Blockchain organizations - Decentralized autonomous organizations and the law

Abstract

Are we bound by any national rules when we act in an organization that only exists in the digital sphere? Could we see the digital sphere as something disconnected from the physical world, and thus exempted from national laws? And how are individuals affected when the digital phenomena have to act in the physical world? Virtual phenomena, such as blockchain technology and various decentralized applications, forces us to consider law from a different perspective. This thesis discusses national laws and general principles of law in the digital world, from the view of a decentralized autonomous organization on a blockchain.

Considering the large amount of capital that is attracted by blockchain technology, and the potential impact the loss of capital, or the infliction of liability could have on the life of private persons, there is a need for trying to clarify the legal situation around organizations and actors on the blockchain. The thesis therefore treats the issue of personal liability for members of a blockchain organization, using three approaches to the decentralized autonomous organization. First, it makes a comparison with various Swedish and international laws about associations. This serves to show the contradiction and conflict between blockchain principles and common principles of association law. The thesis then proceeds to consider the organization as sets of contracts, drawing from general principles of law such as pacta sunt servanda. This highlights the internal and external relationships of the organization. Finally, the thesis considers blockchain technology in general, from a philosophy of law perspective. In this part, theories on posthumanism and Actor Network Theory have been used to compare the creation of entities on a blockchain to the creation and distinction of entities in the physical world. This is then added to the discussion around code as law, and the writings of Lawrence Lessig, to consider if a blockchain could, and should, be seen as a jurisdiction of its own.