Bitcoin may eventually be labeled as a brand new type of property in the U.S. and U.K. because it doesn’t physically exist in any one specific location.
Preston Byrne puts forward a solid argument that bitcoin will eventually be labeled as a new type of property and its understanding could be different in the U.S. and England.
As you can see above, bitcoin is truly unique as a type of property due to the fact that it doesn’t actually physically exist in any one place because of the fact that the ledger is maintained in an extremely distributed fashion and it does not fit neatly into any definition of property that has been established to date. On top of this, the nature of control over a UTXO is determined by a private key, which can be signed by the individual who created it, someone who gained access to it via nefarious means or someone who used a very powerful computer to guess it. When combined, these factors make it pretty clear — as Preston points out — that we are dealing with a peculiar beast.
If bitcoin gets designated as speech that is exercised in no specific location but everywhere at once, I imagine it could decrease the ease with which any individual court within a relatively honest legal system in any particular jurisdiction could try to claim bitcoin as taxable within their borders. By defining this new type of property as something that someone has ownership over but not in a specific location, plausible deniability increases significantly, which makes it much harder to enforce local laws on bitcoin owners.
