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Comment by runbathtime | Hacker News Reader

In Step 1, he explains how to create a cryptographic identity- the private public key pair. I came across an argument that a number cannot be property or owned because you can't legally own a number. If this is true then you can't own UTXOs associated with a private key or a cryptographic identity.

I do think that bitcoin is fundamentally too complicated to understand, mathematically, for most people- myself included. I would argue everyone needs to do this exercise, from scratch, and also understand what they are doing (the math), to have confidence in bitcoin payment network. Anyone who thinks you don't need to get it is most likely in it for speculation alone.

With something so abstract like bitcoin, it has a much larger uphill battle for understanding than a physical commodity like Gold, the precursor of paper dollars.

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You don't own the number that is your private key, just as you don't own the number that is your bank account PIN or balance. What you own is space on the blockchain.

And just as you don't need to tour the mint to have confidence in the dollar, or implement Diffie-Hellman to have confidence in your TLS connection to Amazon, you don't need to understand elliptic curve cryptography to have faith in Bitcoin.

A bank account balance is representative value of dollars that bank owes you. If someone tries to steal it by pretending to be you even if they just steal your PIN, they are committing fraud.

If someone steals a private key by committing another crime like stealing a laptop, that is a crime because you own the laptop. If they learn of your private key without committing a crime, that is not theft.

You don't own 'space on the blockchain.' I have no idea what that even means.

You do need to understand elliptic curve cryptography to have confidence (not faith) in bitcoin because you make the transactions in bitcoin. You are responsible, not some third party. People understand the dollar because it is physical and you can get them on demand and they originally got their value from Gold, not some abstraction like proof of spent energy one time awhile back.

The bank PIN is just a number. Your bank account balance is just a number in a database. Your private key is just a number. Your bitcoin balance is just a number in a database (a blockchain is a kind of database). There is no distinction that makes stealing dollars using a bank PIN fraud but stealing bitcoin using a private key not fraud somehow.

Bank deposits are securities. You have a claim on your bank when you make a deposit. If you think there is no difference between a bank account and a bitcoin private public key pair then bitcoin is a security. You are making the argument bitcoin is a security. Who is the issuer? I would say the miners are selling securities and you give them money (like a deposit) in exchange for the miners continuing to mine in the future, so when you decide to spend your bitcoin, bitcoin will still be running. If bitcoin is a security issued by the miners then yes bitcoin becomes more than just a number.

If bank deposits were securities governed by securities law then they would be regulated by the SEC. They are not.

It doesn't matter anyway because Bitcoin is not a bank deposit, nor is it a security. Under the law it is generally treated as property. It's still a crime to steal property.

My point is that the fact that it's all numbers in a computer does not make it somehow legal to steal it. What you own is not the abstract number of your private key, but the concrete database entries in a specific blockchain database.

While not relevant, it's also not even true in a pedantic sense that you "can't legally own a number". All digital files are simply long numbers, and copyright assigns ownership of those numbers to people. Also, the DeCSS case established de facto ownership of a private key, making it illegal to copy, so yes you can actually have a kind of ownership even of just a private key under the law. Again, not relevant or necessary for Bitcoin, but interesting.

You are incorrect. Deposits in banks are securities, I suggest you read this section titled "Every security that is issued must be held by someone until it is retired" here: https://www.hussmanfunds.com/comment/mc210614/

Just like it is not settled whether Ethereum or Bitcoin is a security- thoughts on this can and will change, new regulators get elected... neither is settled whether you can actually say that you own a number.

The community has misplaced confidence imo.

We're talking about the law, not some guy's blog. If you believe that bank accounts and Bitcoin are securities under the law, then you are incorrect. It doesn't matter whether some guy calls bank accounts securities on his blog. That doesn't change the law.

Saying the law could change is literally always true, it means nothing. Will it change? You could make an argument for Ethereum, and I tend to agree that the community is overconfident about the regulations around Ethereum and other coins. However for Bitcoin specifically the SEC has been very clear and consistent in stating that it is not and has never been a security. Their justifications are sound. So no, it almost certainly won't change for Bitcoin.

Copyright covers the specific number in addition to the general intellectual content of the number. You could say it covers a family of related numbers. That's stronger than just covering a single number.

Here is a good article. https://www.investopedia.com/terms/f/financialasset.asp

Bank deposits are financial assets- which gets its value from a contractual right or ownership claim.

When you deposit money in a bank, they lend that money out, they make a return, and in a sane world you would receive interest on that money.

Using this definition of a financial asset, I don't think bitcoin qualifies, it is more of an intangible. It might be a financial asset only if it is held at a custodian.

Congress and the courts decide what a security is, not the SEC. The SEC is the enforcement agency from what I can tell.

Congress defines a security, and the SEC interprets the definition, and the courts subsequently interpret it if the SEC sues. Congress has made a definition that does not apply to Bitcoin, and the SEC has interpreted the definition to not apply to Bitcoin. It hasn't come up in court, and it won't unless the SEC changes their minds first. But their arguments are sound and it's extremely unlikely that their interpretation could change, or that a court would agree with them if they did change.

It's also unlikely that Congress would change the existing definition to apply to Bitcoin. It's much more likely that they would pass specific regulations for Bitcoin and cryptocurrency.

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