nChain plans to acquire patents on blockchain technologies, and plans to release them for free for "Bitcoin Cash" only. I put "Bitcoin Cash" in quotes because, just like Bitcoin before August the fork, what Bitcoin Cash will be in the future, compared to what it is now, is impossible to know.

nChain may very well intend to follow through on this promise in good faith. Even in good faith, however, I would argue that an approach involving intellectual property is a terrible idea because it centralizes decision making power to the entity that owns the patents.

If nChain ends up being a "bad actor"...

If nChain itself ends up being a "bad actor", it's pretty obvious why allowing this patent situation is a bad idea. By releasing their patents selectively to "Bitcoin Cash", they get to *choose* what is and isn't Bitcoin Cash, or at least choose what they call "Bitcoin Cash". If they wanted, they could stifle growth on the Bitcoin Cash software by refusing to release their patents to implementations that attempt to move the protocol forward, thus halting progress. If there is a chain split in response to that situation, nChain will have the option to reserve their patents for only one side of the split, hurting the other fork's chances of successfully escaping their hypothetical tyranny. nChain could argue that the other side of the split isn't the "real" Bitcoin Cash, and could go as far as trying to re-brand the other side of the fork as "BitCash", or "bCoin Cash", or maybe... "bCash"?

If nChain's intent is genuine...

Even if nChain is genuine in their *intent*, the centralization of decision making power is still a terrible idea because having good intentions doesn't mean you're going to be * right *. They may choose to support what is, by some objective standard, the "wrong" side of a future chain split, simply because the company is made of human beings who can make mistakes.

One might argue that there couldn't be an objective measure for what is and isn't the "right" side of the fork, but that changes very little. In that case, the only reasonable thing for nChain to do after a contentious chain split is to release its patents to both sides of the fork... which we can't possibly know they will or won't do until that exact situation happens! The future of Bitcoin Cash would be in the hands of a single company, a centralized entity. That is really obviously a bad idea.

Okay but how would this actually go down?

For the record, we don't need to be able to come up with any specific examples of how this could go wrong to argue that it's a bad idea. But one situation, just for example:

Craig Wright, chief scientist of nChain, has argued that the selfish mining paper's conclusions are incorrect, and that Bitcoin is secure against non-majority hashpower attacks. This could lead them to the conclusion that implementing certain measures *against* those selfish mining attacks is unnecessary. If a chain split is caused when one implementation introduces measures against selfish mining attacks while others do not, then it's possible, if not likely, that nChain will only release their patents to the implementations they agree with, thus stifling growth on a totally legitimate fork that considers the selfish mining paper's conclusions sound.

You don't have to take a side on the actual point of contention in that fork situation to recognize that this is a dangerous centralization of decision power. If you think the selfish mining paper is flawed and Bitcoin is secure against non-majority hashpower attacks, just imagine that a company that disagreed with you was filing for patents which they could use to de-legitimize the side of the split that didn't introduce those new anti-selfish mining measures.

I'm still not sold the idea that this patent situation is a bad thing because I completely trust nChain to release their patents to both sides of a contentious chain split

Even if we all completely trusted nChain to *intend* to release their patents to both sides of a fork, that *still* doesn't make centralizing the decision making power ok, because a centralized decision maker can be **compromised**. I don't care how much you trust someone; they have the potential to do something completely unexpected if, say, their families are threatened. It would be dangerous to assume that, even if nChain planned on doing everything completely fairly, that they could not be persuaded by threats of violence to act otherwise. If you ignore even just the *possibility* of something like that happening, I would argue that you don't know what's at stake for some of the most power entities in the world when it comes to peer-to-peer electronic cash.

In Conclusion

No matter what, centralization of decision making power for what's supposed to be a decentralized digital currency is a bad thing. Patents, and intellectual property in general, give certain entities monopolies over those technologies, which centralizes decision making power. We should not sit idly while a company, no matter how much we trust them, acquires that power.