Beyond Bitcoin – Legal Impurities and Off-Chain Assets

24 Pages Posted: 25 Oct 2017

See all articles by Chris Reed

Chris Reed

Queen Mary University of London, School of Law

Umamahesh Sathyanarayan

Queen Mary University of London, Centre for Commercial Law Studies, Students

Shuhui Ruan

Queen Mary University of London, Centre for Commercial Law Studies, Students

Justine Collins

Queen Mary University of London, Centre for Commercial Law Studies, Students

Date Written: October 25, 2017

Abstract

Blockchain technology allows the creation of distributed ledgers. These distribute control among the players rather than requiring a centralised database, and so can reduce costs and speed up transactions. However, when it is used for assets which exist outside the blockchain itself, an unmodified adoption of the technology would bypass legal and regulatory requirements which, for these kinds of assets, cannot be bypassed without fundamental change to the law.

Building those requirements into any blockchain-based system introduces features which are not necessary for performing its core functions, and we call these ‘legal impurities’. The most important legal impurities required are those relating to identification of the parties, and introducing the ability of a trusted third party to make modifications to the ledger. Not only does introducing these legal impurities make fundamental changes to the concept behind blockchain, but it is also essential that they are implemented in ways which do not threaten the integrity of the blockchain as evidence.

Suggested Citation

Reed, Chris and Sathyanarayan, Umamahesh and Ruan, Shuhui and Collins, Justine, Beyond Bitcoin – Legal Impurities and Off-Chain Assets (October 25, 2017). Queen Mary School of Law Legal Studies Research Paper No. 260/2017. Available at SSRN: https://ssrn.com/abstract=3058945 or http://dx.doi.org/10.2139/ssrn.3058945

Chris Reed (Contact Author)

Queen Mary University of London, School of Law ( email )

Umamahesh Sathyanarayan

Queen Mary University of London, Centre for Commercial Law Studies, Students

67-69 Lincoln’s Inn Fields
London
United Kingdom

Shuhui Ruan

Queen Mary University of London, Centre for Commercial Law Studies, Students ( email )

67-69 Lincoln’s Inn Fields
London
United Kingdom

Justine Collins

Queen Mary University of London, Centre for Commercial Law Studies, Students ( email )

67-69 Lincoln’s Inn Fields
London
United Kingdom

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