1 Bitcoin Cash vs Bitcoin SV: Bitcoin Cash originated as a hard fork of the original Bitcoin blockchain with the main goal of increasing Bitcoin’s ledger block size to achieve higher transaction processing rates. Bitcoin SV, or Bitcoin “Satoshi Vision”, is the latest Bitcoin hard fork that increases the block size of Bitcoin Cash from 32 MB to a maximum of 128 MB, again to achieve extra transactions rates. At the time of writing, the market cap of Bitcoin SV is about one fourth of that of Bitcoin Cash (source coinmarketcap.com). See eg J Magas, “Opposing Bitcoin ABC and Bitcoin SV Factions’ Debates Grow Heated as the Bitcoin Cash Hard Fork Draws Closer” Cointelegraph (2019), available at 〈cointelegraph.com/news/opposing-bitcoin-abc-and-bitcoin-sv-factions-debates-grow-heated-as-the-bitcoin-cash-hard-fork-draws-closer〉 (last accessed 4 July 2019).

2 See for example Rocco, “On Governance: Coordination, Layers, and Structural Integrity” Medium (2019), available at 〈medium.com/alpineintel/on-governance-coordination-layers-and-structural-integrity-81a722ba1bc0〉 and Haon, “Blockchain forks and chain splits: why we should avoid them” Good Audience (2019), available at 〈blog.goodaudience.com/blockchain-forks-and-chain-splits-why-we-should-avoid-them-f54c693a90f1〉 (last accessed 4 July 2019).

3 Yeung, K, “Regulation by Blockchain: the Emerging Battle for Supremacy between the Code of Law and Code as Law” (2019) 82(2) Modern Law Review 207–239.CrossRefGoogle Scholar

4 Finck, M, Blockchain Regulation and Governance in Europe (Cambridge University Press 2018).CrossRefGoogle Scholar

5 Bevir, M “Governance as Theory, Practice and Dilemma” in Bevir, M (ed), The SAGE Handbook of Governance (2019).Google Scholar

6 Lēwî-Faur, D, “From ‘Big Government’ to ‘Big Governance’?” in Lēwî-Faur, D (ed) Oxford Handbook of Governance (Oxford, Oxford University Press 2012) pp 1–18.CrossRefGoogle Scholar

7 For example Kersbergen, K and Waarden, F, “‘Governance’ as a bridge between disciplines: Cross-disciplinary inspiration regarding shifts in governance and problems of governability, accountability and legitimacy (2004) 43(2) European Journal of Political Research 143 CrossRefGoogle Scholar, identify nine different ways of studying governance in social scientific literature, describing the study of governance as a “growth industry”.

8 This understanding of governance springs from Bevir’s observation that “At the most general level, governance refers to theories and issues of social coordination and the nature of all patterns of rule”: Bevir, supra, note 5.

9 See eg P De Filippi and G McMullen, Governance of blockchain systems: Governance of and by Distributed Infrastructure (2018), available at 〈hal.archives-ouvertes.fr/hal-02046787/〉 (last accessed 16 July 2019).

10 This conception of regulation reflects our common practice of referring to the regulation of particular sectors or domains, such as environmental regulation, financial regulation, workplace safety regulation and so forth.

11 See Black, J, “Decentring Regulation: Understanding the Role of Regulation and Self-Regulation in a ‘Post-Regulatory’ World” (2001) 54(1) Current Legal Problems 103–146 CrossRefGoogle Scholar and J Black, “Learning from regulatory disasters” (2014) LSE Legal Studies Working Paper No 24/2014.

12 Representative examples are P Lucsok, “Why on-chain governance?” (27 September 2018), available at 〈medium.com/polkadot-network/why-on-chain-governance-82ecf28f314c〉, GitHub, “Governance” (2019), available at 〈github.com/paritytech/polkadot/wiki/Governance〉 and Tezos Foundation, “A Digital Commonwealth - Tezos Foundation” available at 〈tezos.foundation/a-digital-commonwealth〉 (last accessed 16 July 2019).

13 A particularly ambitious proposal is that of “Liberal Radicalism”, that seeks to organise some societal functions purely by algorithms and game-theory: see V Buterin, Z Hitzig and E Glen Weyl, “Liberal Radicalism: A Flexible Design For Philanthropic Matching Funds” (2018), available at 〈papers.ssrn.com/sol3/papers.cfm?abstract_id=3243656〉.

14 Finck, supra, note 4, ch 7.

15 However, much of what we describe in the following paragraphs about Bitcoin and forks can be also applied to the Ethereum permission-less blockchain.

16 S Nakamoto, “Bitcoin: A Peer-to-Peer Electronic Cash System”, available at 〈bitcoin.org/en/bitcoin-paper〉 (last accessed 16 July 2019).

17 Vidan, G and Lehdonvirta, V, “Mine the gap: Bitcoin and the maintenance of trustlessness” (2018) 21(1) New Media & Society 42.CrossRefGoogle Scholar

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19 Buterin, who has been described as a “benevolent dictator” over the Ethereum network: T Friebe, “Ethereum: Governed by a benevolent dictator?” (31 October 2017) Medium, available at 〈medium.com/blockchainspace/ethereum-governed-by-a-benevolent-dictator-2a2be8aa331a〉 (last accessed 16 July 2019).

20 Walch, supra, note 18.

21 Vidan and Lehdonvirta, supra, note 17, p 10.

22 Botsman, R, Who Can You Trust? (New York, Hachette Book Group 2017) p 214.Google Scholar

23 Vigna, P and Casey, M, The Age of Cryptocurrency: How Bitcoin and Digital Money are Challenging the Global Economic Order (London, Vintage 2016).Google Scholar

24 Dodd, supra, note 18, p 46.

25 A prominent example affecting the Ethereum network took place recently, in which a scheduled update called Constantinople had to be reversed halfway through its implementation by the network when bugs therein were discovered by a team of academic researchers. The process followed is consistent with the informal governance mechanisms hereby described. See Aniket, “Ethereum Constantinople Upgrade: Things you should know”, Coinmonks (2019), available at 〈medium.com/coinmonks/ethereum-constantinople-upgrade-things-you-should-know-aa75e7655345〉.

26 As Vidan and Lehdonvirta observe, “any live software system is not a static artefact, but an ongoing sociotechnical project”: Vidan and Lehdonvirta, supra, note 17, p 8.

27 Walch, supra, note 18.

28 S Falkon, “The Story of the DAO – Its History and Consequences”, The Startup (2019), available at 〈medium.com/swlh/the-story-of-the-dao-its-history-and-consequences-71e6a8a551ee〉.

29 Finck, supra, note 4, ch 7. Singh and Chopra make a conceptually similar claim by arguing that the inexistence of a universal mechanism to establish the correctness of smart contracts written in a Turing-complete language (such as Ethereum smart contracts) implies the need to take account of social meaning to govern blockchain systems: MP Singh and AK Chopra, “Violable Contracts and Governance for Blockchain Applications”, arXiv (2018), available at 〈arxiv.org/abs/1801.02672〉.

30 Atzori, M, “Blockchain Technology and Decentralized Governance: is the State Still Necessary?” (2017) 6(1) Journal of Governance and Regulation 52.Google Scholar

31 Dodd, supra, note 18, p 45.

32 De Filippi, P and Loveluck, B, “The invisible politics of Bitcoin: governance crisis of a decentralised infrastructure” (2016) 5(3) Internet Policy Review.Google Scholar

33 See Galligan’s account of the “functions” of law which he ascribes to Hart, and Galligan’s scepticism about them: Galligan, DJ, Law in Modern Society (Oxford, Oxford University Press 2006)CrossRefGoogle Scholar.

34 Hart’s methodological approach rooted in the tradition of analytic jurisprudence has been subject to sustained criticism from a variety of perspectives over time. In particular, to acquire a holistic understanding of modern legal systems, it is important to supplement this analytic approach with a law and society perspective; see for example, Galligan, ibid. Our present purpose in drawing on Hart’s approach is narrow and limited: as an illuminating springboard for a critical interrogation of unified and self-sustaining systems of governance in order to illuminate the promise and potential of public blockchains, rather than necessarily endorsing Hart’s particular theory of law in an uncritical fashion.

35 Hart, HLA, The Concept of Law, 2nd edn (Oxford, Oxford University Press 1994) p 95.Google Scholar

36 ibid.

37 ibid.

38 Hart comments that there is clearly a very close connection between the rules of change and the rules of recognition: for where the former exists, the latter will necessarily incorporate a reference to legislation as an identifying feature of the rules, though it need not refer to all the details of procedure involved in legislation. Usually some official certificate or copy will, under the Rule of Recognition, be taken as sufficient proof of enactment: ibid, p 96.

39 Hart comments that there are intimate connections between the rules of adjudication with the other secondary rules. A system which has rules of adjudication is necessarily also committed to a rule of recognition of an elementary and imperfect sort: this is so because if courts are empowered to make authoritative determinations of the fact that a rule has been broken, these cannot avoid being taken as authoritative determination of what the rules are. So the rule which confers jurisdiction will also be a rule of recognition, identifying the primary rules through the judgements of the courts, and these judgements will become a “source of law”. Although such a simple rule of recognition will be very imperfect and be inseparable from the minimum form of jurisdiction: ibid, p 97.

40 ibid.

41 ibid, p 117. However, Hart warns that the combination of primary and secondary rules does not of itself illuminate every problem, though it is at the centre of a legal system – and as we move away from the centre, we must accommodate elements of a different character.

42 C Kim and N De, “Ethereum’s Constantinople Upgrade Faces Delay Due to Security Vulnerability” CoinDesk (2019), available at 〈www.coindesk.com/ethereums-constantinople-upgrade-faces-delay-due-to-security-vulnerability〉 (last accessed 16 July 2019).

43 Atzori, supra, note 30.

44 Hart, supra, note 35, p 116.

45 ibid.

46 ibid.

47 Walch, supra, note 18.

48 ibid, p 15.

49 The Bitcoin hash-wars offer a lesson in research methodology: the limitations of a purely theoretical approach to blockchain (ie “white paper” analysis) as opposed to one that regards its interaction with the social world and surrounding context as vital and indispensable to a clear-eyed understanding of its operation, potential and limitations. This does not, however, detract from understanding the Nakamoto White Paper as a theoretically robust and elegant proposal to the problem of cooperation between strangers – but its capacity to facilitate the delivery of essential social goods (eg facilitating social cooperation) cannot be evaluated in purely theoretical or technological terms.

50 De Filippi and Loveluck, supra, note 32, p 11.

51 Simpson, TW, “Computing and the search for trust” in Harper, RH (ed), Trust, Computing and Society (Cambridge University Press 2017) p 113.Google Scholar