Another take at intellectual property - what about bitcoin private keys?

[mobodick]

I think I haven't explained myself clearly. I'm not trying to say bitcoins and mp3s are IP, or that IP is good, or IP is bad or anything similar. Here's what I'm trying to do:

I'm hypothesizing a [libertarian] society where there is no such thing as IP and I'm asking a question about that society. Now, in this society, it is not permitted to regulate any persons use of their private property, as long as they does not infringe on anyone else's property rights and do not violate the NonAggressionPrinciple (NAP). Read the IP thread I linked to in the OP for more details.

Thus, in this society, duplicating an mp3 cannot be outlawed - no property has been damaged or stolen, and no aggression has occurred.

In these circumstances, therefore, could there be any rational justification for outlawing the copying of a bitcoin private key?  The BPK is not property, and no aggression has taken place.

Just to make it clear, I have an anti-libertarian inclination (though I keep an open mind), and I'm trying to present libertarians with a difficult question. In short: "In your libertarian world, how can you abolish IP and still claim a loss if your bitcoins are stolen? Therefore: get ye gone and sully the bitcoin world no more with your libertarian trash."  Ta-da!  

That's the key, [copying a BPK is] fraud. Not really anything to do with "intellectual property"

Assuming you are actually referring to the anti-IPR society, how is it fraud to copy a number, and execute mathematical functions on it? What exactly have I defrauded you of if I copy they keys in your possession, and transfer the associated bitcoins to a key in my possession.

You cannot infer that because an mp3 is a string of numbers and a bitcoin address is a string of numbers that the bitcoin address is IP because the thing an mp3 represents is also IP'd.

I didn't. I said: "...bitcoin private keys cannot ever be considered physical property. If they are to be considered property at all, it can only be as intellectual property - like an mp3..."
I didn't say because, I said like.

And remember, I was referring to this hypothetical anti-IPR society.

Aah, interesting.

But you'll have to ask yourself what use there would be for bitcoin in a society without property.
Why would anyone even produce food if it got taken away because they didn't own it?
Such a society simply cannot exist.

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[fergalish]

(a) I don't think libertarian necessarily means anti IP.  A brief Google search leads me to believe opinions on this are all over the map.  (b) I believe in IP (just not as presently implemented in the US, particularly am not a fan of the status quo patent system).

(a) Yes. (b) Me too (agreed).

I also think private keys have nothing to do with IP.  A private key, being a random number, is not IP.  The presence or absence of laws regarding IP in this hypothetical society would matter as much as the presence or absence of laws regarding oranges.

Yes, I agree.

... falsely representing the [credit] cardholder's intent by presenting a transaction against his account, the number being just a vehicle to make that misrepresentation ... I see no reason why Bitcoin fraud would be any different.

I can agree with all this, except the very last sentence. See this quote from the thread about legal research I cited in OP (which, however, refers to our current world, not the imaginary anti-IPR world) (emphasis original):

<snip> A [bitcoin] private key is not like a bank account which is titled as property in someone's name. <snip>

If you think bitcoin fraud is similar to credit card fraud, then why couldn't I claim the same thing for mp3 fraud? However, since you are in favor of IP, you're probably the wrong person to ask.

But you'll have to ask yourself what use there would be for bitcoin in a society without property.
Why would anyone even produce food if it got taken away because they didn't own it?
Such a society simply cannot exist.

There is property in this society. Just not intellectual property.

[casascius]

If you think bitcoin fraud is similar to credit card fraud, then why couldn't I claim the same thing for mp3 fraud? However, since you are in favor of IP, you're probably the wrong person to ask.

First, you might need to define mp3 fraud.  I have no idea what that means.

Credit card fraud is a wide-ranging term for theft and fraud committed using a credit card or any similar payment mechanism as a fraudulent source of funds in a transaction. The purpose may be to obtain goods without paying, or to obtain unauthorized funds from an account.

Changing credit card to Bitcoin makes sense:  Bitcoin fraud is a wide-ranging term for theft and fraud committed using Bitcoin or any related mechanism as a fraudulent source of funds in a transaction. The purpose may be to obtain goods without paying, or to obtain unauthorized funds from an account.    (Of course, since Bitcoin is also a unit of account, not just a payment method, the term "Bitcoin fraud" might properly be defined to also include any kind of fraud that involves attempts to take someone's Bitcoins.)

If I try to say: MP3 fraud is a wide-ranging term for theft and fraud committed using an MP3 file or any similar audio file as a fraudulent source of funds in a transaction. The purpose may be to obtain goods without paying, or to obtain unauthorized funds from an account.   ... the statement no longer makes sense.

[mobodick]

But you'll have to ask yourself what use there would be for bitcoin in a society without property.
Why would anyone even produce food if it got taken away because they didn't own it?
Such a society simply cannot exist.

There is property in this society. Just not intellectual property.

Ok, but then the situation becomes that you cannot have IP laws for bitcoin because you don't allow IP laws.
Then if bitcoin is important enough to society we will invent some law that will address cryptocurreny directly.
For one, information needs a physical medium to be contained and you can make the private key more physical so that normal property laws apply.
If you want to stay within the digital domain then you could define a virtual container and you could say that everything inside the container is your property.

I think we are at the beginning of a new time where law will have to consider virtual property besides real property and intelectual property.
All three call for a different approach.

[myrkul]

A computer is physical property. Hacking is trespassing on that physical property.

Or one can look at it another way. If I transfer Bitcoins from an address you control to an address I control, without your consent, I have stolen from you. You no longer have control of those Bitcoins. You have lost something, suffered damages. Once loss - damages - have been established, any libertarian anywhere will support your retrieval of that loss. No IP laws are needed.

IP laws protect from "loss" of something that cannot be lost: a copy of some data or other. Bitcoins are not just data, they are data which is verifiably under only one person's control at a time. They hold monetary value. The ones and zeroes which make up your bank account information are likewise data which is verifiably under your control, and if I transfer the balance from an account you control to an account I control, without your consent, I have likewise stolen from you. Bitcoins are no different than an electronic bank account balance.

[franky1]

i read the title of this thread and thought about knocking my head against a brick wall wondering why anyone would use interlectual property laws when they never invented the blockchain or the white paper concept of bitcoin.

unless you personally thought up and invented the blockchain/private key we today call bitcoin.. its not your intellectual property. you just have a free licence to use it.

ok now thats covered the legalities in simple terms. lets get to the use of bitcoin technology and how we can protect what we have.

you cannot claim intellectual property privileges/rights of bitcoin as its not your intellect.. your brain fart didnt make bitcoin (as a whole) exist. The bitcoin technology belongs to the guys that made the white paper about the bitcoin concept and they have allowed free user licence along the same terms of open source linux

however you can claim ownership of assets manufactured from someone elses intellectual property.

EG satoshi owns a gold mine(bitcoin code) and allows anyone in the world to mine on his land(blockchain).. and they can keep what they find. (hope u understand the analogy). You dont own the land. But you do own the gold you get and you have a licence to access the land.

your private key is your licence and just like your driving licence, it's an identification to give you access to the land, an identification to go to the bank to cash in or out your gold.

your private key is not deemed as your intellectual property, your private key is your 'identity' and your coins are your asset.

so if looking for legal protection, identity theft and asset/property theft are what you should be looking into.. not intellectual property but standard property..

if i was to for instance, guess your password to your FIAT online bank account and empty your savings. you would not be trying to get me arrested for intellectual property theft. it would be identity theft and theft of assets.

same goes for hacking your forum username and requesting coins from strangers on here to scam them.. you wont try getting me arrested for intellectual property theft because you own your username. you would get me arrested for identity theft and fraud.

same goes for cloning your driving licence and walking into your bank asking(in your name) to empty out the gold in your safety deposit box.

yes you have in your wallet your driving licence and you deem it as yours.. but its not your INTELLECTUAL property.. it belongs to the DMV in the US or the DVLA in the UK. that ID card is not INTELLECTUALLY yours, but it is your property in terms of goods/products/property/bricks and mortar.

so drop the topic about intellectual property, as its meaningless as a legal bitcoin protection. (unless your satoshi)

[Richy_T]

Assuming you are actually referring to the anti-IPR society, how is it fraud to copy a number, and execute mathematical functions on it? What exactly have I defrauded you of if I copy they keys in your possession, and transfer the associated bitcoins to a key in my possession.

Exactly the same as if you walk into my bank with a false beard and pretend to be me and transfer funds into your bank account. You have deprived me of a stored sum of wealth without my permission.

And Casacius is right, most of the libertarians I converse with, even the more strident ones are still in favor of IP laws. Personally, I think they haven't thought the non-aggression principle through sufficiently but there you go. Personally, I'm not completely against the existence of such laws but think that the waters have been muddied way too much by those who claim to represent the content producers.

I think I see what you are trying to get at but I think you need to think about things a little more deeply because you're conflating two different but not dissimilar concepts..

[nybble41]

If I transfer Bitcoins from an address you control to an address I control, without your consent, I have stolen from you. You no longer have control of those Bitcoins. You have lost something, suffered damages. Once loss - damages - have been established, any libertarian anywhere will support your retrieval of that loss.

This argument, and several others similar to it, are predicated on the idea that bitcoins (a) exist, and (b) are property. Bitcoins, per se, do not exist. They are not physical objects you could stake a claim to, or even contracts granting you a claim to property, like your contract with your bank.

What does exist are entries in a distributed database in the form of "A transaction signed with the private key matching this address can transfer exactly X bitcoins to another address of their choice." However, this database exists only by consensus. There is no contract. If the other participants in the bitcoin system fail to recognize your signed transactions, or rewrite the ledger such that the balance is associated with some other key you don't control, that is just too bad for you.

You are completely reliant on others choosing to follow the established bitcoin protocol--and the protocol does not have any regard for ownership in the sense you refer to, only possession of the associated private keys. Use of a key to sign a transaction is only proof of possession, which is true (and thus not fraud), however you came by the key. Any claim you might make against someone misusing your private key would have to be based on the principle that acquiring the key in the first place involved a violation of your rights to the physical property in which the key was stored.

[myrkul]

If I transfer Bitcoins from an address you control to an address I control, without your consent, I have stolen from you. You no longer have control of those Bitcoins. You have lost something, suffered damages. Once loss - damages - have been established, any libertarian anywhere will support your retrieval of that loss.

This argument, and several others similar to it, are predicated on the idea that bitcoins (a) exist, and (b) are property. Bitcoins, per se, do not exist. They are not physical objects you could stake a claim to, or even contracts granting you a claim to property, like your contract with your bank.

Fiat currency is based on essentially the exact same concepts. Moreso the fiat currency residing in a bank balance. Both are digital information that has monetary value by consensus. Either way, if I transfer that digital information from one place to another without your consent, I have stolen from you, whether that theft is denominated in dollars or in Bitcoins. What's been stolen is not the information, but the monetary value it represents.

[nybble41]

Fiat currency is based on essentially the exact same concepts. Moreso the fiat currency residing in a bank balance. Both are digital information that has monetary value by consensus. Either way, if I transfer that digital information from one place to another without your consent, I have stolen from you, whether that theft is denominated in dollars or in Bitcoins. What's been stolen is not the information, but the monetary value it represents.

No, with traditional fiat currencies what is stolen is the physical notes, or contractual claims to the physical notes. The bank balance you refer to is a contractual claim against the bank for a specific amount of fiat currency. If someone shows up at a bank claiming to be you, and withdraws currency from your account or transfers it to a different account, they are committing fraud against the bank. (This is important: the fraud is against the bank, not you, though your contract with the bank may attempt to make you responsible for it.) They are claiming that the bank has an obligation which it does not, in fact, have. Their contract is with you, not the one impersonating you. Using fraudulent claims to trick the bank into giving you currency they do not owe you is theft; you're taking currency which still legitimately belongs to the bank. With bitcoins, there is no property and no contract, only a consensus-based accounting protocol.

What is stolen is always property, not "the monetary value it represents". The value of the property is only relevant when determining damages--but for there to be damages, property must first have been stolen.

[myrkul]

With bitcoins, there is no property and no contract, only a consensus-based accounting protocol.

You seem to be arguing against valuing Bitcoins themselves, not just against considering a loss of them a theft. Yes, Bitcoins are not even a digital "thing", they are defined only by transactions. They are an abstraction of value, just like fiat currency.

If a network error transfers the coins away, then those coins have not been "stolen". Stolen coins are transferred away by someone entering a transaction using a private key they acquired through illicit means, just as if someone somehow acquired your login credentials to your bank and sent all your digital fiat currency to another account with another bank.

But if someone makes a transaction from a private key that you control to one you do not control, you have lost the value of the Bitcoins represented by that transaction. Damages are always denominated in value, not in contracts or objects. Since you have lost value, it doesn't matter what currency that value is denominated in. I could run a quick conversion and say "He stole 4 grams of gold worth of Bitcoins!" and the value lost would still be the same.

Whenever something is stolen, it's the value, and not the Bitcoins, or the gold or the Dollars, or even the TV or car, that has been stolen, and that needs to be returned. Now, ideally, that value is returned in the same manner in which it was taken, but that's not often the case. If your car gets stolen, the insurance agency doesn't send you a new car. They send you a check for the value of the car.

[fergalish]

... the term "Bitcoin fraud" might properly be defined to also include any kind of fraud that involves attempts to take someone's Bitcoins.)

The 'victim' would have to establish that the bitcoins were his. Since both parties have the private key, there is no way to establish that, unless you institute a single central incorruptible authoritative registry of bitcoin keys and their owners.

If I try to say: MP3 fraud is a wide-ranging term for theft and fraud committed using an MP3 file or any similar audio file as a fraudulent source of funds in a transaction. The purpose may be to obtain goods without paying, or to obtain unauthorized funds from an account.   ... the statement no longer makes sense.

I'm not so sure. Suppose I create an mp3 and I sell copies in order to buy bread. If you sell it, then that would constitute a fraudulent source of funds for you. Of course, you could just give away copies for free. But then, someone could steal my bitcoins and give them away for free too, in which case the second receiver would be free to do as he pleases.

If the data is copied, the 'owner' still has the original, therefore there is no theft - nothing has been lost. The rest, executing instructions and mathematical functions on a computer, is not a violation of NAP. See this post below from the thread I cited before; it's the second post in that thread and is quite representative of many who contributed there (boldface mine):

Intellectual property is incompatible with Libertarianism.
If you want to own a idea then don't share it with anyone. Telling me what I can and can't do with my pen and my paper is claiming ownership over my pen and paper. That's little more than theft.
If you sell me a book, you are free to set the terms of the purchase. If you want me to sign a contract that says I can't make copies of that book, that's possible. However, if I violate that contract and show it to a third party, that third party is under no contract and can do whatever they want, including, making copies of it.

A computer is physical property. Hacking is trespassing on that physical property.

nybble41 has already answered this above - I cannot instruct your computer to do anything it is not already programmed to do. Refusing me permission to interact freely with my computer would be a violation of the NAP.

Exactly the same as if you walk into my bank with a false beard and pretend to be me and transfer funds into your bank account. You have deprived me of a stored sum of wealth without my permission.

nybble41 replied to this much better than me.

And Casacius is right, most of the libertarians I converse with, even the more strident ones are still in favor of IP laws.

The thread I quoted seems to suggest otherwise. But I accept your statement. This is precisely why I started this thread talking about anti-IPR - I wanted to avoid generalizing to libertarianism and risk getting it wrong.

I think I see what you are trying to get at but I think you need to think about things a little more deeply because you're conflating two different but not dissimilar concepts..

Can you explain a bit more? It would be great if someone holdings NghtRppr's (of the quote above) views would contribute here because I really feel that copying and using an mp3 is very similar to copying and using a bitcoin private key. Or, alternatively, you'd need an arbitrary law like "numbers that make up an mp3 are not protected, but numbers that make up a BPK are protected".

[myrkul]

A computer is physical property. Hacking is trespassing on that physical property.

nybble41 has already answered this above - I cannot instruct your computer to do anything it is not already programmed to do. Refusing me permission to interact freely with my computer would be a violation of the NAP.

Whaaaa?

If I hold a knife to your mother's throat and instruct her to do something she manifestly knows how to do - proven by the fact of your existence - does that make her refusal to acquiesce to my raping her a violation of the NAP?

If I have a fence around my yard and you climb it, does that make my kicking you off my lawn a violation of the NAP?

Refusing trespass is not a violation of the NAP, nor is defending oneself. I'm not refusing you permission to interact freely with your computer. I'm refusing you permission to interact freely with mine.

[fergalish]

If I hold a knife to your mother's throat and instruct her to do something she manifestly knows how to do - proven by the fact of your existence - does that make her refusal to acquiesce to my raping her a violation of the NAP?
If I have a fence around my yard and you climb it, does that make my kicking you off my lawn a violation of the NAP?

Holding a knife to someone's throat would already be a violation of the NAP, I presume. Likewise entering someone's property.

Refusing trespass is not a violation of the NAP, nor is defending oneself. I'm not refusing you permission to interact freely with your computer. I'm refusing you permission to interact freely with mine.

So either switch yours off, or disconnect it (from me), or secure it.  But even still, let's separate the hacker who gains access to your computer, from the criminal mastermind, who eventually obtains your bitcoin keys and the associated bitcoins. What is your argument now to regain the bitcoins?  Let me quote nybble41's post (boldface mine):

Obviously, numbers (including private keys) are not property. Using them to misrepresent yourself as someone else may, in some cases, be a form of fraud. I do not think that applies to Bitcoin, however, since the only thing you are really representing is that you have the private key, which is perfectly true. There is no actual property involved to substantiate a claim of fraud.

Hacking isn't really a question of IPR; the central question is whether, by sending commands to your PC and causing it to act contrary to the wishes of its owner, the hacker has trespassed on the owner's physical property rights in the PC. The counter-argument would naturally be that a hacker can't cause the PC to do anything it wasn't programmed to do by the owner, by accident or default if not deliberate intent. I lean more toward the latter camp, but I will admit that the trespass argument has some merit.

Assuming the trespass argument is discarded, where does that leave us regarding hacking? I would say that we are left with contracts. Specifically, the end-user's contract with their ISP, the ISP's contract with their upstream provider, and contracts between ISPs and backhaul providers. These contracts should prohibit use of the connection for hacking, specify administrative procedure and penalties, and require similar provisions on the part of anyone connecting to the same network. Anyone caught hacking could then be kicked from the network and/or fined for breach of contract.

Though I must add that the contracts argument, though admirable, couldn't ever be effective - it's not working in today's regulated world, never mind a libertarian world. How could you ever enforce that all internet users the world over have a contract with ISP's, upstream providers, and backbone providers, which prohibits hacking - and that such contracts will all be enforced? And then, suppose someone hacks the ISP and gains "illegitimate" access to the internet? Back to square one. I'm sure nybble41 was aware of this though and was merely pointing out the futility of relying on contracts to eliminate hacking.

[Arto]

And Casacius is right, most of the libertarians I converse with, even the more strident ones are still in favor of IP laws. Personally, I think they haven't thought the non-aggression principle through sufficiently but there you go.

The zeitgeist is definitely coming around on this, however, as Stephan Kinsella notably wrote in The Death Throes of Pro-IP Libertarianism.

In my own experience, rejecting the legitimacy of imaginary property becomes straightforward for most libertarian-minded folk as soon as they check their premises and learn just the following brief background:

1. Despite popular myth and misconception, copyright did not, in fact, come about as some noble effort to protect the rights of authors, but rather has its ignoble origin in the privatization of censorship in post-Gutenberg sixteenth-century England. Its further developments have been by and for the distributors, as is evident even today with the major media companies seeking, and obtaining, what amount to perpetual extensions to their copyright terms.

Karl Fogel's essay The Surprising History of Copyright and The Promise of a Post-Copyright World and Rick Falkvinge's History of Copyright blog series are good summaries for brushing up on the history.

2. As Cory Doctorow pointed out in his recent talk The Coming Civil War over General-Purpose Computing, the very moniker "intellectual property" is a neologism. Before the 1970s, this discussion would have been about "creative monopolies". The smartest thing the distribution industry ever did was reframe the debate in their favor, as it's clearly a lot easier to go hat in hand (and pocketbook at the ready) to Congress if you're just requesting stronger protections for your "property rights" instead of begging that they please extend your already-considerable monopoly privileges.

Peter Saint-Andre's essay Who's Afraid of the Public Domain? makes much the same point, and Tucker and Kinsella have written voluminously on it as well. Once you realize that IP isn't about actual property rights (in the libertarian sense) at all, but rather just state-granted, limited-time monopoly privileges, the rest is easy: intellectual works aren't property any more than copyright infringement is theft, all the "you wouldn't steal a car" propaganda trailers on DVDs notwithstanding.

And once the discussion is properly framed on monopoly privileges instead of property rights, well, for libertarians there isn't much left to debate. As Saint-Andre puts it:

Sure, if you are a Sunday composer or a small-time blogger then it's a minor monopoly, but it's a monopoly nonetheless. I don't know about you, but I don't particularly want to be a monopolist of any kind.

[myrkul]

If I hold a knife to your mother's throat and instruct her to do something she manifestly knows how to do - proven by the fact of your existence - does that make her refusal to acquiesce to my raping her a violation of the NAP?
If I have a fence around my yard and you climb it, does that make my kicking you off my lawn a violation of the NAP?

Holding a knife to someone's throat would already be a violation of the NAP, I presume. Likewise entering someone's property.

Exactly. Entering someone's property. Like their computer. As I said before, hacking is trespass.

Refusing trespass is not a violation of the NAP, nor is defending oneself. I'm not refusing you permission to interact freely with your computer. I'm refusing you permission to interact freely with mine.

So either switch yours off, or disconnect it (from me), or secure it.  But even still, let's separate the hacker who gains access to your computer, from the criminal mastermind, who eventually obtains your bitcoin keys and the associated bitcoins. What is your argument now to regain the bitcoins?

If you acquire stolen goods, it doesn't make them not stolen if you're not the one that stole them. If you somehow decode my private key without entering my computer, that's (pretty much literally) Force majeure. Nothing I or anyone else could have done to stop you. But if you, or your agent, enters my computer system and operates it against my will, and gets my private key that way, You've at minimum committed criminal trespass, same as climbing a fence to peer into my window. It doesn't matter if my password is "biscuits" or if the fence you have to climb over is only a foot tall. It's still an intended barrier, and bypassing it is still trespassing.

As for actually recovering the bitcoins, I don't know of a way, short of threatening - or using - torture, of forcing you to return them, but as for any other crime, once the perpetrator is identified, it's up to the justice system.

[nybble41]

With bitcoins, there is no property and no contract, only a consensus-based accounting protocol.

You seem to be arguing against valuing Bitcoins themselves, not just against considering a loss of them a theft. Yes, Bitcoins are not even a digital "thing", they are defined only by transactions. They are an abstraction of value, just like fiat currency.

The difference, obviously, is that while they may both be "abstractions of value", the fiat currency is also physical property, while the bitcoins are not. Wrongfully taking possession of physical fiat currency you don't own is theft. Claiming that someone else has a contractual obligation to give you that property, in the basis of a false identity, is fraud. You can't take possession of bitcoins, as they have no physical presence, and the rules of the bitcoin system don't require you to make any claims regarding your identity to move bitcoins around, only proof that you possess the correct key, so there is no fraud involved.

If a network error transfers the coins away, then those coins have not been "stolen". Stolen coins are transferred away by someone entering a transaction using a private key they acquired through illicit means, just as if someone somehow acquired your login credentials to your bank and sent all your digital fiat currency to another account with another bank.

First, you're the only one talking about network errors. I was referring to deliberate action. If a majority of bitcoin miners were to get together and chose to rewrite the protocol to exclude your transactions, or to accept transfers from your accounts which are not signed with your key, you would have no legitimate claim against them. Bitcoin is based on consensus, not property rights. (That isn't meant to disparage bitcoin--in many ways, its consensus-based system is more secure than property rights which must be defended with force.)

Second, someone who impersonates you and tricks the bank into transferring your balance to a different account has not stolen from you, but rather from the bank. They had no authority to request that transfer, ergo (once the fraud has been uncovered) your balance should be unchanged. No third party has the authority to alter your contract with the bank. The fraud, and its consequences, are legitimately between the thief and the bank.

Finally, the analogy between bitcoin balances and bank accounts is false. Your bank account balance represents a contract between you and the bank. A bitcoin balance is just an entry in a ledger; there is no contract. There isn't even an organization to contract with. If the bank decreases your balance without your consent, they're in breach of their contract with you. If the consensus within the bitcoin system is that a transaction spending "your" balance is valid, however, that's the final word on the subject, no matter who generated the transaction.

But if someone makes a transaction from a private key that you control to one you do not control, you have lost the value of the Bitcoins represented by that transaction. Damages are always denominated in value, not in contracts or objects. Since you have lost value, it doesn't matter what currency that value is denominated in. I could run a quick conversion and say "He stole 4 grams of gold worth of Bitcoins!" and the value lost would still be the same.

Whenever something is stolen, it's the value, and not the Bitcoins, or the gold or the Dollars, or even the TV or car, that has been stolen, and that needs to be returned. Now, ideally, that value is returned in the same manner in which it was taken, but that's not often the case.

Now this is just nonsense. First and foremost, value is subjective, ergo "denominated in value" is a meaningless phrase. What you mean, I presume, is "denominated in currency", which is an artifact of the concept of "legal tender", the idea that the government can force you to accept their currency as alternative payment despite the fact that what you're really owed is the property which was taken. Second, a loss of value is not sufficient, by itself, to give you a claim for compensation. The most obvious counter-argument here is competition: others who compete with you reduce the value of your property, by increasing the supply, but that doesn't mean your property rights have been infringed. Your rights cover the property itself, not its value. When something is stolen, it's the stolen property which the thief has an obligation to return, not its value--though the harmed owner may be willing to settle for something of equivalent value to them when the return of the original property is out of reach.

If your car gets stolen, the insurance agency doesn't send you a new car. They send you a check for the value of the car.

This is completely irrelevant, as the insurance agency didn't steal your car. Your contract with the insurer obligates them to compensate you for the loss with a specific amount of currency in exchange for your premium payments. The contract could just as easily have specified compensation in the form of a new car, if that was what you and the insurer agreed to, but cash is more flexible for both parties. In any case, the thief still owes you your car back--not the value of the car, or even an equivalent car: the car itself. It never stopped being your property just because you lost possession of it.

[myrkul]

I'll concede the point that bitcoins are not, as such, "property", since they have no physical presence. Which is why my argument hinges on value. I did indeed mean "Denominated in value", as damages are always given in terms of some unit of monetary worth, ie a value. The reason we are having such great difficulty here is that no system for the transmission of value remotely like bitcoin has ever been devised or used before. The closest analogy is digital account balances with a bank.

In that analogy, the bank is not the network. The bank is your own computer, or whatever device you use to store and secure your private keys. (Which, in the case of a paper wallet in a safety deposit box, may indeed be a bank.) Unlawful entry into that device and retrieval of the private key is the crime, the lost bitcoins are the value of that crime - both to the criminal, and as a loss to you.

Now, particularly with Bitcoins, but also in most monetary theft, the return of the specific units of monetary exchange that were stolen is not important. If you're mugged for $50, I doubt you're going to check the serial numbers to make sure it was the same $50 that you got back. All you care about is the value that you have lost. In bank robberies, the police might use the serial numbers to verify that that is indeed the stolen money, not to see that the bank gets that specific money back, but to prove that the person in possession of it is the criminal. If some of it has been spent, they're not going to demand it back from the merchants, they're going to extract it from the thief - probably by selling whatever it was he bought with it, if possible. Again, the specific property is not important, it's the value of that property that's important.

If your car gets stolen, the insurance agency doesn't send you a new car. They send you a check for the value of the car.

This is completely irrelevant, as the insurance agency didn't steal your car. Your contract with the insurer obligates them to compensate you for the loss with a specific amount of currency in exchange for your premium payments. The contract could just as easily have specified compensation in the form of a new car, if that was what you and the insurer agreed to, but cash is more flexible for both parties. In any case, the thief still owes you your car back--not the value of the car, or even an equivalent car: the car itself. It never stopped being your property just because you lost possession of it.

The contract states that the insurer has an obligation to make you whole. That's a phrase with a specific legal meaning: "to pay or award damages sufficient to put the party who was damaged back into the position he/she would have been without the fault of another." Past that point, the insurer's obligation to you is ended. As is the thief's. You have been made whole. You have received the value of the stolen car back. At that point, if the thief owes anyone anything, it's the insurer, not you, since without their theft of your car, that claim would not have been made, and neither would the payout.

It boils down to this: Following your logic, stealing bitcoins is not a crime. Following mine, it is. Since I feel you would be justifiably upset if I were to steal your bitcoins, and would consider me a criminal, it is clear that your logic fails the simplest test of real-world application. Unless you wouldn't? In which case, I have a program I'd like you to download...

[Richy_T]

If I transfer Bitcoins from an address you control to an address I control, without your consent, I have stolen from you. You no longer have control of those Bitcoins. You have lost something, suffered damages. Once loss - damages - have been established, any libertarian anywhere will support your retrieval of that loss.

This argument, and several others similar to it, are predicated on the idea that bitcoins (a) exist, and (b) are property. Bitcoins, per se, do not exist. They are not physical objects you could stake a claim to, or even contracts granting you a claim to property, like your contract with your bank.

What does exist are entries in a distributed database in the form of "A transaction signed with the private key matching this address can transfer exactly X bitcoins to another address of their choice." However, this database exists only by consensus. There is no contract. If the other participants in the bitcoin system fail to recognize your signed transactions, or rewrite the ledger such that the balance is associated with some other key you don't control, that is just too bad for you.

You are completely reliant on others choosing to follow the established bitcoin protocol--and the protocol does not have any regard for ownership in the sense you refer to, only possession of the associated private keys. Use of a key to sign a transaction is only proof of possession, which is true (and thus not fraud), however you came by the key. Any claim you might make against someone misusing your private key would have to be based on the principle that acquiring the key in the first place involved a violation of your rights to the physical property in which the key was stored.

What you say is true. But cash is just paper with pictures of dead white dudes on it. And even if (for example) the US government decides it has the authority to recognise them as something more, if you have $500k of Swiss Franks in your safe and they are stolen, should the US government refuse to act because it's not their currency?

You're wandering into very philosophical deconstructions where most things that we accept as real just stop making sense. It's probably not a very fruitful path and best kept for being drunk with friends (and I mean that in a good way).

[casascius]

If I transfer Bitcoins from an address you control to an address I control, without your consent, I have stolen from you. You no longer have control of those Bitcoins. You have lost something, suffered damages. Once loss - damages - have been established, any libertarian anywhere will support your retrieval of that loss.

This argument, and several others similar to it, are predicated on the idea that bitcoins (a) exist, and (b) are property. Bitcoins, per se, do not exist. They are not physical objects you could stake a claim to, or even contracts granting you a claim to property, like your contract with your bank.

By this flawed definition, stealing electricity should be OK too, because it doesn't "exist" and therefore isn't "property".  But most places would consider it theft if you consumed it in any significant quantity without paying (by this, I mean bypassing the electric meter so you can run miners without the kWh costs for example, or running an extension cord to your neighbor's house.  I do not mean things with negligible costs like charging your cell phone away from home).