# Last edited on 2014-09-09 12:04:27 by stolfilocal # NOT POSTED YET # For the Wall Observer thread Re: Cryptocoin, Property, and Possession [b]CRYPTOCURRENCIES WOULD ABOLISH THE PROPERTY OF MONEY[/b] One fundamental flaw of cryptocoins (that supporters consider a feature) is that they are intended to eliminate the notion of "property" for money, leaving only the more primitive concept of "possession". [b]Property and Possession[/b] The ver "to have" is commonly used in two very different senses: * You have "possession" of something (or "hold" it) if you physically can use it or dispose of it as you like. * The thing is your "property" (that is, it "belongs" to you, or you "own" it) if, and only if, the government thinks you should have possession of it, and you can get his cops and courts to take it away from anyone who may possess it, to put it in your possession. If a thief steals your car, or your gold, or your cash, it becomes his possession; but [i]it is still your property[/i], because the government thinks so, and is expected to take the car from him and give it back to you, by force if needed, once he is found. If a hacker empties you bank account, he may get possession of the money, but [i]that money is still belongs to you[/i](*) -- only because the government thinks so. If your tenant stops paying the rent and refuses to leave, [i]you still own the house[/i], because the government thinks so, and will help you take the guy out so that you can take possession of it again. If you fail to pay taxes by the due date, you retain possession of that money, but the government will take it if they know about it -- because the government thinks that [i]it belongs to them[/i], not to you. There is no way to define propeprty without reference to some government. If there is no government, there is no property, only possession; and when something gets stolen from you, it becomes the thief's possession, and that is it. YOU (and your friends) may think that it is still your property, but the thief (and his friends) will disagree; what then? [b]Property is Value Rather than Things[/b] Property is not simply an imaginary string that connects a material item to its owner. The owner may be forced, by laws or by circumstances, to accept the substitution of money or some other things, officially with the same value, in place of some thing that he owns. If the government needs your plot of land to build a road, it will recognize your ownership to that land, but will forcibly exchange it for its market value in cash. If a thief stole your car and sold it to parties unknown, a just government should seize money from the thief's bank accounts, or auction off his house, and refund the car's market value to you. As for the car itself, if the government succeeded in recovering the stolen value from the thief, it should consider the car to be the legitimate property of the buyer. (Unless the buyer was aware of the theft, or should have been.) In both cases, the government will consider that your property rights have been preserved, even if it is not the original thing. In general, if the government thinks that something that belongs to you was taken, but cannot seize and return that exact same thing, it will redefine your property as a certain amount of generic value, and try to get that value, if it can. [b]Cryptocoins Cannot be Property[/b] In theory, governments could recognize and enforce the property (right to possession) of cryptocoins, just as they handle the proeprty of cash and money in bank accounts (*). However, by design, cryptocoins (as the libertarians see them) are meant to be impossible for any government (or any other entity) to take away from whoever who has possession of them, no matter how he got that possession. Thus, even if the government thought that a certain amont of cryptocoin sitting in a blockchain address belongs to you, they cannot seize it and return it to you. Abstractly, this is not much different than those situations where the government simply cannot find your stolen car and cannot catch the thief. In practice, it is quite a bit worse, because catching a cryptocoin thief is a lot more difficult than catching a car thief or bank robber. However, there is another bigger problem. In order to protect your property right, the government needs to be able to check that something that was supposedly stolen from you is indeed your property. With material things, like cars, you can do that by showing the purchase receipt and other documents. With money in your bank account, the bank has your identity and uses strict accounting procedures that the government trusts. . Indeed, it is nearly impossible for the government to even determine who has possession of the coins that are sitting in any given blockchain address (**). But, in order to defend your proprty, the government needs to But then, by design, no government (or any other authority) can enforce any property rights on cryptocoins. Therefore, there is no concept of "property" in the realm of cryptocoins. Only "possession". The notion of "property" as distinct from "possession" is very old; it may have been invented when humans adopted agriculture and settled down, abandoning the "share the catch" economy of nomadic hunter-gatherers. It has become such a basic feature of society that people seem to forget what makes it work. Do we really want to eliminate the concept of "property" with regards to money? (PS. And then there is the misleading use of "possession" instead of "knowledge" when talking about keys; but that is another issue.) [quote author=NotLambchop link=topic=178336.msg8704601#msg8704601 date=1410032642] This is a case of "not even wrong." Property is a complicated concept, as rigidly defined as, oh, let's say "fairness." [ ... ] This is a huge thing you guys are poking. [/quote] I can't argue against that, even pataphysically. :D [quote author=grappa_barricata link=topic=178336.msg8704336#msg8704336 date=1410031345] [ Attempt to summarize Jorge's post: ] [quote author=JorgeStolfi link=topic=178336.msg8703840#msg8703840 date=1410028764] [[i]digression about the difference between the concept of 'property' (legal ownership/control?) and 'possession' (de-facto ownership/control?)[/i]] [/quote] I would rather avoid the word "ownership" because it is ambiguous: it often means "property" (as in "return the stolen car to its owner") but some may use it for "possession", i.e. de facto control. (Do you use it that way?) I would rather say: "property" = "government's understanding that you have the legal right to possess the item, and that they are supposed to help you to gain possession of it if you do not have it." [quote] [[i]realization of the central role of governments in permitting/determining ownership/control of 'resources' of their subjects[/i]] [/quote] Rather, observing that property is a "right", and one cannot define "right" without reference to a government with power and will to protect that right. (One can discuss philosophically the rights that people [b]should[/b] have, but it is the government who determines the rights that they [b]do[/b] have.) [quote] let me guess that you have not been introduced to the concept of strong-property. [/quote] No, I haven't. Unless it is a fancy name for "possession defended by me, my buddies, and our 3D-printed machine guns" -- which I have seen advocated by some bitcoiners, sometimes, somewhere. [quote author=oda.krell link=topic=178336.msg8704164#msg8704164 date=1410030462] The most hard core libertarians here are (at least in words) violently anti-government. They are also the ones who see Bitcoin absorbing basically the entire money supply. They do away with legal 'property' then, in your terms. I don't follow their logic. However, I also don't follow yours. In your view, [i]only[/i] 'property' matters. 'Possession', which would be extensionally indistinguishable from 'property' if you would truly be the master of your own affairs, doesn't seem to play a role in your world. I know you're not a naive supporter of an all-powerful, purely well meaning government, so I'm sure you understand that there is value to raw possession of your capital (if for no other reason so you can send a donation to Wikileaks and not have it blocked by Paypal or Visa). [/quote] "Property" was invented because mere "possession" did not work. It caught by natural selection at the society level: societies that implemented it properly got richer and more powerful than societies that implemented it badly, or not at all. I agree with libertarians that governments often use their power to do some very evil things. But I can't agree with their solution, "let's get rid of governments and let each one defends himself as he sees fit". I believe that government is inevitable and necessary, and it needs to be strong enough to do the things it was created to do. In particular, it must have the power to seize money and block payments in circumstances defined by law -- that is, transfer the [b]possession[/b] of money from a thief or debtor to its legitimate [b]proprietor[/b]. Therefore, we must accept must do is fight (hard and continuously) to stop it from doing those evil things. Getting cryptocoins anonymously to Wikileaks will not help much, if Wikileaks continues to be persecuted by the US allies and their poodle countries. Our goal must be to stop that persecution and convince the US public that what Wikileaks did is good *for them too*. [quote author=aminorex link=topic=178336.msg8704244#msg8704244 date=1410030848] you [ assert ] that you have property by virtue of the graces of the police and courts. no. property is an inalienable human right. justly acquired property is yours regardless of the possessor. [/quote] I totally disagree! One cannot define "justly acquired", or even "right", without reference to a prevailing set of laws and courts. You can have [b]your opinion[/b] of what those words mean; but, without some governing authority, your opinion is no more right than anyone else's opinion. And people differ enormously on those concepts: what is honest work to you may be heinous crime to others. Almost everything you do depends on the work of others. Even if you make pottery from materials that you collect in the wild, you depend on the guys who made the bricks of your oven and the ax you chop the wood with, the park ranger who protects the land, the teacher who taught you to knead the clay, and so on. So, when you sell a pot to tourists, what is the "just" part of the price that each of them has the right to? (No need to tell me your answer; the point is that different people will give different answers, with the same sincere conviction.) [quote author=NotLambchop link=topic=178336.msg8704601#msg8704601 date=1410032642] The notion of property of property predates farming. The kill of a hunting party, for instance, is that party's [i]joint property[/i]. [/quote] Not quite... There may be exceptions, but the "economy" of hunter-gathering tribes usually is like that or mining pools (and for the same reason): you must share what you catch with the whole tribe, including those hunters who came back empty-handed or are too sick to hunt -- because tomorrow you may be one of them. At most, the successful hunter may get some encouraging reward --- a bigger slice of meat, the juiciest organs, a double serving of beer and a toast from his buddies, sweeter looks from the girls... [quote author=NotLambchop link=topic=178336.msg8704601#msg8704601 date=1410032642] The concept of property does not require a government, or even an outside authority, [i]but force[/i]: "Yeah, I took it from you, now it's mine. Whatcha gonna do about it?" [/quote] [quote author=findftp link=topic=178336.msg8704850#msg8704850 date=1410034010] You should try to take my silver coins. My fists will define my property. [/quote] [b]PROPERTY USUALLY APPLIES TO MONEY TOO[/b] [quote author=jl2012 link=topic=178336.msg8705454#msg8705454 date=1410037477] [quote author=JorgeStolfi link=topic=178336.msg8703840#msg8703840 date=1410028764] If a thief steals your car, it becomes his possession; but it is still your property, because the government thinks so, and is expected to take the car from him and give it back to you, by force if needed, once he is found. If your tenant stops paying the rent and refuses to leave, the house is still your property because the government thinks so, and will help you get the guy out. If a hacker empties you bank account, he may get possession of the money, but that money is still your property -- only because the government thinks so. If you fail to pay taxes by the due date, you retain possession of that money, but it will be property of the government -- just because they think it is. [/quote] [quote author=jl2012 link=topic=178336.msg8705454#msg8705454 date=1410037477] All your examples: cars, houses, bank account, tax are non-anonymous. Try again with cash, gold bullion. Satoshi made it very clear in the title of the white paper: Bitcoin: A Peer-to-Peer Electronic Cash System. Bitcoin is e-cash, not a e-car or e-house. [/quote] No problem: [b]CRYPTOCOIN EXCLUDES PROPERTY OF MONEY[/b] [quote author=aminorex link=topic=178336.msg8704244#msg8704244 date=1410030848] [quote author=JorgeStolfi link=topic=178336.msg8704132#msg8704132 date=1410030322] you will not even be able to prove to the police [ that a cryptocoin theft occurred ] [/quote] unnecessary. you prove it to a judge of appropriate jurisdiction. [/quote] Well, in some countries at least you must start by filing a complaint with the police, and then you must convince them to investigate. You won't get a trial if the police can't identify the thief or does not have enough evidence against him. The police will not put much effort into the investigation if it cannot even be sure that a theft occured at all. So, how do you convince the police (and, eventually, the court) that (a) the address where the coins were moved from was yours at the time of the theft, and (b) that the address where they went to is not yours, and (c) that address belongs to the accused? Consider the MtGOX case, for example (or any of the other similar cases). Mark claimed that the 600'000+ coins that are missing were stolen. Were they, really? How could we be sure? [b]"KNOWLEDGE" -- NOT "POSSESSION" -- OF PRIVATE KEYS[/b] [quote] author=grappa_barricata link=topic=178336.msg8704336#msg8704336 date=1410031345 you are underestimating the powerful concept that 'knowledge is ownership/control' in bitcoin. [ ... ] Now property (ownership/control) is knowledge of a key. [/quote] I mean that cryptocoin does not even allow "possession", really. True possession -- that is, ability to use and dispose of the thing at will -- implies [i]exclusive[/i] control, or sharing of control by consent only. While you have cash in your pocket or in your safe, you can be reasonably certain that no one else has possession of it at the time; and you can reassure yourself of that by checking your pocket or your safe. With cryptocoin, you don't have "possession" of the coins, but only "knowledge" of the private key that allows you to dispose of them. Knowledge, unlike possession, is not intrinsically exclusive. Any number of other people may also know the key, [b]and there is no way you can check that[/b]. Anyone who knows the key has as much control over the destination of your cryptocoins as you do. Bank deposits and credit cards have the same problem, of course: you have knowledge of passwords and PINs, but other people may have that knowledge, in which case they can take your money too. Your protection there is that the bank and the government know and agree that the money in your account is your [b]property[/b](*), not just your possession; so, even if it is stolen, they will help you get it back, perhaps even before they catch the thief. Not so with cryptocoin. [quote author=grappa_barricata link=topic=178336.msg8704336#msg8704336 date=1410031345] you seem to come to a deeper understanding the more you think about this. [/quote] Well, I suppose that I am finding better ways to express the reasons of my skepticism about the ultimate success of cryptocoin. (*) In the strict legal sense of most jurisdictions, cash that you deposit in a bank becomes a property of the bank; from then on, what you have is the right to receive that amount of cash back from the bank in the future, modulo the applicable procedures and restrictions. But, for the purpose of this note, we can disregard this legal detail and consider that the money in your bank account is still your property. (Transferring the property to the bank actually improves immensely your protection against theft. If a hacker steals money from your account, he is stealing the bank's property, not yours, so he will have the bank running after him. Meanwhile, your right to get that amount of money back from the bank is not affected.) (**) Early adopters had hoped that finding the possessor of a blockchain address. Now that bitcoin has been found to be inadequate in this aspect, they are turning to more sophisticated "truly anonymous" altcoins.