For Questions of Liability in a Decentralized World, Blockchain Revolutionaries Should Look to Copyright Law

• Author: Freeman Lewin - Marta Belcher
• Position: Freeman Lewin recently graduated from Benjamin N. Cardozo School of Law. After studying for the New York bar exam, he looks forward to pursuing a career at the intersection of law and technology. He can be reached at flewin@law.cardozo.yu.edu. Marta Belcher is an attorney in Ropes & Gray's intellectual property litigation practice. She...
• Pages: 57-59

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Meeting of the Minds

For Questions of Liability in a Decentralized World,

Blockchain Revolutionaries Should Look to Copyright Law

By Freeman Lewin and Marta Belcher

Blockchain revolutionaries believe

that truly decentralized, distrib-

uted computing—the promise

afforded by Satoshi Nakamoto’s Bitcoin

and Vitalik Buterin’s Ethereum—will

upend our economy, create a new Inter-

net, and obviate the need for centralized

corporations and maybe even govern-

ments. This dream of decentralization

has begun to be actualized by an indus-

try using blockchain technology to

build businesses, raise money, and trade

assets. But, in a decentralized world,

who is liable? For the answer to that

question, blockchain revolutionaries

may need to look to copyright case law

about decentralization in the context of

peer-to-peer le sharing platforms.

Blockchain’s Promise of

Decentralization

For early Internet pioneers, the Internet

was supposed to be free of intermediar-

ies. As Timothy C. May wrote in 1992,

computer technology could provide

“the ability for individuals and groups

to communicate and interact with each

other in a totally anonymous manner.”1

May anticipated that “public-key encryp-

tion, zero-knowledge interactive proof

systems, and various software protocols

for interaction, authentication, and veri-

cation” would fundamentally change

the nature of society, corporations, and

governments, as well as intellectual

property.2 But nearly three decades later,

as many proponents of blockchain tech-

nology point out, the Internet has done

little to diminish the presence of inter-

mediaries in our society. Instead, major

information and communication inter-

mediaries like Google and Facebook

have had an enormous impact on how

billions of people see and access infor-

mation across the globe.

Blockchain revolutionaries hope that

blockchain will obviate the need for

intermediaries. Blockchains3—simply

described as distributed ledgers—

blend advances in peer-to-peer network

architecture, public-private key cryp-

tography, programmable rules, and

mechanisms for achieving consensus—

to record tamper-resistant, publicly

veriable information in transparent

databases maintained by a distributed

network of computers.4 Ultimately, this

means that information can be stored

and shared in a manner that reduces

the need for centralized control. Where

intermediaries were once required to

store data, blockchain-based networks

can now store data across millions of

individual, independent nodes. And,

once data is recorded and stored on

a blockchain, it becomes difcult to

change or delete without the consensus

of at least 51 percent of those who vali-

date the data on the network.5

The distributed nature of blockchain

Freeman Lewin recently graduated from Benjamin N. Cardozo School of Law. After studying for the New York bar exam, he looks

forward to pursuing a career at the intersection of law and technology. He can be reached at ewin@law.cardozo.yu.edu. Marta Belcher

is an attorney in Ropes & Gray’s intellectual property litigation practice. She represents blockchain companies and blockchain trade

associations in matters related to intellectual property and public policy, as well as speaking about blockchain law around the world. She can

be reached at marta.belcher@ropesgray.com.

technologies raises some formidable legal

questions reminiscent of those raised by

le-sharing technologies at the turn of

the twenty-rst century. Those le-shar-

ing technologies relied on a decentralized

network of participants to act “as both a

supplier and consumer of informational

resources.”6 These networks gained wide-

spread popularity and notoriety for their

ability to serve music and video les for

free. But the decentralized nature of le-

sharing sites did not afford them legal

reprieve. To the contrary, the law that

developed as a result of these technolo-

gies is likely to shape the liability of

participants in blockchain-based decen-

tralized networks today.

Code as Law, or Copyright Law?

Early blockchain proponents some-

times asserted that a decentralized,

blockchain-based system could operate

independently of national laws, regula-

tions, and court systems.7 The origin of

Bitcoin, the rst application of block-

chain technology that enables global

peer-to-peer payments, is rooted in that

ethos. In 2016, Vitalik Buterin, one of

the creators of the Ethereum blockchain,

opined that while “[t]raditional courts

serve the very important function of g-

uring out what the appropriate remedy

is when the parties to a dispute have no

prior relationship,” a decentralized dis-

pute resolution system could be used for

Making a Connection between Young IP Attorneys

and Those Who Want to Share Their Experience

“Meeting of the Minds” is a recurring feature of Landslide® magazine. It includes articles authored by young lawyers

in conjunction with experienced attorneys, who participate as mentors in the planning and writing process. Landslide is

proud to provide the opportunity for young lawyers and law students to learn from attorneys in IP practice areas and to get

published in our prominent legal magazine. The end product is a collaboration for which both authors share attribution.