Blockchains and Bitcoin: Regulatory responses to cryptocurrencies

Andres Guadamuz, Chris Marsden

Abstract


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


bitcoin; blockchain; law; regulation

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DOI: http://dx.doi.org/10.5210/fm.v20i12.6198



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