Trust, but Verify: Why the Blockchain Needs the Law

May combine two claims.

By 2016, there were at least fifteen incidents in which cryptocurrency worth at least $1 million was stolen, with a total value exceeding $600 million.

“By 2016, there were already at least fifteen incidents in which cryptocurrency worth at least $1 million was stolen, with a total value exceeding $600 million.”

• cites [37] 37. ntrepreneurs [to found] the user-generated content sites we know and love today."). 246. See Peter Van Valkenburgh, Bitcoin Innovators Need Legal Safe Harbors, COIN CENTER (Jan. 24, 2017), https://coincenter.org/entry/bitcoin-innovators-need-legal-safe-harbors [https://perma.cc/C5ES-KZGN]. 251. Christopher D. Clack, et al., Smart Contract Templates: Foundations, Design Landscape and Research Directions 5 (Aug. 4, 2016) (unpublished manuscript), https://arxiv.org/pdf/1608.00771.pdf [https://perma.cc/PQW8-8GCJ] (defining operational aspect as "the parts of the contract that we wish to automa sourceCould not verify

  The passages on enforcement (section 2.3.2, p. 4) and research challenges (section 3.2.3, p. 10) discuss smart-contract risks, not cryptocurrency theft totals. Searches for fifteen theft incidents, $1 million losses, and a $600 million total found no passage in our copy addressing those figures. (LLM, conf=0.75)

  Experimental — accuracy not yet measured

May combine two claims.

The DAO collapse illustrated the vulnerability of smart contracts: transactions siphoning off funds were valid smart contracts under The DAO's rules and subject to immutable execution.

“The collapse of The DAO, noted in the introduction, illustrated this vulnerability.135 The transactions siphoning off funds were valid smart contracts according to the rules of The DAO, so they were subject to the same immutable execution as any others.”

• cites [135]Not matched

  Couldn’t be matched to a paper in Crossref, so it can’t be checked.

Probably not a substantial claim: may not pass S1 (asserted).

Smart contracts automate contractual enforcement by ceding all power to the decentralized network maintaining the ledger.

“Smart contracts automate contractual enforcement by ceding all power to the decentralized network maintaining the ledger.”

• cites [188]Not matched

  Couldn’t be matched to a paper in Crossref, so it can’t be checked.

Probably not a substantial claim: may not pass S3 (load-bearing).

Internet advocates began to call for government intervention to enforce network neutrality rules and privacy protections.

“Internet advocates began to call for government intervention to enforce network neutrality rules and privacy protections.”

• cites [195]Not matched

  Couldn’t be matched to a paper in Crossref, so it can’t be checked.

Probably not a substantial claim: may not pass S3 (load-bearing).

Arizona passed a law declaring blockchain-based digital signatures as legally enforceable.

“Arizona passed a law declaring blockchain-based digital signatures as legally enforceable.”

• cites [184]Not matched

  Couldn’t be matched to a paper in Crossref, so it can’t be checked.

Probably not a substantial claim: may not pass S3 (load-bearing), S4 (based).

Regulatory skirmishes over blockchain-based systems are already being fought.

“Regulatory skirmishes over blockchain-based systems are already being fought.”

May combine two claims.

Blockchains are vulnerable to selfish behavior, attacks, and manipulation.

“Blockchains are vulnerable to selfish behavior, attacks, and manipulation.”

• cites [36] 36. Kill It, ATLANTIC (Sept. 12, 2013), https://www.theatlantic.com/business/archive/2013/09/the-law-that-gave-us-the-modern -Internet-and-the-campaign-to-kill-it/279588/ [https://perma.cc/HG7W-VJEB]. 245. See id. ("It was simple and intuitive to understand for entrepreneurs and . . . has functioned as a permission slip for . . .Not matched

  Couldn’t be matched to a paper in Crossref, so it can’t be checked.

Probably not a substantial claim: may not pass S2 (checkable).

Even if the math works perfectly, blockchains are systems designed, implemented, and used by humans.

“Even if the math works perfectly, blockchains are systems designed, implemented, and used by humans.”

May combine two claims.

Miners act purely out of self-interest, but in doing so they fulfill a socially beneficial role.

“Miners thus act purely out of self-interest, but in doing so, they fulfill a socially beneficial role.”

May combine two claims.

New bitcoin is only created through the reward mechanism, at a rate that declines over time.

“New bitcoin is only created through the reward mechanism, at a rate that declines over time.82”

• cites [82]Not matched

  Couldn’t be matched to a paper in Crossref, so it can’t be checked.

Probably not a substantial claim: may not pass S2 (checkable), S4 (based).

Subjective intent remains relevant even when expressed through objective code.

“Subjective intent remains relevant even when expressed through objective code.”

Probably not a substantial claim: may not pass S3 (load-bearing).

Each validated block is cryptographically signed with the hash of the prior block, creating an immutable chain of sequential blocks.

“Each block thus validated is cryptographically signed with the hash of the prior block, creating an immutable chain of sequential blocks.”

• cites [75]Not matched

  Couldn’t be matched to a paper in Crossref, so it can’t be checked.

May combine two claims.

Solutions to Bitcoin's proof-of-work puzzles require massive and growing computing power, which is sufficiently expensive to deter Sybil attacks.

“Solutions require massive and growing computing power, which is sufficiently expensive to deter Sybil attacks.71”

• cites [71]Not matched

  Couldn’t be matched to a paper in Crossref, so it can’t be checked.

Probably not a substantial claim: may not pass S2 (checkable), S4 (based). May combine two claims.

There are places the legal system cannot go, and sometimes the formalization that law imposes is an impediment to trust.

“Yet there are places the legal system cannot go, and sometimes the very formalization that law imposes is an impediment to trust.”

Probably not a substantial claim: may not pass S2 (checkable), S4 (based).

Legal structures such as contracts, property, corporations, and judicial enforcement replace interpersonal trust with more structured rights, expectations, and remedies.

“Legal structures such as contracts, property, corporations, and judicial enforcement replace interpersonal trust with more structured rights, expectations, and remedies.”

Probably not a substantial claim: may not pass S2 (checkable).

The blockchain needs law.

“There are points where law needs to adapt to recognize the potential of the blockchain, but the reverse is also true: the blockchain needs law.”

Probably not a substantial claim: may not pass S4 (based).

Blockchain-based systems are less insulated from the law's reach than it seems.

“And they are less insulated from the law's reach than it seems.”

Classified as probably not a substantial claim. May combine two claims.

Reconciliation of separate ledgers introduces complexity, delay, and possibilities for error.

“This introduces complexity, delay, and possibilities for error.”

Probably not a substantial claim: may not pass S2 (checkable), S4 (based).

Wholly divorced from legal enforcement, blockchain-based systems may be counterproductive or even dangerous.

“Wholly divorced from legal enforcement, blockchain-based systems may be counterproductive or even dangerous.”

May combine two claims.

The blockchain is an ingenious solution for verification, but to promote trust requires something more, namely the legal system.

“The blockchain is an ingenious solution for verification but to promote trust requires something more.”

• Also stated in: § I. INTRODUCTION: CODE'S REVENGE · plain

  “That is where the legal system comes in play.”

Probably not a substantial claim: may not pass S3 (load-bearing), S4 (based).

All blockchain systems of the type Bitcoin pioneered incorporate three primary features: distributed ledgers, consensus, and smart contracts.

“All systems of this type incorporate three primary features: distributed ledgers, consensus, and smart contracts.”

Probably not a substantial claim: may not pass S3 (load-bearing).

The proof of work system is tuned dynamically to generate a valid solution to the hashing puzzle for a block roughly once every ten minutes.

“The proof of work system is tuned dynamically to generate a valid solution to the hashing puzzle for a block roughly once every ten minutes.74”

• cites [74]Not matched

  Couldn’t be matched to a paper in Crossref, so it can’t be checked.

Probably not a substantial claim: may not pass S3 (load-bearing).

If each organization or computer keeps its own ledger, every transaction is recorded independently at least twice.

“If, on the other hand, each organization or computer keeps its own ledger (as with most corporate financial records), every transaction is recorded independently at least twice.”

Probably not a substantial claim: may not pass S3 (load-bearing). May combine two claims.

A public blockchain, such as Bitcoin's, records all transactions on the network and is totally transparent to all participants.

“A public blockchain, such as Bitcoin's, records all transactions on the network and is totally transparent to all participants.77”

• cites [77]Not matched

  Couldn’t be matched to a paper in Crossref, so it can’t be checked.

Probably not a substantial claim: may not pass S3 (load-bearing). May combine two claims.

Consensus affirms the integrity both of each individual transaction and of the ledger as a whole.

“Consensus affirms the integrity both of each individual transaction and of the ledger as a whole.”

• cites [73]Not matched

  Couldn’t be matched to a paper in Crossref, so it can’t be checked.

May combine two claims.

A single distributed ledger replaces many private ledgers that must be reconciled for consistency, reducing transaction costs.

“Second, the single distributed ledger replaces many private ledgers that must be reconciled for consistency, thus reducing transaction costs.”

Probably not a substantial claim: may not pass S2 (checkable), S4 (based).

Blockchain-based systems may supplement, complement, or substitute for legal enforcement.

“They may supplement, complement, or substitute for legal enforcement.”

Classified as probably not a substantial claim.

Developers of blockchain-based systems will often need to incorporate both dry code and wet code.

“And surprisingly, developers of blockchain-based systems will often need to incorporate both.”

Classified as probably not a substantial claim.

A blockchain allows confidence in transactions without trusting the integrity of any individuals, intermediaries, or governments.

“First, one can have confidence in transactions without trusting the integrity of any individuals, intermediaries, or governments.”

Probably not a substantial claim: may not pass S3 (load-bearing).

A blockchain is a kind of distributed ledger with no master copy.

“A blockchain is a kind of distributed ledger.58 It is”

Probably not a substantial claim: may not pass S2 (checkable).

Realizing the blockchain's potential will require a careful mapping of the respective roles of the dry code of cryptography and the wet code of law.

“Realizing its potential, however, will require a careful mapping of the respective roles of the”

Probably not a substantial claim: may not pass S2 (checkable).

The reason the blockchain needs law is that both the blockchain and the law are, at their core, mechanisms of trust.

“The reason the blockchain needs law is that both the blockchain and the law are, at their core, mechanisms of trust.”

Classified as probably not a substantial claim.

Any participant in a blockchain network can maintain an instantiation of the ledger and be confident it matches all others.

“Any participant in the network can maintain an instantiation of the ledger, yet be confident it matches all the others.”

Probably not a substantial claim: may not pass S3 (load-bearing).

Nakamoto's response to Sybil attacks combined cryptographic techniques with insights from game theory.

“Nakamoto's response to Sybil attacks cleverly combined cryptographic 64 techniques with insights from game theory.65”

• cites [64]Not matched

  Couldn’t be matched to a paper in Crossref, so it can’t be checked.

• cites [65]Not matched

  Couldn’t be matched to a paper in Crossref, so it can’t be checked.

Probably not a substantial claim: may not pass S4 (based).

Blockchains provide a distributed yet provably accurate record.

“Blockchains use complex technology, but their basic function is simple: providing a distributed yet provably accurate record.”

Probably not a substantial claim: may not pass S3 (load-bearing).

Maintaining synchronization, called consensus, is the hard part because there is no canonical master copy.

“Maintaining that synchronization, called consensus, is the hard part, because there is no canonical master copy.”

Probably not a substantial claim: may not pass S2 (checkable), S4 (based).

The blockchain's impact will depend on its developers' ability to connect Satoshi Nakamoto's cryptoeconomic trust model with the formal structures and institutions of legal enforcement.

“Its impact will depend on its developers' ability to connect Satoshi Nakamoto's cryptoeconomic trust model with the formal structures and institutions of legal enforcement.”

Probably not a substantial claim: may not pass S2 (checkable).

The magic of distributed ledgers is to make certain activities trustworthy without the need to trust anyone in particular.

“The magic of distributed ledgers is to make certain activities trustworthy without the need to trust anyone in particular.”

Probably not a substantial claim: may not pass S3 (load-bearing). May combine two claims.

The idea of smart contracts was introduced independently from blockchains, and well before Bitcoin was developed.

“The idea of smart contracts was introduced independently from blockchains, and well before Bitcoin was developed.86”

• cites [86]Not matched

  Couldn’t be matched to a paper in Crossref, so it can’t be checked.

Probably not a substantial claim: may not pass S2 (checkable), S4 (based).

To achieve their potential and avoid catastrophic failures, blockchain-based systems will need to integrate with the operations and institutions of the law.

“To achieve their monumental potential and avoid catastrophic failures, blockchain-based systems will need to integrate with the operations and institutions of the law.”

Probably not a substantial claim: may not pass S4 (based).

Distributed ledger technology allows participants to trust the outcome of a system without trusting any individual participant.

“Distributed ledger technology allows participants to trust the outcome of a system without trusting any individual participant.”

Probably not a substantial claim: may not pass S2 (checkable), S4 (based). May combine two claims.

The blockchain could become a transformative technology for business, government, and society on the scale of the Internet, but only if it reaches accommodations with law.

“The blockchain could indeed become a transformative technology for business, government, and society on the scale of the Internet, but only if it reaches accommodations with law.”

Probably not a substantial claim: may not pass S2 (checkable), S4 (based).

The blockchain is a novel solution to the age-old human problem of trust.

“Created to support the Bitcoin digital currency, the blockchain is actually something deeper: a novel solution to the age-old human problem of trust.”

Probably not a substantial claim: may not pass S2 (checkable), S4 (based).

Law is the blockchain's destiny, not its undoing.

“This Article defends the contrarian claim that law is the blockchain's destiny, not its undoing.”

Probably not a substantial claim: may not pass S3 (load-bearing).

The Bitcoin development community is engaged in debates about mechanisms such as increasing the size of each block to improve performance.

“The Bitcoin development community is engaged in debates about mechanisms such as increasing the size of each block to improve performance.119”

• cites [119]Not matched

  Couldn’t be matched to a paper in Crossref, so it can’t be checked.

Probably not a substantial claim: may not pass S3 (load-bearing). May combine two claims.

The most prominent platform for smart contracts today is Ethereum, which launched in 2015.

“The most prominent platform for smart contracts today is Ethereum, which launched in 2015.88”

• cites [88]Not matched

  Couldn’t be matched to a paper in Crossref, so it can’t be checked.

May combine two claims.

In 2011, DigiNotar, a Dutch certificate authority, was hacked; fraudulent certificates were issued which allowed attackers to intercept and redirect traffic between users and Google's Gmail service, and the incident shows the risk of centralized systems.

“In 2011, DigiNotar, a Dutch certificate authority, was hacked.105 Fraudulent certificates were issued which allowed attackers to intercept and redirect traffic between users and Google's Gmail service.The damage was limited because Google and web browser vendors acted quickly to invalidate the fraudulent certificates, but the incident shows the risk of centralized systems.106”

• cites [105]Not matched

  Couldn’t be matched to a paper in Crossref, so it can’t be checked.

• cites [106]Not matched

  Couldn’t be matched to a paper in Crossref, so it can’t be checked.

May combine two claims.

Permissioned blockchains may not need to worry about 51% attacks, but they face more traditional information security concerns of centralized systems.

“And while permissioned blockchains, which have an additional layer of centralized trust over the participants in the network, may not need to worry about 51% of the attacks, they face more of the traditional information security concerns of centralized systems.”

May combine two claims.

Token purchasers today generally contribute money to blockchain-based projects with virtually no way to guarantee they get anything in return, and very limited information about risks.

“Token purchasers today are generally contributing money to blockchain-based projects with virtually no way to guarantee they get anything in return, and very limited information about risks.”

Probably not a substantial claim: may not pass S4 (based).

In proof of work systems like Bitcoin, the only two ways to obtain cryptocurrency are through mining or by exchanging with someone else.

“In proof of work systems like Bitcoin, the only two ways to obtain cryptocurrency are through mining or by exchanging with someone else.”

May combine two claims.

Cryptographic immutability makes blockchain-based systems trustworthy, but it also leads to problems that code itself cannot solve.

“That power makes blockchain-based systems trustworthy, but it also leads to problems that code itself cannot solve.”

Probably not a substantial claim: may not pass S3 (load-bearing).

Ether, Ethereum's cryptocurrency, is now easily the second most valuable after bitcoin.

“Ether, Ethereum's cryptocurrency, is now easily the second most valuable after bitcoin.90”

• cites [90]Not matched

  Couldn’t be matched to a paper in Crossref, so it can’t be checked.

May combine two claims.

In 2016, authorities in Buenos Aires, Argentina forbade credit card companies from processing transactions for Uber, and Xapo's bitcoin-based debit card was able to circumvent the ban because it did not require a local connection to a traditional payment processor.

“In 2016, authorities in Buenos Aires, Argentina forbade credit card companies from processing transactions for the ride-hailing company Uber, which was violating local regulations.Xapo, which offers a bitcoin-based debit card, was able to circumvent the ban 101 because it did not require a local connection to a traditional payment processor.”

• cites [101]Not matched

  Couldn’t be matched to a paper in Crossref, so it can’t be checked.

Probably not a substantial claim: may not pass S3 (load-bearing). May combine two claims.

One of Bitcoin's value propositions is to serve as a residual store of value in many ways superior to gold, which today is a $7 trillion asset class.

“One of Bitcoin's value propositions is to serve as a residual store of value in many ways superior to gold, which today is a $7 trillion asset class. 103”

• cites [103]Not matched

  Couldn’t be matched to a paper in Crossref, so it can’t be checked.

Probably not a substantial claim: may not pass S3 (load-bearing).

Quantum computers might be able to break encryption methods that the most powerful conventional computers cannot crack.

“Quantum computers, for example, might be able to break encryption methods that the most powerful conventional computers cannot crack.125”

• cites [125]Not matched

  Couldn’t be matched to a paper in Crossref, so it can’t be checked.

May combine two claims.

These alternative consensus techniques have their own limitations and have survived less real-world exposure than Bitcoin.

“However, these techniques have their own limitations and have survived less real-world exposure than Bitcoin.132”

• cites [132]Not matched

  Couldn’t be matched to a paper in Crossref, so it can’t be checked.

May combine two claims.

Nakamoto's consensus solution is remarkably robust, but it can be overcome by a 51% attack.

“Nakamoto's solution for consensus is remarkably robust, but it can be overcome by a 51% attack.126”

• cites [126]Not matched

  Couldn’t be matched to a paper in Crossref, so it can’t be checked.

May combine two claims.

Although there has been some effort to require licensing of cryptocurrency exchanges, the global nature of the market means many exchanges are effectively unregulated.

“Although there has been some effort to require licensing of cryptocurrency exchanges, the global nature of the market means many exchanges are effectively unregulated.148”

• cites [148]Not matched

  Couldn’t be matched to a paper in Crossref, so it can’t be checked.

Probably not a substantial claim: may not pass S2 (checkable). May combine two claims.

The blockchain offers tremendous potential benefits, but it also poses very serious risks and public policy challenges.

“The blockchain offers tremendous potential benefits.It also poses very serious risks and public policy challenges.”

Probably not a substantial claim: may not pass S3 (load-bearing).

Smart contracts are essentially autonomous software agents.

“Smart contracts are essentially autonomous software agents.87”

• cites [87]Not matched

  Couldn’t be matched to a paper in Crossref, so it can’t be checked.

May combine two claims.

Bitcoin validates a block roughly every ten minutes, and currently has a theoretical limit of seven transactions per second.

“Bitcoin validates a block roughly every ten minutes, and currently has a theoretical limit of seven transactions per second.112”

• cites [112]Not matched

  Couldn’t be matched to a paper in Crossref, so it can’t be checked.

Probably not a substantial claim: may not pass S2 (checkable), S4 (based).

Given the uncertainties and technical complexities of blockchain technology, most investors are unlikely to understand what they are getting into, even with extensive financial disclosure.

“Given all the uncertainties and technical complexities of blockchain technology, most investors are unlikely to understand what they are getting into, even with extensive financial disclosure.”

Probably not a substantial claim: may not pass S2 (checkable), S3 (load-bearing).

The blockchain is clearly more than a fad.

“There are so many well-founded efforts underway, so many significant use cases, so much support from major enterprises, and so much capital flowing in that the blockchain is clearly more than a fad.”

Probably not a substantial claim: may not pass S2 (checkable), S4 (based).

If the blockchain entirely replaces reliance on people, companies, and governments with reliance on software code and cryptography, it will produce distrust.

“If the blockchain entirely replaces reliance on people, companies, and governments with reliance on software code and cryptography, it will produce distrust.”

Probably not a substantial claim: may not pass S3 (load-bearing).

Ethereum offers a Turing-complete programming language, meaning that in theory any application that runs on a conventional computer can be executed on the distributed computer of its consensus network.

“Ethereum offers a Turing-complete programming language, meaning that in theory, any application that runs on a conventional computer can be executed on the distributed computer of its consensus network.89”

• cites [89]Not matched

  Couldn’t be matched to a paper in Crossref, so it can’t be checked.

May combine two claims.

The BitLicense recipients-Circle, Ripple, and Coinbase-were three of the best-funded startups in the space, reinforcing concerns that BitLicense would crowd out innovative small players.

“The recipients-Circle, Ripple, and Coinbase-were three of the best-funded startups in the space, reinforcing concerns that BitLicense would crowd out innovative small players.”

Probably not a substantial claim: may not pass S2 (checkable), S3 (load-bearing).

Questions about surveillance and permissible uses of technology are not new.

“The point is that these are not new questions.”

Probably not a substantial claim: may not pass S2 (checkable).

Universal freedom, at the limit, is tantamount to anarchy: Thomas Hobbes' war of all against all.

“Universal freedom, at the limit, is tantamount to anarchy: Thomas Hobbes' war of all against all.177”

• cites [177]Not matched

  Couldn’t be matched to a paper in Crossref, so it can’t be checked.

Probably not a substantial claim: may not pass S3 (load-bearing).

Ripple's business model depends on its ability to develop partnerships with financial institutions around the world.

“Its business model depends on its ability to develop partnerships with financial institutions around the world.”

Probably not a substantial claim: may not pass S3 (load-bearing).

The classification controversy in the 1990s could not have been resolved quickly because the technology was too immature and its implementation too limited.

“There was no way the classification controversy could have been resolved quickly in the 1990s because the technology was too immature and its implementation too limited.”

May combine two claims.

In response to the FinCEN action, Ripple agreed to a $950,000 fine and committed to establish an AML/KYC compliance regime.

“In response to the FinCEN action, Ripple agreed to a $950,000 fine and committed to establish an AML/KYC compliance regime.”

• cites [204]Not matched

  Couldn’t be matched to a paper in Crossref, so it can’t be checked.

Probably not a substantial claim: may not pass S2 (checkable), S3 (load-bearing), S4 (based).

The Ripple sanctions were a turning point for the cryptocurrency industry.

“The Ripple sanctions were a turning point for the cryptocurrency industry.”

May combine two claims.

The BitLicense regulations were drafted in a way that seemed to cover many cryptocurrency businesses other than custodial exchanges, and the certification process was cumbersome.

“The regulations were drafted in a way that seemed to cover many cryptocurrency businesses other than custodial exchanges, and the certification process was cumbersome.”

Probably not a substantial claim: may not pass S3 (load-bearing), S4 (based).

AML/KYC rules are designed to prevent criminals and terrorists from using the banking system to support their activities.

“These are designed to prevent criminals and terrorists from using the banking system to support their activities.”

Probably not a substantial claim: may not pass S3 (load-bearing), S4 (based). May combine two claims.

Unlike Bitcoin, which is a protocol implemented on a distributed network, Ripple is a for-profit company.

“Unlike Bitcoin, which is a protocol implemented on a distributed network, Ripple is a for-profit company.”

Probably not a substantial claim: may not pass S3 (load-bearing).

Xapo relocated its headquarters from California to Switzerland ten days after the FinCEN decision.

“Xapo, a venturebacked Bitcoin wallet startup, relocated its headquarters from California to Switzerland ten days after the decision.”

• cites [205]Not matched

  Couldn’t be matched to a paper in Crossref, so it can’t be checked.

Probably not a substantial claim: may not pass S3 (load-bearing).

In 2015, FinCEN announced a civil enforcement action against Ripple.

“In 2015, FinCEN, the financial crimes enforcement office of the United States Treasury Department, announced a civil enforcement action against Ripple.”

• cites [202]Not matched

  Couldn’t be matched to a paper in Crossref, so it can’t be checked.

Probably not a substantial claim: may not pass S3 (load-bearing), S4 (based).

There are three major types of controversies over blockchain-based systems: illegality, classification, and legal validity.

“Broadly speaking, there are three major types of controversies: illegality, classification, and legal validity.”

Probably not a substantial claim: may not pass S4 (based).

In a truly decentralized network, there is no way to impose limits on money transfers to known terrorists, transactions selling children into modern slavery, or laundering of funds known to be stolen.

“In a truly decentralized network, there is no way to impose limits on money transfers to known terrorists, transactions selling children into modern slavery, or laundering of funds known to be stolen.”

Probably not a substantial claim: may not pass S2 (checkable), S4 (based).

There is no good way to represent terms such as "reasonable" or "best efforts" in code.

“There is no good way to represent terms such as “reasonable” or “best efforts” in code.”

May combine two claims.

As of early 2017, only three BitLicenses had been granted, despite dozens of applications.

“As of early 2017, only three BitLicenses had been granted, despite dozens of applications.”

• cites [207]Not matched

  Couldn’t be matched to a paper in Crossref, so it can’t be checked.

Probably not a substantial claim: may not pass S4 (based). May combine two claims.

Code that makes it difficult to engage in censorship or tampering also makes it easier to engage in terrorist financing or ransomware.

“The open question is how to deal with code that makes it quite difficult to engage in censorship or tampering, which also makes it easier to engage in terrorist financing or ransomware.”

Probably not a substantial claim: may not pass S2 (checkable). May combine two claims.

There are some things computers cannot do as well as humans, and the same is true for smart contracts.

“No matter how fast they calculate, there are some things computers cannot do as well as humans.The same is true for smart contracts.”

• cites [190]Not matched

  Couldn’t be matched to a paper in Crossref, so it can’t be checked.

Probably not a substantial claim: may not pass S3 (load-bearing), S4 (based).

Regulation as a facilitator of blockchain development is gaining currency, particularly with the rise of permissioned ledgers and enterprise-grade systems on top of public ledgers.

“Particularly with the rise of permissioned ledgers and enterprise-grade systems on top of public ledgers, regulation as a facilitator of blockchain development is gaining currency.”

Probably not a substantial claim: may not pass S3 (load-bearing).

Some companies saw the FinCEN action as a signal that the U.S. was not a hospitable jurisdiction for cryptocurrency companies.

“Some companies saw the FinCEN action as a signal that the U.S. was not a hospitable jurisdiction for cryptocurrency companies.”

• cites [205]Not matched

  Couldn’t be matched to a paper in Crossref, so it can’t be checked.

Probably not a substantial claim: may not pass S2 (checkable).

Automating contractual enforcement is not as neat as automating execution.

“Automating contractual enforcement is not as neat as automating execution.”

Probably not a substantial claim: may not pass S2 (checkable).

The blockchain adds a new chapter to the story of digital technology but does not fundamentally change the balance of power.

“The blockchain adds a new chapter to this story, but does not fundamentally change the balance of power.”

• AssumptionRests on an assumption: Criminals and terrorists will try to exploit the blockchain, just as they exploit other technologies whenever possible.

Probably not a substantial claim: may not pass S3 (load-bearing).

The practical implications of Internet telephony classification involved more than a decade of contentious debates.

“The practical implications in the case of Internet telephony involved more than a decade of contentious debates.”

• cites [199]Not matched

  Couldn’t be matched to a paper in Crossref, so it can’t be checked.

Probably not a substantial claim: may not pass S2 (checkable).

Sometimes the meaning of a contract is best understood in terms of the intent of the parties rather than the precise meaning of the terms they used.

“And sometimes the meaning of the contract is best understood in terms of the intent of the parties rather than the precise meaning of the terms they used.”

May combine two claims.

There may be practical difficulties in identifying pseudonymous or anonymous counterparties and in bringing legal actions against actors in other countries.

“There may be practical difficulties in identifying pseudonymous or anonymous counterparties, as well as in bringing legal actions against actors in other countries.”

Probably not a substantial claim: may not pass S4 (based).

Code, by creating decentralized digital bearer instruments, creates an attractive target for thieves, both external and internal.

“A related concern is that code, by creating decentralized digital bearer instruments, creates an attractive target for thieves, both external and internal.”

Probably not a substantial claim: may not pass S2 (checkable).

There is an inherent conflict between the innovative scope of something like Augur and legitimate public policy considerations.

“There seems to be an inherent conflict between the innovative scope of something like Augur and legitimate public policy considerations.”

• AssumptionRests on an assumption: The Augur developers do not control what questions can be posted on the prediction market.
• AssumptionRests on an assumption: On a distributed platform such as Augur, administrators cannot delete illegal, offensive, or harassing material that users post, unlike on Facebook or Reddit.

May combine two claims.

Even when transactions are entirely digital, peer-to-peer, cross-border, and cryptographically secured, providers and users on the network can be identified and subject to territorial legal obligations.

“Even when transactions are entirely digital, peer-to-peer, cross-border, and cryptographically secured, providers and users on the network can be identified and subject to territorial legal obligations.173”

• cites [173]Not matched

  Couldn’t be matched to a paper in Crossref, so it can’t be checked.

Probably not a substantial claim: may not pass S2 (checkable). May combine two claims.

Blockchain effectively implements a decentralized security model, but this does not obviate the need for legal and regulatory involvement.

“Blockchain effectively implements a decentralized security model, but this does not obviate the need for legal and regulatory involvement.”

Probably not a substantial claim: may not pass S3 (load-bearing).

The AML/KYC process can be onerous, especially for fast-moving and highly-computerized service providers.

“The AML/KYC process, which typically requires financial services operators to verify physical identity documents such as passports and check against blacklists of individuals, can be onerous, especially for fast-moving and highly-computerized service providers.”

Probably not a substantial claim: may not pass S3 (load-bearing).

The FCC was sensitive to concerns about preemptive and over-expansive regulation dampening innovation.

“The FCC was sensitive to concerns about preemptive and over-expansive regulation dampening innovation.”

• cites [200]Not matched

  Couldn’t be matched to a paper in Crossref, so it can’t be checked.

May combine two claims.

Transacting with cryptocurrencies is not per se prohibited, though they are not necessarily accepted as valid within the regulated banking system or for other particular purposes.

“That does not mean they are necessarily accepted as valid within the regulated banking system or for other particular purposes.It only means that transacting with cryptocurrencies in not per se prohibited.”

• AssumptionRests on an assumption: No major Western government attempted to ban cryptocurrencies on the basis of illegal use, and most of the nations that did have since recognized the basic legitimacy of bitcoin and similar currencies.

Probably not a substantial claim: may not pass S3 (load-bearing), S4 (based).

The fact that bitcoin can be used to pay for drugs does not by itself raise legal problems for the cryptocurrency, because Russian rubles or bars of gold can be used similarly.

“The fact that bitcoin can be used to pay for drugs does not by itself raise legal problems for the cryptocurrency; Russian rubles or bars of gold can do the same.”

Probably not a substantial claim: may not pass S2 (checkable), S3 (load-bearing), S4 (based).

In others, where the blockchain is purely supplemental, existing legal arrangements function normally without any special integration.

“In others, where the blockchain is purely supplemental, existing legal arrangements function normally without any special integration.”

Probably not a substantial claim: may not pass S2 (checkable). May combine two claims.

The distributed ledger for orphan works would not take the place of standard copyright law, but it would extend it in a direction that it cannot easily go today.

“The distributed ledger here would not take the place of standard copyright law, but it would extend it in a direction that it cannot easily go today.”

May combine two claims.

The blockchain replaces the error-prone messaging structures between participants but does not seek to upend industry structure.

“The blockchain replaces the error-prone messaging structures between participants but does not seek to upend industry structure.219”

• cites [219]Not matched

  Couldn’t be matched to a paper in Crossref, so it can’t be checked.

Classified as probably not a substantial claim.

Organizations do not just seek the least regulation; they seek the best regulation, among a slate of other factors.

“Organizations do not just seek the least regulation; they seek the best regulation, among a slate of other factors.”

Probably not a substantial claim: may not pass S2 (checkable), S4 (based).

A second class of applications involves situations where trust based on the legal system is breaking down or insufficient.

“A second class of applications involves situations where trust based on the legal system is breaking down or insufficient.”

Probably not a substantial claim: may not pass S3 (load-bearing).

Goldman Sachs estimates moving to distributed ledgers could reduce title insurance premiums in the United States and generate two to four billion dollars in cost savings, thanks to improved efficiency and reduced risk.

“Goldman Sachs estimates moving to distributed ledgers could reduce title insurance premiums in the United States and generate two to four billion dollars in cost savings, thanks to improved efficiency and reduced risk.221”

• cites [221]Not matched

  Couldn’t be matched to a paper in Crossref, so it can’t be checked.

Probably not a substantial claim: may not pass S2 (checkable), S3 (load-bearing), S4 (based).

Often the problem in the current environment is that centralized arrangements cannot scale effectively enough, preventing desirable solutions.

“Often the problem in the current environment is that centralized arrangements cannot scale effectively enough, preventing desirable solutions.”

May combine two claims.

If governed properly, blockchain-based solutions can overcome some of the limitations of legal enforcement, and vice versa.

“If governed properly, blockchain-based solutions can overcome some of the limitations of legal enforcement, and vice versa.”

Probably not a substantial claim: may not pass S2 (checkable), S4 (based).

A reliable and stable regulatory environment will be important for building trust in blockchain platforms that seek a large user base.

“A reliable and stable regulatory environment will be important for building trust in blockchain platforms that seek a large user base.”

Probably not a substantial claim: may not pass S2 (checkable), S3 (load-bearing).

The supplementary mode is likely to be most comfortable for regulators and other government actors, because it does not ask them to change their roles or rules substantially.

“It is likely to be most comfortable for regulators and other government actors, because it does not ask them to change their roles or rules substantially.”

Probably not a substantial claim: may not pass S3 (load-bearing), S4 (based). May combine two claims.

U.S. dominance of the early Internet industry produced major benefits, both economic and in terms of global soft power.

“U.S. dominance of the early Internet industry produced major benefits, both economic and in terms of global soft power.”

May combine two claims.

The early leader in attracting blockchain activity is the canton of Zug, Switzerland, which combines a stable government, a central location in Europe, a welcoming environment for cryptocurrency companies, and very favorable tax policies.

“The early leader is the canton of Zug, Switzerland, which combines a stable government, a central location in Europe, a welcoming environment for cryptocurrency companies, and very favorable tax policies.”

• cites [210]Not matched

  Couldn’t be matched to a paper in Crossref, so it can’t be checked.

Probably not a substantial claim: may not pass S2 (checkable), S4 (based).

One way for the blockchain to achieve more robust trust is through the legal system.

“One way for the blockchain to achieve more robust trust is, perhaps surprisingly, through the legal system.”

Probably not a substantial claim: may not pass S4 (based).

In the United States, there are well-developed legal rules and established practices around real estate transactions.

“For example, in the United States, there are well-developed legal rules and established practices around real estate transactions.”

Probably not a substantial claim: may not pass S2 (checkable), S4 (based).

In many cases, affirmative steps must be taken to combine the best aspects of distributed ledgers and centralized law.

“In many cases, however, affirmative steps must be taken to combine the best aspects of distributed ledgers and centralized law.”

May combine two claims.

In supplementary mode, the risks are lower, but the benefits are concomitantly more limited.

“The risks are lower, but the benefits are concomitantly more limited.”

Probably not a substantial claim: may not pass S2 (checkable).

Whether code is superior or inferior to other modalities depends on the context.

“Whether it is superior or inferior depends on the context.”

Probably not a substantial claim: may not pass S3 (load-bearing), S4 (based).

Singapore is a hotbed of blockchain activity, due in part to its permissive regulatory attitude.

“Singapore is a hotbed of blockchain activity, due in part to its permissive regulatory attitude.”

Probably not a substantial claim: may not pass S3 (load-bearing).

Countries ranging from tiny Gibraltar to Russia are creating new legal frameworks to attract blockchain startups, coin offerings, and other activity.

“Hoping to be the Silicon Valley of the crypto economy, countries ranging from tiny Gibraltar to Russia are creating new legal frameworks to attract blockchain startups, coin offerings, and other activity.”

Probably not a substantial claim: may not pass S3 (load-bearing), S4 (based).

All companies today do not domicile in offshore tax havens for the same reasons.

“These are the same reasons why all companies today do not domicile in offshore tax havens.”

Probably not a substantial claim: may not pass S2 (checkable), S4 (based).

The equally simplistic view that regulators can and should direct these systems the way they manage centralized equivalents is equally misguided.

“Yet the equally simplistic view that regulators can and should direct these systems the way they manage centralized equivalents is equally misguided.”

Probably not a substantial claim: may not pass S2 (checkable), S3 (load-bearing).

Smart contracts could be used to ensure that those who use orphan works pay licensing fees to legitimate rights-holders who come forward.

“Smart contracts could be used to ensure that those who use orphan works pay licensing fees to legitimate rights-holders who come forward (most likely vetted by an arbitration mechanism).”

Probably not a substantial claim: may not pass S4 (based). May combine two claims.

The risk of statutory damages for copyright infringement is a severe threat that scares away potential users of orphan works, even though in some cases the work might actually be in the public domain.

“The risk of statutory damages for copyright infringement is a severe threat that scares away potential users of the material, even though in some cases it might actually be in the public domain.”

Probably not a substantial claim: may not pass S2 (checkable), S4 (based).

There are several mechanisms to hybridize the blockchain's distributed, algorithmic trust structures with the human-interpreted, state-backed institutions of law.

“There are several mechanisms to hybridize the blockchain's distributed, algorithmic trust structures with the human-interpreted, state-backed institutions of law.”

Probably not a substantial claim: may not pass S3 (load-bearing).

Title insurance is used to protect buyers against defects in land titles.

“Title insurance is used to protect buyers against defects in land titles.220”