Below is a direct excerpt from Marty’s crooked problem # 1243: “Is Bitcoin the emergence of a new type of property from a legal point of view?” Sign up for our newsletter here..
Preston Byrne puts forward a strong argument that bitcoin will eventually be labeled as a new type of asset and that understandings of it may differ between the US and the UK.
This is very interesting Blog post Preston Byrne expands on ideas published since 2018. Bitcoin is a new type of asset that will eventually be approved by the courts at some point in the future. If you’re looking for something to eat noodles in this bear market Uncle Marty this is a very exciting exercise trying to understand how bitcoin is and should probably be seen with court eyes I think.
As you can see from the chart above, Bitcoin is truly unique as a type of asset. Because the ledger is maintained in a very decentralized way and doesn’t fit, it doesn’t actually exist anywhere physically. It fits neatly into the previously established definition of properties. In addition to this, the nature of control over the UTXO is that the private key is signed by the individual who created the UTXO, accessed her UTXO by malicious means, or guessed using a very powerful computer. is determined by Combined, these factors make it pretty clear that we’re dealing with a peculiar beast, as Preston points out.
I’m not sure how taxes etc. would change if a US or UK court set a precedent designating Bitcoin as a new type. property, but tend to agree that it makes sense for Bitcoin to set a new precedent. Never before has humanity interacted with this kind of asset. Treating it in the same way as real estate, precious metals, or any other kind of physical property was not intuitive to me. Quite frankly, I think this is a positive thing for Bitcoin. Bitcoin is just information, especially speech, due to the fact that UTXOs don’t actually exist in his one place, but on a globally distributed ledger, where private keys can be stored in the head. I have always believed
If Bitcoin is designated as speech that is exercised everywhere at once, rather than in a particular place, individual courts within the relatively impartial legal system of a particular jurisdiction can tax Bitcoin within its borders. I think it can reduce the ease of claiming that it is a plausible denial by defining this new type of asset as something that someone owns but is not in a particular location. The chances of this are greatly increased, making it much more difficult for Bitcoin owners to enforce local legislation.