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How to Make Sure My Cryptokitties Are Here Forever? The Complementary Roles of Blockchain and the Law to Bring Trust

Published online by Cambridge University Press:  24 July 2019

Abstract

Under the phrase “code is law” and based on its “trustless trust”, blockchain has emerged as a disrupting technology considered by some as an alternative to the law. Based on a study of real-life blockchain-based decentralised applications (Dapps), this article takes blockchain developers at their word and adopts the point of view of users: can blockchain live up to its promise and enable them to transact with each other without the need for the trust granted by the law? The article particularly highlights that users need to be able to ascertain that a self-advertised Dapp indeed qualifies as one. Blockchain technology may make it possible to do away with trust in third parties, but this is not enough. Users also need to trust that an alleged Dapp genuinely is one, and blockchain alone cannot provide this. Beyond Dapps, it is argued that blockchain needs the complementary role of the law to deliver its promises and especially to authenticate blockchain “virtues”. The EU certification mark is identified as a promising form of co-regulation for that purpose.

Type
Symposium on Blockchain Regulation and Governance
Copyright
© Cambridge University Press 2019 

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References

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35 See <storj.io/> (last accessed 4 July 2019).

36 See <lazooz.org/> (last accessed 4 July 2019).

37 See <www.cryptokitties.co> (last accessed 4 July 2019).

38 See <kleros.io> (last accessed 4 July 2019).

39 See <openbazaar.org> (last accessed 4 July 2019).

40 Lesaege and Ast, Kleros Short Paper v.1.0.5, January 2018.

41 Werbach, supra, note 16, p 545.

42 Wright and De Filippi, supra, note 2, 21.

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44 CryptoKitties Terms of Use, Art 2.C (version last updated 15 November 2018, <www.cryptokitties.co/terms-of-use>) (last accessed 4 July 2019).

45 Directive 2005/29/EC concerning unfair business-to-consumer commercial practices in the internal market [2005] OJ L 149/22 (the UCP Directive).

46 ibid, Art 6(1)(b).

47 ibid, Art 6(1)(f).

48 De Filippi and Hassan, supra, note 18. The phrase “code is law” was first used by Lawrence Lessig, Code (Version 2.0, Basic Books 2006) p 20.

49 Directive 2000/31/EC on certain legal aspects of information society services, in particular electronic commerce [2000] OJ L 178/1 (E-Commerce Directive).

50 Werbach, supra, note 16, p 518.

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54 De Filippi and Wright, supra, note 8, p 136.

55 Atzori, supra, note 6, p 51.

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57 Wright and De Filippi, supra, note 2, p 16.

58 See <www.dappsfund.com> (last accessed 4 July 2019).

59 Atzori, supra, note 6, p 57.

60 See <www.stateofthedapps.com/> (last accessed 4 July 2019). It is referred to on multiple blockchain-related websites and forums. See also, among others <dappradar.com/> (last accessed 4 July 2019).

61 See for instance Werbach, supra, note 16, p 506.

62 See <www.stateofthedapps.com/about> (last accessed 4 July 2019).

63 Terms of Use of State of the Dapps, Art 1 <www.stateofthedapps.com/terms> (last accessed 4 July 2019). See also the Terms of Use, Art 5.

64 The section “about” refers to State of the ÐApps as a “not-for-profit curated directory of Decentralized Applications”, supra, note 62.

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75 The DAO was “one of the first decentralized venture capital organizations deployed on the Ethereum blockchain” and its operation, instead of being traditionally delegated to a management team, was “defined using smart contract code”: De Filippi and Wright, supra, note 8, p 137.

76 ibid, p 146.

77 While Atzori considers that DAOs are “self-sufficient agents derived from artificial intelligence” (Atzori, supra, note 6, p 46), De Filippi and Wright consider that a DAO may gain its autonomy not only from artificial intelligence, but also from “the aggregation of several code-based systems, which for a larger coordinated system” or in other words by “stigmergic process”: De Filippi and Wright, supra, note 8, p 149.

78 Kaal and Calcaterra, supra, note 18, p 19.

79 Atzori, supra, note 6, p 58.

80 V Buterin, “DAOs, DACs, DAs and more: an incomplete terminology guide”, 6 May 2014, <blog.ethereum.org/2014/05/06/daos-dacs-das-and-more-an-incomplete-terminology-guide/> (last accessed 4 July 2019).

81 For a further explanation of the “benevolent dictatorship” phenomenon, see Atzori, supra, note 6.

82 Werbach, supra, note 16, pp 534–549.

83 ibid, p 38.

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86 Werbach, supra, note 16, p 37.

87 De Filippi and Wright, supra, note 8, p 189.

88 MIK, supra, note 34, p 13.

89 De Filippi and Wright, supra, note 8, pp 173–192.

90 Act of September 21 2006, ch 26, Ariz. Rev. Stat. Ann. § 44-7003 (2006) (amended by 2017 Ariz Sess Laws 2417), <legiscan.com/AZ/text/HB2417/id/1528949>.

91 Walch, supra, note 69, p 10.

92 Walch especially hints at the debated feature of “immutability” of blockchain, which has been included in the law of Arizona while the blockchain community still lacks a common understanding of its contours and even of its existence: Walch, supra, note 69.

93 The principle of technological neutrality particularly applies in electronic communications law, in the E-Commerce Directive and in the GDPR. See Thompson, M, “The Neutralization of Harmony: The Problem of Technological Neutrality, East and West” (2012) 18 Boston University Journal of Science & Technology Law 303.Google Scholar The reach and scope of technological neutrality in ICT policies are however subject to controversy, see Reed, C, “Taking Sides on Technology Neutrality” (2007) 4 SCRIPTed 263.Google Scholar

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95 It could particularly constitute misleading action within the meaning of Unfair Commercial Practices Directive, Art 6(2)(b).

96 Finck, supra, note 4, p 686.

97 Regulation (EU) 2017/1001 on the European Union trade mark [2017] OJ L 154/1 (European Union Trade Mark Regulation), section 2 of chapter VIII.

98 A Ringelhann and S Martin, “Defining the EU Certification Mark” (2018) 13 Journal of Intellectual Property Law & Practice 625 at p 626.

99 ibid, p 627.

100 European Union Trade Mark Regulation, Art 83(1).

101 ibid, Art 90.

102 ibid, Art 91(b).

103 ibid, Art 83(2).

104 ibid, Art 84(2).

105 ibid, Art 84(1); Ringelhann and Martin, supra, note 98, pp 628–629.

106 Repas, M and Keresteš, T, “The Certification Mark as a New EU-Wide Industrial Property Right” (2018) 49(3) International Review of Intellectual Property and Competition Law 299 at p 303.Google Scholar

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