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Hi Knut, thanks for your post. I wanted to share a few legal insights on the topics you brought up.

Legal systems have invented laws dealing with the "ownership“ of information. Such laws are called Intellectual Property. In practice, “ownership” of information means a monopoly granted by the state to use specific information. For example, as an author, you can own a sequence of words written in your book (copyrights). In some cases, you can even "own" ideas (e.g., inventions or trade secrets).

Therefore, creating legal ownership of bitcoin should not pose a special problem. The state may grant you a right to your bitcoin (private key) and even protect such a right. The problem of "proving" that certain bitcoin is yours may be important in practice, but it constitutes a separate issue, the so-called procedural problem. Being an owner and proving ownership are different matters and should not be mixed up.

Banning sovereign (unhosted) wallets is yet another matter. As is "stopping or restricting Bitcoin." I would agree that such ideas are totalitarian in nature. It would be like banning the use of language or mathematics altogether (as opposed to banning unauthorised use or theft of someone else’s private key).

rfkill 1y ago

Perhaps given the context you are using, you could replace the word "ownership" in the original post with poesession. The state can grant legal ownership over some bitcoin, but proving that you don't posess coins which the state claims you no longer own and must forfeit would still be impossible.

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Gracjan Pietras 1y ago

It's a valid point, thanks.

Lawyers are trained to differentiate between ownership and possession. The former is a legal (abstract) concept, while the latter is a matter of facts in the real world. Possession can be lawful (when the possessor is also the owner) or unlawful (when a the possessor is a thief). Generally, applying this concept to bitcoin should be easy.

Once again, proving that you are the "legal owner" of a UTXO is primarily a procedural issue. In principle, it's not fundamentally different from proving ownership of a physical item, although it presents different practical challenges.