Dead on the wrong hill

“I am prepared to die on this hill,” Ethereum lead researcher Vlad Zamfir said of his new, controversial theory of Blockchain Justice, outlined Saturday in a Medium post. And he did die on that hill, within hours.

Zamfir wants to introduce something called “crypto law,” a crypto-judicial system for the administration of technical changes to blockchain protocols. It was written up as a rebuttal to a concept Zamfir referred to as “Szabo’s law,” named-after-but-not-endorsed-by legendary cypherpunk Nick Szabo, which dictates: “Do not implement changes to the blockchain protocol unless the changes are required for the purpose of technical maintenance.”

Crypto is useful because it allows parties to transact without having to trust one another. Instead, they can trust the underlying protocol. But this can be thrown into disarray when self-interested groups can change the code to suit their political ends. Case in point: after millions’ worth of ether was lost to the DAO hack in 2015, Szabo was one of the few who rejected an update that would restore the missing funds, fearing that politicking would get in the way of the code.

So “Szabo’s law” is a significant position. Indeed, it may seem a core part of what “blockchain” is—immutable, decentralized, apolitical and trustless.  

Yet Zamfir argues that Szabo’s law has several downsides. First, he says that Szabo’s own dark anxieties about power and the state are left as vestiges in the code he builds. As such, the code is already politicized, its “immutability” serving only the political goals of its creator. Then, Zamfir says that Szabo’s law makes it hard for a blockchain to adapt to legal developments—if a core group of devs can’t, say, fork away from software that enables criminal activity, the courts will crack down. Third, Szabo’s “insecure” and “aggressive” posture discourages traditional legal systems from weighing in. “Legal systems don’t like to be involved in disputes with insecure, aggressive legal systems,” Zamfir writes.

In place of the intransigent Szabo’s law, Zamfir advocates an agreed-upon set of “crypto laws” that leave the network open to constant, incremental improvement.

Hallucinatory gibberish

Crypto Twitter swiftly piled in on Zamfir. Szabo himself denounced the take as “hallucinatory gibberish,” likening Zamfir’s notion of a bespoke crypto legal system to the savage, child-led jurisprudence of “Lord of the flies.” Ethereum inventor Vitalik Buterin criticized Zamfir’s vagueness, adding that he had misrepresented Szabo’s position.

Yet the strongest rebuttal, written as another Medium post, came from Gabriel Shapiro, a blockchain-focused attorney with DLxLawLLP, who argues that Zamfir’s pursuit of an internal blockchain-based legal system has already been upstaged by the traditional legal system. He first points to cases of courts stepping in, fairly swiftly, to develop legal resolutions to blockchain problems without much precedent, much like happened in Wyoming. “Legislators amend, or courts construe, old laws to cover new tech like blockchain,” he wrote. This, he says, is a better approach than developing a parallel legal system run by coders with little legal experience (see the disclaimer at the end of Zamfir’s piece):

In addition, Shapiro—as well as Buterin, though somewhat obscurely—points out that a Byzantine legal superstructure would multiply a given blockchain’s points of failure. “Trustless” protocols and those depending on them would be at the mercy of coders, who may or may not at any given point choose (through the necessary crypto legal channels, of course) to upend the entire system, and the trust that comes with it.  

Yet Shapiro was willing to meet Zamfir halfway. Most of the requirements of a parallel crypto-legal-system, he argued, can already be fulfilled by contract law. His advice to Zamfir? Create an experimental, small-scale Ethereum fork, have all willing participants sign a legally enforceable contract dictating blockchain and fork-related rules—don’t steal funds, don’t fork on a Tuesday, don’t send funds to Nouriel, etc.—and if it doesn’t work, say you gave it a shot. Just don’t leave all of us to die on that hill with you.