Craig Wright Says Ethereum Can't Scale, Only for Bucket Shops

Craig Wright, the alleged creator of Bitcoin, submitted a lengthy document to the Commodity Futures Trading Commission (CFTC) last Friday. Railing against the ethereum Blockchain Blockchain Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Read this Term, Wright said that he designed bitcoin as a means of fighting fraud and eradicating the need for clearing houses.

The paper was submitted to the CTFC after a call by the regulator, in mid-December of last year, for the public to submit information on ethereum. In a statement issued at the time, the regulator said that it wanted to gain a better “understanding of the technology, mechanics, and markets” that ethereum and ether support.

Wright’s document was uploaded to the CFTC on the last day that submissions were permitted, and it appears that he may have been in something of a rush to complete the document. Though they don’t entirely take away from his points, the paper is replete with grammatical errors and typos.

The general thrust of the piece is that Wright, who starts by saying that he created bitcoin, launched the first cryptocurrency as a means of trading without such an extensive array of traditional, back-end trading processes.

“Where financial assets, shares and securities are exchanged the blockchain acts to remove the need for a formal Clearing House Clearing House A clearing house is defined as an intermediary between two parties, a buyer and seller, which helps facilitate the overall process from trade inception to settlement. Clearing houses streamline the exchange of payments, securities, or derivatives transactions.The clearing house is situated between two clearing firms who also helps reduce the risk of either member firm failing to honor their respective trade settlement obligations.Buyers and sellers enter into legally binding agreements for the e A clearing house is defined as an intermediary between two parties, a buyer and seller, which helps facilitate the overall process from trade inception to settlement. Clearing houses streamline the exchange of payments, securities, or derivatives transactions.The clearing house is situated between two clearing firms who also helps reduce the risk of either member firm failing to honor their respective trade settlement obligations.Buyers and sellers enter into legally binding agreements for the e Read this Term function,” Wright wrote.

Interestingly, Wright also rubbished the idea that bitcoin is inherently anti-regulation. He said that, though it may revolutionize back-end trading processes, it is people that want to operate bucket shop scams, under the guise of “democratising finance,” who are saying the market should not be regulated.

Ethereum can't scale

On top of these points, the alleged founder of bitcoin laid into ethereum. Calling the blockchain system a rip-off of bitcoin, he attacked the system on almost every single level.

Wright said that ethereum could never scale upwards because of several systematic flaws within the blockchain system. Thus, Wright says, the ethereum blockchain cannot expand anymore that it has.

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“This network has already hit its limit and is effectively only being used to raise capital using illegal bucket shops that are designed in such a way that they can deceive nontechnical parties,” wrote Wright. “No technology released within Ethereum for the provision of computation or ICOs has been created that did not exist prior and in a more effective manner before this network was launched.”

A long history

This is not the first time that Wright has attacked ethereum. In November of last year, he said that ethereum doesn’t have a single use-case. He has also implied that it is fraudulent on several occasions in the past.

For his part, Vitalik Buterin, the ethereum founder, has also said that Wright is a fraud. Speaking at a conference in South Korea last year, Buterin said that Wright makes “so many nonsensical claims” and asked why a “fraud” was being given a platform to share his views.

Wright shot to prominence in 2015 when he claimed that he was the anonymous Satoshi Nakamoto that penned the original Bitcoin whitepaper. Though some people have supported him, the Australian is yet to provide any solid evidence which would back up his claims.