<figure class="wp-block-image size-large"><img width="325px" height="183px" srcSet="https://d2ly46a6b1u3g6.cloudfront.net/wp-content/uploads/2023/11/17062230/Crypto-is-knowledge-375x211.webp 375w, https://d2ly46a6b1u3g6.cloudfront.net/wp-content/uploads/2023/11/17062230/Crypto-is-knowledge-662x372.webp 662w, https://d2ly46a6b1u3g6.cloudfront.net/wp-content/uploads/2023/11/17062230/Crypto-is-knowledge-768x432.webp 768w, https://d2ly46a6b1u3g6.cloudfront.net/wp-content/uploads/2023/11/17062230/Crypto-is-knowledge.webp 688w" sizes="(max-width: 425px) 150px, 450px" src="https://ll-blog-dev.s3.ap-southeast-2.amazonaws.com/wp-content/uploads/2023/11/17062230/Crypto-is-knowledge.webp" alt="Crypto is knowledge" class="wp-image-4533"/></figure>



Cryptocurrency represents a seismic shift in how we conceive of value and ownership. 



Yet most regulations treat digital assets as if they are traditional property. 



This misunderstanding causes problems. 



Laws must recognize crypto as knowledge rather than physical possessions.



<h2 class="wp-block-heading tablecontent">You Don&#x27;t Own Coins - You Know Keys</h2>



Unlike cash, cryptocurrencies have no physical existence. 



There are no actual &quot;coins&quot; stored in a wallet. 



Cryptocurrency derives its entire value from the knowledge contained in private keys and records on <a href="https://www.thecoinzone.com/blockchain/blockchain" data-type="URL" data-id="https://www.thecoinzone.com/blockchain/blockchain" target="_blank" rel="noreferrer noopener">blockchains</a>.



If your wallet is hacked, no funds are literally stolen. 



The coins remain on the blockchain. 



What is compromised is exclusive knowledge of the private key controlling those coins. 



Without your keys, the funds cannot be moved.



<h2 class="wp-block-heading tablecontent">Seed Phrases Grant Access, Not Ownership</h2>



<a href="https://www.thecoinzone.com/security/crypto-wallet" data-type="URL" data-id="https://www.thecoinzone.com/security/crypto-wallet" target="_blank" rel="noreferrer noopener">Wallets</a> don&#x27;t truly hold cryptocurrency. 



They store the <a href="https://www.thecoinzone.com/security/crypto-seed-phrases" data-type="URL" data-id="https://www.thecoinzone.com/security/crypto-seed-phrases" target="_blank" rel="noreferrer noopener">seed phrases</a> that can generate your keys and thus grant access to coins on blockchains. 



Knowing the 12 or 24 words in your seed phrase means you can access your crypto - regardless of where it resides on the internet.



Think of a seed phrase like the master keycode to a series of safety deposit boxes holding your funds. 



The boxes themselves aren&#x27;t in your house, but you have the secret knowledge to open them.



<h2 class="wp-block-heading tablecontent">New Regulations Must Recognize Crypto as Knowledge</h2>



Laws based on &quot;possessing&quot; or &quot;storing&quot; cryptocurrency fail to comprehend its essence as knowledge. 



When regulations treat crypto like physical property, unintended consequences occur.



Rules about transmitting money don&#x27;t map neatly onto sending non-custodial crypto that remains on a user&#x27;s device. 



And concepts of custodial ownership don&#x27;t apply cleanly when wallets only provide access to a shared ledger.



<h2 class="wp-block-heading tablecontent">The Bottom Line</h2>



Lawmakers worldwide must rethink outdated frameworks to effectively regulate cryptocurrency without <a href="https://www.thecoinzone.com/regulation/crypto-regulation-is-outdated" data-type="URL" data-id="https://www.thecoinzone.com/regulation/crypto-regulation-is-outdated" target="_blank" rel="noreferrer noopener">hobbling innovation</a>.



Recognizing crypto as knowledge rather than property is the critical first step. 



The technology&#x27;s potential blossoms when based on true understanding.

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<figure class="wp-block-image size-large"><img width="325px" height="183px" srcset="https://d2ly46a6b1u3g6.cloudfront.net/wp-content/uploads/2023/11/17062230/Crypto-is-knowledge-375x211.webp 375w, https://d2ly46a6b1u3g6.cloudfront.net/wp-content/uploads/2023/11/17062230/Crypto-is-knowledge-662x372.webp 662w, https://d2ly46a6b1u3g6.cloudfront.net/wp-content/uploads/2023/11/17062230/Crypto-is-knowledge-768x432.webp 768w, https://d2ly46a6b1u3g6.cloudfront.net/wp-content/uploads/2023/11/17062230/Crypto-is-knowledge.webp 688w" sizes="(max-width: 425px) 150px, 450px" src="https://ll-blog-dev.s3.ap-southeast-2.amazonaws.com/wp-content/uploads/2023/11/17062230/Crypto-is-knowledge.webp" alt="Crypto is knowledge" class="wp-image-4533"/></figure>



Cryptocurrency represents a seismic shift in how we conceive of value and ownership.&nbsp;



Yet most regulations treat digital assets as if they are traditional property.&nbsp;



This misunderstanding causes problems.&nbsp;



Laws must recognize crypto as knowledge rather than physical possessions.



<h2 class="wp-block-heading tablecontent">You Don't Own Coins - You Know Keys</h2>



Unlike cash, cryptocurrencies have no physical existence.&nbsp;



There are no actual "coins" stored in a wallet.&nbsp;



Cryptocurrency derives its entire value from the knowledge contained in private keys and records on <a href="https://www.thecoinzone.com/blockchain/blockchain" data-type="URL" data-id="https://www.thecoinzone.com/blockchain/blockchain" target="_blank" rel="noreferrer noopener">blockchains</a>.



If your wallet is hacked, no funds are literally stolen.&nbsp;



The coins remain on the blockchain.&nbsp;



What is compromised is exclusive knowledge of the private key controlling those coins.&nbsp;



Without your keys, the funds cannot be moved.



<h2 class="wp-block-heading tablecontent">Seed Phrases Grant Access, Not Ownership</h2>



<a href="https://www.thecoinzone.com/security/crypto-wallet" data-type="URL" data-id="https://www.thecoinzone.com/security/crypto-wallet" target="_blank" rel="noreferrer noopener">Wallets</a> don't truly hold cryptocurrency.&nbsp;



They store the <a href="https://www.thecoinzone.com/security/crypto-seed-phrases" data-type="URL" data-id="https://www.thecoinzone.com/security/crypto-seed-phrases" target="_blank" rel="noreferrer noopener">seed phrases</a> that can generate your keys and thus grant access to coins on blockchains.&nbsp;



Knowing the 12 or 24 words in your seed phrase means you can access your crypto - regardless of where it resides on the internet.



Think of a seed phrase like the master keycode to a series of safety deposit boxes holding your funds.&nbsp;



The boxes themselves aren't in your house, but you have the secret knowledge to open them.



<h2 class="wp-block-heading tablecontent">New Regulations Must Recognize Crypto as Knowledge</h2>



Laws based on "possessing" or "storing" cryptocurrency fail to comprehend its essence as knowledge.&nbsp;



When regulations treat crypto like physical property, unintended consequences occur.



Rules about transmitting money don't map neatly onto sending non-custodial crypto that remains on a user's device.&nbsp;



And concepts of custodial ownership don't apply cleanly when wallets only provide access to a shared ledger.



<h2 class="wp-block-heading tablecontent">The Bottom Line</h2>



Lawmakers worldwide must rethink outdated frameworks to effectively regulate cryptocurrency without <a href="https://www.thecoinzone.com/regulation/crypto-regulation-is-outdated" data-type="URL" data-id="https://www.thecoinzone.com/regulation/crypto-regulation-is-outdated" target="_blank" rel="noreferrer noopener">hobbling innovation</a>.



Recognizing crypto as knowledge rather than property is the critical first step.&nbsp;



The technology's potential blossoms when based on true understanding.

Cryptocurrency is Knowledge, Not Property: Why Laws Must Adapt

This post explains how cryptocurrencies are knowledge and how regulators must adapt to this reality.