I'm not waving it away, this isn't a discussion about the legal system.
If someone steals steal a fiver from your back pocket then there's no magical wand that the police can wave that teleports the cash back into your hand. They need to come and get it from the kitchen table or wherever the thief has put it assuming they haven't spent it.
Most cryptocurrencies are explicitly designed to act as digital cash in this way. The system is structured such that a coin is fully under the control of the owner of the private key, there is no third party involved to effect some sort of return like a bank can.
If the coins are sitting in an exchange or some other custodian i.e. not exclusively under the control of the owner of a private key then you can effect this change by leaning on the exchange (in a legal sense).
Possession is probably a better word than ownership, sure.
In the same way that if someone takes your cash into their possession, they might not have legal ownership, but now they have to somehow be involved in its' future transfer (even if that's like, handcuffing them and forcing them to hand it over).
In a cryptographic system you need the key in order to do things. Whether you think it's good or bad to apply that principle to the concept of money is orthogonal to the ground reality of how it actually works.
The original Bitcoin whitepaper explicitly refers to itself as a peer to peer electronic cash system (https://bitcoin.org/bitcoin.pdf). It's the 7th word in. It's designed to operate in a cash-like manner as opposed to a referential (credit-like? not sure what the term is for this) as in a bank ledger or similar.
> Possession is probably a better word than ownership, sure.
I want to stress that I don't consider this a minor difference.
> In the same way that if someone takes your cash into their possession, they might not have legal ownership, but now they have to somehow be involved in its' future transfer
Yes. Cash can be stolen by a pickpocket. But two things make this not a difference in degree, but in kind:
1. You can't pickpocket $70M
2. A pickpocket can quickly hand the $100 in your pocket to an accomplice, but not to an accomplice in Bolivia.
If you want to move millions or billions in cash then you have to fill out paperwork exactly because that's how money laundering happens. Cash isn't actually easy to move, nor anonymous, at scale.
$70M is 700kg in $100s. And any legit business you show up with $1M in cash will report it, because they have to and/or because they don't want to be tried as an accomplice to money laundering.
I've had friends receive huge sums in cash, and they have reported it exactly for this reason. Enforcement against financial crime is actually built in.
I think the comparison to cash therefore is completely inappropriate, to the point where I question if it's even said in good faith.
> In a cryptographic system you need the key in order to do things. Whether you think it's good or bad to apply that principle to the concept of money is orthogonal to the ground reality of how it actually works.
In my opinion it's not "money" that's being replaced with math, but "intentions". It's not about replacing fiscal policy with math so much as replacing laws against theft and money laundering.
The definition for the features of cryptocurrencies tend to be the exact description of money laundering and tax evasion.
So if the goal is "I want to commit all the financial crimes" then yes, for those purposes cryptocurrencies have found their use cases.
If someone steals steal a fiver from your back pocket then there's no magical wand that the police can wave that teleports the cash back into your hand. They need to come and get it from the kitchen table or wherever the thief has put it assuming they haven't spent it.
Most cryptocurrencies are explicitly designed to act as digital cash in this way. The system is structured such that a coin is fully under the control of the owner of the private key, there is no third party involved to effect some sort of return like a bank can.
If the coins are sitting in an exchange or some other custodian i.e. not exclusively under the control of the owner of a private key then you can effect this change by leaning on the exchange (in a legal sense).
The exchange is the bank, the coins are cash.