Bitcoin Is Digital Property
THE BITCOIN ESSAYS
Originally Published March 2023
5 Minute Read
“By the sweat of your brow you will eat your food until you return to the ground, since from it you were taken; for dust you are and to dust you will return.” // Genesis 3:19
It is not at all obvious when the concept of property first took root in the human mind. Perhaps the early innings of the agricultural revolution would be an obvious location to begin tracing its origins; yet glimmers emerge even in the pre-historic foraging of primeval hunters and gatherers. Surely they had basic acknowledgement to the individual autonomy of their own kin and tribesmen. Recognizing, for example, to whom a certain spear belongs and perhaps even respective apportionment of the spoils of a successful hunt. As human civilization scaled, the idea of property developed from the realm of individuals, to domains of collectives and divine beings. Mankind has even experimented with properties transcending death, seen now in the modern will and testament, which gives the owner certain executive function over their assets even when their hand no longer signs the dotted line. The novel evolution of digital property marks a paradigm shift unlike anything humans have seen in terms of its quality and unique capabilities. There are, and will be many more, variants on digital property. This essay will seek to explore the Bitcoin blockchain specifically – how it creates, allocates, and defends digital property to the benefit of participants and observers alike.
The creation of digital property is coupled to the moment of its discovery. A solution to the double spend problem had long evaded even the most astute cryptographers; that is, until the genius innovation presented by Satoshi Nakamoto on Halloween 2008. This hallmark, discovered invention, forever flipped the game board by enabling humans to create self-sovereign property using their own free entropy and secret keeping. With the 2009 genesis block, digital property was effectively created ex nihilo in the far corners of cyberspace, beginning an infinite march to the beat of a bi-weekly difficulty adjustment targeting ten minute block times. At current writing, the block height reaches ~780K sequential timestamps in height and has yet to succumb to any attacks seeking to thwart its immutable chain of cryptographic truth. Any participant who has successfully created their own public-private key pair, acquired Bitcoin, and maintained control of their private keys is now the rightful owner to their respective block in cyberspace.
No other entity may claim title or authority over this sacred ownership.
The creation of a novel property system is required, by way of its own existence, to allocate said property. The implementation of property allocation is effectively the crux of endless debates surrounding alternative models of human governance. The spectrums of libertarianism-authoritarianism and capitalism-communism can be thought of in context of property allocation. In certain persuasions, the individual should reign supreme in their ability to acquire and persist private property. Conversely, collective models posit concepts of the commons, emphasizing the transience of the individual and the near immortal persistence of the collective to persuade participants to relinquish property for “the common good.” The complications of physical property are largely to blame for these continual debates, as contextual dependencies suggest certain physical objects are better owned, operated, and liable to the collective. Public roadways are perhaps one of the more notable examples of a physical property with contextual difficulties in ascribing ownership to any entity other than the commonwealth.
Herein we find Bitcoin offers an entirely novel and qualitatively distinct mechanism for allocating property. Now broadly recognized as a commodity, Bitcoins are not issued by a counterparty and carry an entirely different risk profile to the other assets on offer. All Bitcoins have been and will continue to be created, and subsequently allocated, in the same manner. The unending competition between miners is rewarded every ten minutes with the sole authority to append one unit of Bitcoin transactions to the immutable chain. This winner then ascribes themselves the block subsidy and the metaphorical gun goes off once more, commencing yet another like competition for write privileges. This undying state and chain of custody is the mechanism by which the protocol allocates property. Even Satoshi themself acquired their (now unspent, and thought lost) Bitcoin through this same energy transaction. Early adopters are rightfully rewarded for their risk and subsequent adopters evaluate the risk-adjusted valuation and determine a fair price. In this sense, Bitcoin is a fair game, and all participants are allocated coins by virtue of their own initiative to participate in the network. No one else is going to buy your Bitcoin for you.
Having conceived this novel mechanism for creating and allocating property, it now must be defended, for undefended property is soon to be the property of someone else. We find this common thread across scale and domain, that property rights must be enforced through literal force in the form of power projection. Consider the bear defending his territory in a particular neck of the woods, the bucks duking it out for mating privileges, primeval man squabbling it out for the choice meat. These matters appear somewhat innocent and trivial in remote instances but hit all too close to home when the folded flag is presented to the grieving widow whose spouse perished defending the claims of their nation.
Thank God for Bitcoin. For the first time in human history, we discover a peaceful means of projecting power to defend private property. When one acquires Bitcoin, they claim ownership over a particular sliver of the global hash power being projected by distributed mining farms the world over. This form of power projection is exponentially growing in magnitude, diversifying in approach, and with every lurch in hash rate the attack surface narrows. This ability to project power in a peaceful manner, through nothing more than mathematics, software, and machines is one of the most intriguing and distinctive qualities separating Bitcoin from all other forms of property humanity has held.
BENEFITS FOR PARTICIPANTS AND OBSERVERS
The benefits of creating, allocating, and defending property by means of time stamping immutable blocks of ownership into a perpetual state and chain of custody accrue universally to all humans alive today. These benefits accrue most acutely to participants who experience a volatile, but sure, increase in purchasing power over time. Yet even the observer stands ready to benefit as others around them participate and become wealthier. The quality of the goods, services, and individuals who consume them all improve over the mid to long term and this is to everyones gain. Rising tides raise all ships.
This is Jonathan David Kellogg – Writing for
That Bitcoin Blog.
These are The Bitcoin Essays.
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