Blockchains and Bitcoin: Regulatory Responses to Cryptocurrencies
First Monday, Volume 20, Number 12 - 7 December 2015
46 Pages Posted: 18 Dec 2015
Date Written: December 7, 2015
This paper examines Bitcoin from a legal and regulatory perspective, answering several important questions.
We begin by explaining what Bitcoin is, and why it matters. We describe problems with Bitcoin as a method of implementing a cryptocurrency. This introduction to cryptocurrencies allows us eventually to ask the inevitable question: is it legal? What are the regulatory responses to the currency? Can it be regulated?
We make clear why virtual currencies are of interest, how self-regulation has failed, and what useful lessons can be learned. Finally, we produce useful and semi-permanent findings into the usefulness of virtual currencies in general, blockchains as a means of mining currency, and the profundity of Bitcoin as compared with the development of block chain technologies. We conclude that though Bitcoin may be the equivalent of Second Life a decade later, so blockchains may be the equivalent of Web 2.0 social networks, a truly transformative social technology.
Keywords: regulation, cyberlaw, bitcoin, blockchain
JEL Classification: K00
Suggested Citation: Suggested Citation