What does “legal” even mean in a decentralized world?

[Veloxcrypt]

After reading the responses on my previous post about Bitcoin’s legality, I realized something interesting.
Maybe the real question isn’t whether Bitcoin is legal because governments can’t control it. Maybe the real question is:
What does “legal” even mean in a decentralized world?
Governments don’t control Bitcoin’s network.
They can’t shut it down, they can’t change its supply.
But they can regulate:
Exchanges, On/off ramps, Businesses, Tax reporting, Banks interacting with crypto
So technically, they don’t control Bitcoin itself, they control the points where Bitcoin touches the traditional system that creates a strange dynamic:
Bitcoin is decentralized by design, but its users still live inside nation-states.
So here’s where it gets deeper:
If a government bans Bitcoin, does that make Bitcoin illegal or does it only make participation risky within that jurisdiction?
Because the network doesn’t recognize borders.
This makes Bitcoin different from any asset in history. Gold can be confiscated. Bank accounts can be frozen. Companies can be shut down.
But Bitcoin keeps producing blocks every 10 minutes, regardless of policy decisions.
So maybe Bitcoin’s “legality” is not about permission  but about how much friction governments are willing to create around it.
Just my own opinion and view point...

[zasad@]

If your government bans Bitcoin and the police find Bitcoin in a citizen's possession, the following mechanisms are available. It's virtually impossible to confiscate Bitcoin unless the citizen hands over the private key. Therefore, the court can seize or confiscate the citizen's property worth that amount. If the citizen has no property, the government can ban them from leaving the country until they pay the debt, as well as other adverse legal consequences.

[MusaMohamed]

If your government bans Bitcoin and the police find Bitcoin in a citizen's possession, the following mechanisms are available. It's virtually impossible to confiscate Bitcoin unless the citizen hands over the private key. Therefore, the court can seize or confiscate the citizen's property worth that amount. If the citizen has no property, the government can ban them from leaving the country until they pay the debt, as well as other adverse legal consequences.

In some nations, governments through police can enter citizen houses and do their 'dirty jobs' for finding things they need. Like if they know you have bitcoins, and you broke some kinds of laws, they will enter your house and find 'evidence' while who knows what will they do if they find your bitcoin private keys, wallets and so on. In such nations, the best practice is don't let governments knowing about your Bitcoin and cryptocurrency related activities. Don't do anything stupid that can bring them to your home, as if it happens, you will lose your bitcoins.

People who are living in nations with Illegal, Allegal or Unknow legality of Bitcoin and cryptocurrency have to practice more carefully than people who are living in nations where the legality of Bitcoin & cryptocurrency is legal.

https://newhedge.io/terminal/bitcoin/legality-map

[Z-tight]

So maybe Bitcoin’s “legality” is not about permission  but about how much friction governments are willing to create around it.
Just my own opinion and view point...

It is true that BTC is permissionless and if you are doing everything on-chain, without using any custodial service, then you don't need any permission to move your BTC's as you like. However, government makes the law, so if they declare BTC illegal, they cannot stop you from using it because of its nature, but they can punish you for using it based on the existing law.

If a government bans Bitcoin, does that make Bitcoin illegal or does it only make participation risky within that jurisdiction?

If any government puts a ban on BTC, it surely does not affect BTC in itself. It only prohibits its use in that jurisdiction, of which it is easy to circumvent because of the nature of BTC. But good thing there are only a few nations with a full ban on BTC.

[zasad@]

If your government bans Bitcoin and the police find Bitcoin in a citizen's possession, the following mechanisms are available. It's virtually impossible to confiscate Bitcoin unless the citizen hands over the private key. Therefore, the court can seize or confiscate the citizen's property worth that amount. If the citizen has no property, the government can ban them from leaving the country until they pay the debt, as well as other adverse legal consequences.

In some nations, governments through police can enter citizen houses and do their 'dirty jobs' for finding things they need. Like if they know you have bitcoins, and you broke some kinds of laws, they will enter your house and find 'evidence' while who knows what will they do if they find your bitcoin private keys, wallets and so on. In such nations, the best practice is don't let governments knowing about your Bitcoin and cryptocurrency related activities. Don't do anything stupid that can bring them to your home, as if it happens, you will lose your bitcoins.

People who are living in nations with Illegal, Allegal or Unknow legality of Bitcoin and cryptocurrency have to practice more carefully than people who are living in nations where the legality of Bitcoin & cryptocurrency is legal.

https://newhedge.io/terminal/bitcoin/legality-map

I think it's dangerous to tell people about your cryptocurrency in any country. You need to be careful in everything: don't discuss cryptocurrencies with unnecessary people and don't show through your behavior that you're rich where it's not necessary.
__
If the government bans cryptocurrencies while major world leaders are legalizing them, it will cause a significant lag. Even the most disloyal governments are currently shifting their policies toward legalization, but custodial services will generally be permitted.

[safar1980]

than people who are living in nations where the legality of Bitcoin & cryptocurrency is legal.

https://newhedge.io/terminal/bitcoin/legality-map

The head of Binance France was subject to an attempted robbery.
On Thursday, February 12, three criminals attempted to rob the CEO of a crypto platform in his apartment in Val-de-Marne, but escaped while he was away. The group was arrested in Lyon after a second robbery attempt later that day.
According to a police source who spoke to RTL, the group searched the crypto mogul's residence and, upon noticing his absence, fled, stealing two phones.

[NotFuzzyWarm]

If a government bans Bitcoin, does that make Bitcoin illegal or does it only make participation risky within that jurisdiction?

Again, why do you seem to think that the laws in one country should have anything to do with laws in a different country?

The world does not work that way. Each nation is unto itself a sovereign entity that can decide to make whatever it wants illegal in their country while other nations could care less about it.

[Z-tight]

The head of Binance France was subject to an attempted robbery.
On Thursday, February 12, three criminals attempted to rob the CEO of a crypto platform in his apartment in Val-de-Marne, but escaped while he was away. The group was arrested in Lyon after a second robbery attempt later that day.
According to a police source who spoke to RTL, the group searched the crypto mogul's residence and, upon noticing his absence, fled, stealing two phones.

I don't know why you have posted this here. It seems unrelated to the topic of discussion, even though in itself it is an important topic to discuss, but under crypto attacks and cases of $5 wrench attacks.

I am really curious why most of these $5 wrench attacks happen in France. I am pretty sure in the last few years, at least 90% of these cases have been reported in France, and it does not look like it would stop anytime soon. They would probably have kidnapped this Binance's France manager if he was at home and forced him to send them crypto.

[zasad@]

I can only assume that the purpose of this news is to show that cryptocurrency owners are not safe in any country. And no one knows how things would have ended if the Binance exchange representative had been at home.
We've achieved decentralization, but now we've also gained more dangers.

[YOSHIE]

Just my own opinion and view point...

Legally, as you say, it can be said to be decentralized, it can be related to blockchain, DAO, DeFi, which means it has a "legal" meaning, decentralized ecosystem, you no longer need the name Central authorities such as banks can regulate you in everything and limit your own policies, but you just have to play by code or by community consensus, that's how the law applies.

[Z-tight]

I can only assume that the purpose of this news is to show that cryptocurrency owners are not safe in any country.

It is mostly happening in France though, but i get your point. However, while the number of $5 wrench attacks is growing in the last 12 months or more, i don't think it is at an alarming level yet. Assailants attack people daily to steal their fiat and other valuables, it is not too often they come for BTC. And if you have no reason to be loud about your funds, then the risk is almost non-existent.

We've achieved decentralization, but now we've also gained more dangers.

Anything that's of real value will always be at risk of being stolen if attackers see a chance to do so.

[zasad@]

I can only assume that the purpose of this news is to show that cryptocurrency owners are not safe in any country.

It is mostly happening in France though, but i get your point. However, while the number of $5 wrench attacks is growing in the last 12 months or more, i don't think it is at an alarming level yet. Assailants attack people daily to steal their fiat and other valuables, it is not too often they come for BTC. And if you have no reason to be loud about your funds, then the risk is almost non-existent.

We've achieved decentralization, but now we've also gained more dangers.

Anything that's of real value will always be at risk of being stolen if attackers see a chance to do so.

I'd say we mostly hear about robberies from the US and Europe. A lot of incidents happen in other countries in Asia and South America, but we don't even hear about them in the news. There, criminals can rob you even knowing you have 10,000 dollars, and in these countries, the police might not catch the perpetrators.

[internetional]

What does “legal” even mean in a decentralized world?

No matter how decentralized the world may be, almost all of its space is claimed by roughly two hundred states that set rules for the people located within the territories they control. The word "legal" means not violating those rules. The rules are written not for Bitcoin, but for people. Therefore, Bitcoin itself cannot violate them in any case, and the word "legal" is hardly applicable to it.

When people speak about the legality of Bitcoin, they usually mean the legality of the actions of those who interact with it. If a rule is introduced prohibiting the possession of bitcoins - as the Algerian authorities have done - then simply failing to check the "spam" folder in one's email inbox, where malicious actors might accidentally send a private key to an address holding a hundred sats, would already constitute a violation. And if somewhere the activity of acquiring bitcoins is prohibited, then one or two purchases would still be perfectly legal, since those would be sporadic actions rather than an ongoing activity.

[yhiaali3]

Yes, we can call it a dilemma: what does "legitimacy" mean in a decentralized world? How can we resolve the issue or the relationship between Bitcoin's decentralization and legitimacy, which is often determined by government approval, or by governments deciding what is legal and illegal?

In fact, the question, "If a government bans Bitcoin, does it become illegal, or is participation in it only risky within that country?" is also a contentious one. Some people believe they have the right to use Bitcoin even if the government bans it because they don't believe government decisions are always right. They argue that governments often make decisions against the interests of their citizens, and therefore, even if Bitcoin becomes illegal in their country due to a government decision, they will continue to use it clandestinely.

[Z-tight]

Some people believe they have the right to use Bitcoin even if the government bans it because they don't believe government decisions are always right. They argue that governments often make decisions against the interests of their citizens, and therefore, even if Bitcoin becomes illegal in their country due to a government decision, they will continue to use it clandestinely.

Government make a lot of stupid policies, so many people in government are dumb and so the people suffer through stupid policies, i.e. taxing or attempting to tax unrealized capital gains. However, irrespective of how we feel about any government policy, as long as it has been signed to law, you must abide by it or leave the country. If you break the law secretly and you are eventually caught, you'd face the penalty, disliking a policy does not give one the right to break the law.

[yhiaali3]

Some people believe they have the right to use Bitcoin even if the government bans it because they don't believe government decisions are always right. They argue that governments often make decisions against the interests of their citizens, and therefore, even if Bitcoin becomes illegal in their country due to a government decision, they will continue to use it clandestinely.

Government make a lot of stupid policies, so many people in government are dumb and so the people suffer through stupid policies, i.e. taxing or attempting to tax unrealized capital gains. However, irrespective of how we feel about any government policy, as long as it has been signed to law, you must abide by it or leave the country. If you break the law secretly and you are eventually caught, you'd face the penalty, disliking a policy does not give one the right to break the law.

Yes, I agree with you that regardless of our opinion of any government policy, once it becomes law, we must abide by it or leave the country, because otherwise we become outlaws. Although some people, especially the political opposition, argue that many laws are invalid, these laws remain legitimate until a new government comes along and changes them.

Here in my country, for example, a new government came in and repealed a large number of previous laws and government decrees, and even released many prisoners convicted under the old regime. Therefore, we can say that the word "legitimacy" is a relative concept that varies from government to government, and is not a fixed concept.

[Z-tight]

Therefore, we can say that the word "legitimacy" is a relative concept that varies from government to government, and is not a fixed concept.

Cbdc was on its way to being launched in the U.S. and would have been signed into law as a 'legitimate' currency, but the Trump administration came and changed that, and it is great that they did, considering how useless cbdc's are. This is just am example to support your statement above.

Government adminstrations will differ in style and what is acceptable in one may not be in another. I.e. The Biden administration were hostile to crypto and regulated it through enforcement, unlike the current administration that is much more friendly.

[SuperBitMan]

There was time in country, when the government was seriously against bitcoin and cryptocurrencies in general, and it got to a point, when as a bitcoin trader or cryptocurrency trader you need to be very careful if not you will be arrested by the police if caught trading bitcoin or any other crypto coin.
When the government is against bitcoin in any country the citizens finds it very difficult to accumulate bitcoin or sell bitcoin. First they will close down all crypto exchange in that country and you can’t access it except using VPN which will always be cracked down by the government.

When the government says Bitcoin is illegal in there country it could mean two things.
1. Bitcoin is not a legal tender.
2. Bitcoin can’t be used by citizens or organizations for anything.

Now when Bitcoin being illegal they mean, Bitcoin not being a illegal tender, it means the citizens are free to accumulate it and trade it within themselves but can’t use it to purchase anything in the supermarket or stores.

But when Bitcoin being illegal means, citizens or organizations can’t use or do anything with Bitcoin, it simply means it’s ban in the country and you don’t have right to own it or do anything with it and there’s a punishment for those who disobey that law.

My advice if you are in a country that has ban Bitcoin and you are still holding Bitcoin in your wallet, just keep holding it they can’t trace you it’s impossible, even if you can’t accumulate again, just continue holding the one’s you already have, your government can change there mind one day or you will leave the country one day, so there’s still hope for you just keep holding.