How Bitcoin is a New Form of Property

What is Property, and What is Ownership?

Some things are property — like real estate, televisions, cars, sandwiches, and chairs.

Some things aren’t — like the weather, the English language, math, and the planet Jupiter.

Property can be?owned, and to?own?something means to be able to determine how it is used, consumed, or disposed of.?

Enforcement of Property Ownership

Generally speaking, ownership of property is something that is enforced, either through force or the threat of it. A television is yours because anyone who attempts to use it without your permission will be forced to surrender their use of it by law enforcement agencies. They are discouraged from stealing your TV because of the threat that they will be forced to return it and punished for having taken it.

We have laws that prescribe how you come to own property and how the government will enforce your ownership of it.

Some forms of property, like houses and cars, come with built-in technologies to make it hard for people to try to take them from you in the first place, like keys and locks. But in the end, you must rely on the authority and force of law enforcement to protect your ownership. And you must rely on the justice system to protect your property rights if they are violated.

Bitcoin Ownership is Unique

Unseizable?Property

Like other properties, Bitcoin is something whose use can only be determined by its owner. But Bitcoin has a?unique?feature that no prior form of property has ever had. Your ownership of Bitcoin does?not?rely on local laws or law enforcement agencies. Bitcoin has built-in technology that makes it?impossible?for anyone to take it from you by force — even law enforcement agencies cannot seize it. Bitcoin is the first?unseizable?property in history — unseizable by law-breakers or by law enforcers.

Perfectly Portable Property

Bitcoin is Global:?it can be used as property anywhere on Earth. Even where there is no law enforcement or where governments themselves violate property ownership, Bitcoin can be owned as property with its use solely decided upon by its rightful owner.?

This means that Bitcoin is not just?unseizable?but completely?portable. You can send it to anyone in the world, and you can take it with you anywhere in the world. You can go anywhere and cross any border without having to ‘carry’ your Bitcoin with you. You can retrieve it for spending wherever you are, whenever you want.

Indestructible Property

Bitcoin is also property that can be backed up and kept in multiple places. Unlike your house, which will be gone if a fire burns it down, if you kept your keys for your Bitcoin in your home, you could also keep spare copies of them elsewhere. Retrieving those keys from any of those places, even if your house burns down, allows you to spend those coins.?

Bitcoin are essentially?indestructible?property. This is because all the Bitcoin themselves exist in tens of thousands of locations all over the world, but the right to spend them is granted only to a person in possession of the keys.

Perfectly Scarce and Easily?Authenticatable?Property

Finally, as a result of how Bitcoin came into existence, the number of Bitcoin in circulation is perfectly?knowable?at any point in time. It is also?certain?that there will never be more than 21 million Bitcoin — the supply is?knowably,?certainly,?provably?scarce.?

Also, the?authenticity?of Bitcoin is easy to determine. You cannot pass off fake Bitcoin, unlike a fake bill or coin, without easily and automatically being caught in the attempt to pass it off.?

While there are other purely scarce things and even those that are one-of-a-kind, those things are not?indestructible,?unseizeable, easily verified for?authenticity, or perfectly?portable.??

Property that is Ideal as Money

When combined with these other features, Bitcoin’s?scarcity?and easy?verifiability?make it a type of property very well suited to be used?as?money.?

Bitcoin is?perfect?for exchanging for other things. And money, after all, is?not?the property you?consume?but the property you?exchange?for other property you intend to use in some fashion.

Responsibilities of Owning Bitcoin

Now, because of all of the above, owning this?unique?form of property comes with two special responsibilities.?

First, an owner of Bitcoin must?not?lose their keys. If keys are lost while the Bitcoin remain, they can never be spent. No government or law enforcement agency can intervene to help. Lost keys?cannot?be recreated.

Second, an owner of Bitcoin must?not?let anyone else make a copy of the keys needed to spend their coins. If someone gets your keys, then?they?own your coins, and they can spend them. Once spent, coins cannot be unspent. There are no take-backs in Bitcoin. Bitcoin transactions are?irreversible.??

It is possible to hire a company to look after your Bitcoin for you. Many people do. But, if someone else is holding your Bitcoin for you, they really own the Bitcoin according to Bitcoin’s unique rules.

What you own in that case is a legal contract with that company — a contract enforceable by the law enforcement system of the jurisdiction in which they operate. This, then, as far as?you’re?concerned, is like all other forms of property ownership, and you don’t benefit from nor take on the responsibilities unique to Bitcoin as property.?

Holding Bitcoin directly is a?trustless?form of property ownership, but it comes with?responsibility.

Some firms make ‘partial’ custody available where, under certain conditions, they can produce one or several keys necessary to aid in moving your coins or all the necessary keys necessary to move your coins in case you pass away and want your heirs to be given the keys.

Conclusion

Bitcoin is property, but it has?unique,?powerful, and responsibility-requiring characteristics that?no?other form of property on Earth has.?

Use it wisely.?

Enjoy it responsibly.?

This article by?Tomer Strolight?was initially published on the Swan Signal blog on January 4th, 2024.?

About the Author: Tomer Strolight is Editor-in-Chief at Swan Bitcoin. He completed Bachelor's and Master's Degrees at Toronto's Schulich School of Business. Tomer spent 25 years operating digital media and private equity businesses before turning his attention to Bitcoin.?

Tomer wrote the book "Why Bitcoin?" a collection of 27 short articles, each explaining a different facet of this revolutionary new monetary system. Tomer also wrote and narrated the short film "Bitcoin Is Generational Wealth."?

He has appeared on many Bitcoin podcasts, including What Bitcoin Did, The Stephan Livera Podcast, Bitcoin Rapid Fire, Twice Bitten, the Bitcoin Matrix, and many more.