Legal Nature of
the Bitbon System Social Network
Bitbon System social network of economic relations based on the distributed ledger technology (blockchain) (hereinafter also referred to as the “Bitbon System Social Network”) is a form of organization of the Bitbon System Community that allows its users to realize social relations by executing their methods of managing their property or personal non-property rights using digital assets[i] based on the Bitbon System[i]. Decentralized management of the Bitbon System is carried out by Bitbon System Participants[i] in the interests of all Bitbon System Users[i] in accordance with the requirements of the Bitbon System Public Contract[i] based on the “Participant” status[i], the role[i] and account rating[i] of the Participant, the combination of which determines the scope of each Participant in managing the Bitbon System Social Network. A Bitbon[i] unit[i] is the instrument for managing the Bitbon System Social Network. Thus, the Bitbon System Social Network allows its Users to manage their property by means of their digital assets.
Currently, SIMCORD LLC as the first Operator[i] of the Bitbon System Social Network, in accordance with the Roadmap published on the website https://www.bitbon.space, is developing, creating and implementing base services[i] and components[i] for comprehensive operation of the Bitbon System Social Network.
The following points are key for describing the legal nature of the Bitbon System Social Network:
1. Principles laid down in the legal nature of the Bitbon System Social Network.
The Bitbon System Social Network[i] is based on the fundamental principle, Right to the right[i], which allows a Bitbon System User to operate property or personal non-property right by means of digital asset units. When operating property right by means of digital asset units, the actual property is outside of the Bitbon System, namely in possession of the owner of such property, the Bitbon System User, for the entire period of digital asset circulation.
You can learn more about the “Right to the Right Principle” by following this link: https://www.bitbon.space/en/right-to-the-right-principle
There are also other principles, the implementation of which is ensured by the mechanisms and infrastructure of the Bitbon System[i] (you can learn more about them in the Bitbon System Public Contract). These principles include:
- principle of value integrity[i];
- principle of noninterference[i];
- principle of neutrality[i];
- principle of responsibility division[i];
- principle of personal responsibility[i];
- principle of presumption of authorship[i];
- principle of irreversibility of deals[i];
- principle of establishing access to digital assets[i];
- principle of decentralization[i];
- principle of segregation of digital assets[i];
- principle of balance of assets[i];
- principle of sovereign identity[i].
2. Legal regulation of digital assets of the Bitbon System Social Network.
Special significance of Bitbon System digital assets[i] consists in their backing by assets[i], which is implemented through asset digitization procedure and the Right to the right principle laid down in the Bitbon System. The asset digitization procedure is the know-how of SIMCORD LLC and allows Bitbon System Users to carry out secure and equivalent exchange of digital assets backed by the right to a value[i].
When describing digital assets of the Bitbon System Social Network, the following aspects should be considered separately:
2.1 Bitbon digital asset as the key component of the Bitbon System.
Within the Bitbon System social network of economic relations based on the distributed ledger[i] technology (blockchain[i]), the Bitbon digital asset is the method for SIMCORD LLC to manage its property transferred for use to Participants in the Bitbon System social network of economic relations based on the distributed ledger technology (blockchain). The procedure, terms and conditions of using this property are established in the Bitbon System Public Contract and Bitbon Protocol. These documents are published on the website https://www.bitbon.space and are mandatory for all Users of the Bitbon System Social Network. The Bitbon digital asset as a key component of the Bitbon System has the property of exchange value of all digital assets in the Bitbon System, which ensures mutually beneficial economic and legal relations between Bitbon System Users.
Bitbon digital asset is access to the Bitbon System social network of economic relations based on the distributed ledger technology (blockchain), and Bitbon units are access (right of access) to the mentioned social network, which contains a certain scope of access. Bitbon, as an intangible asset (IA), is a product.
You can learn more about “Bitbon in the Economic and Legal Field” by following this link: https://www.bitbon.space/en/bitbon-economic-and-legal-field
2.2 Digital assets of Bitbon System Users.
Each User has the ability to create his/her own digital assets to manage own property and/or personal non-property rights in order to register and dispose of them, in particular to carry out equivalent exchange of such rights by means of digital asset units. In the Bitbon System, the circulation of property and/or personal non-property rights of Users takes place through units of digital assets of these Users.
During the asset digitization procedure, when the digital asset protocol[i] is being created, a Bitbon System User must, among other things, specify all possible claims of the owner of the digital asset to him/her as the owner of the asset in this document. In other words, this Bitbon System User on his/her own determines the claim right to his/her own asset in the protocol of a specific digital asset, as well as the conditions for realizing the claim right. This can be a claim on ownership, possession, use, etc.
It should also be noted that realization of the claim right to the asset, as well as the realization of the transfer of property rights to assets, is possible outside the Bitbon System based on agreements concluded between the owner of the property (owner of the asset) and another person (backer, guarantor, trustee) in accordance with the laws of the country, in the jurisdiction of which these contractual relations take place, which guarantees state protection and ensures their fulfillment.
Legal regulation of Bitbon System digital assets is ensured by documents regulating the operation of the Bitbon System. In particular, the terms and conditions for creation and circulation of digital assets[i] created by Bitbon System Users are established by the Bitbon System Public Contract.
3. International legal standards1 as the foundation of the legal model of the Bitbon System Social Network.
The relations between subjects of the Bitbon System are established and realized in accordance with the Bitbon System Public Contract, and regulation of Bitbon System digital assets as objects of civil rights takes place exclusively within the legal framework and ensures transparency of processes and interaction of all Bitbon System components. Legal relations of subjects of the Bitbon System are based on the ability to exchange digital assets between each other by means of the mechanism used in the Bitbon System. Thus, digital assets can be owned, used and disposed of in accordance with the terms and conditions specified in the protocols of these digital assets.
In the context of covering the issue of international standards that the legal model of the Bitbon System Social Network is based on, we should state that:
- Bitbon digital asset is the regulator of legal relations between Bitbon System Users. Such legal relations are considered norms of the law of obligations and are recognized by all Bitbon System Users.
- The use of the Bitbon System, digital assets and, in particular, the Bitbon digital asset does not contradict the current regulations of international law.
- All Bitbon System digital assets by their nature are information resources[i], which is why for the purposes of accounting they can be considered as intangible assets (IA). Their recording in accounting documentation should be done in accordance with the International Financial Reporting Standards (IAS) 38 “Intangible Assets” dated 01.01.2012.
Based on everything stated above, we can claim that the operation of the Bitbon System, as well as activity of Bitbon System Users with Bitbon System digital assets take place within the existing international legal field.
1 Currently, in the age of globalization, we witness unification of legal systems more and more, a certain creation of a common denominator. The key instrument of this process are international standards, which in a broad sense should be considered as internationally accepted regulations recognized by a number of states and used by them to simplify the processes of field-specific, including international, interaction within certain legal relations.