Where and Why Blockchains and Law Intersect

in #essay7 years ago (edited)

Well, everyone seems to be talking about blockchain constitutions these days, and as expected, there's a lot of concern and confusion. This is a big change, to embed a construct of law, namely, a constitution, into the very genesis block of a new blockchain. I can all but hear the voices crying out, "But didn't we create blockchains to get away from these tried-and-failed, stone-age legal constructs? Why would we throw all that away by incorporating that very same thing we're trying to progress beyond into the innermost core of a new chain?"

I understand this perspective, because it was one I might've held myself had I not studied law, the good parts and the bad, and come to understand, at its most fundamental level, what law is, and how law differs from the legal codes imposed by modern nation-states, codes which are a corruption and inversion of a system of law that, properly understood and applied, forms a consistent and principled framework within which disputes can be handled.

Law According to Modprobe

As one who understands law (or, at the least, believes he does), I hope to clarify in this post the purpose of law. I make no promise that anyone else on earth will agree with this description of law, but it's how I think about it, and I believe it is more or less compatible with similar descriptions put forth by many historical lawyers. Just like the heading says, this is "Law According to Modprobe," and I will attempt to convey to the readers an understanding of law which I find quite powerful, but otherwise make no promises about.

So let's start off by defining terms. In the following discussion, Law, at its most basic level, can be thought of as "the rules and standards which people define and voluntarily agree shall govern their interactions with eachother." Note, dear reader, that to understand the following discussion, you will need to adopt a blank slate, reasoning only from my definitions presented herein, and not definitions you've heard elsewhere. Those definitions probably don't match mine, and thus will muddy the message making it nonsense rather than a clear, consistent thought or idea. Any argument against the nonsense idea will itself be, to me, a nonsense idea, and productive conversation will be impossible until and unless we can understand eachother's terms.

With respect to law, I want to dispel two notions straight away. First, what modern states like to call "law," the legal codes they coercively impose via their "legislatures" and enforce through their "courts" -- this is not law. This is legal codes masquerading as law. The cognitive gymnastics necessary to argue under law that these legal codes are somehow law over you and I are so elaborate and complex, having slowly and inexorably accreted through the passage of thousands of obscure and opaque "laws" (legal codes) over the course of millennia, that most likely no one fully understands them, and that is probably the point: the codes are so complex that no one can point out where exactly the mistakes are, and even if they could, their arguments would be so convoluted (because the code itself is so convoluted), few others would understand the arguments enough to argue that they were correct, and thus the system continues unabated, the status quo unshaken.

Second, "Law," as I use the term, is not prescriptive, it is descriptive. It does not define how people should act; rather, it describes how they agree to act. Law is a description of the interactions of human beings. It is the mutually understood context within which people communicate and interact with each other. All meaningful interpersonal communication occurs within a context which must be mutually understood for communication to succeed. This context of shared understanding includes not only comparatively well-defined categories such as a language, grammar, and vocabulary; but also more loosely defined categories such as a particular dialect or jargon within that language, and the worldview (beliefs, experiences, mindset, philosophy, etc) of the communicators. All of this context which is understood and accepted between a group of people is referred to as the law between that group of people.

At this point, we begin to recognize this notion as what we normally think of as Law: when people in a society agree that they will not do X, and anyone who does X will suffer certain consequences, we often refer to this as a "law against X." We also recognize lawlessness: if someone enters this society and, whether due to ignorance of the "law against X," or disregard of it, does X anyways, this is, according to the other people in the society, lawless behavior, punishable by law. The new person has "broken the law" of the society. Note, however, that he has not broken his own law: he may honestly believe himself blameless.

Now here's the mindwarp: in Law, neither party in the above scenario is in the right or wrong. This is because there was no "law against X" in the law shared between the old members of the society and the new one, since law only exists as the shared context, and the "law against X" was not shared with the new member. This is a mindwarp because most people aren't accustomed to Law having ambiguity; rather, they expect it to define in (ideally) all circumstances exactly how to proceed. Should the new member be punished according to community laws, or should he be let off because he intended no harm, or something else entirely? Law gives us no answer to this, because there is no defined law between the old and new members.

The people will do something, though, regardless of airy discussions about law. In perfect likelihood, the old members of the society might prosecute and punish the new member under their own law; however, by the new member's standards, this is lawless because they are applying their own law to him in violation of his own, and he never consented to their law.

Note that one response the community could choose, which even the new member would not regard as lawless, would be to let the offender off with a warning of the society's laws, with perhaps a requirement that the new member agree to these laws in order to remain a member of the society. Once this happens, the new member would be bound by the "law against X" because he chose to agree to it.

If we assume that it is ideal for there to be the least 'lawlessness' possible (note that this cannot be proven: we've defined the word 'lawlessness' to apply to certain behaviors, but it's a separate discussion, out of scope for this post, whether those behaviors are good or bad), the forgive-but-demand-agreement approach is a better solution than punishing the offender under a law to which he never consented. The society feels the new member acted lawlessly, but that ship has sailed; at least it's still possible to prevent the new member from feeling the society acted lawlessly as well. Be cognizant, also, that this ideal to minimize perception of lawlessness is a subjectively defined ideal, since lawlessness is subjective (defined by people, who may have conflicting definitions, rather than by nature, which has no contradictions).

Now that we've established our definition of Law, we can see how it describes the interactions between people, but we don't yet see why it's worth thinking about: all we've done is point out that people don't always agree on how to behave, and we've named cases where they don't "lawlessness." So to bring this mental model a bit closer to reality, we observe that this system of thinking called Law could actually help people interact more peacefully if they could codify laws. Then, anytime they encounter someone unfamiliar with their laws, they can provide that code to the newcomer.

At this point, the newcomer has a few choices: to accept the law and thereby interact with the community; to reject the law, and thereby ostracize himself from the community; or to lie and claim to accept the law without any intent to do so. In the first two cases, the result is more or less ideal: no one has observed any lawlessness. Law has been upheld universally. In the final case, however, we might ask, what good was the law? It was still broken, even though it was known. One advantage that can be noted to using Law in this situation, however, is that the use of Law forced the newcomer to out himself as a fraudulent and malicious individual: his actions were intentionally malicious to the community.

Note also how my framework of Law handles this third scenario, where the newcomer intentionally violates the community's laws... All people are entitled to define their own laws, and the laws which are shared between people govern their interactions, and by codifying these laws they can smooth relations with others and minimize the likelihood of any "lawless" behavior. So the origin of all Law is the individual, who defines his own. The malicious newcomer, however, has done something different; he has defined two laws for himself: one he claims to abide by, and one he really abides by. Moreover, these laws are contradictory to each other. Law is a description of things in nature, and nature cannot have contradictions, thus it cannot be said that, under my framework of Law, this malicious newcomer has any law at all because the closest thing he has to a law is a contradiction. Thus the community could, in full honesty to my framework of Law, take action against this malicious individual without performing, in anyone's view, a lawless act: the only law they could be violating is the newcomer's, but he volunteered to forfeit his law: in full opportunity and ability to define a law, he chose not to. I leave it to the reader to discern whether it is a feature or a bug, this 'loophole' allowing Lawful punishment of intentionally malicious individuals who did not agree to the law under which they are punished.

This concludes my overview of how I think about Law. Once again, I do not necessarily expect anyone to agree that this analysis is valid or useful; I merely assert that it is valid and useful to me. I also honestly believe it to be closely parallel to the understanding of law of any classic lawyer (for instance, I can describe British Common Law using this framework; if that would be interesting to readers, let me know in the comments), though our choices in vocabulary will undoubtedly differ widely, making the parallels more difficult to discern.

Law and the Blockchain

Congratulations, dear reader, on making it so far into this treatise. It's almost over. :)

In conclusion, I would like to revisit the question of a constitution and a blockchain. Let us assume, within my framework of Law, that a Constitution is any document which attempts to codify a particular framework of law, which can then be used as a codified law that people can voluntarily accept, and acceptance is required to interact within the community. Once this has been done, ambiguity is eliminated: all members of the community know the law over their interactions in the community because it is (1) codified, and (2) voluntarily accepted by all members. There can be no further dispute of what the law says, nor which law(s) might be applicable. The advantages of this approach should be self-evident. The only room left for dispute is interpretation of the codified law, thus a good constitution will be as unambiguous and complete as possible.

Furthermore, the right of all individuals to engage in contracts of private association, which is what such a constitution is, is recognized under international law, thus compelling all nations which claim to follow international law to recognize the legitimacy of this private association. Furthermore, if the state argues that it's laws compel some change in blockchain state (i.e. a legally mandated hard-fork), it will be unable to enforce this on the real blockchain, since the real blockchain defines its own lawful jurisdiction, distinct from the state's, and in the blockchain's jurisdiction, the state law does not exist. Thus no state agent may apply the state's mandated change to the blockchain without violating blockchain law, which state courts are compelled by international law to uphold, because in order to modify the blockchain, the state agent was required to sign a transaction, which signs the blockchain constitution.

Thus by embedding a constitution in the blockchain, it creates a lawful jurisdiction removed from, and not subject to, the laws of any state, and the states are compelled under international law to respect that lawful jurisdiction. Thus there is an ironclad lawful argument that no action on the blockchain can possibly violate a state's law, and no penalty assigned under state law can be applied to the blockchain. Beware, however, that states are known for using laws to accomplish their own ends, and ignoring them otherwise. These states are fundamentally lawless institutions, so a lawful argument alone is no guarantee of safety. Law is intended to describe and make clear the behaviors of people, but it cannot control them.


With a background in software development and a passion for security, Nathan has identified blockchain technology as his niche. He is dedicated to creating applications which empower individuals to shape a better world for themselves and others.

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@modprobe Great contente, I appreciate the time you take to educate me.

@modprobe very interesting stuff I need to do more homework thanks for the great info

Very interesting ... even if complicated to read for a 'layman' (concerning law) and English non-native speaker ...

Good times bud. A constitution is a strong play. You may recall me talking about it a few months before it was cool!

Where do I sign? I love the concept of having a jurisdiction that doesn't identify as a nation state. It's the first nail in the coffin for the old way of doing things, I presume.

Thank you for a truly enjoyable and informative article Nathan! Ohh and I would be interested in your description of British Common Law using this framework. :)

Nice article and in-depth analysis keep rocking

Great information. It's going to be a fascinating experiment. I think a lot of things are possible.

Nice perspective!

Beware, however, that states are known for using laws to accomplish their own ends, and ignoring them otherwise. These states are fundamentally lawless institutions, so a lawful argument alone is no guarantee of safety.

This is the point that I started to think when I was reading the text. No matter how logical the system is, it doesn't matter if those who are in power don't accept it.

That's why I'm more interested in practical applications. It's important to seek for systems that work in the real world and think less about abstract systems that work only in the imagination. I like to contemplate on abstract systems every now and then, but in the end, all that matters is whether or not we can actually use those ideas to make the world a better place.

Indeed, but it's better if we force the states to abandon their refuge of perceived lawfulness. States claim a monopoly on lawfulness, but in reality they are the world's most lawless institutions. By building our blockchain on a rock-solid foundation of Law that can be understood, at least at a high level, in the reading of an essay, we force states that wish to impose their lawless behavior to clearly and overtly abandon Law and simply say "We don't care about law, we're going to hurt you anyways."

Perception of legitimacy is the state's only power. If I take refuge in a jurisdiction that, for states to do harm in, they must first sacrifice their appearance of legitimacy and color of law, I think I've accomplished something truly worthwhile.

Perception of legitimacy is the state's only power.

The use of force is actually the state's main power. With regards legitimacy, one hand washes the other here. It's not so long ago that legitimacy was clearly defined in terms of physical power.

(Just adding this here even though I engaged with you in my own comment, as it's a strong statement.)

Perception of legitimacy is the state's only power. If I take refuge in a jurisdiction that, for states to do harm in, they must first sacrifice their appearance of legitimacy and color of law, I think I've accomplished something truly worthwhile.

This is easier said than done. Because it's all about perception, things like logic have very little power. It's really hard to get a state to lose its perception of legitimacy. They can do pretty horrible stuff and still preserve it.

I just wrote more about my thoughts on blockchain constitution. Your story in the OP about better law system fits quite well in it. Your story is great and humankind would be getter off if people believed it. But the problem is: how you are going to make people believe it?

I've been libertarian for many years. Nowadays I take part in philosophical discussions very rarely because they tend to have zero impact on the real world. No matter how good the system looks on paper, it doesn't matter as long as there are no practical and actionable steps towards it.

...and nature cannot have contradictions

I appreciate the clarity of your argument, but the above statement is obviously false if we consider the description of nature offered by quantum physics.

Nature having no contradictions is axiomatic, so I'm not going to argue over it. You'll simply have to decide for yourself what you wish to believe. But the proposition that "nature has no contradictions" is binary-equivalent to the one that "existence exists."

I very much doubt that quantum physics implies nature has contradictions. I think it does argue that nature is not always resolved to a particular non-contradictory state, with the classic example being Schrödinger's cat: It's not defined by nature whether the cat is alive or dead, but this is not a contradiction, since neither possible collapse is itself a contradiction. The state is simply unresolved.

Nature does not have contradictions, though. I hold this as axiomatic and will not attempt to prove it, but it's still true. If modern quantum physics indicates otherwise, it's either arguing something not quite the same, or it's simply wrong. :-)