Blockchain and the (re)imagining of trusts jurisprudence

• Date: 01 September 2017
• DOI: http://doi.org/10.1002/jsc.2145
• Published date: 01 September 2017

RESEARCH ARTICLE

Strategic Change. 2017;26(5):453–460. wileyonlinelibrary.com/journal/jsc © 2017 John Wiley & Sons, Ltd. 453

DOI: 10.1002/jsc.2145

Abstract

There are important synergies between the trust of blockchain and that of trusts law.

This arcle crically examines the intersecon between law and blockchain technology through

an exploraon of the noonal impacts upon orthodox pracces and principles of trusts law made

by blockchain and other “disrupve” technologies, including smart property and the Internet

of Things.

What is it that determines this progression today? We can

no longer argue that it is an economic or social condion, or

educaon, or any other human factor. Essenally, the preced‐

ing technical situaon alone is determinave. When a given

technical discovery occurs, it has followed almost of neces‐

sity certain other discoveries. Human intervenon in this suc‐

cession appears only as an incidental cause, and no man can

do this by himself. But anyone who is suciently up‐to‐date

technically can make a valid discovery which raonally follows

its predecessors and raonally heralds what is to follow. (Ellul,

1964, p. 90)

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 INTRODUCTION

This arcle explores noonal impacts to the orthodox pracces and

principles of trusts law (as that law is designated in England and Wales)

in light of blockchain and other “disrupve” technologies, including

“smart property” and the “Internet of Things.”† From the outset, this

assessment of the relevance of blockchain to trusts law will be based

on what are now widely accepted characteriscs of the technology,

notwithstanding blockchain connues to evolve within the growing

number of contexts in which it is set. These characteriscs include

decentralizaon and disintermediaon “based on cryptographic proof

instead of trust” (Nakamoto, 2008, p. 1). Blockchain operates as a

“peer‐to‐peer network using proof‐of‐work to record a public history

of transacons” (Nakamoto, 2008, p. 8), fosters a post‐trust paradigm

whereby there is no need “for parcipants to be trusted,” and provides

“no centralized, single point of failure” (IBM, 2015, p. 9).

As an early and thus somewhat tentave exploraon into poten‐

al compabilies between blockchain architecture and trusts, the

discussion here will tread lightly on the ground of both its legal and

technological subjects in order to, rst and foremost, maintain as clear

and concise a discussion as possible. Accordingly, this arcle will only

focus on the basic principles of private express trusts.‡ In me, it will be

necessary to test these ideas against a greater level of legal sophisca‐

on. This arcle does not, however, represent that me, but merely a

phase in an ongoing discussion. Whether the me, money, energy, and

excitement invested in blockchain is warranted in many of the sectors

it is now interpolang is an increasingly important queson, and this

applies to law as much as it does to economics and polics.

As the quote from Jacques Ellul above maintains, and everyday life

in Western capitalist sociees aests, there is a socio‐economic ines‐

capabilty to technological innovaon in today’s world. To understand

many aspects of our world, including the law, is, therefore, to at least

acknowledge the unassailable impact of technological innovaon—

even if we cannot always understand it, nor, it might be said, the rea‐

sons or movaons for it. Evidence from the new legal paradigm of

“smart contracts,” while sll immature, is already demonstrang that

Blockchain and the (re)imagining of trusts jurisprudence*

Robert Herian

Law School, The Open University, United

Kingdom

Correspondence

Law School, The Open University, Walton

Hall, Milton Keynes MK7 6AA, United

Kingdom

Email: robert.herian@open.ac.uk

* JEL classicaon codes: K11, K12, K19, K49, O31, O33, P14.

† Throughout this arcle, smart property, contracts, and blockchain collecvely

will be referred to as “blockchain architecture.”

‡ A private express trust is dened here as: a trust being for the benet of people

(beneciaries), which is intenonally created by a selor through the selement

of property held on trust by a single trustee or group/board of trustees. The trust

in queson must also be validly created by conforming to longstanding rules of

formality and by sasfying the “three certaines” as per Knight v Knight (1840)

3 Beav 148.