Who is Liable for Cryptocurrency Consensus Mechanism (Mis)Representations?

18 Pages Posted: 27 Mar 2020

Date Written: March 3, 2020

Abstract

Cryptocurrencies are based on cryptography-signed transactions propagated peer-to-peer to be validated in a distributed manner according to consensus mechanisms in compliance with consented protocols. The performance of the consensus mechanism is crucial for a consistent, available, and fault-tolerant cryptocurrency ledger. The quality of consensus mechanisms is communicated by various representations such as narratives, mathematical models, visual illustrations, pseudocode and code. Sometimes, these representations are misleading, which can cause harm to those relying on them. This paper discusses legal liability for misrepresentations of cryptocurrency consensus mechanisms and finds that, inter alia, protocol developers, professionals, and trading platforms can be liable.

Keywords: Blockchain, Consensus, Cryptocurrencies, Liability, Open Source

JEL Classification: E42, K13, K24, L17

Suggested Citation

Østbye, Peder, Who is Liable for Cryptocurrency Consensus Mechanism (Mis)Representations? (March 3, 2020). Available at SSRN: https://ssrn.com/abstract=3548203 or http://dx.doi.org/10.2139/ssrn.3548203

Peder Østbye (Contact Author)

Norges Bank ( email )

P.O. Box 1179
Oslo, N-0107
Norway

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