Blockchain Law

Review of Blockchain and the law by Primavera De Filippi & Aaron Wright

Review by @henkvancann (twitter)

Lex cryptographica -> what is cryptographica at the rule of code that is on a blockchain. It is readable and open source?

General remarks

1. Impact of technology well positioned

2. Its technological nature misunderstood / wrongly explained

3. Clear filtering criteria for smart contract that will work

4. Many real life examples that could work

5. Credible outlook for coming 10 years

6. Imposes fear on the reader?

Page 35 Open source software.... overall usefulness

What would be the minimal viable number of developers you need to make it reliable? Because "Many eyes make bugs shallow" and the closed source alternative delivers "security by obscurity"; so the latter is worthless in terms of added value to blockchain. So it's not the blockchain that has disputable usefulness, but the decisions people make behind the of an application.

Page 38 Governments no longer need ... benefit of the public.

Ouch: BLOCKCHAIN IS NOT STORAGE. I can't believe to have to read a sentence like this in an expert book on blockchains... In detail:

A. There is no source data on blockchains, only proofs of data, that might point back to source data

B. People might get concerned about the privacy compliance of blockchains, and for what reason? Only because of misinformation.

C. It suggest that government records on a public blockchain are effortless approachable / downloadable, but of course after tracing back the origins via its hash, you still have to be identified, then authenticated and authorised to see this data, which only has been proved on the blockchain.

We unfortunately see this fundamental misunderstanding throughout the book and we are wondering why the renown blockchain specialists that contributed to the book have not corrected these passages.

Page 39 Pseudonymity,... tax evasion.

Criminals that use pseudonymous blockchains / crypto currencies are stupid criminals? They should use anonymous cryptos, which is of course a different kettle of fish.

We miss the following type statistics in this part of the book:

1. What percentage of money involved in drugs is the cash US dollar?

2. How is tax evasion supported by the federation of international banks and to what extent

3. How do these figures relate to drugs - and tax evasion numbers using crypto currencies for transactions and store of value?

This passage in the book sounds biased to please those currently in power.

Page 46 The immense ... characteristics. plus Page 48 Protocols like Bitcoin ... Figure 2.2).

This is fundamentally incorrect. Strictly speaking blockchains do not need the internet nor its TCP/IP protocol. It comes in handy and it reinforces its current success, fair enough, but it is not "necessary" nor does it "rely on" the TCP/IP protocol. Currently the bitcoin uses TCP/IP a lot, true, but it's the people behind the nodes themselves who decide how they accept a raw transaction.

Page 75 Once the wheels of... execution.

Maybe it is interesting to explain why we do not add that halt-code from the start?

Page 76 In the decentralized marketplaces... it's price.

No, it will not consist of more than the link to it. This is a common misconception spread by the book:

There is no* content on a public blockchain, only proofs that point back to data somewhere else.

'* OK, there is hardly any content on public blockchains. Only:

A few numbers, to support / proof the UTXO of the associated currency,

signatures (but you could argue these are pointers too)

Smart contract code

Page 78 Even where smart ... signature.

Additionally you could say that we are able to reuse testable negotiations to might become more and more readily available, as you have illustrated by the garments-analogy on page 86.

Page 109 Blockchains are viewed ... the globe.

No, this passage lacks the notion of what really resides on a public blockchain and that is trust, proofs and pointers. No content. Private blockchain have content on the blockchain, but they are business as usual as you said in chapter 1.

Page 110 ... - could be chronicled .... offices.

This makes no sense, if the data is just replaced from one database to another.

Page 111 If government records are stored..... efficiencies. and the example that follows

1. We don't store records on a blockchain..., just the proofs that point back to the records, but to access these records you need to go through to the normal good old Identity and Access Management (IAM) process: Identification (AML/KYC?) -> Authentication -> Authorization. Once you get hold of the records, that is the very first moment the blockchain has added value. You can proof that the Hash is the same or not. A blockchain can't do more with data.

2. Where is the true added value of doing this?: to create the possibility of more self sovereignty to citizens! It makes no sense to put government records on a blockchain without using the added value of public blockchains: immutable proofs, two-way commitment and disintermediation.

Page 112 On a more general level ... modify data.

No, the intrinsic capabilities of blockchains to perform Identity and Access Management (IAM) are way too basic. Use systems that have been designed for that for decades. Blockchains hold proofs and code, no more. That can add to self sovereignty principles of Identity Management, but not the way it is described in this paragraph "Page 112 On a more general level ... modify data"

Page 113 For instance, ... history.

Be careful to state that the content is not a the blockchain. To shine a light on HOW proofs can be checked -> With public / private key pairs in signatures.

Page 113 Relying on ... consequences.

We have arrived at the part of the book that undermines the credibility of the book (which is a shame, it's a good book):

1. no data on the blockchain

2. proofs of data on the blockchain are not readable by design

Page 113 Blockchain are not immutable ... records.

This paragraph is internally inconsistent / inconsequent for reasons given above.

Page 114 A blockchain also cannot ... blockchain.

Huh?!? This paragraph is the proof of a major misconception in the book. There is no source data on the blockchain, only it's crypto graphical proofs.

Page 114 If inaccurate information ... problem.

Only the unidirectional 64 bits proof of the information is present on the blockchain. Who cares. If you alter the data (the records) just put another proof on the blockchain with a later timestamp and live happy ever after...

Page 115 Further undermining ... risks.

What a bummer again! There are no records on-chain. The proofs that are present do not reveal any information related to its origin (unidirectional digest). It is privacy by design, the right to be forgotten by design, etc, etc. It is better than we ever had, really.

Page 116 These privacy problems ... information. and also later on on that page speaking of 'transparency'

Incorrect, arguments already provided:

There is no* content on a public blockchain, only proofs that point back to data somewhere else.

The proofS are open source cryptographically secured (no collision, unidirectional and computable).

FROM CHAPTER 7 I HAVE REMARKS TOO, BUT CHAPTER 6 HAD SO MANY FUNDAMENTAL MISTAKES, THEY SHOULD BE ADDRESSED FIRST?

ONCE YOU GRASP THE HIDING PROPERTIES OF PROOFS / POINTERS ON THE BLOCKCHAIN, YOU WILL WANT TO REWRITE PARTS OF THE BOOK.

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