The Law Commission of England and Wales, an independent consultant firm for legal reform originally commissioned by the parliament, has proposed a new category of property to encompass digital assets such as bitcoin in a 549 page proposal[1].
How could this change the way the United Kingdom interacts with and recognizes bitcoin, and why was it necessary?
Reforming Legal Structure
In the UK there are currently two recognized forms of property: things in possession, and things in action.
Property belonging to the category of things in possession simply refers to tangible objects that can be held or touched, such as a gold bullion, whilst property categorized as a thing in action is a concept or idea that is upheld through legal actions or proceedings.
However, bitcoin cannot meet any of this criteria. Bitcoin cannot be held in possession in a tangible way, nor can legal action dictate bitcoin’s existence. Thus, the Law Commission proposed the addition of data objects as a form of property.
Data objects are composed of data which is represented in an electronic medium. This designation can include computer code, as well as electronic or analogue systems. Additionally, data objects must exist independently of persons and the legal system, meaning the data object must be separable from both the individual and legal rights.
Moreover, the data object must also be “rivalrous,” meaning no two persons can simultaneously use the same data object. While two people cannot both use the same computer to write a book at the same time, so too those individuals can not spend the same unspent transaction output (UTXO), or bitcoin.
Not only does the Law Commission outline this new understanding of
