Saturday, November 3, 2018

Bitcoin, blockchain and Is Code Law?

I probably  know  less than my dog about bitcoin and block chain technology.  Like Nick Paumgarten says in his recent New Yorkerarticle, "The Stuff Dreams are Made Of," "I'd ideally hoped I might be just old enough to make it to my deathbed without having to get up to speed."  But I really did want to try and understand blockchain technology and what the hell  everybody else in the world seemed to comprehend except me. For a primer, I read Paumgarten's article.  He does a good job of explaining the concepts and the players involved. 

However, the most interesting part of the article to me was his description of something called the Decentralized Autonomous Organization, defined as "A crowd sourced venture fund, a way of using smart contracts to cut out traditional venture capitalists, reduce fees, and give access to regular civilians who contribute 'ether' (i.e. cryptocurrency) and vote on which projects to invest in."  The author tells us that within weeks of launching,  the site was hacked and that investors lost their money - it simply vanished (literally into the ether). 

This set up an ethical debate: could or should the people behind the fund reverse the transactions to restore the investors to their funds - or would this be "a violation of the principle that blocks must remain immutable?" In the terrestrial  world this would be an obvious crime. 

Then the article gets really interesting:

            We were all wondering is code law?  What is code?  What is law? What is the covenant?    It was almost epistemological.  We were a bunch of computer geeks way out of our       depth.  

I thought about this for hours.  We really are witnessing the creation of a whole new society and a new set of laws to govern that society.  This is a world that exists without traditional concepts of jurisdiction.  It is easy to lump this into a discussion of the internet, social media , Russian hackers and all of the other inventions that have morphed into something we could not have comprehended.  But I really believe that this might be the beginning of something entirely unique and it does give us an opportunity to watch laws develop.

However, I still don’t get the allure of bitcoin. 

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