Bitcoin's journey began on November 1, 2008, when an account ID named Satoshi Nakamoto published "Bitcoin: A Peer-to-Peer Electronic Cash System" on the P2P Foundation website. Twelve years later, Bitcoin’s price surged from $0.00076 to over $36,000 (peaking above $64,000), marking an unprecedented growth of over 84 million times. As the pioneer of virtual currencies, Bitcoin—alongside Ethereum, Dogecoin, and Litecoin—has stirred significant waves in global financial markets.
This rapid rise has also sparked legal disputes and regulatory scrutiny worldwide. Below, we analyze the characteristics of mainstream virtual currencies, their legal attributes, and applicable laws across jurisdictions.
Key Features of Virtual Currencies
1. Digitalization and Disposability
Unlike physical money, virtual currencies exist purely as cryptographic codes on blockchain networks. "Mining" involves solving complex algorithms to generate these codes, which are then owned via digital keys. This process eliminates physical intermediaries, emphasizing their virtual nature.
2. Decentralization
Transactions are validated by distributed nodes rather than central authorities (e.g., banks). Bitcoin’s whitepaper outlines this peer-to-peer model, where ownership is transferred via digital signatures—a framework adopted by most virtual currencies.
3. Non-Legal Tender Status
Virtual currencies lack state-backed guarantees, distinguishing them from central bank digital currencies (CBDCs). Their value derives solely from market demand, not legal mandates.
4. Fixed Supply
Most virtual currencies cap total supply (e.g., Bitcoin at 21 million coins). This contrasts with fiat currencies, whose supplies adjust per economic policies.
Legal Attributes and Protections
1. Currency Theory
Early proponents viewed Bitcoin as global money. However, courts and regulators (e.g., U.S. bankruptcy rulings, China’s "94 Notice") reject this, citing absent legal tender status and monetary utility.
2. Security Theory
Some argue virtual currencies pass the Howey Test (U.S. securities criteria). Yet, former SEC Chair Jay Clayton clarified they’re commodities—not securities—regulated by the CFTC. China’s "94 Notice" further prohibits tokenized securities.
3. Illegality Theory
Post-"94 Notice," some courts invalidated virtual currency contracts. However, this misinterprets the policy’s aim: to curb financing risks, not ban ownership/trading.
4. Virtual Commodity Theory (Prevailing View)
- Property Traits: Scarcity, value, and controllability align with civil law protections.
- Judicial Recognition: Chinese courts (e.g., Case No. (2019)沪01民终13689号) affirm Bitcoin’s virtual property status, though trading safeguards remain debated.
Key Case: Shenzhen Intermediate Court (2018) voided a Bitcoin-to-fiat award, citing "public interest" risks without denying Bitcoin’s property attributes.
FAQs
Q1: Is Bitcoin legal in China?
A: Ownership isn’t banned, but trading platforms and ICOs are prohibited to mitigate financial risks.
Q2: Can Bitcoin be considered money?
A: No. It lacks state backing and legal tender status, functioning as a commodity.
Q3: How do courts handle Bitcoin disputes?
A: Most recognize its property value but may limit enforcement to prevent speculative harm.
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Conclusion
Regulators globally target virtual currencies to prevent fraud and criminal misuse—not to stifle technological innovation. While their commodity status gains judicial traction, trading protections require clearer boundaries. The debate continues as markets evolve.
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