Can you arrest a decentralized autonomous organization that lives in outer space?
Blog Article Published: 01/23/2020
By Kurt Seifried, Chief Blockchain Officer, CSA
One aspect of the modern world is that lawbreaking has gotten more and more ambiguous. If I ship a pile of electronic scooters to some random city and pay contractors to drop them off around the city, have I just committed some bizarre act of littering? What about creating a website that lets people list their spare bedroom for rent and connect with people who want to rent it, typically something that isn’t regulated in most places. But what if people start subletting apartments via this site and essentially turn their apartments into short term hotels, an industry that tends to be highly regulated? Well it turns out it’s pretty simple, regulators simply define new terms or redefine old terms and create new regulations and laws to cover these new activities (“But it’s a horseless taxi! Totally different!”).
The same logic has generally been used to apply to jurisdiction. Even where you have a missing jurisdiction (“the Zone of Death”), you usually have some legal entity responsible for what is going on (a person or a company) that does reside in some jurisdiction somewhere (e.g. ships in international waters are registered in a country). Even if they live outside your jurisdiction, at least it gives you someone or something to talk to and negotiate with.
But what if the legal entity is a smart contract running on a blockchain, controlled by a technical voting process that usually boils down to voting based on how many units of the entity is owned by a voting organization. Oh and ownership of this obviously support anonymous and pseudonymous modes, assuming they even have any record-keeping or KYC (“Know Your Customer”) going on. A regulator could attempt to make contact with the owners of the DAO, if they can figure out who that is, and even then you’d still have to convince a majority of the DAO owners to vote in favor of whatever is being proposed. Again traditionally one way to deal with this is to talk to the Blockchain that runs the workload; however, as this is rapidly going away, it turns out that building security into these smart contract systems keeps not only the bad guys out, but also deflects regulation.
Conclusion: if you think things are weird and messy now, just wait until a billionaire starts tweeting via a communications platform in outer space. Oh wait: