Blockchain and the Law – Legality, Law-like Characteristics, and Legal Applications

Abstract

The transformative potential of blockchain means the technology has expanded beyond its initial uses in supporting cryptocurrencies. Because of the range of potential applications of blockchain, the technology has a complex relationship with the law. When the terms blockchain and the law are used, this can typically mean one of three things. First, when describing the most salient application of the technology - to develop and secure cryptocurrency networks - the question tends to deal with the legal status of a given cryptocurrency. Second, blockchains themselves have important law-like characteristics in terms of their effects in constraining and incentivizing network participants to act in the interest of network users. Third, blockchains have several potentially transformative legal applications in terms of facilitating smart contracts and more complex associational forms. In this chapter I detail each of these distinct relationships between blockchain and the law in order to clarify the legal space for blockchain scholars and protocol designers.