This paper examines blockchain and Bitcoin from a legal and regulatory perspective, answering several important questions.

This paper explains what Bitcoin is, and why it matters, before describing problems with Bitcoin as a method of implementing a cryptocurrency. This introduction to blockchain and Bitcoin allows the authors to eventually ask the inevitable question: is it legal?

When it comes to blockchain and Bitcoin, the paper also answers the following questions:

• What are the regulatory responses to the currency?
• Can it be regulated?
• Why are virtual currencies of interest?
• How did self-regulation failed?
• What useful lessons can be learned?

Finally, the authors 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 blockchain technologies. They 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.

The authors conclude that it is decreasingly accurate to call Bitcoin a currency. Money is a unit of account, store of value and medium of exchange. Bitcoin is none of those, in any serious sense. Bitcoin has too many problems to be the solution. An anonymous and decentralised payment system could indeed revolutionise the economy, help to end the disproportionate power of some banking systems and democratise monetary exchange. A system created by an anonymous cryptographer may not be the way of the future; true openness is needed for the next experiment to be successful.

To find out more about blockchain and Bitcoin, access this free research paper!