Topic: Another take at intellectual property - what about bitcoin private keys? - page 2. (Read 7054 times)

What is the key difference?

Just to say, I've lost interest in the private key aspect of this argument but I agree that the hacking of a computer is not the same as trespass. Though it does have some aspects in common, it is still a different thing.


You're missing a logical step in there somewhere.

That's pretty close. I would say that you're using my property (the computer) without my permission, or even knowledge, which, while there is no damage done to that property, does result in a financial loss to me, the same as if you had picked the lock on my front door, and used the access to my house thus acquired to rifle through my financial records and gain access to my bank account information.

computer ~= house
privkey ~= banking records

In both cases, you're not substantially altering or damaging the property you're trespassing on. In both cases, you're there only for information, which, once you have a copy, you leave unaltered where you found it. In both cases, the financial loss only comes later, when you use the information thus acquired to pretend you're me and transfer away my funds. In both cases, the trespass is only the enabling crime which allows for the larger crime of the financial theft.

Trespass is not damaging property, it's accessing property against the owner's wishes. I'm not even saying that private keys are property, any more than your bank account information is property. It's data, but data which access to allows a considerable amount of mayhem. So, mere possession of my private key is not - itself -  a crime, but the means that was used to get it, and what is done with it, those might be crimes.

If I foolishly posted my private key down there in my sig, or nailed my banking records to my front door, then the end result of that is my own damn fault, and I'd have a hard time prosecuting you for using the data that is so freely available. On the other hand, if you had to trespass to get that data, then the data is clearly illicit, and what you do with it (such as steal my money) may further compound your crimes.

Ask any anti-IPR if copying an mp3 is a crime. Then ask any Hollywood producer. What you, or I, "think", is irrelevant. The point of a legal system is to reduce conflict and have a fair method of resolving any residual conflict not already covered by the "law".

I, at least, agree with this. The next question is whether private keys can be considered "property" at all - given the nature of the bitcoin network, all that matters is possession.  Let's move, then, from an anti-IPR world to an anti-VP "anti-Virtual-Property" world, where it is not possible to define non-physical objects as property - specifically, in this case, data (such as an mp3, or a private key).

First of all, it is not possible to *forge* a bitcoin transaction.

Second, even if I agree that hacking a computer is equivalent to trespass, then you would have to show me which property I trespassed upon. The hard disc? Looks just the same to me, no damage done. The CPU? No damage there either. Really - I'm not *touching* your property, only mine - my keyboard, my mouse. All you can say is that the *data* on your computer (the privkey) has been interfered with (copied), and if you want your data to be legally protected from copying, then I fail to see why an mp3 cannot be also legally protected from copying.  I get the difference that, to copy an mp3, you don't need to hack Lady Gaga's computer, or her publisher's. But, even if we allow for the trespass argument, all I need is for your privkeys to "somehow" find their way to my computer and I can fully legally, without any possible accusation of trespass transact the BTCs to myself.

Insurance companies often won't pay a claim if it can be shown that the claimant did not take reasonable steps to secure the property. So, if you leave your door open, to use the argument above, then it's still illegal to enter and steal BUT tough luck, the insurance company won't pay up. Therefore, if your computer is not adequately programmed to protect against hacking, then you would be responsible for the loss.

And even the "arbitrary code execution" is still just avoiding the point - if you want *your* computer secure, then *you* should make sure there are no bugs which would permit arbitrary code execution.

**EDIT: Most of the people contributing here seem to agree that private keys should be somehow legally protected. My intention is not to say that they shouldn't be protected, but to see what "purist" libertarians think, by which I mean libertarians who declare that data (such as an mp3) cannot be declared as property of any sort but, being on this forum and liking bitcoins, think that private keys *should* somehow be declared as property.  To make it clear, I link again to NghtRppr's post. For the present argument, I might say: "Telling me what I can and cannot do with my computer is equivalent to claiming ownership of my computer, which amounts to little more than theft, hence a violation of NAP".

I don't think you understand how hacking works. In most cases a flaw in one or another software package allows data in the message (which should always be treated as data, never instructions) to be run as instructions. This is known as a remote code execution or arbitrary code execution bug. The hacker then maliciously crafts a message which includes the instructions that he wants to run on your machine at the appropriate location in the data. When you receive this message, your computer runs those instructions, and the hacker gains access to your computer.

So, no. The owner didn't put those instructions there. The hacker did. And that is equivalent, at minimum, to trespass.

Right, so if the lock to your house has a flaw that alows anyone to open it by operating it in a certain way it gives anyone the right to enter your house.
"I'm sorry, your honor, but i didn't break in, the lock simply allowed me to unlock it and there was nothing else to prevent me from entering. The house simply complied with my attemts to unlock it and so i had the right to enter."

A message can't "force" the computer to do anything. The computer only follows its instructions, and the instructions in effect at the time the message is received are those the owner put there.

Anyway, to try to steer this conversation back on-topic, the original question was whether private keys are a form of "IP"--specifically, whether you could claim copyright infringement against someone else for possessing an unauthorized copy of your key. It looks like we're all agreed that private keys are not covered by copyright, being random numbers with no creative aspect, so that argument won't work, regardless of whether "IP" is a meaningful concept. Does anyone disagree?

The universe can be said to exist only in terms of specific information.
So everything physical can be seen as just information.
And a thing like a private key is a unique piece of information.
It is maximally scarce since there is only one example of it.
Sure, the nature of information makes it easy to copy, but physical opbjects can be copied too, atom by atom if nessesary. So the problem remains.

Maliciously crafting a message to send to a computer to force it to act in a way the owner does not intend is, yes.

I see a lot of sophistry but I still haven't seen a good reason why someone forging a bitcoin transaction would not be legitimately illegal even in a fairly strong Libertarian system and I still don't see that intellectual property isn't an orthogonal issue.

Every time someone comes up with a counter, you jump to something else. Not intellectual property? It's non-agression. Not non-agression? It's scarcity... I feel like I'm on a wild goose chase. I give up. Honestly. To prove it, just send me your private key and I'll transfer all your bitcoins to my account.

I find it hard to believe that you're actually advocating legislation-by-analogy. Analogies are bad enough when they show up in normal arguments, since they're always false to some degree. Using them as the basis for legislation, as justification for the use of force, is even worse. An analogy can provide a useful mental image, to illustrate an argument, but you have to keep in mind that the image is deceptive--and analogies involving computers and "cyberspace" are more deceptive than most, because the underlying realities are so much more complex.

The "trespass", if there was any, is not because the hacker "entered" your computer, but rather because they caused it (by whatever means) to do something you didn't want it to do. It's a tenuous argument, however, because they can't really make your computer do anything. The computer is only reacting to eternal stimuli according to its programming. Even if you didn't intend that specific result, you are responsible for your own property, and you chose to hook it up to a communications system capable of receiving messages from anywhere in the world. Ensuring that your computer operates securely regardless of which messages it might receive is mostly your problem. Or, to flip that around, are you seriously going to claim that sending a message addressed to your computer which it happens to process in a manner you did not intend is equivalent to the use of force?


Property is more than a social convention. The law exists to uphold property rights, not to define them. Property rights are an artifact of scarcity, which is to say, the nature of the universe, and human nature. I recommend reading Bastiat for a full treatment of this subject.


The government can pervert the law to enforce their monopoly, and even make that monopoly permanent rather than temporary, but it can't grant them "ownership" of information, because whatever the law might try to claim, information is not property. It lacks the critical qualification of scarcity. In any case, ownership isn't about exclusive control, it's about having the right to use the property. Copyright and the like turn the concept of property on its head, attempting to enforce exclusive control over non-scarce information at the expense of denying others the right to use their rightful property.

The phrase "store of value" refers to another false analogy. It invokes images of possessing value, of staking a property claim to it. But value isn't something you can possess. You can only possess property which is expected to remain valuable. That value fluctuates, since it's not a physical aspect of the property, but rather a result of people's thoughts and preferences. It can change in an instant. Gold, for example, is widely considered a "store of value", and is obviously property, but if someone were to invent, say, a cheap way of extracting gold from seawater, the value of your gold would evaporate overnight, and you would have no claim against the inventor for that loss of value. You still have the gold itself, which is all you ever had a right to.


What contract would that be? Anyone can join the mining network. You don't even need to identify yourself, much less sign a contract. If someone wanted to start mining blocks, but follow a different set of rules, I don't see anything that would give anyone using the blockchain a legitimate claim against them. Of course, no one else needs to accept their blocks as valid, either, but if enough people got together and agreed on a set of changes to the rules, however arbitrary or discriminatory they might be, those who dissented and kept to the original rules still have no justification for forcing anyone to stick with their branch of the blockchain, or to compensate them for the lost market value of the bitcoin balances stranded on an unpopular fork.

OK, not a completely valid analogy but you can bet the crime will be prosecuted somewhat differently than if someone stole a box of printer paper.

I guess what it comes down to is that the concept of property and ownership, other than what you are holding in your hand, rely on societal conventions. If you leave your house, it's not OK for squatters to move in. If you park your car on the street, it's not OK for someone to just help themselves, even if you leave the keys in and the engine running. And if you have a store of value and someone reassigns that value to themselves without your permission, that's not OK either. This is why the big media companies are pushing the whole "intellectual property" thing so heavily. They want to get away from a temporary monopoly granted by the government and towards actual ownership of information.

If you want to go your way with the contract/fraud thing, by joining the mining network, are miners not contracting with bitcoin users to authenticate and validate their transactions (particularly where transaction fees apply)? This is who the fraudster would be defrauding in your scenario. Take that where you will...

Well, there you go. We finally agree. Thank you.

Now, you seem to have a problem with considering a hacking the equivalent of trespassing. Well, it is. Hackers don't say "I'm talking to your computer", they say, "I'm in your computer" Trojans aren't called "surreptitious communications channels," they're called "back doors." From both sides of the fence, the perception is that cyberspace is at least a useful abstraction, and that someone who has gained illicit access to your computer is trespassing. Since that allows the only logical path for prosecution of digital theft of Bitcoins, I tend to agree.

Unfortunately for your argument, "loss of value" is not a justification for use of force. Loss of property is.


Which, as I already pointed out, is about as far as you can possibly get from a useful analogy, but whatever.


"Entry into that device"--another bad analogy, this time based on the mythology of cyberspace. Hackers don't "enter" other people's computers, they send messages addressed to them, which those computers are (deliberately or otherwise) programmed to respond to in fixed ways. Applying reasoning based on trespass to "computer crimes" is a dubious practice, at best.

Assuming, however, that there is some legitimate basis for the reasoning that giving orders to your computer without your consent represents an infringement of your rights to your computer, then I agree that this would be the actual crime, and that you could claim damages based on all its consequences, including the financial value of the bitcoins lost to you through misuse of your private key.


That's true enough for fungible property, like currency, but it's only a matter of convention and convenience. For less fungible property, like a car, or an heirloom with mostly emotional value to the owner, it's obviously not acceptable to simply substitute a facsimile of similar market value. Your property right is not simply for "an object like this", but rather "this object". In some cases it's easy to convince the owner to settle for a close substitute, but they are under no obligation to do so.


I don't know where you get your insurance, but all of my policies have specific limits on the amount payed out, which may or may not equal the estimated value of the item being insured. The insurer is not taking on any open-ended obligation to "make me whole", and I am not forfeiting my rights to the stolen property by accepting compensation from my insurer for its loss.


The thief has a different obligation--that of returning the stolen property to its rightful owner. This is where the concept of "making whole" applies. The thief is not absolved of the crime simple because I have an insurance policy which covers the theft.


The only reason the thief would owe the insurer anything is if my contract with the insurer required me to give them the rights to the stolen property in exchange for the insurance payout. That is a reasonable step, but it's not automatic. Without a specific clause in the insurance contract transferring the property rights, it would be perfectly reasonable to accept the insurance payout and still claim the rights to the stolen property.

Remember, I payed for that insurance. The payout is coming out of my premiums, and those of my fellow insurees. Saying that the insurance payout can "make me whole" is equivalent to saying that I can "make myself whole".


I might be upset, mostly at myself for failing to secure my private key, but I wouldn't consider you a criminal solely on the basis of losing control over my bitcoins. Force would not be justified. Of course, by the same token, I am free to respond in kind.


You seem to have misunderstood what I said. It doesn't matter that the Swiss Franks aren't U.S. government currency; what matters is that they are physical property. They may only be bits of paper with pictures, but they're still your bits of paper, just as if it has been bars of gold or important legal documents or an unpublished manuscript in that safe instead of Swiss Franks.

Bitcoins, on the other hand, don't exist. You can't possess them, and they aren't property. Your bitcoin balance is just a number in other people's computers, one which they are in no way obligated to recognize. In many ways it's a lot like a reputation. You don't have a property right to your bitcoin balance any more than you have a property right to the way other people think about you.


Obviously, whether "most places" consider it theft has no bearing on whether it actually is theft. However, this is worth analyzing. I wouldn't consider the electricity itself (the electrons and/or electric field) to be property. However, the electric meter itself, and the supply side of the power lines, are certainly the property of the utility company, so connecting to them without the company's permissions would be a violation of their property rights. A similar argument applies for running a power cable to your neighbor's house. Having infringed their property rights, you would be liable for the full cost of the consequences.

By this flawed definition, stealing electricity should be OK too, because it doesn't "exist" and therefore isn't "property".  But most places would consider it theft if you consumed it in any significant quantity without paying (by this, I mean bypassing the electric meter so you can run miners without the kWh costs for example, or running an extension cord to your neighbor's house.  I do not mean things with negligible costs like charging your cell phone away from home).

What you say is true. But cash is just paper with pictures of dead white dudes on it. And even if (for example) the US government decides it has the authority to recognise them as something more, if you have $500k of Swiss Franks in your safe and they are stolen, should the US government refuse to act because it's not their currency?

You're wandering into very philosophical deconstructions where most things that we accept as real just stop making sense. It's probably not a very fruitful path and best kept for being drunk with friends (and I mean that in a good way).

I'll concede the point that bitcoins are not, as such, "property", since they have no physical presence. Which is why my argument hinges on value. I did indeed mean "Denominated in value", as damages are always given in terms of some unit of monetary worth, ie a value. The reason we are having such great difficulty here is that no system for the transmission of value remotely like bitcoin has ever been devised or used before. The closest analogy is digital account balances with a bank.

In that analogy, the bank is not the network. The bank is your own computer, or whatever device you use to store and secure your private keys. (Which, in the case of a paper wallet in a safety deposit box, may indeed be a bank.) Unlawful entry into that device and retrieval of the private key is the crime, the lost bitcoins are the value of that crime - both to the criminal, and as a loss to you.

Now, particularly with Bitcoins, but also in most monetary theft, the return of the specific units of monetary exchange that were stolen is not important. If you're mugged for $50, I doubt you're going to check the serial numbers to make sure it was the same $50 that you got back. All you care about is the value that you have lost. In bank robberies, the police might use the serial numbers to verify that that is indeed the stolen money, not to see that the bank gets that specific money back, but to prove that the person in possession of it is the criminal. If some of it has been spent, they're not going to demand it back from the merchants, they're going to extract it from the thief - probably by selling whatever it was he bought with it, if possible. Again, the specific property is not important, it's the value of that property that's important.


The contract states that the insurer has an obligation to make you whole. That's a phrase with a specific legal meaning: "to pay or award damages sufficient to put the party who was damaged back into the position he/she would have been without the fault of another." Past that point, the insurer's obligation to you is ended. As is the thief's. You have been made whole. You have received the value of the stolen car back. At that point, if the thief owes anyone anything, it's the insurer, not you, since without their theft of your car, that claim would not have been made, and neither would the payout.

It boils down to this: Following your logic, stealing bitcoins is not a crime. Following mine, it is. Since I feel you would be justifiably upset if I were to steal your bitcoins, and would consider me a criminal, it is clear that your logic fails the simplest test of real-world application. Unless you wouldn't? In which case, I have a program I'd like you to download...

The difference, obviously, is that while they may both be "abstractions of value", the fiat currency is also physical property, while the bitcoins are not. Wrongfully taking possession of physical fiat currency you don't own is theft. Claiming that someone else has a contractual obligation to give you that property, in the basis of a false identity, is fraud. You can't take possession of bitcoins, as they have no physical presence, and the rules of the bitcoin system don't require you to make any claims regarding your identity to move bitcoins around, only proof that you possess the correct key, so there is no fraud involved.


First, you're the only one talking about network errors. I was referring to deliberate action. If a majority of bitcoin miners were to get together and chose to rewrite the protocol to exclude your transactions, or to accept transfers from your accounts which are not signed with your key, you would have no legitimate claim against them. Bitcoin is based on consensus, not property rights. (That isn't meant to disparage bitcoin--in many ways, its consensus-based system is more secure than property rights which must be defended with force.)

Second, someone who impersonates you and tricks the bank into transferring your balance to a different account has not stolen from you, but rather from the bank. They had no authority to request that transfer, ergo (once the fraud has been uncovered) your balance should be unchanged. No third party has the authority to alter your contract with the bank. The fraud, and its consequences, are legitimately between the thief and the bank.

Finally, the analogy between bitcoin balances and bank accounts is false. Your bank account balance represents a contract between you and the bank. A bitcoin balance is just an entry in a ledger; there is no contract. There isn't even an organization to contract with. If the bank decreases your balance without your consent, they're in breach of their contract with you. If the consensus within the bitcoin system is that a transaction spending "your" balance is valid, however, that's the final word on the subject, no matter who generated the transaction.


Now this is just nonsense. First and foremost, value is subjective, ergo "denominated in value" is a meaningless phrase. What you mean, I presume, is "denominated in currency", which is an artifact of the concept of "legal tender", the idea that the government can force you to accept their currency as alternative payment despite the fact that what you're really owed is the property which was taken. Second, a loss of value is not sufficient, by itself, to give you a claim for compensation. The most obvious counter-argument here is competition: others who compete with you reduce the value of your property, by increasing the supply, but that doesn't mean your property rights have been infringed. Your rights cover the property itself, not its value. When something is stolen, it's the stolen property which the thief has an obligation to return, not its value--though the harmed owner may be willing to settle for something of equivalent value to them when the return of the original property is out of reach.


This is completely irrelevant, as the insurance agency didn't steal your car. Your contract with the insurer obligates them to compensate you for the loss with a specific amount of currency in exchange for your premium payments. The contract could just as easily have specified compensation in the form of a new car, if that was what you and the insurer agreed to, but cash is more flexible for both parties. In any case, the thief still owes you your car back--not the value of the car, or even an equivalent car: the car itself. It never stopped being your property just because you lost possession of it.

Exactly. Entering someone's property. Like their computer. As I said before, hacking is trespass.


If you acquire stolen goods, it doesn't make them not stolen if you're not the one that stole them. If you somehow decode my private key without entering my computer, that's (pretty much literally) Force majeure. Nothing I or anyone else could have done to stop you. But if you, or your agent, enters my computer system and operates it against my will, and gets my private key that way, You've at minimum committed criminal trespass, same as climbing a fence to peer into my window. It doesn't matter if my password is "biscuits" or if the fence you have to climb over is only a foot tall. It's still an intended barrier, and bypassing it is still trespassing.

As for actually recovering the bitcoins, I don't know of a way, short of threatening - or using - torture, of forcing you to return them, but as for any other crime, once the perpetrator is identified, it's up to the justice system.

The zeitgeist is definitely coming around on this, however, as Stephan Kinsella notably wrote in The Death Throes of Pro-IP Libertarianism.

In my own experience, rejecting the legitimacy of imaginary property becomes straightforward for most libertarian-minded folk as soon as they check their premises and learn just the following brief background:

1. Despite popular myth and misconception, copyright did not, in fact, come about as some noble effort to protect the rights of authors, but rather has its ignoble origin in the privatization of censorship in post-Gutenberg sixteenth-century England. Its further developments have been by and for the distributors, as is evident even today with the major media companies seeking, and obtaining, what amount to perpetual extensions to their copyright terms.

Karl Fogel's essay The Surprising History of Copyright and The Promise of a Post-Copyright World and Rick Falkvinge's History of Copyright blog series are good summaries for brushing up on the history.

2. As Cory Doctorow pointed out in his recent talk The Coming Civil War over General-Purpose Computing, the very moniker "intellectual property" is a neologism. Before the 1970s, this discussion would have been about "creative monopolies". The smartest thing the distribution industry ever did was reframe the debate in their favor, as it's clearly a lot easier to go hat in hand (and pocketbook at the ready) to Congress if you're just requesting stronger protections for your "property rights" instead of begging that they please extend your already-considerable monopoly privileges.

Peter Saint-Andre's essay Who's Afraid of the Public Domain? makes much the same point, and Tucker and Kinsella have written voluminously on it as well. Once you realize that IP isn't about actual property rights (in the libertarian sense) at all, but rather just state-granted, limited-time monopoly privileges, the rest is easy: intellectual works aren't property any more than copyright infringement is theft, all the "you wouldn't steal a car" propaganda trailers on DVDs notwithstanding.

And once the discussion is properly framed on monopoly privileges instead of property rights, well, for libertarians there isn't much left to debate. As Saint-Andre puts it: