Blockchain Ownership: References & Some more thoughts…


Some more thoughts:

  1. Establishing new property rights will create new power structures and disparities. It is not automatically the case that that in a well functioning market economy, all “private” rights can and will be freely rearranged by market forces, rendering decisions about their initial allocation unimportant. Nor, that the formalization of property rights leads cleanly to both efficiency and growth, eliminating the need for policy judgment about the desirability of alternative uses and distributional arrangements. As David Kennedy has pointed out, a focus on creating “clear and strong property rights” as advocated by De Soto and countless others has two unacknowledged corollaries: 1) an empowerment of legal intermediaries and 2) the likely increase in the concentration of assets to those with existing market power, because “strengthening” property rights has distributive implications.
  2. Commodification and what’s not for sale. Opening new market entitlements creates moral dilemma’s about where to draw the line on the commodification of ideas, things, people, and services. Even if not regulated by a government, this line has to be defined somehow.
  3. Is financial decentralization dependent on territorial and legal centralization? There’s an overemphasis on deregulation and opening up of flow of value in virtual space through cryptocurrency and blockchain technology while ignoring the actual hardening of physical borders, a torrent of new patents for corporate blockchain IP, and a massive expansion in the power of legal experts.
  4. Coproduction: For Elinor Ostrom, the commons is about non-market, non-governmental governance mechanisms driven by what she later described as the necessity of institutional “co-production” — that is the need for users to be involved in the ongoing production of rules and processes for how we use resources. And, that includes deciding what exactly property, governance, access consists of and how it is defined.
  5. The “bundle of rights” we often come across in cryptocurrencies have focused on entitlements including: exchangeability, fungibility; right to financial value (cryptoassets), decision making consensus power (PoS), and privileged use (utility). Other property entitlements and responsibilities to consider include: unbundling the right to use from title ownership, duty to refrain from use that causes others harm, and residual rights on the reversion of lapsed ownership rights held by others.
  6. Smart contracts parameters (in Ethereum classic in particular) could also be designed as covenants immutable over time and future use just like “covenants that run with the land,” which are promises that can adapt over time.
  7. Externalities are usually defined as the cost or benefit that affects a party who did not choose to incur that cost or benefit. Some of these can be easily internalized but many problems like carbon emissions scale fast and create complex costs that are difficult to bake into a transaction or incentive. As Vinay Gupta points out, blockchain could be the first major step to internalizing these costs at the global scale.
  8. As more of the world is mediated through crypto protocols and contracts, we have to consider the implications of crypto enclosure. A quick thought experiment using the city analogy earlier: Imagine if people were able to privately owned all the streets and highways with the right not only to charge but also to exclude passengers. The costs of potential exclusion dwarf the potential upside of creating these property rights both in the intellectual and physical domains. What if certain words derived from ancient Greek were patent protected? Perhaps not the words themselves but the protocol or way they were written or said (i.e. their grammar/protocol)? It could incentivize people to develop new works and innovation, but it would likely discourage broader use of the language (at least formally). But while the costs of potential exclusion are extremely high, these generalized costs maybe be hard to see until we turn the knob too far.
  9. Anticommons: tl;dr: It matters how you assemble property rights and how you integrate markets. Rights of exclusion are as fundamental as privileges of use. The difference between private property and anticommons property can be expressed in terms of the bundle-of-rights metaphor. In a legal anticommons, rights, rather than bundles, are the locus of property endowments. An object is held as anticommons property if one owner holds one of Honore’s core rights in an object, and a second owner holds the same or another core right in the object, and so on, with no hierarchy among these owners’ rights or clear rules for conflict resolution. Many of the core rights can function as rights of exclusion. For example, the owner of a right of possession may be able to prevent the owner of the capital value from realizing the value of the asset, and vice versa. Unlike owners in a private property regime, owners in an anticommons regime must reach some agreement among themselves for the object to be used.
The top 10 firms in terms of filings for blockchain-related patent applications. Source

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