Hearn — Big Bank Bitcoin Bully

There are a few infamous names in the Bitcoin space, Mount Gox, Bitcoinica, Pirateat40, the list stretches on. This is a consequence of having something valuable enough to steal, while shady characters succumb to the urge for a quick buck or bitcoin.

More recently, if there’s going to be a name synonymous for selling-out to big corporate interests while giving Bitcoin a kick in the solar plexus, it is going to be Mike Hearn. But before we examine his failed attempt to takeover the Bitcoin ecosystem with his particular flavor of corporate-centralized ideas, lets take a brief look at how his indoctrination at various stages evolved.

Mike’s last publicized occupation was at Google, ostensibly in charge of developing system security and working on projects of the same vein. This wasn’t enough for the ambitious developer, as he shortly pivoted towards Bitcoin. Seems like an innocent transition, doesn’t it? It brings to mind the image of a person working hard around the beanbags and primary-colored lounge chairs in a painfully dot-com kind of way, idly considering whether to get another bowl of free cereal, or actually check up on something left compiling in the sprawling open-office space.

His most recent position is with R3CEV, a consortium of Banks intent on plucking choice bits of the Bitcoin ecosystem, without spreading that benefit to any of its users. Or in more simple terms, a good old coporate-rogering while they resell what was given freely with a middleman price-hike.

But there’s more! Floating around the internet is references to Mike Hearn’s involvement in Signals Intelligence, specifically “Command, Control, Communications, Computers, Intelligence, Surveillance and Reconnaissance (C4ISR)”. The breadcrumbs left by his email address used in employment of Qinetiq/GCHQ (UK Intelligence) are scattered throughout various commits and posts to the Wine open-source project during 2002–2005. Ref[1] http://marc.info/?a=103519148400001&r=1&w=4 and even echoed in his CV as it mentions his work on Wine.

This casts a rather long shadow over more his former career in Bitcoin. It wouldn’t be the first time a government actor got involved in a open-source project, but it certainly is telling that someone of Mike’s station previously involved in Bitcoin development, is for all intents and purposes, a government/corporate provocateur.

This is a man, who on the surface promoted the usual “Bitcoin is financial freedom” and “Decentralization is Bitcoin’s greatest strength” while simultaneously introducing ideas and code into the project that ultimately would undermine those goals.

Hearn and Transaction Tracking:

Several years ago Hearn was the person championing “Coin Marking”, essentially an insidious way to make Bitcoin gradually non-fungible and easily tracked. After all, if someone used Bitcoin for some non-legal purpose in a given jurisdiction and you knew you’d be liable handling their coins through marking, then those coins would end up on the floor like so much sawdust tailings from a wood lathe. It was offered as a way to track stolen funds, but clearly this disguised the real intent — providing a mechanism to mark coins also allowed them to be tracked from user-to-user with enhanced granular information available. Ref[2] http://www.coindesk.com/bitcoin-tracking-proposal-divides-bitcoin-community/

Hearn and Monopolistic Control:

Amazingly in the Bitcoin XT FAQ there’s a short section on how decisions are made. “Decisions are made through agreement between Mike and Gavin, with Mike making the final call if a serious dispute were to arise.” Ref[3] https://bitcoinxt.software/faq.html

This method of governance is a short hop, skip and jump away from a pure dictatorship — especially if any tie-breaker also happens to be the person making the change in the first place. It wouldn’t be the first time Hearn expressed the desire to have complete control, in fact, Bitcoin XT is nothing more than a hastily-designed land grab disguised as a blocksize debate.

Hearn and Hardfork Threats:

When an adult doesn’t get their way in polite society, they often stop and suss out the situation. This is done to gather information on whether they were at fault, or perhaps the idea that they were promoting was out of step with the environment or just plain wrong. Hearn, on the other hand, resorts to threats in the form of hard-forking (run my software or else). Bitcoin XT was Hearn’s “suggestion” wrapped up in a rude hard-forking bow.

But don’t take my word for it, lets hear from Charlie Lee, a prominent developer of the popular alt Litecoin.

“Nuclear option of forking the codebase should only be used as a last resort. It’s DANGEROUS and IRRESPONSIBLE.” (Emphasis mine.) Ref[4] https://www.reddit.com/r/Bitcoin/comments/3hp190/charlie_lee_nuclear_option_of_forking_the/cu9e4tj

And yet, Mike persisted. While cloaking Bitcoin XT in the blocksize debate, he also pushed ahead other changes that would only make sense if someone was trying to exercise specific control over certain freedoms in the original Bitcoin implementation.

Hearn and Tor Blacklisting:

Adding to the pile of failure that is XT, Mike enabled blacklists for Tor nodes. If you’re not familiar, Tor is used by freedom advocates all over the world to communicate securely from oppressive regimes without fear of reprisal and tracking. Under Mike’s proposal, nodes would be banned under the guise of preventing Distributed Denial-of-Service attacks. This is Mike to a tee, every chip he takes out of the freedom of Bitcoin is wrapped in a shell of plausible denial — much how like certain governments behave. Ref[5] https://lists.linuxfoundation.org/pipermail/bitcoin-dev/2015-August/010379.html

Not to mention the problem with XT where nodes are vulnerable to vote manipulation, which again, harks back to the “ultimate control” agenda that Mike promotes through his ideas and those of his employers. Ref[6] https://www.reddit.com/r/bitcoinxt/comments/3i1dra/psa_its_super_easy_to_manipulate_the_node_count_i/

Hearn XT Failure Errata:

There’s miles more, but to save your eyes a bit its all been collated here:

http://spectrum.ieee.org/tech-talk/computing/networks/the-bitcoin-for-is-a-coup
http://www.zerohedge.com/news/2015-08-23/what-bitcoin-xt-primer-everyone
http://motherboard.vice.com/read/bitcoin-core-devs-in-civil-war-insist-were-not-getting-the-whole-story
http://techcrunch.com/2015/08/22/money-and-politics-bitcoins-governance-crisis/
http://wallstreettechnologist.com/2015/08/19/bitcoin-xt-vs-core-blocksize-limit-the-schism-that-divides-us-all/

In the end, XT only garnered 10% of total nodes in the network, failing to meet its 75% activation level this January. A small triumph for common sense in the face of blatant manipulation.

Conclusions:

So many to draw, and yet so little time in which to do it. Mike Hearn has proven with his overly-dramatic quit post (coincidentally timed while a meeting between his corporate employer and finance bigwigs was underway) and his prior actions in Bitcoin development that he is not only an unstable and erratic egocentric mess, but displays alarmingly centrist and government-fed agendas that are inherently incompatible with Bitcoin itself.

He won’t be the first, and definitely not the last. While this bad apple has been identified and shunned from the ecosystem, we must be serious about preserving the qualities that make Bitcoin as strong as it is — the decentralized nature of the network, and the fungibility of the Bitcoins traded globally. To compromise any of those freedoms is not only wrong, but the litmus test as to who should be participating in the project or not.

Hearn may have left the building, but his shadowy partners are still making their plans and attempting to subvert one of the greatest financial juggernauts of our time, a goal that must opposed if Bitcoin is to remain truly free.