What do you legally “own” with Bitcoin? A short introduction to krypto-property

I had to do a lot of research to understand this in a technical sense. (I haven't read the article OP linked.)

I found the answer really interesting: with bitcoin, what you actually own in a technical sense is the cryptographic signature of an output of a previous transaction on the blockchain. "Owning 10 bitcoin" is intrinsically identical to "owning the cryptographic keys to a previous transaction whose value was 10 bitcoin, proving you were the recipient and can therefore initiate a new transaction with the previous transaction's output as an input, thus paying 10 bitcoin to someone else."

In this context, "is this legal" refers to what actions with a key you know are permissible, depending on how you obtained that key. There may be things that you are physically able to do with it but are legally not allowed to, just as there may things you would be legally allowed to do, but may lack the capacity (if, for example, you've forgotten some passphrase). Control and ownership are two very different things in this regard.

Bitcoin users generally accept that if they lose sole access to their keys, they lose sole control of their funds, but not ownership.

For example, if I (for whatever reason) put a private key on a sheet of paper on my desk, and somebody sees that key, then I have lost effective control of that cryptocurrency, but not ownership; if that person would use that knowledge to deprive me of that currency, I would be entitled to have the court send angry armed men to extract compensation for that. It's quite comparable to the scenario where I have gold coins on my desk, and someone manages to take them - they have gained control of the coins, the physical reality enforces a rule where whoever holds the coins can hand them to others in exchange for goods and services (just as mathematical reality enforces a rule where whoever knows the private key can authorize Bitcoin transactions), but gaining control does not necessarily imply gaining ownership. Just as if a rich man gives their accountant the access codes to their electronic banking, and the keys to their safe, it does not mean that the accountant is legally free to do whatever they want with that money (even in the absence of a specific contract) - they have been given control, but not the ownership.

And, of course, simply using Bitcoin does not constitute opting out of the common property rights. You could opt out by a specific contract, but simply being aware "that if they lose sole access to their keys, they lose sole access to their funds" does not mean waiving your legal rights for redress if your funds get taken (though it might be difficult to find the culprit), just as being aware of all the risks involved by drunkenly waving around a bag with gold coins in a seedy alley does not mean waiving your rights for redress if these coins get taken.

> The lawyer in this article asserts that

Has this been tested in court? Lawyers say all kinds of things, but the set of proven-correct things they say is smaller than the set of all things they say.

The main point of this article is that there is nothing in current case law regarding the concept of cryptocurrency ownership, these questions have never been raised in courts yet, so all we can do to evaluate what's likely to happen is to apply analogies from the existing case law regarding non-crypto intangible assets, from which this article cites quite interesting cases.

It seems over thought. Blockchain is essentially a ledger (don’t even worry about the distributed part), and the bitcoin associated with a public address (wallet) is accessible to the holder(s) of the private key of the address. In my mind there is digital access to a digital account, while in theory the account is immutable and transactions on the ledger are immutable (ie no need to worry about double spend in this system) access can be lost or stolen.

That’s it! Ownership, like its suggested by the lawyer...well like all things in law: “it depends” and what it depends on are the facts as applied to ownership laws of local jurisdiction