Bitcoin Forum

I made a similar request a little over a year ago. I ultimately decided to focus on anonymity. See: https://bitcointalk.org/index.php?topic=40783.0

I would love some good research about stock/bond exchanges using btc.

I'm most interested in people listing assets on and those running the exchange. The contracts used on exciting exchanges seem very fussy and incomplete. A lack of research and clear laws on the mater is probably a major reason for that.

https://glbse.com/
https://cryptostocks.com/
https://www.litecoinglobal.com/

Broad request and I'm not sure if this falls under your requirements but there must be some new legal issues to be found in those.

If not, maybe p2p exchanges based on the bitcoin protocol where there is no regulator or exchange manager but just issuers. Colored coins is probably closed description atm:
https://bitcointalk.org/index.php?topic=106449.0
https://bitcointalk.org/index.php?topic=106373.0

I was wondering if anyone is curious about any other legal issues that BitCoin presents.

It turns out someone has already written on the general legality of BitCoin (which is questionable).

......

So if anyone is curious about any specific legal issues that BitCoin presents (aside from general legality, which is covered in the above-linked article), please suggest them here.

@Stephen Gornick

Could you not just make a screen shot, when you receive the bill with the bitcoin address ?

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You can easily:
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Perhaps a follow up question: If 'bitcoins' constitute property then what property right(s), if any, attach and who owns those rights?

The article you cite conflates way too many issues, is completely unorganized and does not succinctly frame a proper issue. Sure, it appears to be fairly well researched at the start but getting into section VI it begins to show serious flaws such as with the Liberty Dollar case and misstated the law (it is legal to issue private currencies such as frequent flier miles or Chuckie Cheese tokens or Disney Dollars; just don't make them confusingly similar to legal tender, which is the advice Dr. Vieira gave von Nothaus which was ignored by the idiot to his peril!). But beyond that its organization is like some hornbook vomited all over the screen. Then the persuasive as opposed to objective approach is a huge error.

Next, the Constitution does not need to say anything about private parties creating money (which is different from currency in legal status, duh!). Article I Section 8 Clause 5, Article I Section 10 Clause 1 and 10th Amendment says everything that is needed and why private currencies are clearly legal. For the Stamp Act stuff just go read the relevant chapters in Dr. Vieira's Pieces of Eight (http://www.amazon.com/Pieces-Eight-Monetary-Disabilities-Constitution/dp/0967175917/ref=sr_1_1?ie=UTF8&qid=1349330394&sr=8-1). He is the recognized legal expert in this topic of jurisprudence.

Under current United States Code Bitcoin is clearly legal, likely protected non-commercial free speech and there are no reasonable legal arguments for illegality.

For example, it asserts that Bitcoin ' is a digital, decentralized, partially anonymous currency' but provides absolutely rules, with citations, or any analysis. Under 31 USC 5103 The article has assumed a fact not in evidence and then built straw-man arguments around that premise. Bitcoins are more like air guitars (http://themonetaryfuture.blogspot.com/2011/11/air-guitars-and-bitcoin-regulation.html) than currency so asserting that Bitcoin is a currency without any authority or analysis is a huge fail.

As applied:

Prosecutor to Defendant: In Exhibit A (a blockchain transaction) we see that a currency transaction of 6 bitcoins were made from Wallet A to Wallet B. Did you transfer 6 bitcoins from Wallet A to Wallet B?
Defense Counsel: Objection; assuming a fact not in evidence, ambiguous, unintelligible and vague.
Judge: Sustained.

WHAT I WOULD LIKE TO SEE
I would like to see a well researched objective legal article addressing an extremely basic issue: Whether 'bitcoins', the unit of account in the open source software governed under the MIT license, constitute property?

And my current research and analysis tends towards this being suspect.

Perhaps a follow up question: If 'bitcoins' constitute property then what property right(s), if any, attach and who owns those rights?

Of course, digging into these two simple issues raise some extremely thorny issues which is probably beyond your competence. But it would be an interesting research project and probably be pretty fun.

This question has not been definitively answered by the court system.  As such, the legal outcome is uncertain.

Under current United States Code Bitcoin is clearly legal, likely protected non-commercial free speech and there are no reasonable legal arguments for illegality.

Constitutionally protected as a matter of free speech?  I have not researched it thoroughly, but I'm going to go ahead and say 'No'.

Yes, there's debate as to whether BitCoin is even a currency.  But if it's some kind of security, you've got even more regulatory issues.  And if it just some kind of asset, then bitcoin itself might be safe, but all of the trading exchanges that actually give the coins value could be in trouble.

What's your point?

I'll look into it.

Of course, digging into these two simple issues raise some extremely thorny issues which is probably beyond your competence. But it would be an interesting research project and probably be pretty fun.

I resent that.

So when you say 'bitcoins' constitute a property, are you referring to the private keys that enable the user to transfer amounts in the public database, or the numeric representation of value in the database, all of these objects taken in total, or something different again?

I.e. what items of the technology have you used as your legal definition of 'bitcoins', the chattels that are able to be possessed, here?

I would like to see a well researched objective legal article addressing an extremely basic issue: Whether 'bitcoins', the unit of account in the open source software governed under the MIT license, constitute property?

And my current research and analysis tends towards this being suspect.

marcus_of_augustus, you are poking into some of the intricate technology facts when deciding on how to even frame the issue. In case I was not clear earlier. I am not asserting or advocating that 'bitcoins' even constitute property. But then how I would advocate depends on the needs of whom I am advocating for. In this discussion, I am attempting to look at it objectively and not via advocation.

And establishing that 'bitcoins' are property that can be individually owned is antecedent to so many issues.

For example, how can someone steal what is not property?

By analogy as applied to your example, can someone steal '2+4=6'? All the private key allows one to do is perform math more easily than someone who has only the public key. A private key is not like a bank account which is titled as property in someone's name. And even if '4' is property then it is still governed under the MIT license!

Are the Bitcoinica plaintiff's going to get dismissed for failing to state facts sufficient to raise a cause of action?

Nulla poena sine lege and nullum crimen, nulla poena sine praevia lege poenali. Article 1 Section 9 Clause 3.

In one instance, performing accounting is legal. Even tax law requires accounting to be done. On one level, Bitcoin is software that merely performs accounting.

A problem is you are conflating many different levels of abstraction from Bitcoin, perhaps you need more Intellectual Property law understanding when dealing with levels of abstraction?, and potential uses of Bitcoin. Many issues you raise come into play when determining how one use's Bitcoin; which happens at different layers of the abstraction.

Fail.
Fail.
...

Every time I stop being involved in internet communities for a while, I forget how completely ridiculously insulting people are online. 

...people that are worth it usually see that there points are invalid anyway ...

The question "Are Bitcoins Legal?" should be replaced with "What Are Bitcoins, Legally?".

Technically, a Bitcoin address is a public expression of a private key.  The private key infers a right to "spend" on the Bitcoin network which keeps a public chain of transactions.

Are the private keys speech?  
Is a private key protected by copyright law?  
Do the DMCA anti-circumvention provisions apply?
Are the rights to "spend" private intellectual property?
Are block chain entries public intellectual property?
Is a right to "spend" transfer from one address to another a private intellectual property transfer recorded in a public instrument?

Clearly you can see my bias in this line of thinking.  But hopefully it's helpful.

Okay, nice side-step, I like the way you argue. I appreciate that it depends on whether you are advocating or delivering an objective analysis.

The ability to steal seems to point towards an underlying 'property' somewhere. But isn't this the same as stealing someone's password to their on-line bank account login? Being able to possess the on-line banking password does not necessarily mean that the numerical representation of money in the banks database constitute a property though, does it?

The Bitcoin protocol and resulting network records answers resulting from solving math problems. Encryption is merely the performance of math and performing certain types of math may or may not be legal as, for example, encryption exportation was criminalized under the Munitions Act. The encryption used in Bitcoin is legal under US law. One speculative reason that Satoshi 'disappeared' may be a result of failing to notify the BIS before publication and a desire to avoid potential liability but the issue is now moot for others. If you have only the public key then solving the math problem is really, really hard. If you have the private key then solving the math problem is really easy. Anyone who can do the math can record in the Bitcoin network. See the issue now with regards to property and how Bitcoin/bitcoins are distinguished from a bank account?

How the public or private key is obtained raises a whole separate set of issues. Obviously, if the private key is obtained through unauthorized computer intrusion and used then the actions would give rise to unjust enrichment.

Thus, I suppose one could attempt to frame the issue you are getting at as: Is there a property right in a private key?

Taking the other side of the argument, the non-zero probability of guessing the private key doesn't completely destroy property rights in the U.S. where you have patents, copyrights, and trade secrets for intellectual property.  You can accidentally guess the contents of each of these protections with a comparable probability to guessing a private key: non-zero but impractical to ever accomplish.

For patents, it doesn't matter that you guessed it after it was filed, you still need to license it in order to use it.  Not doing so is a tort.  This applies even if you guess something close (i.e. covered in the claims).

For copyrights, there is a burden to prove who was first to create it to establish ownership, right to copy/assign/transfer, etc.

For trade secrets, the legal protection is very weak.  In essence, you can steal it by guessing because it was not afforded to the other two protections.

This is why I believe in establishing that private keys are copyrightable speech.  Then they can be afforded a first line of protection from "theft" under existing U.S. law.

The value of a copyrighted work has all manner of precedence to draw from in U.S. law as well.

BIS : as in Bank of International Settlements? (Wondering why Satoshi would have had to notify them before publishing bitcoin?)

Actually, I think you just made a fairly solid case that there is no property right endowed by possession of a bitcoin private key, since there is a non-zero possibility that someone may be able to move  bitcoins on the blockchain database without possession of the private key.

Taking the other side of the argument, the non-zero probability of guessing the private key doesn't completely destroy property rights in the U.S. where you have patents, copyrights, and trade secrets for intellectual property.

Unless you are attempting to recover stolen bitcoin property, you will most likely be trying to prove that your bitcoin 'property' does not exist and has not ever existed.

Unless you are attempting to recover stolen bitcoin property, you will most likely be trying to prove that your bitcoin 'property' does not exist and has not ever existed.

...snip...

Now we are getting some where. One of the first issues to deal with is the MIT license.

By imperfect analogy:
...snip...

Bitcoin protocol is released under the MIT license and created with it are bitcoins which are scarce and become valued in the market. Individuals through hard work obtain bitcoins. The issue becomes: Is a bitcoin property? Whose?

...snip...

In this model, the public "owns" the entire block chain but the "Right To Spend" is what makes it valuable.  So the valuable property is the rights given to you by owning the copyright on private keys.

So would such a copyright on the private keys also extend to a seed for a deterministic wallet, i.e. a generator of private keys in the case the private actual keys do not exist, since they have been created and destroyed at this point?

Say you held copyright to an equation, it would be like claiming you held copyright to all other equations capable of being derived from that seed.

...snip...
Can he be sued for deriving his work from expressions of other people's creative "private key" works?

While it's not very clear, I think that the right having bitcoins in your wallet gives you the right to possess, use, and enjoy a determinable thing.  It's not really a chattel, but the law is definitely going to have to stretch in some manner in order to accomodate BitCoin.  I know there are a lot of problems with this application, but that's the nature of this topic.  

The private keys in the wallet.dat give you the right to "spend" the coins.  Essentially, they give you the right to possess, use, and enjoy a determinable thing.

WHAT I WOULD LIKE TO SEE
I would like to see a well researched objective legal article addressing an extremely basic issue: Whether 'bitcoins', the unit of account in the open source software governed under the MIT license, constitute property?

Thanks for the input guys.  I'm probably going to write my paper on the property rights of bitcoins. ... I don't have much Intellectual Property background

BitCoin makes a mess out of the current law.

While it's not very clear, I think that the right having bitcoins in your wallet gives you the right to possess, use, and enjoy a determinable thing.

Given the assumption that it is, in fact, property, I think it's pretty clearly some form of intangible asset.  However, it's not necessarily a copyright

It's not really a chattel, but the law is definitely going to have to stretch in some manner in order to accomodate BitCoin.

Hopefully I can find some caselaw that defines money more clearly.

I think that the power that the owner of a bitcoin wallet exerts over his bitcoins is tantamount to a physical chattel in almost every way except the physical aspect.

To start, you may want to learn how the Elliptic Curve Digital Signature Algorithm, XOR ciphers and SHA-256 work

Good luck, have your library get you a copy of Dr. Vieira's Pieces of Eight. Hurry, it may take a while. But to save you some time; you are probably chasing a red herring off in the weeds with this issue.

http://monetaryfreedom.org/

http://savingtosuitorsclub.net/showthread.php?471-Redemption-of-Lawful-Money-at-US-Bank

.... with the caveat that any mathematical functions that can derive those private keys can also do the same. Like a phrase inside your brain can give you the right to enjoy a determinable thing.

You are welcome, Mr. Competent. Don't worry, you will come to appreciate me.  ;)

You need to be careful with your pronouns. You are assuming at least four major conclusions of law and have failed to provide any support. This is extremely poor reasoning.

Are you intending to write a paper 'Are bitcoins property?' [objective] or 'Why bitcoins are property?' [subjective] You are welcome for framing the issue statement.

"ZOMFG U DIDNT PROVE THEY'RE PROPERTY!!1!11!!1"

Did no one tell you that nothing pisses off a judge more than when you present subjectively when asked to present objectively? The law is what it is and just because it may be different from what you want it to be does not mean that it is 'going to have to stretch in some manner in order to accomodate' your personal preferences because the law doesn't give two dingleberries about your personal preferences.

First, there is only the Bitcoin source code goverened by the MIT license.

Second, 'bitcoins', whatever those are, are merely records moved around, more easily by those with the private key, within the output of that source code.

Third, the source code and resulting outputs are stored in hundreds of thousands, if not millions, of places all over the world (Just to be nice, I won't even raise the territorial aspect of copyright law!).

Fourth, the major attribute of 'bitcoins' resulting in them having value is how the source code solves the 'double spend issue'.

Good luck, have your library get you a copy of Dr. Vieira's Pieces of Eight. Hurry, it may take a while. But to save you some time; you are probably chasing a red herring off in the weeds with this issue.

No, no, no, not a bit. See above.

Welcome to the new battle-field. Learn how to use the weapons or prepare to meet your maker.


Damn. You probably just took the fun out of witnessing a wild goose chase.


I submit that our "LegalEagle" law student should brush up on the battlefield of the monopoly of State issued fiat currencies in general. And in particular take notice that United States Federal Reserve Notes are actually a State-sanctioned monopoly issuance of a private debt note. The fact that it is a private debt note, rather than a Federal Government elastic paper money supply, allows the Federal Government of the United States to circumvent their constitutional requirement for sound money. Ostensibly there is no compulsion to use the Federal Reserve private debt notes State-sanctioned monopoly "money" (as this also would be unconstitutional), but in practice, life in the USA without using the private debt notes of the FR is difficult so the monopoly exists in effect but not in law. Competing private money supplies are also discouraged with every legal angle in the Federal Government's bag of low tricks.

First of all, you're wrong.  Federal reserve notes are legal tender ...

As far as I'm concerned, you raised approximately zero legitimate questions, which is a difficult task considering that there are hundreds and hundreds of unresolved legal issues surrounding bitcoin.

Since copyright rights are exclusive, you have an exclusive right to spend.  Which gets you to property.

but if I hear one more "9-11 WUZ AN INSIDE JOB!!1!" video I'm going to be sick.  Do some real research from real sources before you act like you know what you're talking about, or if you want people to take you seriously.

I think your copyright argument is far too tenuous and detached from both the spirit and intent of copyright law and the actual protections it grants.

But even accepting for the sake of argument your previous points; how do you attach a copyright to the private key that is stored in the form of a brainwallet?

You are trying to establish a property right in the private key, right?

Under what authority does Congress derive power to create law that empowers them to make Federal Reserve Notes legal tender?

Out of "there" depth?  Really?  I think you're clearly the one who's out of his element here.  

Federal reserve notes are legal tender, meaning that the failure to accept them as repayment of debt results in a default on your contract, by operation of law.  So yes, there IS a compulsion to use federal reserve notes.

unless you're talking about a constitutional amendment.

Edit :

Actually, this is wrong (far be it from me to tell you how to do lawyering) but contracts can be done in any currency trading parties choose, so there is no compulsion just an implied contractual arrangement that you are using legal tender (which happen to be private FR debt notes) when it is not explicitly stated in a contract otherwise. Just having a SSN implies an unwritten contract to use FRN private debt notes .... this is how they get around the constitution by using contract law (implied consent to contract when choosing to be paid in "legal tender" etc, etc) and the body of contractual law surrounding private debt notes.

Legal tender laws don't apply to goods and services.  They mainly apply to pure loans.  There is no legal obligation to accept cash for goods and services, but there is one to accept it as repayment for a loan (as distinguished from sale on credit).  However, given the prevalence and necessity of loans for almost any kind of commercial enterprise, there is definitely a compulsion to use federal reserve notes.

You cited an internet forum as a reference, for god's sake. 

The problem with what you're saying is that you're vastly overestimating how much the mechanics of bitcoin matter in the attachment of property rights.  They only matter to a very small degree.

Copyright is a red herring - it exists (in the US specifically, and generally, internationally) to protect creative/artistic expression. Short phrases (such as titles of books/songs/movies/etc) cannot be copyrighted, nor can bare facts (e.g., "The Washington Senators won the last game in the World Series by a score of 5-4".)

Further, there are a number of "fair use" exceptions which allow limited use of copyrighted works without the copyright holder's permission.

Trade secret is also not a great match - it protects confidential information/processes used in the conduct of a trade or business which confer a competitive advantage. It's not at all clear to me that the average person using BTC as a medium of exchange is engaged in a trade or business (they might be - but if I buy a cup of coffee, for my own consumption, with BTC, that doesn't sound to me like I'm engaged in a business) or that the use of a particular private key or keypair confers a competitive advantage.

I am not saying there are no property rights in BTC, but I don't think they're going to come from copyright or trade secret.

unconstitutional blah blah blah.  That libertarian pipe-dream is just that: a pipe-dream.  While you and I might agree that's how it should be, the United States Supreme Court does not, and they are the only ones that matter unless you're talking about a constitutional amendment.

However, I do believe the block chain is a large distributed creative work.  I also think its a problem that no license applies to the block chain as its copied all over the world.  Very few people in the developer thread seemed to care.  There is only one registered copyright with the word Bitcoin in the U.S. right now and its by CBS for "The Good Wife S3E13: Bitcoin For Dummies".

Bitcoins are nothing more than copied data that is processed by individuals collectively making their own contributions of data.  "I own Bitcoins and I can spend them" is nothing but an idea.  I believe it is an expressible idea, that the expression is creative, and that the mechanics involved in Bitcoin can enjoy protection under existing copyright law if all else fails.

Could the blockchain possibly be regarded as a kind of ever-extending, massively multi-party [Ricardian?] Contract?

If a judge is willing to allow that

Bitcoins are nothing more than copied data that is processed by individuals collectively making their own contributions of data.

Knox v. Lee, 79 U.S. 457 (1871).  See also 31 USC § 5103.

First, perhaps you should learn a little bit about how judging is done. Judges don't just 'allow' and 'disallow' stuff; well, at least that is not what they are supposed to be doing and the appeals system, essential for due process, is pretty good at correcting those who do that. Justice Cardozo wrote a great short book about it: The Nature Of The Judicial Process (http://www.amazon.com/The-Nature-Of-Judicial-Process/dp/1456568558/).

Second, 'Bitcoin', and resulting 'bitcoins', are really just a math equation and results of that equation. Obviously, neither the equation '2+2=4' nor '4' are not copyrightable. However, if you use a particular font, color, etc. and fix it in a medium then you may be able to have a copyright attach to that particular work. Copyright is a very abstract area of law in that sense. Consequently, copyrighting the math equation that is Bitcoin is, almost without a doubt, going to fail just like you would fail with trying to copyright the general formula '2+2=4'.

Alright, so I just finished reading through this thread, and I must say I'm a bit confused....what exactly are we talking about here? Is the primary topic focused on 'property and Bitcoin' or are we just spit-balling various legal issues for LegalEagle to research for his paper?

Alright, so I just finished reading through this thread, and I must say I'm a bit confused....what exactly are we talking about here? Is the primary topic focused on 'property and Bitcoin' or are we just spit-balling various legal issues for LegalEagle to research for his paper?

I think it would be helpful to distinguish between discussing code that achieves a particular result (the source code or executables for, say, bitcoind) and the output or results of using that code.

There should be no argument that Excel, the spreadsheet, is subject to copyright. And there should also be no argument that, if I use Excel (or some other computerized tool) to calculate the result of an equation or expression, that the result is not subject to copyright by virtue of the fact that I used copyrighted code to create it, versus working it out by hand with pencil & paper.

I do not see a meaningful difference between a simple equation and a complicated one - I suspect that all of us would easily agree that "2 * 2 = 4" is not subject to copyright; I find the idea that "342972134893249 * 212312389547523 = 72817233507401087375017372227" is not copyrightable a tiny bit more uncomfortable, since obviously there's more work required to reach the result, and that's not exactly an equation that a lot of us wander around with at the tip of our tongues. But I can't come up with a principled legal reason to distinguish between them, that's meaningful in a copyright sense, since it's well established that copyright is intended to protect creative expression, not sweat-of-the-brow hard work (see, e.g., Feist v. Rural Telephone (http://en.wikipedia.org/wiki/Feist_v._Rural)).

(People unfamiliar with copyright may want to be aware that while a particular number or fact is not subject to copyright, a collection of numbers or facts that has been deliberately arranged/edited/curated can be, but only to the extent of that human creative intervention. Similarly, a creator can take something which is not subject to copyright and add something to it, and the resulting combination is copyrightable. So I can't hold a copyright to Plato's Republic; but if I came up with a new translation of it to English, I could copyright that; or I could take a public domain translation and intersperse commentary and artwork that I created, and get a copyright in the resulting work, but only to the extent of my additions/changes.)

So I am curious to hear more about the argument that BTC could be protected by copyright - either the private keys ("wallet"), or the abstract idea of value which is represented on the blockchain and is controlled by the keys. The private keypair, as far as I know (and this is bumping up against the limit of my understanding of the technical side of BTC/Bitcoin) is simply a group of numbers that happen to have a particular characteristic; they were identified through an iterative process by which potential candidates were created randomly and tested for having that characteristic, and the first which were found to have that characteristic were selected. So I don't really see any of the traditional creative/editorial input from a human being which has historically been an essential part of the creation of a copyrightable work.

Of course, it would be possible to argue that the creative/editorial input was added at the time the program was written, in the description of the criteria for identifying viable private keys - but that suggests that all of our BTC's are the property of the development team, since they're the ones who provided that input.

(Of course, this would be different in the case of vanity addresses, since the holder of the address made a deliberate choice about the text they wanted included in the address. Most of the addresses which are short enough to be found this century are also probably short enough to be uncopyrightable, but at least it's the beginning of an argument.)

I am not wild about calling the blockchain a contract from a legal point of view because it's not at all clear to me who the parties are, or what their agreement is, or what the terms of the contract are. We could say that all of the activity for a day or a week or a year or all time on, say, the NYSE is one big multiparty contract - but I'm not sure it really makes any sense, or that it helps us much, or has any real meaning.

In many ways, Bitcoin is reinventing the Torrens title system (http://en.wikipedia.org/wiki/Torrens_title), except that the underlying good is an intangible shared expectation of value, not real estate; and there isn't one central registry, but a decentralized peer-to-peer registry.

But I can't come up with a principled legal reason to distinguish between them,

So I am curious to hear more about the argument that BTC could be protected by copyright - either the private keys ("wallet"), or the abstract idea of value which is represented on the blockchain and is controlled by the keys.

In many ways, Bitcoin is reinventing the Torrens title system (http://en.wikipedia.org/wiki/Torrens_title), except that the underlying good is an intangible shared expectation of value, not real estate; and there isn't one central registry, but a decentralized peer-to-peer registry.

I think it would be helpful to distinguish between discussing code that achieves a particular result (the source code or executables for, say, bitcoind) and the output or results of using that code.

There should be no argument that Excel, the spreadsheet, is subject to copyright. And there should also be no argument that, if I use Excel (or some other computerized tool) to calculate the result of an equation or expression, that the result is not subject to copyright by virtue of the fact that I used copyrighted code to create it, versus working it out by hand with pencil & paper.

I do not see a meaningful difference between a simple equation and a complicated one - I suspect that all of us would easily agree that "2 * 2 = 4" is not subject to copyright; I find the idea that "342972134893249 * 212312389547523 = 72817233507401087375017372227" is not copyrightable a tiny bit more uncomfortable, since obviously there's more work required to reach the result, and that's not exactly an equation that a lot of us wander around with at the tip of our tongues. But I can't come up with a principled legal reason to distinguish between them, that's meaningful in a copyright sense, since it's well established that copyright is intended to protect creative expression, not sweat-of-the-brow hard work (see, e.g., Feist v. Rural Telephone (http://en.wikipedia.org/wiki/Feist_v._Rural)).

So I am curious to hear more about the argument that BTC could be protected by copyright - either the private keys ("wallet"), or the abstract idea of value which is represented on the blockchain and is controlled by the keys. The private keypair, as far as I know (and this is bumping up against the limit of my understanding of the technical side of BTC/Bitcoin) is simply a group of numbers that happen to have a particular characteristic; they were identified through an iterative process by which potential candidates were created randomly and tested for having that characteristic, and the first which were found to have that characteristic were selected. So I don't really see any of the traditional creative/editorial input from a human being which has historically been an essential part of the creation of a copyrightable work.

The intangible asset classification (like goodwill) raises the question whether any (all?) digital money would be classed as intangible wouldn't it?

Like the digital money held in databases of MegaBank corp on deposit for loyal customers, wouldn't that be an "intangible asset" by the same reasoning as bitcoin is an intangible asset?

I think your copyright argument is far too tenuous and detached from both the spirit and intent of copyright law and the actual protections it grants.

But even accepting for the sake of argument your previous points; how do you attach a copyright to the private key that is stored in the form of a brainwallet?

You are trying to establish a property right in the private key, right?

to turning the blockchain into something recognizable to legal system(s).

What happened to LegalEagle? Perhaps, he is off reading Brainwallet: The Ultimate in Mobile Money (http://www.forbes.com/sites/jonmatonis/2012/03/12/brainwallet-the-ultimate-in-mobile-money/)

Perhaps.  But I do think bitcoins are property, even if they're not considered "money".

... because bending technology to suit the legal system(s) inflexibility is such a good idea ....

or, perhaps it's looking at the law as the distillation of centuries' worth of human experience with transactions, property, and disputes, and piggybacking on the lessons learned by others, rather than insisting on novelty for its own sake, and re-learning some difficult lessons the hard way.

Assuming that a particular law has to be enforceable to have any meaning, would it be possible to enforce anything in case bitcoins considered "property"? If not, shouldn't bitcoins be considered "not property" on that basis alone?

FASB and IFRS are standards not law. More error from the fledgling Legal Beagle.

Of course it would be possible to enforce a judgment.  Judgment liens and jail time make the court system quite coercive. 

That's why technical details matters. For example, in a lot of cases you won't be able to prove that a person received any bitcoins, and it would be funny to try to coerce the person to give up bitcoins when you don't know if he has it.

You, sir, are in over your head on this topic.  Allow me to shut you down:

(1) The SEC is an administrative agency.
(2) SEC makes administrative law, which is a very important part of the legal spectrum
(3) The SEC requires certain entities to use GAAP (Generally Accepted Accounting Principals) in their financial reporting
(4) GAAP contains Goodwill reporting requirements
(4.1) Incidentally, FASB is responsible for establishing GAAP.

But keep it up with the creative nicknames.  Really effective logic there.

"I've talked to a lot of professors and practicing attorneys in the last week or so, and they all agree that the attachment of property rights to bitcoin is so obvious that it is barely even a legitimate question."
is probably not really "Legal Research", and probably not any more conclusive than hearsay.

In a lot of cases you aren't able to prove a person has received cash either.  Doesn't change much. 

There are property rights in WoW gold (subject to your contract with Blizzard), why should this be any different?  

I've talked to a lot of professors and practicing attorneys in the last week or so, and they all agree that the attachment of property rights to bitcoin is so obvious that it is barely even a legitimate question . . . . If you guys still don't agree, that's fine, you can just wait for the first court case involving bitcoin.

The question is, how do we get there from here?

If A transfers B's BTC's to C, without B's permission, is that a crime? If so, what crime? Is it a civil wrong, is that a tort, or based on some sort of contract, or a statutory wrong, or ..?

If A defrauds B out of some BTC (assuming all of the other elements of fraud are present), has anything really happened?

In the course of trying to track down your reference to property rights in WoW gold, I ran across these articles, which don't appear to answer the question, but may be of interest to others:

Well there would be all the usual laws surrounding illegal use of a computer, etc, etc anyway if your machine/account was hacked anyway.

That doesn't mean that bitcoins are property ... just that your computer/account was broken into.

First of all, just because it's difficult to prove theft doesn't mean it's not property.  Also, you're getting into difficulty of proof, which is irrelevant to what the law is. 

Second, how can you argue that you don't have property rights in BitCoin and then turn around and say you could recover for them in a civil action?  You're contradicting yourself.  You can't have damages for fraud if you never had any property rights in your swindled bitcoins in the first place.

Are you guys really suggesting that there would be no way to recover stolen bitcoins in civil court?  ???  What about fraud, that doesn't involve an illegal use of a computer? 

Do you really think a judge would allow you to defraud someone of $10k in bitcoins and say, "oh sorry, it's not fraud because you didn't take anything of value"??

There are no cases involving bitcoin, so you couldn't use them in a brief.

All you could do is make the plethora of arguments that I've made throughout this thread, and wait for the judge to agree with one of them.

Then how do you suppose the law is applied to new things/ideas?

Do you think that when the first cases were argued regarding telephones, that the attorneys and judges involved said "well, we've got no appellate caselaw about telephones, so there's no need for briefs, we'll just make some shit up"?

HINT: This is a question that can be answered with research.

ANOTHER HINT: The answer starts with "no, that's not what they did."


You have not made arguments, you have reported on comments made by unidentified professors and lawyers and you have said that the correct outcome is "obvious". While taking a survey of people with training or experience may be a good way to predict future outcome(s), it is not a substitute for actual reasoning.

Perhaps that's all that you can do right now, but you should not imagine that your limitations are universal.

I suspect that as your education continues, you will reach a point where you are capable of coming up with arguments about how and why existing legal doctrines can and should be extended (or not) to fit new situations or technologies.

I really miss this thread so I wrote this blog post on "tangible prepaid access devices" and brainwallets:

Department Of Homeland Security To Scan Payment Cards At Borders And Airports
http://www.forbes.com/sites/jonmatonis/2012/11/07/department-of-homeland-security-to-scan-payment-cards-at-borders-and-airports/

Brainwallets appear to be safe for now:
http://www.regulations.gov/#!documentDetail;D=FINCEN-2011-0003-0016

Look, I understand that you probably feel like a retard for being completely wrong after acting as arrogent as you guys did.

I'm not even going to address your assertion that I have made zero arguments in support of BitCoin being property, as you're clearly just grasping at any argument you can right now.  Go read through the thread, and think next time before you get behind a loudmouth like Sunnankar. 

Also, don't patronize me about my education.  I'm right, you're wrong.  Deal with it.