The Blockchain and the New Architecture of Trust

Description

How the blockchain—a system built on foundations of mutual mistrust—can become trustworthy. The blockchain entered the world on January 3, 2009, introducing an innovative new trust architecture: an environment in which users trust a system—for example, a shared ledger of information—without necessarily trusting any of its components. The cryptocurrency Bitcoin is the most famous implementation of the blockchain, but hundreds of other companies have been founded and billions of dollars invested in similar applications since Bitcoin's launch. Some see the blockchain as offering more opportunities for criminal behavior than benefits to society. In this book, Kevin Werbach shows how a technology resting on foundations of mutual mistrust can become trustworthy. The blockchain, built on open software and decentralized foundations that allow anyone to participate, seems like a threat to any form of regulation. In fact, Werbach argues, law and the blockchain need each other. Blockchain systems that ignore law and governance are likely to fail, or to become outlaw technologies irrelevant to the mainstream economy. That, Werbach cautions, would be a tragic waste of potential. If, however, we recognize the blockchain as a kind of legal technology that shapes behavior in new ways, it can be harnessed to create tremendous business and social value. Contents Series Editor’s Introduction Acknowledgments Introduction: The Parable of the Tree Buttonwood to Blockchain Logically Centralized, Organizationally Decentralized Law and Quantum Thought The Path Ahead I: A Revolution in Nine Pages 1. The Trust Challenge Without Relying on Trust A Crisis of Trust Defining Trust Trust Architectures: Peer-to-Peer, Leviathan, Intermediary Trustless Trust 2. Satoshi’s Solution Too Trusted to Fail? In the Beginning, There Was Bitcoin Nakamoto Consensus The Significance of Cryptocurrency 3. More than Money It All Started When They Nerfed the Siphon Life Spell Permissioned Ledgers Smart Contracts The DAO Saga 4. Why Blockchain? Beyond the Whoppercoin The Enduring Value of Intermediaries Decentralization Shared Truth Translucent Collaboration Tokens of Value II: Ledgers Meet Law 5. Unpacking Blockchain Trust Something from Nothing Distributed Cryptoeconomic Immutable Transparent Algorithmic 6. What Could Possibly Go Wrong? Vision and Reality Satoshi’s Error The Limits of Decentralization Not-So-Smart Contracts Trusting the Token Issuers Centralized Edge Providers Rules of the Road 7. Blockchain Governance Vili’s Paradox The Power of Consensus Governing the Governors The Social Contract Governance in Practice 8. Blockchain As/And Law Vlad’s Conundrum Things That Cryptoregulate This Time It’s Different? Ex Ante Design vs. Ex Post Dispute Resolution Law as a Technology of Trust Modes of Interaction: Supplements, Complements, Substitutes 9. We’re from the Government, and We’re Here to Help We Need to Begin Somewhere Regulatory Controversies The Token Offering Test Case Regulation and Innovation A Framework for Regulation III: Building the Decentralized Future 10. Connecting the Legal and the Technical The Education of Nicholas Szabo Making Law More Code-Like Making Code More Law-Like Fusions of Cryptogovernance 11. An Unpredictable Certainty As Speculative as They Are Rich Decentralization Cannot Hold Overcoming the Trust Trade-Off Blockchain as Spanning Layer 12. Conclusion Mike Hearn’s Odyssey A Matter of Trust Notes Introduction Chapter 1 Chapter 2 Chapter 3 Chapter 4 Chapter 5 Chapter 6 Chapter 7 Chapter 8 Chapter 9 Chapter 10 Chapter 11 Chapter 12 Index