Bitcoin and the secured lender

The growing use of Bitcoin poses potential legal issues for creditors, particularly when Bitcoin may be a source of collateral for a loan, arid perfection of security interests and recovery of the collateral is integral to the deal. As both market size and transaction volume have been growing rapidly, Bitcoin may seem like an increasingly attractive source of collateral. Bitcoin has been one of the most-discussed of the emerging payment systems, often referred to as "virtual currencies." Users often claim Bitcoin is a "virtual currency" and it is casually referred to as such. However, experts disagree with categorization of Bitcoin as a currency. Transactions conducted on the platform rely on the use of a unique identifier, known as a private key, that is used to "sign" transactions from one "address" to a recipient address. The supply of Bitcoin is regulated by software and the "agreement" of users to comply with the software's rules.