There is a lot of current interest in various “crypto currencies” such as Bitcoin, but that does not mean there have not been previous combined ledger and token recording systems. Others have noticed the relevance of Crawfurd v The Royal Bank (the case where money became money), and we are going to write about this yet again.
Very roughly: a Bitcoin is a cryptographic secret that is considered to have some value. Bitcoins are individual data tokens, and duplication is prevented through a distributed shared ledger (called the blockchain). As interesting as this is, we want to point out notional value existing both in ledgers and as possessed tokens has quite a long precedent.
This helps us remember that important questions about Bitcoins (such as: are they a currency or a commodity?) will be determined by regulators, courts, and legislators. It will not be a simple inevitable consequence of some detail of implementation as this has never been the case for other forms of value (gold, coins, bank notes, stocks certificates, or bank account balances).
Value has often been recorded in combinations of ledgers and tokens, so many of these issues have been seen before (though they have never been as simple as one would hope). Historically the rules that apply to such systems are subtle, and not completely driven by whether the system primarily resides in ledgers or primarily resides portable tokens. So we shouldn’t expect determinations involving Bitcoin to be simple either.
What I would like to do with this note is point out some fun examples and end with the interesting case of Crawfurd v The Royal Bank, as brought up by “goonsack” in 2013. Continue reading Bitcoin’s status isn’t as simple as ruling if it is more a private token or a public ledger