As early as 2011 I recognized that bitcoin could be closer to ideal money than anything else before. stephankinsella.com/2024/10/am-i-a:
“(IN the bitcoin thing with digital currency, you can arbitrarily increase the granularity by adding more digits; in such a digital numeraire (which I confess I sort of think is the ideal money, in some sense, though not in a practical sense given some political and other problems), you never need to increase the supply at all (once it reaches its asymptotic maximum), because any supply truly is enough: you never face the granularity problem you guys allude to.”
The “political” problems I was thinking of was my fear that the state would kill it, if it became a real threat. For once I was too pessimistic (too confident in the competence of the state to realize the danger bitcoin poses) and thus I lost a bet to @real_vijay … but that led me to buy some bitcoin to repay my debt to him, so I don’t regret losing that bet!
But I have always realized bitcoins are not “property,” or to put it more accurately, not things that can be the subject of property rights. This is because bitcoins do not “exist” as independent conflictable (scarce, rivalrous) objects that can be the subject of conflict, since they are just useful conceptual identifications we have of the entries on a ledger that is itself just an information structure that is stored on physical, owned things (memory devices on computers participating in the bitcoin network and storing copies of the blockchain–the ledger or spreadsheet). Those things are themselves owned and so the way those transistors are arranged cannot be owned, just as features of owned things cannot be owned–the redness of my car is not ownable separately from the car itself, nor its age or weight–as they are universals, and one cannot own universals. And for the same reason that information in general cannot be owned since it is always just a pattern, an impatterning of an underlying (physical, owned) resource. Thus figuring out IP, and why it unjust, which led me to arrive at a deeper understanding of the nature property rights, enabled me to then easily see that bitcoins “are not property”–that is, cannot be owned.
As I wrote here, The Title-Transfer Theory of Contract, stephankinsella.com/2024/09/tttc-w To see all this one has to understand the difference between the economic and descriptive realms, and the juristic, normative, and prescriptive realms; and to understand the difference between possession and use of scarce (conflictable, causally-efficacious) means and ownership, which is a normative and juristic status and concept. As I wrote in one of my best pieces, here, stephankinsella.com/2024/09/tttc-w The Title-Transfer Theory of Contract:
Legal ownership, or property rights, may be thought of as the legal institutional supports for possession and control of means. The legal system bolsters or complements the ability of actors to use and possess resources. When the law succeeds in securing property rights, then “the legal concept of property rights correspond[s] to the catallactic concept.” (Mises 1998, ch. XXIV, §4, p. 679) Or as Böhm-Bawerk (1962, p. 58) explains, “legal rights carry economic significance only if and to the extent that they embody physical control, or at least imply a means of acquiring such control.” Thus, for Böhm-Bawerk, “legal enforcement is only complementary to the effective power of disposal, and merely extends the latter in scope” (Campan 1999, p. 24).
Likewise, contract law may be considered to be the legal analogue or normative support for the economic institution of exchange. In a society with institutions of property rights (ownership) and contract law that support possession and exchange, the economist may assume their existence and take them into account for a more useful analysis.
Notice: in our world it is impossible to break or violate a causal law, like gravity, or an economic law like supply and demand; but it is possible to break or violate normative laws such as moral or ethical laws, or juristic or legal laws, or to violate someone’s rights—precisely because people can choose to be guided by prescriptions (while it does not matter whether they “choose” to abide by a causal law–it applies whether they like it or not). This is why dualism matters. In an ideal, unrealistic, “perfect” world where God, or some omniscient, benevolent, omnipotent AI-guided system physically prevented people from ever violating rights (say, an AI-guided space laser system that zaps and incinerates anyone who touches another person without consent) then it would be be impossible to violate rights and in this case, the prescriptive and descriptive realms would merge into one and it would be as impossible to violate rights as it would be to violate the law of gravity.
In this case monism would apply and there would be no need for law to bolster possession; possession itself would be enough since it is the same as ownership; ownership and possession would be the same thing. For just as Crusoe has only possession of his fishing nets and fish but that is all he needs there is no one else around to steal it, i.e. theft is impossible, meaning there is “only” possession, but possession that is just as good as–nay, better than–the ownership conferred by a good legal system (since no legal system is perfect in its enforcement and it’s still possible for legal laws to be violated) —in a world with God or some mechanism that prevented possession from being interfered with, it would be perfect, “ownership” equivalent to Robinsonade-style possession.
In the case of bitcoin, it is some conceptually identifiable “thing” that is useful in part because its encryption scheme makes it impossible to take it without permission, which is the ideal that normative, prescriptive, human property laws of ownership attempt to give to possessors. So although it cannot be “owned” for the reasons noted above–it is not the type of thing that can be owned, as it is not an independently existing thing apart from the impatterning of an underlying owned substrate or carrier–the possession and use of it is perfect can cannot be disturbed at all as if it were “owned” in a system of perfect normative/legal enforcement.
This is why laymen bitcoin enthusiasts–and perhaps I should concede that here “layman” means almost everyone in the world other than me, since I am apparently almost alone in understanding the significance of all this (no matter; I trust future generations will finally see this and make up a posthumous Nobel prize to give me)–get sloppy and use the term “ownership” to refer to what is really the mere possession of bitcoin. Since the possession of bitcoin is as good as perfect ownership would be in the Hoppean libertarian Garden of Eden or Schlaraffenland. In the realm of bitcoin we approach nirvana when the prescriptive merges with the descriptive and monism reigns, as all hitherto important distinctions start to collapse. And now that I am starting to talk like Michael Saylor with his meanderings about “bitcoin is … stored … energy…” perhaps I should stop before I am awarded a liberal arts degree.
