Of Course You Can Own Bitcoins

You can both own and possess bitcoins.

You can possess bitcoins without owning them.

You can own bitcoins without possessing them.

What’s the difference?

Possession is the access, ability, custody, or control of a property. In the case of bitcoins, which are a digital property, that would generally mean that a person has exclusive access to the private keys which can control the UTXOs of a certain amount of bitcoins. Whoever has physical access to or knowledge of those private keys possesses those bitcoins.

Ownership is the rightful or legal claim to a property. Whether someone believes that rights come from a Higher Being, government, social contract, or some combination of the above, ownership is that right to not have one’s rightfully owned property stolen. Owning bitcoins is when one rightfully earned or purchased a specific amount of bitcoins with the right to spend them.

One can own bitcoins but not currently possess them. Maybe they were lost, maybe they are on loan, or maybe they were stolen. If it were not possible to rightfully own bitcoins then it would also not be possible to steal them either, an idea which doesn’t pass simple logic and experience.

Now if bitcoins are stolen or lost, at some point, a person can lose ownership after enough time has passed, or circumstances make clear that those bitcoins will never be returned. Those exact details of when ownership is lost is nuanced and depends on the unique circumstances. I hope to cover that topic further in a dedicated article about lost and found bitcoins.

(Note: If bitcoins are stored in a careless way which make them trivially stolen, such as a brain wallet, or if in the future quantum computers upend the ability to secure private keys, then in either case, bitcoins can no longer be owned, because there is no reasonable expectation of exclusive control and therefore no ability to have unique ownership.)

One can possess bitcoins but not own them. A custodian can be guarding someone else’s bitcoins. A borrower can have bitcoins out on loan. A thief or hacker may have wrongfully gained access to a person’s private property or records and stolen private keys, or tricked a person’s wallet into sending bitcoins to the wrong address, or used threats or violence to coerce relinquishing of private keys or UTXO’s. If someone possesses something which they do not rightfully own, they can be compelled by law or justifiable force to return the property to its rightful owner.

Obviously the US government treats bitcoins as property which can be owned.

The IRS says that virtual currency is treated as property.

The CFTC treats bitcoin as a commodity.

FinCEN treats bitcoins as personal property.

None of these things would apply if bitcoins could not be owned.

The fact that bitcoins are different than normal physical property doesn’t change the basic facts that bitcoins function essentially like other bearer assets, other personal properties.

Just because a private key is a “rare number” doesn’t mean that you can’t be the one that possesses that “rare number”, to the exclusion of everyone else, and that in certain cases, you are also the one that rightfully owns that rare number as well.

If you can own anything at all (which is admittedly debatable) then you can own your body, the fruits of your labor, you can own the dirt under your feet and you can own bitcoins.