Anyone who has tried to explain bitcoin around their kitchen table knows that it is not easy to put your finger on what exactly the technology is. Because of their innovative nature, digital currencies don’t have obvious analogs or fit easily into existing categories. Bitcoin is part currency, part digital payment system, and part immutable ledger.
This confusion is not merely academic. How digital currencies are defined determines how they are regulated. For instance, the Internal Revenue Service (IRS) determined that bitcoin is a form of property, not currency, for tax purposes. The Commodity Futures Trading Commission (CFTC) labeled bitcoin a commodity. Could the Securities and Exchange Commission (SEC) decide that bitcoin is a form of security?Continue Reading Are Bitcoin and Other Digital Currencies Securities?