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41 T. Marshall L. Rev. 55 (2015-2016)
Bitcoin: The Trade of Digital Signatures

handle is hein.journals/thurlr41 and id is 65 raw text is: 


                             SHAHLA HAZRATJEE*

       Bank-paper must be suppressed, and the circulating medium must be
                   restored to the nation to whom it belongs. ,,


     Bitcoin is an online, digital ledger that securely records the transfer of
digital signatures, or Coins, from one person to another.2 Since the creation
of the Bitcoin system in 2009, Coins3 have been traded online for money4,
and are increasingly becoming accepted as a means of payment for economic
activity.5 This new technology has created many legal issues6 that have not
been fully addressed by our courts7, regulatory bodies,' or state legislatures.9

    * Shahla Hazratjee is an LL.B Honors graduate from the University of Hull, United
Kindgom, and a J.D. candidate at the University of Houston Law Center, Houston, Texas. The
author would like to thank Amr Hassan for introducing her to the wonderful world of Bitcoin
and for his support in writing this paper.
    1. Letter from Thomas Jefferson, Pres. of the U.S., to John Wayles Eppes, U.S.
Congressman (Sept. 11, 1813) (in PTJ:RS, 6:494, on file with author).
2 Satoshi Nakamoto, Bitcoin: A Peer-to-Peer Electronic Cash System, BITCOIN 2 (last visited
Feb. 5, 2016), http://www.bitcoin.orgibitcoin.pdf; See infra Parts I.B.-II (explaining how the
Bitcoin ledger works and the nature of Coins).
    3. Coins generated by the Bitcion System are sometimes referred to as Bitcoins but are
herein referred to as Coins. This is to avoid confusion with the use of the term Bitcoin
which is used herein to refer to the Bitcoin System on which Coins are recorded and traded.
    4. See How to Sell Bitcoin, CoINDESK, http://www.coindesk.com/information/sell-
bitcoin (last updated Oct. 23, 2015) (explaining how to sell Coins through online exchange
    5. What   Can    You   Buy   with   Bitcoin?, CoINDESK    (Feb.   17,  2015),
http://www.coindesk.com/information/what-can-you-buy-with-bitcoins  (describing  how
many major e-commerce sites including those of Microsoft, Dell, Overstock.com, and
TigerDirect accept Coins as payment).
    6. Is     Bitcoin      Legal?,      CoINDESK       (Aug.       19,     2014),
http://www.coindesk.com/information/is-bitcoin-legal (Bitcoin is of interest to law
enforcement agencies, tax authorities, and legal regulators, all of which are trying to
understand how the cryptocurrency fits into existing frameworks.).
    7. See infra Part II.D (discussing that courts have held that Coins are money or type of
    8. See infra Part II.C (discussing that Coins are treated as property for tax purposes). See
infra Part II.E (discussing the implications of regulating Bitcoin under money transmitter
    9. See infra Part II.E (discussing how State Legislatures have approached Bitcoin

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