all about uncensorable property rights.

The miner nodes and user nodes distinction is crucial to understanding Bitcoin. It is also why BCH failed to commandeer Bitcoin in 2017. I would recommend reading "The Blocksize War" in order to understand these dynamics.

And to answer your question at the beginning of your comment, in that case, the miners would have to implement a hard fork in order to implement that recovery method. When user nodes do not adopt that hard fork because it is not in their interest to do so (as was the case with BCH), the miners have recovery power over their hard fork that nobody recognizes or uses, but do not have power over the original Bitcoin which everyone still uses.

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Hate to burst your bubble.

I worked on a project that translated a court order to a machine readable instruction that automates freezing coins and subsequently reassigns them based on a court order. The catch is that miners/nodes need to connect to the service. miners we spoke with were willing to connect if the right indemnifications and governance are in place. No honest miner will connect to an unknown or malicious entity because once their machines get the instruction itโ€™s executed.

The software can be implemented on BTC, BCH, BSV. basically all variants of Bitcoin.

In EVM context, it is also possible as they have reverted transaction to reassign coins.

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author

That doesn't burst my bubble at all? That sounds like programmable instructions for management of assets that an entity has ownership and control of.

But if you're talking about seizing coins that other people are holding... that would be a contentious hardfork that no user nodes would agree to. (Why would they grant authority to allow their coins to be seized?) That is exactly what the design of Bitcoin prevents.

And it doesn't matter if the majority of miners are onboard (I doubt they are). BCH had the overwhelming support of miners, but nodes rejected it... a few years later, BCH is all but worthless.

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Thereโ€™s a more direct solution supported by the underlying protocol. โ€œLostโ€ Bitcoin can be recovered.

Itโ€™s an immutable ledger where things donโ€™t go missing. A key is misplace or someone steals but the ledger is there for evidence.

The solution to losing keys is the same as recovering theft (assuming a fast response to the theft). Off-chain proof of ownership, in this case the agreements and records connecting users with the custodian.

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Aug 30, 2023Liked by Jesse Myers

Except, as I understand it, no third party has extra privileges or amin rights to direct bitcoin without the key that controls it at the address on the ledger. So once the key is lost no one can move it. It is one of the great things about bitcoin and what gives you freedom and protection from discrimination or gatekeepers. At the same time it gives you responsibility.

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author

Perfectly said, Brian. There will never be a solution for "lost" Bitcoin recovery, because there is nobody with the authority to impose that jarring and hugely problematic change on existing Bitcoin holders.

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