The terms ‘property’ and ‘proprietary interest’ are routinely used in Australian law to represent the broad category of rights an individual may have with respect to tangible and intangible things. ‘Money’, ‘currency’, and ‘legal tender’ are examples of property that facilitate the exchange of goods and services, settle monetary obligations, and measure wealth within a community. Within the last decade, Bitcoin, a decentralised payment system denominated in its own unit of account (‘bitcoin’), has emerged as an attractive form of investment and medium of exchange. Despite its widespread use, Bitcoin’s status as property, money, currency, and legal tender for Australian legal purposes remains uncertain.This dissertation explains how an individual’s right to access, redeem and use the value associated with an unspent transaction output (‘UXTO’) on the Bitcoin blockchain amounts to a proprietary interest for the purpose of Australian law. Each UTXO is discretely encrypted and associated with one or more private/public keypairs, which prevents the UTXO from being redeemed unless that private/public keypair is presented to ‘unlock’ the UTXO for use in a subsequent transaction. Due to the distributed nature of the Bitcoin blockchain, duplications of that UTXO can exist across the full nodes that maintain the Bitcoin network. Therefore, a separate proprietary right exists on all full nodes that recognise that replicated right, subject to a few exceptions. Further, when an individual redeems a UTXO on a full node, that person implicitly authorises the full node to re-transmit the transaction (and the exercise the right) on the individual’s behalf to peer nodes.This dissertation also explores the evolution of the terms ‘money’ and ‘currency’ and examines the legislative meaning of ‘legal tender’. Throughout history, many objects have functioned as money, such as cowrie shells, rum bottles, and electronic entries on digitised bank ledgers. Similarly, UTXOs meet the functional and common law definition of money; and, due to its widespread adoption domestically and internationally, UTXOs also satisfy the broadest definition of currency. ‘Legal tender’, however, is a statutory term referring to the prescribed, ‘lawful money’ of a nation. UTXOs are not legal tender in Australia as the lawful money of Australia is prescribed by the Currency Act 1965 (Cth) and Reserve Bank Act 1959 (Cth). Due to the decree recently issued by the Legislative Assembly of the Republic of El Salvador, bitcoin has been adopted as the legal tender of El Salvador.The conclusions reached by this dissertation influence the taxation of Bitcoin in Australia, inter alia. For example, the application of the capital gains tax (CGT) regime to bitcoin transactions now imposes a significant administrative burden on taxpayers. Each redemption of a UTXO (including re-transmitted transactions) has income tax implications. Further, as UTXOs satisfy the meaning of ‘foreign currency’ for the purpose of the Income Tax Assessment Act 1997 (Cth), individuals can elect to account for gains or losses made in relation to UTXOs under the ‘foreign exchange rules’ instead of the CGT regime
