BLOCKCHAIN AND THE LAW

An exploration of the promise—and perils—of an emerging, decentralized technology.

Since Bitcoin appeared in 2009, the digital currency has been hailed as an Internet marvel and decried as the preferred transaction vehicle for all manner of criminals. It has left nearly everyone without a computer science degree confused: Just how do you “mine” money from ones and zeros?

The answer lies in a technology called blockchain, which can be used for much more than Bitcoin. A general-purpose tool for creating secure, decentralized, peer-to-peer applications, blockchain technology has been compared to the Internet in both form and impact. Blockchains are used to create autonomous computer programs known as “smart contracts,” to expedite payments, to create financial instruments, to organize the exchange of information, and to facilitate interactions between humans and machines. The technology could also support new organizational structures that promote more democratic decision making.

Primavera De Filippi and Aaron Wright welcome these new possibilities and urge the law to catch up. Disintermediation—a blockchain's greatest benefit and threat—cuts out middlemen, possibly undermining the capacity of governmental authorities to supervise activities in banking, commerce, law, and other vital areas. As Blockchain and the Law makes clear, the technology cannot be harnessed productively without new rules and approaches to legal thinking.

Primavera De Filippi is a permanent researcher at the CERSA/CNRS/Université Paris II and a faculty associate at the Berkman-Klein Center for Internet & Society at Harvard Law School. Aaron Wright is Associate Clinical Professor of Law and Director of the Blockchain Project at Benjamin N. Cardozo School of Law at Yeshiva University.