Is Bitcoin a new type of property? – Bitcoin Magazine
Below is a direct excerpt from Marty’s Bent Issue #1243: “Is bitcoin the emergence of a new type of property in the eyes of the law?” Sign up for the newsletter here.
Preston Byrne makes a solid case that bitcoin will eventually be labeled as a new type of property, and the understanding may be different in the US and England.
via Preston Byrne’s blog
This is a very interesting blog post where Preston Byrne expands on an idea he has been publishing since 2018: Bitcoin represents a new type of property, and this will eventually be recognized by a court at some point in the future. If you’re looking for something to nitpick over during this bear market, Uncle Marty thinks this is a very stimulating exercise in trying to understand how bitcoin is and probably should be viewed in the eyes of the courts.
As you can see above, bitcoin is truly unique as a type of property due to the fact that it does not actually exist physically anywhere due to the fact that the ledger is maintained in an extremely distributed manner and it does not fit neatly into any definition of property established to date. On top of this, the nature of the control over a UTXO is determined by a private key, which can be signed by the person who created it, someone who gained access to it via malicious means, or someone who used a very powerful computer to guess it. When combined, these factors make it quite clear – as Preston points out – that we are dealing with a distinctive beast.
I’m not entirely sure how things like taxes will change if and when a court in the US or England sets a precedent designating bitcoin as a new type of property, but I’m inclined to agree that it makes sense for bitcoin to set a new precedent. Never before has humanity interacted with a resource of this kind. Treating it the same as real estate, a precious metal, or other types of physical property has never made sense to me, intuitively. To be clear, I think this is a positive thing for bitcoin. The fact that UTXOs really don’t exist in one place, but in a globally distributed ledger, and that you can store private keys in your head, has always led me to believe that bitcoin is simply information – specifically speech.
If bitcoin is designated as speech that is not exercised in a specific place but everywhere at once, I can imagine that it might reduce the ease with which an individual court within a relatively honest legal system in a particular jurisdiction could try to claim bitcoin as taxable within its borders. . Defining this new type of property as something that someone has ownership over, but not in a specific location, greatly increases the likelihood, making it much more difficult to enforce local laws on bitcoin owners.
