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Article: Legal Issues for the Regulation of Bitcoin

This article goes a little deeper than most with regard to the regulation of bitcoin. As they state……”Creating concrete definitions when the technology itself is in a constant state of flux”

Legal report

“To speak a language is to take on a world, a culture,” claimed revolutionary thinker Frantz Fanon, words that ring true when negotiating the emerging world of blockchain, whose defining language is still being determined. For economists, the world of Bitcoin is complex enough; cryptocurrency expert Jochen Möbert notes that “potentially disruptive technologies, from digitalization to biotechnology, will simply add to the list of requirements, as economists will need to understand just what is innovative about the new procedures.”

Cryptocurrency economists, he states, will need to be both software and hardware experts if they are to understand Bitcoin codes and comprehend decentralized networks and mining processes. If economists themselves will need to specialize in technology to issue accurate forecasts or to issue sound advice to investors, one can only imagine the difficult road ahead for lawyers.

Bitcoin Lies Beyond Current Legal Definitions

Bitcoin cannot neatly be defined through terms such as ‘currency’ or ‘commodity’. It cannot be valued based on factors such as interest rate or price differences between currency pairs, nor is it a commodity, like gold or other precious metals, which has a minimum value. Bitcoin has no intrinsic value; in fact, experts note that the frequent fluctuation of cryptocurrency can be attributed to the susceptibility of cryptocurrency values to market gambling. There is no way to set an objective, fair price for cryptocurrency and, as noted by Möbert, the increasing demand for Bitcoin indicates that trust in cryptocurrency is growing, which means that the effects of this technology could revolutionize our entire financial and payment systems.

Problems with Terminology

In an important paper on blockchain lexicon for lawyers, Angela Walch notes that the vocabulary used in blockchain technology is “notoriously confusing… Blockchain technology, sometimes called ‘the blockchain’ or just ‘blockchain’, is alternatively referred to as ‘distributed ledger technology’ or ‘shared ledger technology’ or ‘mutual distributed ledger technology’, or even a decentralized or distributed ‘database’. Some blockchains are public, others private, others restricted/unrestricted, and there are various parties involved in operating the databases or ledgers.”

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