In the traditional financial world, assets are a claim on a specific property. For example, a commodity, shares in a company or a debt owed.
Crypto assets, however, are not a claim on anything. What is bitcoin a claim to? Or ether?
Instead, crypto assets are a form of proof. They are cryptographic proof that a specific set of mathematical functions has been performed. They are proof that certain software instructions have been performed and of the algorithmic outputs of that software. And crucially, the mathematical functions are performed by nobody in particular, they are performed by the network as a whole.
Property is “ownership determined by law.” Crypto assets are not property because they are not determined by law – they are determined by maths. This presents some obvious issues when it comes to figuring out exactly how to regulate them.
‘Enforcement 40’ for 2020
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