[...]
While many may use this system of programs and data that describe access to the blockchain as "currency" or "commodity". Really all that technically exists is computer programs stored in a database that describe who else is allowed to add more computer programs to that same database, and what the rules are for adding such programs. There is no "currency", there is no "commodity". It's all imaginary in our heads. There are only those that have programming rights, and their ability to reassign some of those programming rights to others.
Wallets don't technically "move" bitcoins. They simply write the computer programs for those that don't understand how.
[...]
When you put it like that, it's actually not much different from modern banking. It's all just ledgers and transaction protocols with trusted human oversight -- Bitcoin's innovation being getting rid of the latter and replacing it with trustless automation.
Point being,
the law is very well able to handle socially constructed property rights, regardless of technical implementation. Everything else is just talking semantics, as you can know the private key of Bitcoins you don't own and lose the private key of Bitcoins you do own.
...
You ignored a fundamental aspect of the Bitcoin system in order to claim that it still
conforms to current laws and legal interpretation. The reality is that with the modern
banking system, it is true that it is a ledger/settlement system with human oversight,
and could be compared to a blockchain type system, but you ignore that the entry
representatives in the banking version are actually owned and regulated by its
government. That is where your legal rights stem, only by its enforceability.
[...]
I fully agree with everything you wrote except for one thing: Legal and property rights have nothing to do with enforceability. Even with tangible goods you can own property that you don't have access to and have access to property that legally is someone elses.
Under law, if you "own property that you don't have access to", the law still grants
you rights to that property, because the law is able to enforce itself by its regulation.
For example, if you "own property" like a vehicle that is in a parking garage in an
another city, that "vehicle" and its storage would fall under many different aspects
of the law to "enforce" your property rights, as to that vehicle. This type of property
and its rights are only attributed to you because you have registered it with a
governmental registration system, in whatever form.
Another example, if you "own virtual property" like land or items within a video game
that you paid real money to purchase, the law mandates that the company who made
the game do one of two things: (1) in the ToS, provide notice that the purchases and
items are temporary and only exist at the discretion of the company and are property
of the company at all times, and the users are only purchasing a temporary license
(like almost all video games, especially on cell phones) or (2) required to give the
game users rights and remedies for the property or items they own within the game
and maintain the game indefinitely to preserve those rights (most never do this).
So, in the case of "virtual property", majority of the time people are only purchasing
a "temporary license" because the companies don't want to be required to provide
rights and etc, that other businesses are required to do. If they provide rights to you
about your "vitual property", they could bring a successful suit against the developers
for failures in the game that could damage your "virtual property" (though in most
cases, due to developer intervention within the game, could remedy the damage
prior to court action).
The issue here is that bitcoins are not physical, but a type of virtual, which we all call
"digital". This means that it falls under certain types of enforcement that assumes
there is a "controller" or "responsible party" to that "virtual environment" or "digital
network", whether a company, government, bank, or etc. In order to enforce someone's
rights to bitcoins, there needs to be someone who is empowered to give them or take
them away, and in Bitcoin we call those people a third party, which Bitcoin was designed
to specifically prevent from occurring within the blockchain.
So, when the bitcoins remain in your privatekey control and are still represented
within the Bitcoin blockchain, in actuality the only entity who owns and has property
rights to those coins are the Bitcoin blockchain itself. Essentially, the blockchain has
provided you a "temporary license" to move the coins within itself, BUT does not
provide you a ToS by law, or any normal rights mandated by law, since the Bitcoin
blockchain is not "controlled" or have "responsible parties" who are required to enforce.
All participants are voluntary and expendable, and thus are not bound by law to
provide rights or attempt to provide rights. Only third party systems that attach
themselves to Bitcoin's blockchain and directly connect to the "outside" financial
world, do property rights come into existence since the "outside" governments
mandate that they provide that to their users.
So, Bitcoin and its blockchain is a "special environment" specifically crafted with the
intention to circumvent the current understanding of law and the way it enforces. This
type of system can not exist in the normal world framework since it would be violating
multiple laws. That is why node decentralization is most important above all other
things, not because it is a "buzzword" or because it could be used to "scare others
about on-chain scaling", but is because it truly is the one piece that if removed,
brings the whole network into compliance with the outside world, and thus
controllable and destroyable.
Human markets always give way to human laws. For example, China just announced
that ICOs are illegal or something to that effect, and now the markets react. The human
laws supersedes the human markets, and actually controls them. Markets are not a public
good or right, but a privilege that your governments allow, due to current human economic
theories and understanding. There is no such thing as free markets, and though Satoshi
designed the Bitcoin system to participate in the human markets in certain aspects, it
actually assumes them corrupted and maladjusted, and thus the actual design of his
"special environment".
For the Bitcoin experiment to succeed, it assumes everything outside itself is flawed
and in some systems, immoral and irredeemable. In some ways if you wish, you could
argue that Satoshi hated the human markets more than all other things.
