1.1 Title: The Implications of Blockchain for Legal Theory.
1.1 Central Question: What are the implications of blockchain technology for legal theory?
1.2 Broad Approaches: philosophy of law, interdisciplinary legal studies, contract theory (relational and rational choice).
1.3 Literature Gap: From the philosophical standpoint, there is a need to examine the implications of blockchain for (a) legal discourse, (b) legal relations, and (c) the social relations of contract and property.
1.4 Policy Implications: A clearer understanding of the ways in which blockchain technologies challenge settled notions of law will inform regulatory approaches in diverse domains such as monetary policy, innovation, taxation, welfare, financial regulation etc.
1.5 Keywords: blockchain, smart contracts, legal relations, legal discourse, contract, property.
2.1 Blockchains: Blockchains are an emergent ‘class of technologies’[1] which rely on a set of technological innovations, including cryptographic signatures and consensus algorithms,[2]to enable digital transactions to be recorded in a tamper-proof and decentralised way.[3] Smart contracts (SCs) can be seen as the second major application of blockchains, cryptocurrencies being the first. Simply put, they are agreements written in machine language, as opposed to natural language,[4] which allows them to automate enforcement through a series of if-then statements.[5]In other words, specific transactions are self-executed whenever their precoded terms are met.[6] Illustratively, one could think of vending machines which have been programmed to release particular beverages once adequate currency notes are entered.
2.2 Smart contracts: As is evident, such ‘smart’ transactions are irreversible and do not always require human mediation. It is quite conceivable, for instance, that a robot learns how to use vending machines and ‘purchases’ beverages from them. In a similar fashion, SCs can be designed to interact with each other through coded interdependence. When deployed over blockchains, this process may lead to the creation of web-like contractual relations which are mutually reinforced with each iteration.[7] Triggers for these transactions can be programmed to lie outside individual control, such as in weather patterns or global commodity prices. Or they may be governed through decentralised organisations which are maintained and enforced through code.
2.3 Challenges for legal theory: It must be noted that the concept of SCs, strictly speaking, precedes blockchains.[8] But due to the latter’s relative independence from fiat currencies, their scope has recently expanded.[9]This expansion has been rapid and far-reaching enough to be labelled a ‘revolution’[10]in our understanding of the internet itself, from a network of information to a ‘network of value’.[11] What is more, the SC-blockchain combination presents a series of foundational questions for law.[12] At which point, for instance, does ‘legality’ enter such transactions? Is it before, during or after the transfer of the asset? What is the precise nature of the transferred asset? Can it qualify as ‘property’, given that it is nothing more than code? To what extent can exchanges between two non-human agents be called ‘contracts’? Can SCs themselves be seen as juridical ‘persons’ since they exhibit the ‘capacity to contract’? How should we understand the ‘validity’ of these exchanges, i.e. can they be said to carry the ‘force of law’? If so, given the absence of centralised authorities, where does this force come from? How may we classify and govern complex organisational forms which are constructed atop this technology?[13] More specifically, what becomes of legal discourse in a world of interconnected SCs? Are we witnessing the former’s displacement by, or its absorption into, code?
3.1 The regulatory standpoint: The rapidly growing literature in this area seems to follow three broad tangents with respect to law. The first of these may be called the ‘regulatory standpoint’ insofar as it deals with the twin challenges of controlling and classifying blockchains.[14] This perspective employs a wide array of foci in exploring the rationales, possibilities, manners and limits of state intervention.[15] ‘Law’ figures here primarily as positive-law, i.e. backed by state authority. Blockchains, quite like marginal social practices, are seen as semi-autonomous domains which must be regulated using state force.
3.2 The technical standpoint: As opposed to this, the ‘technical standpoint’ considers them to be beyond the purview of positive-law due to their self-executing and decentralised nature.[16] It focuses instead on internal designs and architectures that make blockchains more efficient, democratic, environmentally-friendly and so on. References to ‘law’, from this perspective, are usually not to state authority but to the coded language itself, leading to the maxim ‘code is law’.[17]
3.3 The philosophical standpoint: The third tangent, which may be loosely labelled the ‘philosophical standpoint’, takes a more nuanced stance on the blockchain-law relation. By foregrounding normative tensions and synergies between both terms, it favours co-evolutionary frames for understanding their interplay. This broad approach draws on many interweaving traditions including philosophies of technology,[18] science technology society studies,[19] and interdisciplinary legal theories.[20]
3.4 Positivist formalism and technological determinism: The regulatory and technical standpoints may be seen as constituting two ends of a spectrum which runs from positivist formalism to technological determinism. While these perspectives cannot be ignored, the philosophical standpoint is best suited for this inquiry insofar as it avoids both extremes. Two further reasons may be noted in this regard: (a) the philosophical standpoint does not take the locus of law as settled within or without the state,[21]and (b) it gives due prominence to theoretical questions.[22]
3.5 Philosophy of law: There are several interdisciplinary prisms through which the idea of contract has been analysed.[23] In jurisprudential accounts, it has been understood in relation with concepts such as will, consent, property, reciprocity, freedom, obligation, reason and authority.[24] Specifically, ‘transfer theorists’ have argued that contracts give rise to binding obligations because they result in the ‘transfer of some right from the promisor to the promisee’.[25] The precise nature of this right and its relationship with property is the central question here.[26] It can be seen as the route through which the ‘transfer debate’ merges into wider scholarship on property and ownership.[27] In this context, legal discourse seems to circulate around three primary axes:[28] (i) the nature of transferred interests, (ii) the modes of transfer, and (iii) the soundness of rationales through which ownership comes to be justified.[29] Presently, blockchain-based SCs face challenges on all these fronts. From a philosophical standpoint, it is unclear whether they lead to an automatic transfer of rights and interests, and also whether purely technological forms of ownership can be said to have legal sanctity.[30]
3.6 Contract law: Consequently, the literature on SCs and contract law is quite divergent, not least due to jurisdictional particularities. Some argue that SCs make contract law difficult to enforce because of their self-enforcing, immutable and distributed nature.[31] Others believe that they can be incorporated within existing contractual principles once the latter are suitably modified for the digital age.[32] Due to the demands of pragmatic clarity, however, much of this scholarship adopts a regulatory standpoint. That is to say, it treats ‘law’ as a conceptually stable construct embedded in state authority, and focuses on examining the challenges posed to it by a novel technological form.
3.7 Law, technology & political economy: Interdisciplinary legal scholarship is not similarly constrained. The generative subfield of ‘law and technology’ has taken a much broader view of ‘law’ and included technological forms within its fold.[33] It has done so by ascribing to the latter an inherent normative dimension which controls and orients human behaviour in unique ways.[34] This move has allowed law and technology scholars to place questions of ideology, power, structure and agency alongside doctrinal ones such as privacy and liberty.[35] On the specific question of legal language, they have highlighted how technology has led to its ‘formalisation’ and ‘digitalisation’[36], as well as to the birth of new ‘lexical fields’[37] with their own philosophical and regulatory challenges. ‘Law and political economy’ scholarship has contributed to these debates by stressing law’s role as a ‘mediating institution that ties together politics and economics’.[38] It has challenged the autonomy of law and economics,[39] and highlighted technology’s role in ‘structuring social relations’.[40] Technology itself has been usefully framed within this scholarship as ‘congealed practical knowledge embedded in material culture’,[41] as well as a ‘distinct dimension of power’,[42] and a ‘site of struggle’[43]. In the context of this project, there is a specific need to develop these threads into a discursive exploration of social relations. This is because blockchain’s primary challenge to law seems to reside in its ability to produce an alternative language for transnational exchange-relations.[44] [see 4.3 and 4.8]
3.8 Legal discourse: The general literature on ‘legal discourse’ converges with much larger streams (including legal philosophy, law & humanities, law & language) around questions concerning law’s meaning,[45] structure,[46] form[47] and interpretation[48]. From within this vast and heterogeneous landscape, it may be useful to cull out the most pertinent strands. The first of these concerns itself with interpretive techniques for locating the truth of ‘legal propositions’.[49] Formalist currents in this strand derive such truth from law’s own peculiar logic and/or its unique history, while contextualist currents rely on wider socio-historical forces.[50] The second strand consists of linguistic analyses which study the semiotic, semantic, and syntactical properties of legal propositions.[51] Here the ‘logic of law’ is revealed through a set of formal techniques which belong to the linguist, as opposed to the lawyer. It is notable that both these strands tend to overlap substantially on questions of inferential analysis. This is unsurprising because the task of drawing ‘correct’ inferences from general propositions concerns lawyers, linguists and logicians alike. The third strand relies on interpretive strategies belonging neither to the lawyer nor to the linguist, but to the social theorist. Here the emphasis is on deploying broad social-scientific frames for understanding and analysing legal discourse.[52] While all three strands may be labelled ‘hermeneutical’, the third distinguishes itself in retaining the complexity of the term ‘legal discourse’ by resisting its reduction to legal propositions.[53]
4.1 The object of inquiry: In order to identify the most relevant debates for this project, we must pay specific attention to the objects of analysis, i.e. blockchains and SCs. While the latter may be studied using broad lenses such as ‘digitalisation’ and ‘formalisation’, their specific challenge to legal theory remains unspecified. Can it be argued, for instance, that blockchain-based SCs have inaugurated a new legal language? If so, in what precise sense is it ‘legal’? Under what conditions can code begin to appropriate the elements of legal discourse? What are these ‘elements’ to begin with? More specifically, we must ask, what is it about legal discourse that allows it to be transposed from natural language to machine language? Such a framing is important because the ‘law within blockchain’[54], being the central object of inquiry, cannot be presupposed.
4.2 Property and contract: The connected notions of ‘property’ and ‘contract’ are pivotal in approaching the transposition problem [see 4.1]. Traditionally, they have been seen as the archetypal preserves of law.[55] Histories of property-ownership and contract-formation have been routinely tied to the birth of modern law itself.[56] One legal scholar has suggested that property serves as the ‘guardian of every other right’,[57] while another has claimed that all the characteristic movements of legal discourse are traceable to ‘commodity-exchange’.[58] Every so often, theorists - both doctrinal and interdisciplinary - have renewed attempts to clarify these foundations, following the conviction that ‘property is one of the main battlegrounds’ in legal interpretation.[59] What is more, dominant narratives about the origins of state-authority invariably lead to the idea of an originary ‘contract’.[60]
4.3 From positive law to legal relations: Blockchain-based SCs challenge traditional approaches to property and contract since they permit the ownership and transfer of assets without explicit state-mediation.[61] Their characteristic agnosticism towards positive-legal norms as well as their claims to ‘legality’, are both derived from the same source, i.e. their (seemingly autonomous) capacity to generate legal relations. Lex cryptographica must therefore be understood in family resemblance with lex mercatoria, the law of market relations.[62] In other words, it is impossible to grasp the ‘law within blockchain’ without examining the ways in which it furnishes the building blocks - both normative and non-normative - for contractual relations.[63]
4.4 Rational choice and cryptoeconomics: The dominant approach to contract theory in the context of blockchains relies on neoclassical and rational choice foundations.[64] Most of this literature overlaps with the ‘technical standpoint’ [see 3.2], since blockchains are ultimately reducible to incentive-based architectures revolving around a native token.[65] It has in fact become customary for all new projects to develop a comprehensive ‘white paper’ which sets out this architecture in detail, laying out the channels through which its tokens would be produced, exchanged and consumed.[66] This has led to the emergence of a new subfield called ‘cryptoeconomics’[67] which studies ‘economic coordination games in cryptographically secured peer-to-peer networks’.[68]
4.5 Relational approach to contracts: From a legal perspective, the ‘obligation’[69] to abide by the rules of these ‘coordination games’ arises, not from state authority, but the incentive structure of the protocol itself. Here, the ‘relational approach’ becomes useful since it studies contracts as relations between parties which develop over time.[70] By studying ‘exchange’ as a wider phenomenon, it distinguishes between contract qua discrete event, and contract qua non-discrete social relation.[71] The core idea here is that when exchanges become iterative relations between parties, “an informal and spontaneous form of contract enforcement emerges that enables the involved actors to risk economic transactions without the need to steer the conduct of actors with the help of deliberately created external institutions, such as state law.”[72] For the present project, this decentering of the state is theoretically useful for four interrelated reasons: (i) blockchains harbour a deep suspicion towards state authority,[73] (ii) they make a conscious effort to remain structurally insulated from it,[74] (iii) their underlying technological infrastructure is premised on self-enforcement,[75] and (iv) they continue to rely on a set of ‘granular norms’ which require explanation.[76]
4.6 Relational approach to property: For a comprehensive analysis of the ‘law within blockchains’, relational contract theory is useful but insufficient. We also require alongside it a social theory of property relations.[77] Just as obligations to follow a blockchain’s rules arise from the protocol itself, the ‘title’ to the transacted asset is maintained through cryptography. This means that the ‘right to exclude’[78] others from the enjoyment of one’s property, in the blockchain space, is constrained by precoded architectures.[79] That is to say, the ‘owner’ never has direct and unmediated access to his digital asset, but only through a publicly maintained ‘infrastructure’.[80] For this reason, the Hohfeldian approach to property as a ‘bundle of rights’ must be preferred over the Blackstonian one which frames it as ‘absolute dominion over the thing’.[81] The notion of property-in-blockchain is, in other words, best analysed as a person-person, as opposed to a person-thing, relation.
4.7 Private property and the commons:One of the most striking aspects of blockchain-based innovation is the public nature of the biggest protocols. Programmers are encouraged to build applications on top of ‘open source’ languages, resulting in overall growth for the ecosystem and consequent appreciation in the value of its native token. This implies a negation of the mainstream (Coasean) position which favours the privatisation of commons for wider social utility.[82] As one scholar puts it, blockchains qua ‘infrastructural commons’ have the “potential to generate significant positive externalities, which are third-party effects that may result in social gains; [they] may thus permit a wide range of downstream producers of private, public, and social goods to flourish”.[83] It appears, therefore, that blockchains also challenge the Lockean notion of ownership by reframing property as a share of collective labour.
4.8 Key questions: It is important to note that the nature of this collective labour is intellectual; more precisely, discursive.[84] It focuses on the production of (machine) languages which can facilitate cross-jurisdictional transactions without state-mediation. Since property, contract and money had already become ‘bits of information’,[85] there was a need for tamper-proof recording systems in order to make peer-to-peer economic transactions a reality. Blockchains have resolved this issue through their use of decentralised cryptographic networks, but in the process, they have challenged the state’s control over markets by setting up a parallel economy. At the time of writing, their total market capitalisation is above $2 trillion, which puts them - figuratively speaking - in the list of top ten nations by GDP.[86] Does this suggest their disembeddedness from politics and the emergence of a ‘purely economic’ sphere, or their re-embeddedness into a new set of legal relations?[87] How shall we understand the play of forces which led to the emergence of a seemingly novel language of exchange? How does this language relate with traditional legal discourse, both in terms of content and form? Is lex cryptographica, like lex mercatoria, in the process of erecting its own proto-state apparatus?[88] What does this movement imply, not just for notions of property, contract and state, but for legal theory as such? These are the key questions this project seeks to explore.
4.9 Broad scheme: Part 1 will examine the implications of blockchain for property relations, with a specific focus on intellectual property rights (IPR). While most claim that blockchains strengthen the existing IPR regime,[89] others foresee tensions between open source protocols and the notion of private property.[90] The central puzzle here is that, unlike the Lockean conception, claims to property seem to arise from collective labour [see 4.7]. Part 2 will focus on theories of contract in order to examine the ‘law within blockchain’. Here, SCs will be analysed through a combination of rational-choice and relational perspectives.[91] Particular attention will be paid to the traditional building blocks of contracts (promise, consent, will, obligation) in order to understand their linguistic transposition into code [see 4.1]. Finally, Part 3 will focus on the larger problematic of state-theory, and examine whether blockchains signal the emergence of a transnational state apparatus. It will encapsulate the findings of earlier parts and suggest, in broad outline, a framework for blockchain-jurisprudence.
[1] Finck 2019, sec 1.1.
[2] The primary function of these operations is to guarantee ‘trust’ in the system. For this reason, blockchains have also been referred to as ‘technologies of trust’ which create a novel ‘economic infrastructure’ (Berg et. al. 2019, Preface, Introduction). De Filippi and Wright provide a neat encapsulation of its technological essence: “The core components of a block’s header are a unique fingerprint (or a hash) of all transactions contained in that block, along with a timestamp and importantly a hash of the previous block. Hashes are generated using standard cryptographic hashing functions invented by the U.S. National Security Agency (NSA), providing a way to represent the bundle of transactions in a block as a string of characters and numbers that are uniquely associated with that block’s transactions. (De Filippi and Wright 2018, ch. 1)
[3] This recording function is widely considered to be the core innovation of blockchains (see Campbell-Verduyn 2018,s pg 1; Nakamoto 2008, sec 2; De Filippi and Wright 2018, ch. 4). In essence, they “propose to create value by decentralizing the creation, verification, validation, and secure storage of economic transactions, both within and between organizations.” (Hsieh, Vergne and Wang 2018, pg. 48, emphasis added)
[4] Grimmelmann 2019, Hildebrandt 2020. ‘Ricardian contracts’ permit meaningful interactions between machine and natural language (see Grigg 2004).
[5] Compagnucci, Fenwick and Wrbka call smart contracts “a scripting language overlaid on the blockchain that enables transactions on a blockchain that mirror ‘real life’ contracts by defining if/then conditions. For example, if an asset hits a certain price on a specific date, then a payout should be made to the other party (or parties) to the contract”. (Compagnucci et. al. 2021, pg. 2, emphasis added)
[6] Green and Sanitt 2021, Werbach and Cornell 2021, sec II. Clarke and Burstall 2019, pg 6.
[7] “A blockchain is a magic computer that anyone can upload programs to and leave the programs to self-execute, where the current and all previous states of every program are always publicly visible, and which carries a very strong cryptoeconomically secured guarantee that programs running on the chain will continue to execute in exactly the way that the blockchain protocol specifies.” (Buterin 2015, emphasis added); for a view on ‘smart contracts as agents’, see Rudanko 2021, sec. E.
[8] Szabo 1994, Szabo 1996, Miller 1997.
[9] Fenwick and Vermeulen 2021, pg. 179-180.
[10] Tapscott and Tapscott 2016. Related: Schwab 2016.
[11] O’Dair 2019, ch. 2; Tasca 2020.
[12] Werbach and Cornell 2021, De Filippi and Wright 2018. Szostek adopts a more sceptical position and argues that the blockchain revolution is merely “the next stage of evolution of the tools used in the law, not a legal revolution”. (Szostek 2019, pg. 139)
[13] On these new forms, especially, DAOs (decentralised autonomous organisations) see Allen 2021, Wright 2021, Kaal 2021.
[14] Alston 2021, Blemus 2017, Bossu et. al. 2020, Girasa 2018, Herian 2019, Rodrigues 2018, Szostek 2019.
[15] An indicative survey of the diversity of perspectives within the regulatory standpoint: data protection (Finck 2019, Lawrence et. al. 2017); digital sovereignty (Martinet 2021); dispute resolution (Ast and Deffains 2021, Buchwald 2020); financial market regulation (Batista 2021); innovation (Mcquinn and Castro 2019); use-cases (Bernstein 2018, NITI Aayog 2020, GoI 2021, GoT 2019).
[16] Nakamoto 2008, Srinivasan 2022, Voshmgir and Zargham 2020, Wood 2022, sec 1.2. Nabilou believes that while blockchains can be regulated by state structures, they ought to be governed internally through protocol improvements (Nabilou 2021).
[17] The phrase itself is attributed to Lessig 2006. Also see Hassan and De Filippi 2017, Drummer and Neumann 2020, Weber 2018.
[18] Castells 2010, Casey and Vigna 2018, Ellul 1964, Galloway 2004, Harman 2002, Morozov 2014, Poster and Savat 2009, Swan 2015, Swartz 2017.
[19] Latour 2002, Feenberg 2010, Haraway 1991, Harman 2009, Mackenzie and Wacjman 1985, Pinch and Bijker 1984.
[20] Becker 2022, Blanchette 2012, De Filippi and Wright 2018, Dimitropoulos 2020, Herian 2019, Husain et. al. 2017, Lessig 2006, Rouvroy and Stiegler 2016.
[21] It is useful to demarcate “two layers of interaction between traditional law and blockchain: the law within blockchain, which has been termed lex cryptographica, and the law of the interaction between the real world and the online world” (Dimitropulos 2020: pg, 1123). In such a conception, only the second component of the ‘law of blockchain’ corresponds with positive-law.
[22] These range across a wide variety of issues, such as the body (Becker 2022), space (Dimitropoulos 2020), authority (Ziolkowska 2020), ideology (Husain et. al. 2017) sovereignty (Caria 2021), citizenship (Gstrein and Kochenov 2021), to name a few.
[23] These include, among others, economics (Ayres and Gertner 1989, Bolton and Dewatripont 2005, Binmore 1994, Hart 1988, Koszegi 2014, Schwartz and Scott 2003), philosophy, (Lucy 2004, May 1980), history (Tushnet 1996, Zelin et. al. 2004), political theory (Grover 1990, Pateman and Mills 2007, Severance 2000), social theory (Suchman 2003, Wild 1985, Zumbansen 2007), literary theory (Davis 2011, Goodman 1999, Samuels 2008).
[24] Amstutz et. al. 2007, Baumgold 2010, Benson 2001, Benson 2019, Bix 2017, Gordley 1991, Hevia 2013, Macaulay 2011, Murray 2002, Fried 2015, Horwitz 1974, Kimel 2003, Kreitner 2019,
[25] Serafin 2018, pg. 151, emphasis added. In this project, the transfer approach has been preferred over ‘choice theory’ because of the latter’s justificatory tilt: “Choice theory is an interpretive theory of the contract law of a liberal state. Accordingly, it aims both to justify and fit the contract law of a liberal state, but it is clear that the main engine of its enterprise lies in justification. The Choice Theory of Contracts is clearly an exercise in normative philosophy more than in explanatory theory” (Esposito 2019, pg 299-300, emphasis added). For a general account of choice theory, see Dagan and Heller 2017.
[26] Essentially, the philosophical battle is between Kantian (primacy of contract) and Hegelian (primacy of property) positions. See Dedek 2012, Serafin 2018.
[27] Dagan 2003, Eleftheriadis 1996, Fiorito and Vatiero 2011, Kanatli 2022, Merrill and Smith 2001, Merrill and Smith 2011, Morales 2003, Nunan 1988, Richardson 2010, Singer 2014, Smith 2015, Stern 2013, Stern 2017, Stern 2018, Waldron 1988, Whelan 1980, Wilson 2015.
[28] These preoccupations cease to appear accidental once we note that the primary task of jurisprudence has been to provide intellectual resources for the development of legal doctrine.
[29] The justificatory plane in property scholarship is usually where political ideologies (liberalism, libertarianism, marxism, feminism) begin to play a significant part.
[30] The primary area of interest here is intellectual property rights [see 4.9, 4.10]. Also see Fairfield 2015, Baker 2015., Menell et. al. 2017, Ribstein 2011, Raskin 2017, Tsarsitalidis et. al. 2021.
[31] Brownsword 2019, Cvetkovic 2020, Fenwick and Vermeulen 2021, Rudanko 2021.
[32] Compagnucci et. al. 2021, Green and Sanitt 2021, Grimmelmann 2019, Hsiao 2017, Raskin 2017, Schulze and Staudenmayer 2015, Sommer 2000.
[33] Brenner 2007, Brownsword and Goodwin 2012, Busch and De Franceschi 2021, De Filippi and Hassan 2016, De Filippi and Wright 2018, Herian 2019, Johnson and Post 1996, Lessig 2006.
[34] De Filippi and Wright explain: “As with law, technology has a similar capacity to influence an individual’s behavior. Technology provides a means for people to do things that they would be unable to do otherwise, such as flying on an airplane or communicating through a phone line, but it also dictates the way in which these things can be done, such as setting the maximum speed of an aircraft or the bandwidth of a telephone line. As opposed to the law, however, technology does not leave much room for people to decide which course of action to take. Instead, it relies on rigid rules and technical features to provide a particular set of affordances and constraints that ultimately shape human interactions.” (De Filippi and Wright 2018, pg. 194)
[35] See Bernstein 2007, Biagioli and Buning 2018, Cockfield 2010, Chandler 2010, Koops 2010, Tranter 2010, Vismann 2011.
[36] See Anesa 2021, Dyever 2020, Eenma 2021, McCarty 1989, Halbert 1994, Knight et. al. 1998, Reyes 2017.
[37] Rackeviciene and Mockiene 2020.
[38] Purdy et. al. 2017.
[39] Aber and Parker 2021, Cohen 2018, Haskell and Rasulov 2018, Kapczynski 2018, Kjaer 2020.
[40] Benkler 2018b.
[41] Benkler 2018c.
[42] Benkler 2018a.
[43] Benkler 2018a.
[44] As Busch and De Franceschi emphasise, law is ‘only words’ (Busch and De Franceschi 2021). Rudanko writes: “The terms of the smart contract are written in standard programming languages. The translation of natural language into code means a transition from one linguistic regime to another with quite different communication tools, structures and even purposes.” (Rudanko 2021, pg. 75, emphasis added)
[45] Bix 1991, Booher 2006, Fallon 2015, Goodrich 1984, Halpin 2005, Morawski 1999, Mullins 2018, Northrop 1962, Peters 1981, Rodriguez-Velasco 2006, Waldron 1994.
[46] Balganesh 2012, Mertz 1994, Zheng 2016.
[47] Deakin 2015, Hohfeld 1914, Hohfeld 1917, Lloyd 1955, Luhmann 1995, Oetken 1991,
[48] Brozek 2008, Baude and Sachs 2017, Robertshaw 1987, White 1981, Wroblewski 1985,
[49] Alchourron 1996, Alexy 1993, Atria 1999, Dworkin 1994, Gunther 1993, Raz 1996, Unger 1996.****
[50] See generally Goetsch 1980, Kennedy 1973, Michaels 1979, Peterson and Marquis 2016, Villa 2012.
[51] Danet 1980, sec. III C, Kaplan 1993, Kiguru 2019, Lindroos 2019, Pontrandolfo 2019,
[52] See generally McIntyre 1998, Stone 1966. On sociological approaches to law see Baxter 2013, Bourdieu 1987, Cotterrell 1984, Cotterrell 1995.
[53] See, for instance, Balbus 1977 and Bourdieu 1987.
[54] Dimitropoulos 2020, pg. 1123. On the ‘law-like characteristics’ of blockchain, see Alston 2021, sec. C.
[55] Kanatli observes: “…the study of (positive) law with its roots in Greek and Roman Antiquity, and the branch of medicine (as the investigation of the human body in a non-mystified way) do reflect the earlier mentioned new image of the world with its conscious, that means rational, inhabitants. State and society began to embed more and more diversified structures to be handled by the individuals. Thus, contractual relations became the new ‘mind’ of subject-subject and subject-object relations. This ‘mind’ is still ongoing in the contemporary world: If one would ask for a general and universal term which all legal systems within the framework of positive law have in common, one would without doubt say Contract Law.” (Kanatli 2022, pg. ix, emphasis added)
[56] See, for instance, Birla 2019, Wood 2012.
[57] Ely Jr. 1992.
[58] Pashukanis 2002. Drawing on Pashukanis, Fitzpatrick writes: “In the modern period there is a seeming increase in the resort to law as facilitative, to the involving ability of the subject to act creatively through law, so much so that the contract is often seen as the typical form of modern law.” (Fitzpatrick , pg. 129, emphasis added)
[59] Smith 2003, pg. 1106.
[60] For a general overview of contractarian positions, see Kanatli 2022, ch. 2.
[61] One scholar calls the technology “the strongest challenge ever posed to the monopoly of the State over the promulgation, formation, keeping and verification of institutions and the public record.” (Markey-Towler 2018, pg. 1)
[62] Wright and De Filippi 2015 see both lex informatica (internet-law) and lex cryptographica (blockchain-law) as further developments of lex mercatoria (law of the market). Birla equates the latter with “mercantile law, a term that British and Roman jurisprudence had defined as the largely autonomous sphere of common law governing trade and finance.” (Birla 2009, pg. 14, emphasis added)
[63] This means that we must employ the third (i.e. social-scientific) hermeneutical strand. [see 3.7]
[64] See Herian 2019, ch. 6.
[65] Voshmgir and Zargham explain the consensus-structure of bitcoin in the following way: “Nakamoto Consensus, for example, is a cryptoeconomic mechanism based on proof-of-work that is designed to provide convergence to a dynamic equilibrium–a synchronous shared global state, which furthermore remains resistant to a range of attacks constituting of self-interested misinformation despite being a permissionless network. An attack would be any violation of the state transition rules encoded in the protocol, such as a ‘double spend’. Nakamoto consensus uses a combination of cryptographic tools with economic incentives that make economic cost of wrongdoing disproportionate to the benefit of doing so.” (Voshmgir and Zargham 2020, sec. 9)
[66] The two most important white papers are those of Bitcoin and Ethereum (Nakamoto 2008 and Buterin 2014 respectively).
[67] Berg et. al. 2019, Buterin 2013, Voshmgir and Zargham 2020,
[68] Voshmgir and Zargham 2020, sec. 1.
[69] On the centrality of ‘obligation’ in contract theory, see Fried 2015.
[70] Macneil 1980, Macneil 1988. See generally Campbell et. al. 2003.
[71] Barnett 1992, pg. 1177. Feinman 2000, pg. 741. Hardin 1982. For this reason, discrete contracts are best analysed from the ‘cryptoeconomic’, i.e. rational-choice perspective. At a more abstract level of social aggregation, however, the relational perspective becomes useful in unpacking the macro-constituents of a successful contractual relation.
[72] Dietz 2014, pg. 46, emphasis added.
[73] “Blockchain has one feature that makes it even more distinctive than any other disruptive innovation: it is by nature and design a global, transnational technology. It was developed explicitly to circumvent national borders and established institutions. Blockchain facilitates the transmission of data and economic value independent of the geographical location of the participants in the blockchain network (’the nodes´).” Dimitropoulos 2020, pg. 1119 (emphasis added); “From a technical perspective, national borders are largely irrelevant for the operation of blockchain-based networks.” (De Filippi and Wright 2018, ch. 2)
[74] Voshmgir and Zargham 2020, sec. 1. On the politics of blockchain, see Husain et. al. 2020, Markey-Towler 2018.
[75] It is possible to argue here that the architecture of the protocol itself performs state-functions.
[76] Busch and De Franceschi 2021.
[77] Barnett 1992, pg. 1180.
[78] On the importance of the ‘right to exclude’ in property theory, see Stern 2018, Merrill and Smith 2001, sec. II.
[79] Alston argues that ‘permissionless blockchains have a constitutional structure with respect to the different actors on the network’. (Alston 2021, sec. C, emphasis added)
[80] Dimitropoulos 2020, sec. II.
[81] Robilant and Syed 2020, pg. 1-2.
[82] Note, for instance, the collectivist rhetoric in the following passage: “People of the free internet, we now have the opportunity to create a world where we choose to work a 4 hour work week at our whim, collaborating globally with whom we like, freely choosing compensation in currency or equity, frolicking in our hyper-creative and artistic, fractally self-organized fluid work groups, protected from catastrophic risk by a basic income provided by our egalitarian peer to peer protocols. In this vision the tragedy of the commons is stamped out like polio by a collaborative network of trust and enforced by a consensus-based cryptographic protocol that ensures our aligned incentivization towards the expression of our personal and collective purposes.” (Swartz 2017, pg. 88, emphases added)
[83] Dimitropoulos 2020, pg. 1174.
[84] For instance, Ethereum, the largest smart contract platform, relies on a novel machine language called ‘solidity’.
[85] Girasa 2018, ch. 1. Grey 2021,
[86] Best 2022.
[87] Polanyi’s idea of ‘embeddedness’ has been usefully employed as a key category in the ‘economic sociology of law’. (Cotterrell 2013, Frerichs 2009, Perry-Kessaris 2011)
[88] Srinivasan 2022. For a historical account of the legal infrastructure underpinning the Indian state, see Birla 2019.
[89] Clarke and Burstall 2019, Whitaker 2019.
[90] Kimppa 2005, Scanlan 2005.
[91] In order to understand both discrete and non-discrete dimensions.