Bitcoin hasn’t been classified technically
as property, but the courts have treated it as if it is an alienable thing. The way Bitcoin is like property is that it
has a way of being controlled and isolated into a single person’s hand. The way you control Bitcoin is something called
a “private key,” and this private key is just a series of numbers and letters. But, if you know what those numbers and letters
are, you have the ability to control those Bitcoins, you have the ability to send those
Bitcoins to someone else. So whoever owns the private key, whoever has
possession of the private key, has possession of the Bitcoins. So, a court can say: “Well, we have this
safety deposit box, and it’s filled with, uh, this private key, so we have the ability
to control this Bitcoin. And we can attach it to litigation, or we
can do all sorts of things with it that is part of the usual remedies and the usual procedures
of a civil litigation in this country.” There hasn’t been many cases involving Bitcoin. A lot of them have been criminal actions involving
money laundering or involving ponzi schemes. One of the things about Bitcoin is that because
it’s not completely anonymous, you’re able to tie a series of numbers and letters
to each transaction, and so it makes it very easy for the FBI to track it; much, much easier
than cash. They’re able to isolate and take ownership
over that Bitcoin. It’s essentially treated as a tangible,
just like gold, or just like apples, for instance. If the Bitcoin,er, is in a particular jurisdiction,
a court can exercise all kinds of, uh, control over it, just like it can exercise control
over a house. So, courts have classified Bitcoin as money,
but money in the same way that gold is money. The difference between tangible and intangible
property is that a tangible thing has value on its own and doesn’t need any third-party
validation to give it value. So, for instance, a gold bar: whoever is holding
that gold bar, that gold bar is worth something. Now, compare that with shares of a company. If I have a contract that says: “Max owns
50 % of, uh, X, Y, Z corporation” and somehow, someone else gets their hand on that piece
of paper, that piece of paper doesn’t give them the ownership to 50% of the company. The ownership is an intangible thing. It’s something that I have by virtue of
being me, and by virtue of a court and a judicial system and a financial system giving me that
right. Someone could say that Bitcoin is intangible
property and could be dealt with by courts in the same way we deal with shares of a company,
for instance. But the difficulty is, a court can say: “You
no longer own these shares of a company- you no longer have that, and you can no longer
sell it to other people.” With Bitcoin, a person actually has those
Bitcoin, because it acts very much like gold. You can apply many of the same rules, and
so, one of the ideas is that you don’t need a complex new system of regulations or a complex
new law to be able to govern Bitcoin. You can go with the same old property rules
and the same old procedure rules, uh, that govern other forms of property. Many like Professor Lessig, uh, want to create
a new jurisprudence for the Internet. Many like Judge Easterbrook adopt the approach
that says: “New innovation doesn’t necessitate new legal regimes,” and that the old system
of common law, the old system of rules that we have governing property are perfectly capable
of dealing with, uh, new innovations.