May 14, 2020

Crypto Transactions/Smart Contracting

Crypto Transactions/Smart Contracting

Crypto Transaction Dispute Resolution
     Wulf A. Kaal and Craig Calcaterra; 73(1): 109-152 (Winter 2017/2018)
The rapid evolution of anonymous, autonomous, and distributed blockchain-based smart contracting creates friction and enforceability issues with existing legal and jurisdictional principles, calling the future governance of blockchain technology into question. The effective governance of blockchain technology and smart contracting is essential to ensuring its continuing evolution. Based on the mathematical principles underlying the disposition of blockchains, we propose and evaluate an alternative approach to the existing legal exercise of jurisdiction that is inherent in blockchain technology itself. We call this “distributed jurisdiction.”

This contribution is not merely theoretical. Several Ethereum smart contracting crypto start-ups have demonstrated that anonymity can be perpetuated in blockchain technology, despite blockchains’ eternal storage of information and their growing size working against anonymity. Start-up applications highlight that the technology itself offers means of internal controls that help ensure effective governance in the continuing evolution of the technology.

Based on the concept of distributed jurisdiction, we suggest an opensource platform ecosystem for smart contracting dispute resolution that allows users to opt in to a conflict resolution mechanism that enables more nuanced crypto solutions and produces greater certainty in the process. Anonymized arbiter expertise via rankings in combination with a representation option for crypto disputes provide a resolution mechanism for legacy businesses that desire to participate in the growth of crypto business opportunities and hope to avoid legacy system intermediation and the associated transaction costs but require legal legacy system assurances and crypto dispute resolution equivalence.