What users of the Bitcoin network own are private keys. These allow you to control corresponding entries on the Bitcoin ledger by signing transactions and broadcasting them to the Bitcoin network.

Signed transactions can even be shared through other channels, to be broadcast at a later time for settlement, like a check. This is how the Lightning Network functions.

Keys can be held in many forms, including purely in software, digitally inside a hardware secure element, or converted to words and printed on paper or metal.

Bitcoin even has basic scripting that allows more complex setups, such as only allowing a ledger entry to be updated after a certain duration (timelocks) or requiring a quorum of signers (multisig), so simply having a corresponding private is not always sufficient to immediately spend the corresponding funds.

In the past “brain wallets” were popular, where the private key is generated from a memorized passphrase. These are a bad idea because it’s trivial to watch addresses corresponding to every entry a password dump, and automatically move these funds whether you’re the original owner or not. I mention this to illustrate how having the corresponding private key is necessary to control funds but it’s not sufficient to prevent someone else from controlling the same funds.

On top of all this, most “Bitcoin users” leave “their” Bitcoin on exchanges, so what they really own are IOUs rather than Bitcoin itself.

Bitcoin “ownership” can be pretty abstract.

Also almost all governments have KYC/AML/CFT regulations that apply to crypto exchanges as well. And governments can monitor, control, sanction your bitcoin transactions by controlling these exchanges through regulations. When the local currency becomes unstable and the local government becomes unstable, one should assume access to crypto exchanges like coinbase will be very very hard.

this is where decentralized exchanges like Uniswap come into play, no KYC, no account

And how do you move your money to/from a DEX? It still needs a regulated exchange like Coinbase to interface with Fiat money, no?

You can sell goods and services locally and accept Bitcoin as payment. Craigslist even added a “cryptocurrency ok” flag you can set on your posts.

LocalBitcoins enables face to face transfers.

Bisq is a DEX that enables remote exchanges using any form of payment, including most centralized payment services, and even cash through snail mail.

But then, the seller has to pay taxes - either business taxes if it is a merchant or capital gains taxes in case they sold an asset. And taxes are paid only in Fiat. So you still need Fiat integration somewhere.

You’re right, “not your keys, not your coins”

Fair question.

It would be more accurate to say that you can own "mathematically guaranteed exclusive control over" bitcoins.

and you that can store that mathematical guarantee on any number of cheap, readily available physical devices.

You can also elect to destroy the possibility of outside knowledge of the secret, leaving the "physical memory chip" as the sole means of humanity interacting with those coins.

It’s a comparison to your traditional bank account. At chase bank you don’t physically own the money in your account - it’s in a banks database. With Bitcoin you own that coin and it’s stored in your own digital wallet. Like cash v bank account, but Bitcoin is safer and easier to store than cash.

Your Bitcoin is stored as an unspent transaction output (UTXO) in a globally distributed ledger (i.e. a database). But for most people the private key that would allow them to spend that Bitcoin is not actually in their possession - it's owned by Coinbase for example, who are acting as a bank and keep yet another database to store who owns what.

If you use a local wallet to store your BTC, let’s say on a HDD, the the magnetic pattern on the disk that makes up the bits that represent your coins would be physically owning then. They can’t be retrieved any other way.

As codehalo pointed out, there's no magnetic pattern that represents coins on your hard drive. There is a magnetic pattern that represents your private key for your wallet (if you store it there), which possession of you might equate to possession of the coins to since without it they can't be used.

Still, access isn't really possession is it. I can lend my house key to a friend but they don't possess my house. The deed is what really declares me the owner. In the case of your coins, it's the consensus of the blockchain.

Bitcoins are like bearer bonds. Unlike houses.

Bitcoin is not stored on your HDD, or on a local wallet. The "local wallet" simply points (or references) an address on the bitcoin blockchain. There are obviously more details, but you can do your own research.

Isn't this functionally equivalent to the statement "(access to) the coins is stored on your HDD" for most purposes?

Not all discussions require the highest level of technical detail.

Do I still own the BTC if the whole BTC network shuts down?

If you have a $100 currency note in your hand, you can spend it as long as there exist someone who believes there is a market for $100 bills. Same as with a gold coin.

But if you have a $100 in your bank account, there is an additional constraint – you can spend it only if your bank is alive and functioning correctly and lets you specifically (you are not sanctioned/banned) to spend it.

Same is the case with bitcoin for those who store their private key on exchanges.

First there should exist a market for it (others who also believe bitcoin has value). Then, just like banks, the bitcoin exchanges where you escrowed your key have to let you spend it through them.

If all exchanges you have access to in your country decide to ban you (because your govt told them to) then you cannot spend your bitcoin.

In this way, bitcoin and your bank account balance are similar and they both are different from hard cash in hand or gold coin in hand.

If you hold your private key yourself and run your own bitcoin lightweight node to connect to bitcoin network and submit your transactions, then you don't need exchanges. Even then, others who use exchanges maybe blocked from transacting with you through govt sanctions etc.

> But if you have a $100 in your bank account, there is an additional constraint – you can spend it only if your bank is alive and functioning correctly and lets you specifically (you are not sanctioned/banned) to spend it.

Given my bank is on the list of "systemically important banks", if it goes under/down there's probably more going on in the world such that I probably won't be worrying about my proverbial $100 too much:

* https://en.wikipedia.org/wiki/List_of_systemically_important...

(And I do have accounts at multiple banks in case of IT problems at one bank.)

> If all exchanges you have access to in your country decide to ban you (because your govt told them to) then you cannot spend your bitcoin.

Of all the things that I could worry about going wrong in my life, these doomsday scenarios are not even in the Top 1000. I'm more worried about stubbing my toe than some of these currency collapse scenarios that some Bitcoin fans come up with.

You own your Bitcoin as long as there is at least a single node out there storing its Blockchain. But it would be the only instance left that could confirm your ownership in that doomsday vision of yours.

You can think of Bitcoin as a kind of identity management system. The blockchain stores transactions mapping public keys to each other and monetary values. As long as you remember the private key matching your public key you can issue transactions on the blockchain.

Contrary to common belief Bitcoin is not stored on your hard drive, they contain only your private keys. The monetary units themselves, “UTXOs”, are stored on the network of Bitcoin nodes distributed all over the world.

The keys own the coins, you're ancillary.

All you need is a wallet address, which you can put on a USB stick or even print out on a card and store at home.

You dont need the wallet address, you need the private key. They are not the same.