Discussion: Duplicate private keys - Who has Bitcoin ownership?

[kcirazy]

In light of the current discussions about regulations and education of government entities,
I have some questions for the Bitcoin Foundation and the community about Bitcoin ownership:

• What is the stance of the Bitcoin Foundation and the community on the situation where more than one person has knowledge of a private key?
• Who owns the corresponding Bitcoin?

I know Satoshi said: "The owner of a coin is just whoever has its private key", but in case you say: "it depends on the way they obtained the knowledge of the private key":

e.g. How would you treat it differently if...

• a computer was hacked to learn it?
• it was read while somebody was accidentally exposing it?
• guessing was done through weakness in random number generation (either accidentally which it unlikely, or running a program)?
• agreements were made between two or more people to have shared knowledge?
• the person who made a/the transaction to the corresponding public key, is not the same as the person who generated they private key
• ... any scenario I missed?

And to make things more complicated

• How should we deal with these situations where knowledge is spread over different nationalities and/or borders?
• With the near impossibility of proving the act in disputes, would you still acknowledge theft or rather treat it as an inherent risk to using the Bitcoin technology?
• Where would you draw the line between morally wrong and legally wrong?

[RodeoX]

That is a lot to consider. In a practical sense  the owner of the private key is always going to be the "owner" of the bitcoins, right?. Since that person, good or bad, can spend the coins.
Sharing a private key would require a huge amount of trust.

[GrantDe]

If you can prove someone stole the private key from you, best of luck, but for practical reasons whoever has access to the private key has control and ownership of it.

[Bitobsessed]

If you can prove someone stole the private key from you, best of luck, but for practical reasons whoever has access to the private key has control and ownership of it.

I think this is more of a moral question because theft is still theft no matter how you want to look at it.

[vesperwillow]

At the end of the day your private key is your cash. If you leave it out, anyone can take it. If it gets stolen, it's lost. If you give it away, that's all there is to it. If a government forcefully taxes it from you at gunpoint, it's still gone.

It's not so much about "proper ownership" at that point, it's who has it.

[willphase]

the one who moves the bitcoins off the shared private key first is the one who owns the bitcoins

Will

[franky1]

the only way to maybe have a key that is proved to belong to you in the first place is to vanity address a public key that means something. such as your username.

but even that is not full proof

[Winslow Strong]

These are mostly legal questions.  Why should the bitcoin foundation have something to say about them?

[optimator]

I'm not sure how long a "duplicate" private key would last. If someone with nefarious intents "happened" upon a private key which was in-use, then I suspect the coins would be transferred to an address solely under the bad person's control.

Conversely, an honest person would attempt to alert the person. So, I think, there are two questions. First, what legally happens to the thief, and second, what happens if the thief spends the coins?

Interestingly, a legal challenge to the introduction of Scottish Banknotes in 1695 can help us answer the later question.

At issue was whether the recipient of a tainted banknote could be held responsible for previous illegal acts committed with the banknote. Essentially, does the holder of a banknote (bitcoin) have free and clear title to that note despite its previous history?

The Royal Bank of Scotland prevailed in the lawsuit. The legal argument essentially said that not providing title upon acceptance of a banknote "would be to render the Notes absolutely useless, and consequently would in a great Measure deprive the Nation of the Benefit of the Banks, which could hardly subsist without the Circulation of their Notes".

I would suggest the same for bitcoin. That the holder of the private key must have free and clear title to the bitcoins represented by the private key.

Of course, just like paper currency, the acquisition of a private key by fraudulent means should be illegal.

[MSantori]

As a matter of law, "ownership" and "control" are two distinct concepts.  Similarly, "power" and "right" are two distinct concepts. 

If I have car keys, I have control over the car associated with that key.  That is to say, I have the power to drive it around.  Whether I have ownership over the car depends upon a panoply of factual circumstances that are as varied as every day life.

Similarly, if I possess a private key, I have control over the coins associated with that key.  That is to say, I have the power to dispose of them.  Whether I have ownership over them depends upon a panoply of factual circumstances that are as varied as every day life.

[jdbtracker]

the coins always belong to the person who has control over the wallet; If the key is given to a significant other and they spend them, then the person who makes the first transaction had the power, but how do you prove it was them and not someone else?

If they are stolen then you lose control immediately after the transaction, and who is to say if they can ever be prosecuted if someone does not find the identity of the person who did the next transaction? the power has already been ceded cryptographically to the thief, they now have control to return or maintain the coins in limbo.

 Legally the coins are yours... but you have lost control over them. A completely different system would have to be used to return those coins back... like mandatory work camps to re-emburse the victims lost revenue and with Bitcoin that would be brutal, the coin keeps appreciating.

But don't worry, we are all smart people helping each other, in one way or another, we'll think of something and someone will figure out how to counter that until the perfect solution is found... good or bad.

The only way to counter it is to protect that private key any way you can. I can only think of one way to prosecute thieves; setting up a service to follow the coins and notify businesses of the theft so they can act on the information and deny any possibility of spending or benefiting from that theft.

[domob]

The only way to counter it is to protect that private key any way you can. I can only think of one way to prosecute thieves; setting up a service to follow the coins and notify businesses of the theft so they can act on the information and deny any possibility of spending or benefiting from that theft.

...and coin tainting being brought up again.  Seems that is a really hot topic, although I'm not sure whether this comment really expresses a favour for introducing coin taining (as opposed to just mentioning it).  Not sure why so many people think about it even though to me it seems basically completely at odds to what Bitcoin supporters on this forum should be interested in.  ("Should" not meaning I want them to but rather that I suspect they are when they found their way here.)

[kcirazy]

I would suggest the same for bitcoin. That the holder of the private key must have free and clear title to the bitcoins represented by the private key.
Of course, just like paper currency, the acquisition of a private key by fraudulent means should be illegal.

Do you mean to say that:

• The first to establish proof of control (knowledge of the private key) should have legal ownership?
• And without such proof, acquisition of the private key by any means should not be illegal?

As a matter of law, "ownership" and "control" are two distinct concepts.  Similarly, "power" and "right" are two distinct concepts.

Thanks for bringing that up.
I would like to hear people's opinion about where "ownership" and "control", "power" and "right" apply to the technical attributes of the Bitcoin protocol like "bitcoin" & "private key".

Similarly, if I possess a private key, I have control over the coins associated with that key.  That is to say, I have the power to dispose of them. Whether I have ownership over them depends upon a panoply of factual circumstances that are as varied as every day life.

Both opinions & interpretations of the law based on those varied circumstances are welcome.

But do you think the analogy with bitcoins and physical objects will hold? As there are already separate laws for physical property and intellectual property. In a bitcoin-transaction you transfer the bitcoin to a new address without proof that the counterparty actually has control.

Under which circumstances do you gain or lose the rights to control bitcoins and how does this relate to ownership?

[jdbtracker]

The only way to counter it is to protect that private key any way you can. I can only think of one way to prosecute thieves; setting up a service to follow the coins and notify businesses of the theft so they can act on the information and deny any possibility of spending or benefiting from that theft.

...and coin tainting being brought up again.  Seems that is a really hot topic, although I'm not sure whether this comment really expresses a favour for introducing coin taining (as opposed to just mentioning it).  Not sure why so many people think about it even though to me it seems basically completely at odds to what Bitcoin supporters on this forum should be interested in.  ("Should" not meaning I want them to but rather that I suspect they are when they found their way here.)

We basically have a choice: Pre-emptive measures proving ones ownership, proven security measures while having ownership or penalties of some sort to discourage theft. the other options are math based proofs...

1) Establish clear ownership, pre-taint the coins with a tertiary encryption with verifiable proof of ownership that can only be removed when legal ownership is finished(spent at a store). The business would have the right and legal standing to demand that it be removed, simply by the fact they are a established legally run business.  They can be transferred too.

2) Defend that wallet with every safe guard available.

3) or some unknown penalty, in a way this option is the POW for those who infringe the rights of others.

I truthfully do not like the idea of bringing more coins into the pit of oblivion, there aren't that many and once they are lost they are lost permanently. The current system employed by Bitcoin of collective civil vigilance over the blockchain works, but... man it is expensive... 20,000 coins lost forever for fear of being exposed and what of those who do it to spite others? They have nothing to lose never to be exposed.

some sort of coin retrieval system has to be employed on a personal level to mitigate legal costs and lost revenue.

[bhafner]

Hi,

I use to sometimes define my ownership of a bitcoin address by a very simple trick :

I create a brainwallet with a passphrase that cointains :

1° My first and last names

2° The purpose of this address

3° PGP-signed 2° and 3°


I can than prove with my PGP that I created that wallet. I can give the private key (or even the passphrase) to someone without them being able to prove their ownership.


Bhafner

[johnyj]

Hi,

I use to sometimes define my ownership of a bitcoin address by a very simple trick :

I create a brainwallet with a passphrase that cointains :

1° My first and last names

2° The purpose of this address

3° PGP-signed 2° and 3°


I can than prove with my PGP that I created that wallet. I can give the private key (or even the passphrase) to someone without them being able to prove their ownership.


Bhafner

They don't need to prove their ownership, they only need to empty the bitcoin from that address 

It the same as you losing your wallet with cash and id card in it, you find it back with cash removed

[vesperwillow]

It's a simple concept. It's cash. You lose it, it's lost. It's stolen, it's gone. You find it, it's yours. It's not that hard, even from a legal standpoint. Just like with cash, it usually doesn't matter if you can prove the $20 someone else is holding is yours or not.

I'm starting to get curious why the  OP is trying to use surgical precision with the concept. Sounds like there's some digging going on to get at something.

[optimator]

I would suggest the same for bitcoin. That the holder of the private key must have free and clear title to the bitcoins represented by the private key.
Of course, just like paper currency, the acquisition of a private key by fraudulent means should be illegal.

Do you mean to say that:

• The first to establish proof of control (knowledge of the private key) should have legal ownership?
• And without such proof, acquisition of the private key by any means should not be illegal?

Not quite. My point is tangental to Santori's ownership/control analogy. I'm suggesting that once someone loses control of a bitcoin address, and the new controlling party spends those coins, then those coins should be able to be spent freely by subsequent owners. More specifically there should be no blacklist attempt to quarantine tainted coins.

I am not suggesting that acquisition of a bitcoin address by any means should be legal.

[kcirazy]

I'm starting to get curious why the  OP is trying to use surgical precision with the concept. Sounds like there's some digging going on to get at something.

There are several constructions possible with Bitcoin and duplication of private keys where I can't grasp the moral or legal risk and thus your rights after losing control of bitcoins. I'd like to know how people think of "rights" and "ownership" in relation to private keys and bitcoins and hopefully, through following the logic, to see how these hold up in all the different scenario's. Instead of giving my own single scenarios, I'm trying to find some consistent definitions supported by the users here.

For example: Would you consider bitcoins an intangible asset? How about a financial asset? Or should it be whole new asset class altogether with corresponding laws? There are already laws regarding property (ownership rights) and how would you like to see these applied to the attributes of Bitcoin or would you like to see new laws passed?

The reason I'm asking about the opinion of the Bitcoin Foundation is because it might carry some weight with the regulators.

Not quite. My point is tangental to Santori's ownership/control analogy. I'm suggesting that once someone loses control of a bitcoin address, and the new controlling party spends those coins, then those coins should be able to be spent freely by subsequent owners. More specifically there should be no blacklist attempt to quarantine tainted coins.

Ah, understood.

[bhafner]

Hi,

I use to sometimes define my ownership of a bitcoin address by a very simple trick :

I create a brainwallet with a passphrase that cointains :

1° My first and last names

2° The purpose of this address

3° PGP-signed 2° and 3°


I can than prove with my PGP that I created that wallet. I can give the private key (or even the passphrase) to someone without them being able to prove their ownership.


Bhafner

They don't need to prove their ownership, they only need to empty the bitcoin from that address 

It the same as you losing your wallet with cash and id card in it, you find it back with cash removed

Oh well, sorry I didn't understand it was about preventing from theft (while retrospectively it seems quite obvious). My method is for timestamping the point 2° with a definition of ownership.