Since Stephan Kinsella challenged me to come up with a definition of ownership that justifies stating that I own Bitcoin, I will attempt to define the word "homesteading" in a way that encompasses digital assets the same way John Locke justified ownership of land by adding one's labor to it.

Digital homesteading, in my proposed definition, is the acquisition of a unique string of bytes that is unknown to anyone else. For some common examples: (1) a Bitcoin private key (256 bits); (2) A GPG signing key (typically 2048 or 4096 bits); (3) an online bank account password (typically 50 to 100 bits of entropy (defined as L * log2(R), where L is the password length and R is the size of the pool of characters (typically 72 letters, digits, and special characters).

This ownership is conditional, just as Lockean land ownership is. It depends on several factors, one of which is the difficulty of someone else "reaching" the same asset on their own, and another is one's ability to keep the asset from prying eyes. These are analogous to the need to defend one's land claims from those who wish to trespass and steal.

To some extent, there is often a trust requirement for this to work. Your bank should not have to know your password; all they require is a cryptographic hash of it to be stored. But they could easily store it at any point of the registration of any login process, so you have to be able to trust the employees with access to that data will not misuse it. Likewise, if you run a Bitcoin node on a VPS or dedicated server, you have to be able to trust that the techs at those data centers will not keylog you or use their physical console access to grab your keys.

But as long as you have some expectation of trust, and are otherwise able to keep your digital assets private, you own those assets to the extent that they cannot be guessed.

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last updated 2021-05-23 21:42:20. served from tektonic.jcomeau.com