[dkshdkjshdk]

Have you ever heard that "posession is nine-tenths of the law"? Well... this is a system in which "posession is ten-tenths of the law".

This has obvious disadvantages (as you pointed out), but it also has a clear advantage: it becomes trivial to figure out who effectively owns something within the system (whoever controls/posesses the associated key).

Just because a system doesn't encode/enforce "property laws", doesn't necessarily mean that it is useless. In fact, few systems (if any) formally encode property laws: that is always something imposed from the outside.

If someone steals your crypto keys, you can still use the (normal) court system to get your assets back (assuming you have some way of proving that you own the assets, and you know who stole them from you).

Does the Internet encode/enforce property laws? No. If someone (e.g.) copies your stuff, you're still forced to go to the court system (just like when someone "steals" crypto from you). Does that make the Internet "not suitable for almost anything", just because it doesn't automatically enforce property laws?

[lottin]

The internet wasn't invented to keep track of who owns what. It was invented to transmit information and it does an excellent job at that. The blockchain, on the other hand, was invented to keep track of who owns that. That's its only purpose. The fact it doesn't and can't enforce property rights, which, it could be argued, are pretty essential for that purpose, appears to indicate that blockchains do suffer from a fatal design flaw. At least that's the way I see it.

[dkshdkjshdk]

> The blockchain, on the other hand, was invented to keep track of who owns that. That's its only purpose.

Well.. its purpose is to enable transactions between people, and not keep track of legal ownership of things. In fact, these networks usually don't make any claim about who legally owns anything: only about who controls something (i.e. who owns it within the system, not who owns it in the legal sense).

Does physical cash keep track of who actually owns it (and not just "who posesses it")? No. Does that make it useless or fatally flawed for the purpose of "value exchange"? Not really.

If you receive a 10 USD bill from someone as payment, you have to assume that they own that bill (and didn't just steal from anyone else). The bill itself doesn't enforce property law.

Furthermore, if you have lax security and a pickpocket takes your wallet (with 500 USD inside), you also have little recourse or method to enforce your ownership of the stolen cash. In fact, you probably even have less recourse than with things on blockchains: there's no way of tracking where cash goes, after someone steals it from you.

Is the fact that "cash" doesn't encode/enforce your property rights over it a problem that prevents "cash" from being effectively used a medium of value exchange between people? As far as I can tell, no.

Just like with "blockchains", if someone steals your cash, or anything else, you need to go to a court to get things fixed.

I understand your argument and accept that such properties of the system could be seen as "design flaws" (though... how could you even fix such design flaws? "law" is not a formal system). On the other hand, if such properties were "fatal design flaws" (for the purpose of a system of value exchange between economical agents), then plain vanilla cash is just as flawed, if not more (since it does not encode or enforce your property rights, and it's even less traceable than blockchain "assets").

[lottin]

Property rights are a social construct. They are recognised in a certain social context and enforced by state institutions by use of force. They are separate from the actual objects of ownership. Cash is like any other physical object. If stolen, the owner can demand that the courts act on their behalf and get the stolen cash back. Sure, it may be difficult, in some situations, to prove ownership of the stolen cash or to recover it, and maybe this explains why many people seem to prefer electronic payments over cash. It might indicate that indeed cash is perceived as being less safe.

Now, back to blockchains. Blockchains are very inefficient and expensive to run. This is so, because they have to do a whole lot of extra work in order to avoid relying on a central authority that ultimately has the final say on who owns what. If blockchain users have to go to court to have property rights enforced, that means that the courts do have the final say on who owns what, and so the entire purpose of the blockchain, which was to avoid a central authority, is defeated. Not only that. The other problem is there can be no enforcement without the ability to exert force, and by design a blockchain cannot be changed by use of force, only by "consensus". So the courts would be powerless to enforce anything on a blockchain, even if they wanted. In short, blockchains are designed in a manner that makes them antithetical to property rights. I think most people want property rights and therefore will steer clear of blockchains.

[dkshdkjshdk]

> Property rights are a social construct [...]

Right. So expecting a social informal construct to be enforced in an automated way is, to put it mildly, difficult.

> Sure, it may be difficult, in some situations, to prove ownership of the stolen cash or to recover it.

How do you exactly prove ownership of money? It seems a bit more than "difficult" to me.

> maybe this explains why many people seem to prefer electronic payments over cash

And just as many people prefer cash over electronic payments. It still doesn't mean that cash is, in any way, fatally flawed.

> It might indicate that indeed cash is perceived as being less safe.

Well... different people have different opinions and perceptions. Just because most people use electronic payments (let's assume) doesn't mean that cash is useless or fatally flawed as a medium of exchange. And just because most people use cash rather than blockchain thingies also doesn't mean that these are necessarily fatally flawed.

> Now, back to blockchains. Blockchains are very inefficient and expensive to run. This is so, because they have to do a whole lot of extra work in order to avoid relying on a central authority that ultimately has the final say on who owns what.

Sure.

> If blockchain users have to go to court to have property rights enforced,

Of course they have to go to court to see their property rights enforced. Rights/laws are always enforced by humans, not by automated systems.

> that means that the courts do have the final say on who owns what, and so the entire purpose of the blockchain, which was to avoid a central authority, is defeated.

Not really, since courts do not have global jurisdiction. If I steal your crypto-assets and we're both in the same country (and you have some proof of ownership and whatnot), then you can go to a court and get your assets back. If we're not in the same country, you probably won't be able to.

The same way that, if someone steals my money (or any other asset) and flees to another jurisdiction, I probably won't be able to do much.

If entities A and B are in the same jurisdiction, then courts can compel A to give something (that was stolen) back to B; if they are not, probably not.

Either way, even a court can't force a (distributed, non-centralized) blockchain to assign ownership of something to a entity B: it has to first find entity A and compel/force them to deliver the keys that control the assets, through the use of force.

> So the courts would be powerless to enforce anything on a blockchain, even if they wanted.

Even if that was the case (and, as I pointed out, it's not clear that it is the case... a court can always compel a person to give out their keys under the threat of force, as long as that person is within their jurisdiction, regardless of blockchain magic sprinkles), that would make blockchain assets more valuable (since that means they can't be easily seized from you against your will), and not less.

> In short, blockchains are designed in a manner that makes them antithetical to property rights.

[citation needed]

As far as I can tell, nothing in blockchains prevents courts from exerting their power within their jurisdiction. In fact, in some sense, it might make it even easier to do so: remember that transactions are irreversibly recorded (i.e. if the courts needs evidence against you, you would be better off having used cash than any blockchain asset).

> I think most people want property rights and therefore will steer clear of blockchains.

Blockchains don't remove or restrict your property rights; they just don't enforce or explicitly encode it, just like any other formal system or physical asset: you always have to rely on an external non-automated system of courts and law enforcement to ensure that your property rights. Blockchains don't change that, and are not supposed to change that, or to replace courts and law enforcement. So-called "smart contracts" are not actual legal contracts and shouldn't be seen as such. Etc.

TL;DR: It seems to me like you are postulating that blockchains need a feature that no other asset or medium of exchange has (i.e. automated enforcement of property laws, without having a court and a judge involved), otherwise it's not useful. If you apply that same threshold of usefulness to other classes of assets, then most (if not all) assets are useless (since they don't encode and can't enforce your property rights over it).

[lmm]

> And just as many people prefer cash over electronic payments. It still doesn't mean that cash is, in any way, fatally flawed.

I don't think that's true. Someone asking to be paid in cash is inherently suspicious (at a minimum they're probably evading tax, if not an outright scammer).

> Of course they have to go to court to see their property rights enforced. Rights/laws are always enforced by humans, not by automated systems.

Right, which eliminates the big selling point of bitcoin. Code isn't and can't be law, because law enforcement will enforce the actual law rather than the code.

> Even if that was the case (and, as I pointed out, it's not clear that it is the case... a court can always compel a person to give out their keys under the threat of force, as long as that person is within their jurisdiction, regardless of blockchain magic sprinkles), that would make blockchain assets more valuable (since that means they can't be easily seized from you against your will), and not less.

I don't think that's true. If things are difficult to protect from theft then that makes them less valuable, e.g. a second-hand bicycle in a high-crime city is worth less than the same bicycle in a country that has bicycle registration and strong law enforcement. Decent people generally prefer to live under a legal system that returns stolen property to its rightful owners rather than "possession is the whole of the law"; yes, there is a risk that the courts might wrongly decide that my property was stolen from someone else and take it from me and give it to them, but you have to weigh that against the risk of my property actually being stolen by someone else.

[dkshdkjshdk]

> Someone asking to be paid in cash is inherently suspicious (at a minimum they're probably evading tax, if not an outright scammer).

Maybe to you, but not to me. First, not all countries have widespread low-cost electronic payment systems and not all people have access to those (or banking services, in general). Second, I rather pay with cash just for the fact that it saves me on transaction fees. Third, a vendor might not have a working terminal... does that make the vendor a tax evader or a scammer?

I think your comment may apply in some places/cultures, but it certainly doesn't apply to all places/cultures.

I, for one, certainly don't want to live in a world where cash doesn't exist and I'm forced to have every single transaction I do be recorded. Your mileage may vary, but you should accept that there isn't a consensus: different people have different opinions on this.

> Right, which eliminates the big selling point of bitcoin. Code isn't and can't be law, because law enforcement will enforce the actual law rather than the code.

I'm not sure it does. Bitcoin never claimed to want to replace law or law enforcement, or to be immune from the application of law by courts and law enforcement. The proof is in the pudding... people are using/buying it, so there must be some sort of selling point that hasn't been eliminated.

> Decent people generally prefer to live under a legal system that returns stolen property to its rightful owners rather than "possession is the whole of the law"; yes, there is a risk that the courts might wrongly decide that my property was stolen from someone else and take it from me and give it to them, but you have to weigh that against the risk of my property actually being stolen by someone else.

Sure... and I did not say otherwise. My point is that property rights apply equally to blockchain assets as to other assets, and thus can be seized by a court. Are there cases where a court is unable to seize someone's cash or blockchain assets (or any other assets that can be "hidden")? Yes. Does that make property laws not apply? Not really.

Besides, there are (very popular) crypto assets that can be (and have been) centrally and arbitrarily seized, such as USDC. If someone is concerned about the scenarios you describe, then they can use blockchain assets that (e.g.) are 100% within US jurisdiction (assuming you live in the US) and be sure that their local courts can always "do something about it" if shit hits the fan.

Just like with cash, with crypto assets "posession is [also] nine-tenths of the law": by default, we assume that whoever is in control of something is their legitimate owner (and, just like "in real life", with cash, whoever is in the posession of it can use it for transactions). If that is not the case (i.e. if your property rights have been infringed on somehow), then, as always and as with any other asset, you have to go to a court of law to get "things fixed".

TL;DR: My overall point is... when it comes to "property rights", crypto assets and cash are quite similar... they can complicate enforcement, but they don't make the rights themselves void or completely unenforceable.

[lottin]

The issue isn't that blockchains lack an automated enforcement of property rights, but that property rights are not enforceable at all (either by an automated system or by courts of justice). Why? Because in order to enforce property rights it is necessary that some authority have the power to seize assets from one person and hand them to another person. Blockchains are designed specifically to prevent that.

Cash doesn't have this problem, because it's a physical object and physical objects can be seized. You seem to be making the point that because sometimes cash is stolen and courts aren't unable to recover it this means that somehow property rights don't apply to cash?

[dkshdkjshdk]

My point is that property laws apply equally to cash and to (so called) blockchain assets (and to many other types of assets): if you are within the court's jurisdiction, it can always compel you to give them whatever asset you supposedly stole from someone. If the thief somehow makes that impossible (e.g. hid the money, or hid the key that controls your blockchain assets), then the judge will make the thief's ass rot in jail.

If you are not within the court's jurisdiction, then it is powerless, yes. But that applies equally to cash, blockchain assets or any asset, really.

> The issue isn't that blockchains lack an automated enforcement of property rights, but that property rights are not enforceable at all (either by an automated system or by courts of justice). Why? Because in order to enforce property rights it is necessary that some authority have the power to seize assets from one person and hand them to another person. Blockchains are designed specifically to prevent that.

Blockchains are not designed specifically for that, it's just part of the feature set (if they are decentralized): things cannot be arbitrarily seized. It's a feature, not a bug. The court can seize the assets, but they have to get to the person that has the assets in their posession (through a key), just like for any other asset (i.e. they have to find the asset/key first, or the person that knows where the asset is).

Also, note that blockchains can't prevent a court from jailing you until you "cough up" the assets you stole, if you are within the court's jurisdiction, just like it works for any other asset.

> Cash doesn't have this problem, because it's a physical object and physical objects can be seized.

Yes, and physical objects can also be hidden. How do you seize the thief's loot, then, if it's hidden? Well.. you put him in jail until he coughs up where he hid the loot. Same with crypto assets: "until you cough up the key, you'll be in jail, and your own assets will be liquidated to cover your theft". Simple. How does a blockchain prevent that?

> You seem to be making the point that because sometimes cash is stolen and courts aren't unable to recover it this means that somehow property rights don't apply to cash?

You seem to be making the point that, because sometimes it might be difficult for a court to recover "crypto assets" from a thief, somehow property rights stop existing and don't apply to such assets, and courts become powerless (because "blockchain magic sprinkles"?). Many "crypto people" would like that to be true, but it really isn't.

Blockchains may complicate the work of courts and law enforcement (the same way that the use of cash in drug transactions complicates the work of courts and law enforcement), but that's not the same as saying that "property rights/laws" don't apply to "blockchain assets" (or cash).

EDIT: And, furthermore, because the fact that "blockchain transactions" are permanently recorded and readily available, unlike "cash transactions", it might even be easier to prove the theft in court. How would you prove to a court that the money that is in someone's posession has been pickpocketed from you? Seems more complicated to me, when there probably isn't going to be any register of it (assuming there's no CCTV around).

EDIT2: Also, note that some blockchain assets can be (and have been) centrally and arbitrarily seized by (e.g.) US courts, if they want, as long as the entity that controls the token is within US jurisdiction. Here's an example of Coinbase/Centre, which is within US jurisdiction, blacklisting (i.e. seizing, effectively) 100 000 USDC (i.e. ~100 000 USD) from a thief/hacker, due to a court order or some collaboration with law enforcement: https://cryptobriefing.com/100000-usdc-blacklisted-highlight...