Who is Liable for an Attack on Cryptocurrency Consensus?
17 Pages Posted: 29 Aug 2019 Last revised: 5 Mar 2020
Date Written: August 25, 2019
Cryptocurrencies are based on cryptography-based asset disposals broadcasted peer-to-peer to be validated decentrally according to consensus mechanisms in compliance with consented protocols. The consensus mechanisms are crucial for reaching a consistent state of a cryptocurrency ledger in a decentralized manner. However, there are several ways to attack consensus. The technical aspects of such attacks have been well explored in the literature, but the legal consequences of such attacks have been less explored. This paper discusses possible legal bases for liability for attacks on consensus and the limits of liability in deterring attacks and providing victim compensation.
Keywords: Blockchain, Consensus, Cryptocurrencies, Liability, Open Source
JEL Classification: E42, K13, K24, L17
Suggested Citation: Suggested Citation