Free software and fiduciary duty
Free software and fiduciary duty
Posted Mar 5, 2023 22:18 UTC (Sun) by nybble41 (subscriber, #55106)In reply to: Free software and fiduciary duty by james
Parent article: Free software and fiduciary duty
Why wasn't this disputed? Bitcoins are clearly *not* property. Elsewhere (paragraph 24) the ruling makes an argument that cryptoassets are property on the basis that they are rivalrous, but this is false. To begin with there is no such thing as "a bitcoin"; it's an abstract unit with no physical reality. What exists only in people's minds cannot be rivalrous; the number of bitcoins is limited only be imagination. What *is* limited by the system design is the set of unspent transaction outputs (UTxOs) at a particular block in a specific blockchain. However, while a given UTxO may be unique and only capable of being spent once within a particular chain, there can be infinitely many blockchains based on that block with the exact same UTxO set. Anyone can start their own fork, perhaps with modified rules, where they control those UTxOs. There is no guarantee that anyone else will recognize it, but recognition of your fork by others as the One True Bitcoin Blockchain is not something you can reasonably demand. Particularly when it goes against the set of rules by which Bitcoin has been defined since the beginning. To be non-rivalrous it suffices that everyone *can* have their own fork, if they so choose, where they are in control.
If Wright were to get his way and convince the court to compel the developers of (one version of) the Bitcoin client software to release a version which altered the rules to hand control over those UTxO to him that would create a fork of the blockchain. Putting aside the question of whether the altered fork has any chance of succeeding in gaining recognition, there would at least briefly be two copies of the UTxO, one which he controls and one which he does not. That alone is enough to prove that the bitcoins in question are non-rivalrous, as rivalrous goods can't simply be created out of nothing.
Posted Mar 6, 2023 11:28 UTC (Mon)
by james (subscriber, #1325)
[Link] (6 responses)
Which of them is going to argue that Bitcoin isn't property?
English civil law (IANAL) is adversarial, hence the Lord Justice's careful wording — "there was no dispute". English courts won't normally rule on questions that aren't before them. A judge might take the point if a case was clearly based on an incorrect premise, but that isn't the case here — it at least arguably passes the duck test for property. It's not that far from concepts such as copyrights, futures and derivatives¹.
As for the fork question, the judge wrote:
Posted Mar 11, 2023 3:40 UTC (Sat)
by nybble41 (subscriber, #55106)
[Link] (5 responses)
Any of the sixteen defendants would have a reason to make that argument. It would completely undermine the case against them. Would it serve them well elsewhere? Maybe not... but it's true nonetheless.
My concern is less about the defendants winning this particular case and more about the way this can lead to cryptoassets, and potentially other virtual "assets" such as game tokens, to become entrenched as a form of "property" despite lacking the requisite attributes (such as being rivalrous) to make that classification reasonable. Even if it's not taken as binding precedent, the more cases that are decided on the basis that cryptoassets are actually property the harder it gets to overturn that assumption in the future, even if the only reason the argument wasn't made is that it wasn't in the defendant's self-interest to challenge that point.
Posted Mar 12, 2023 16:38 UTC (Sun)
by kleptog (subscriber, #1183)
[Link] (4 responses)
Why would this be a problem, if I may ask? Is it more a language thing? In Dutch law we use "property" only to refer to physical objects, everything else you can own is defined as "rights" (like intellectual property rights). When you buy an apartment you are not buying property, but rather a bundle of rights (like the exclusive right to live there and shared responsibility for shared spaces).
It seems to me obvious that a Bitcoin is a sort of right since it gives you access to something is exclusive that can be traded. It's not terribly useful though as it can't be used as collateral since a judge cannot take it from you without your cooperation. Is the reason you don't want it to be called "property" because of the possible confusion?
As for judges deciding what is property, that's Common Law for you.
Posted Mar 12, 2023 18:46 UTC (Sun)
by Wol (subscriber, #4433)
[Link] (1 responses)
But I would have thought, if nobody has addressed whether bitcoin is property, then at some point a plaintiff or defendant could ask the judge to decide and say "there is no precedent, regardless of what other courts have assumed, please do the right thing". If other courts haven't ruled, the Judge is free to rule how he pleases.
Cheers,
Posted Mar 12, 2023 19:12 UTC (Sun)
by Wol (subscriber, #4433)
[Link]
Cheers,
Posted Mar 14, 2023 20:27 UTC (Tue)
by nybble41 (subscriber, #55106)
[Link] (1 responses)
Except it's not exclusive—that was the point of the explanation about it being non-rivalrous above—and bitcoins don't really exist either as a physical good *or* as a bundle of legal rights and obligations. What exists is one or more versions of the blockchain which say that a certain private key (identified by its public counterpart) can be used to sign a transaction which Bitcoin nodes following certain rules will recognize as valid and (probably, eventually) incorporate into future version(s) of the blockchain. Critically, they have no *obligation* to either to recognize that transaction as valid or to include it in the blockchain, even if it's properly signed. That's just a convention; the rules of a game, so to speak, in which no one is compelled to participate.
With that said, there can be rights closely related to the Bitcoin system which are not themselves bitcoins. For example if you have an account with an exchange then the exchange may have a contract with you to perform the service of signing and broadcasting a valid transaction according to the Bitcoin rules in response to your request to make a withdrawal. Alternatively, if you make a purchase with bitcoins the merchant agrees to provide you with goods or services in exchange for you signing and broadcasting such a transaction. Those contacts would classified as rights—having agreed to this exchange of goods and services (which does not include bitcoins per se, only the signed transactions) both parties have a legal obligation to uphold their end of the bargain.
Posted Mar 16, 2023 13:07 UTC (Thu)
by kleptog (subscriber, #1183)
[Link]
I guess at the very least they give you the right to say you own a share in the company.
Lord Justice Birss, in the Court of Appeal in London, wrote:
Free software and fiduciary duty
There was no dispute that the cryptocurrency in issue was property...
nybble41 asked:
Why wasn't this disputed?
The case was between "Tulip Trading Limited, a company associated with Dr Craig Wright" and sixteen defendants, including Bitcoin Association for BSV and the developers who "control and run the four relevant bitcoin networks".
One aspect of the defendants' case is that if such a patch was added to the bitcoin network source code at the relevant GitHub database, then the miners might not accept it and a fork would or may occur, but the likelihood of that happening is an aspect of the dispute on decentralisaton which cannot be resolved without a trial
presumably because the court would need to hear evidence on it.
¹ "... trading in pork futures—in pork that doesn’t exist yet—led to the building of the warehouse to store it in until it does..." — Terry Pratchett, Men at Arms, a satirical fantasy novel.
Free software and fiduciary duty
Free software and fiduciary duty
Free software and fiduciary duty
Wol
Free software and fiduciary duty
Wol
Free software and fiduciary duty
Free software and fiduciary duty