Crypto Needs Better Lawyers, ASAP
A strange thing happened at on the EthTrader Subreddit the other day, specifically, the announcement thread about the Stanford Center for Blockchain Research.
Here’s how Stanford billed the new center in its announcement:
And here’s how the new CBR framed its mission:
A bit later, we’ll share a verbatim copy of our comment on this Reddit thread that we joined, and were then booted from. Because the message is so central to the success of the broad crypto enterprise, we decided to offer some more context, and wrote a longer separate response on the EthLaw Subreddit, titled, “Here’s Why Vitalik Needs Better Lawyers, ASAP.” We share the gist of that message down below as well.
Right now, these are messages without a cause. They offer analysis of several legal postures and legal signals emanating from the cryptosphere that should give cause for alarm, and we are sounding the alarm bells as clearly as we can.
Reddit doesn’t seem to want to read them; in part, because the core point is drowning in a “sea of words,” according to one responder.
Remembering Medium as the self-proclaimed place where “words matter,” we’ve brought the story here in the sincere hope that the seawater will taste better in this vessel.
Agenda
We suspect that some of the insights that we develop here might be useful to the crypto developer community, and we offer them as a gesture of good will and good faith.
The broader crypto community can benefit from some of the macro- and micro-level legal frameworks and critiques that we’ve developed and have started deploying. For our part, we need the crypto community to rally around what we’ve identified as crypto’s killer app in the current stage of blockchain development and adoption. Our hope is that both can complement one another.
Beyond that, there’s no agenda to this piece — no ICOs, no tricks, no tomfoolery. We’re a small nonprofit just trying to make the world a better place. Cliché, but true.
Disclaimer
We made the disclaimer above, and restate for emphasis. This is a long and complex read, written in a dialect of American English called American English Legalese. Furthermore, what you’re reading is accented in a particular governance, theory, and international/comparative law slang.
Yes, these are things. No, this is not a joke. Consequently, as with any jargon-filled dialect, there will be lots of things that you may miss if you aren’t familiar with American English Legalese, spoken in a particular governance slang.
Please know what you’re getting into. If you find this insufferably vague (like the redditors on EthLaw) or confusing, this may be our fault — or it may be a function of the vagueness and indeterminacy built into the legal constructs we’re exploring.
So, if this is so heavily-accented and potentially accessible only to a small number of globally-minded lawyers attuned to structural questions of governance and justice, why should you read what follows?
We have several answers: (1) if you’re a self-proclaimed or peer-acknowledged CryptoLawyer, a crypto investor, or a crypto enthusiast, this is mandatory reading — period; (2) if you’re a crypto developer who is starting to think about “regulatory issues” because your project is scaling or because you’re not getting the answers you want from your current lawyer or legal team — this will be helpful; (3) if you’re a casual reader who just stumbled upon this page randomly, there’s quite a bit of palace intrigue, so it might make for a fun read — if you’re into that sort of thing.
CryptoLawyers, Rejoice! But Not So Fast.
The Stanford announcement should make every lawyer and legal theorist happy because it expressly foregrounds the myriad legal aspects of blockchain technology in the new center’s research agenda.
The announcement is a big deal not only because it acknowledges the centrality of socio-legal implications and challenges, but also because this research center received significant funding from the Ethereum Foundation and several other Blockchain/crypto development groups.
CBR Will Make Law
Stanford’s global reputation and serious external funding practically assure that the work product produced by Stanford’s CBR will be highly influential in current and future socio-legal debates.
For “bread-and-butter” CryptoLawyers (folks who do volume work for clients wondering if their crypto will be viewed as a “security”) this is very good news. It opens the door to the CBR as a potential regulatory interlocutor between formal regulatory authorities and the globally dispersed crypto community.
It allows us to imagine Stanford’s CBR fulfilling informal “notice & comment” functions, translating the needs of the crypto community into legalese, and translating the concerns of regulators into crypto.
CBR’s publications will go on to be cited by regulators, legislators, judges, academics, and by “bread-and-butter” CryptoLawyers, even though the CBR doesn’t have any formal powers or any governmental authority.
Every lawyer reading this knows that, despite a lack of formal powers, CBR will have de facto law-making authority. This is why it’s so important that the CBR take as many viable stances as possible (remembering our 1L lessons in the power of alternative pleading) vis-a-vis various constituencies. The same is true for every donor and institutions behind CBR. Investment in flexible governance now is a good way of protecting core interests in a high-risk near-term future.
CBR Will Push Legal Theory Forward
Theory-minded law folks should also welcome this announcement, as it comes with lots of funding, a concept that’s not usually seen as going hand-in-hand with legal theory, especially theory of a critical, eclectic, or unorthodox bent. Because they will be studying legal processes and legal forms at the leading edge of technological change, the law people at CBR will invariably push our current socio-legal theoretical frameworks forward.
All lawyers and analysts all over the world should be excited by this news coming out of Palo Alto. As a nonprofit that’s urging the BigTech & crypto communities to start offering much more social utility in the CivicTech realm, along some established and some totally novel legal lines, we certainly welcomed the news.
Anytime anyone invests resources to ask big questions about the place of law vis-a-vis particular social/technological processes, we’re better off because it raises the likelihood of better legal thought.
But because lawyers also know that legal institutions exist to serve particular interests, we must also acknowledge the possibility that — despite impressive resumes, stellar institutional support, and abundant funding — some bad, and potentially even dangerous, legal thought can emerge as well.
This is why it’s so important, in moments like this, to pause, to reflect, … to reexamine core assumptions and background institutional practices — in a word, to turn a new page, but with a critical recollection of what came before.
We must welcome initiatives like the Center for Blockchain Research, and centers like CBR must welcome our questions and critiques. In a space as mercurial as the Crypto/BigTech/BlockTech nexus, we must be supportive of all efforts to infuse the conversation with more analytical rigor.
The Nail That Sticks Out Must Be Crushed
Excited by the intersection of all things legal and BlockTech, we immediately wrote a note of congratulations and genuine hurrah on Reddit, responding to a short post by one of Ethereum’s top leaders, Vitalik Buterin.
We started by congratulating Vitalik, flashing some good faith bona fides (nonprofit CleanApp Foundation to nonprofit Ethereum Foundation writing about a presumably nonprofit CBR), and then immediately stressed the need for more foundational socio-legal theoretical work to be developed around Ethereum/Blockchain.
We took the opportunity to engage Vitalik directly because, to us, there’s a clear disconnect between the way that he seems to understand legal processes, and the way that different legal institutions that are affected by Vitalik’s vision understand legal processes (not to mention the way that legal institutions understand/misunderstand Blockchain). Here’s a screenshot of our post:
We’re mindful that ad hominem tactics like this raise eyebrows, but because each of the figures listed is a known public figure (individually and institutionally), it was useful to take a quintessentially legal step, and to invoke adequate authority for a given proposition.
Don’t take our word for it … a lot of smart people like W, X, Y, … have made this argument. Institutions like Z… serve Git-like functions of pooling together totally different legal and non-legal crews, so their experiences may be very valuable to the CBR.
So, What’s the Core Message
There are many ways to read the message above, and that was precisely the point: (1) Stanford, yay, Stanford is a global thought leader if ever there was one, but Stanford’s not really known for inclusiveness, so please make sure that the Ethereum-backed CBR actually fosters institutional and intellectual inclusiveness, instead of just reaffirming particular hierarchies and established central authorities — e.g., make sure this is consistent with the ethos of Ethereum; (2) Stanford, yay, but at a minimum, be sure to make a similar investment at a competing institution like Haaaavahd, so that the Stanford and Harvard projects can attack one another, thereby making honest nodes of one another (yet another point encoded in just those nine characters — “L. Lessig”); (3) Stanford, yay, but please know that there are even stronger institutional veils of protection that “the Ethereum world” can benefit from learning about and taking into consideration; (4) […].
Every lawyer knows that of the four enumerated points above, #4 is the most important. #4 is the legal coder’s professionally-instilled reminder to stay humble, hungry, and vigilant, because if we are not thinking about #4, and #5, and #6, our opponents could be. And if our opponents get ahead of us, it doesn’t matter how honest our nodes or intentions are; it’s game over.
The numerous individual/institutional sources of authority in the original post suggested some credible support for the argument that there’s value in “additional angles of approach, second and third-level redundancies, and contingencies for contingencies.”
If the publication records and public institution-building efforts of “L. Lessig” or “D. Kennedy” turned out to not support the central claim their names were being used to support (that they’re the “Neos of the socio-legal plane”) — that would have been fairly easy to expose and contest.
Reddit Misread It
The core message was both laudatory and cautionary: congrats on treading lightly, slowing your roll, deepening your bench. But, there’s still a lot of thin ice, still a need to tread lightly, still a need to deepen your bench.
On Reddit, that’s not how folks read it.
To redditors, the post above was shameless self-promotion, nothing but a “vague” form of spam.
The comment was downvoted so far into oblivion that we were stripped of the karma necessary to respond and convince these EthTraders they were jubilatingly downvoting one of Ethereum’s clearest potential hard value propositions — its supposed inclusiveness, pluralism, and, social utility:
To Reclaim Karma, Double Down
In today’s Internet, we’re supposedly more free; it’s supposed to be easier to have purely virtual identities; there is a “rich pluralism” of online forums and communities — subreddits, dark webs, mediums, telegrams, etc. — where we can really speak “truth to power” and allow our ideas to be judged on their merits, not by the color of their profile photos.
But in the wild reality that is today’s institutionalized Internet, tribalism reigns supreme and it’s arguably harder than ever to float an idea and to wage an idea campaign.
This is especially true in the crypto space, where everyone thinks you’re gaming the system, and a bedrock assumption is that you could be an “attacker node” — in whatever guise — even if one’s ‘attacks’ are actually constructive critiques of an operational/tactical nature.
Today’s Crypto Discourse is War
This episode is a great illustration of the mistrustful and combative reality that is today’s crypto discourse. For CleanApp Foundation, the decision to post on Reddit was a way of calling attention to some serious threats to the Ethereum project and the broader crypto enterprise. Everyone knows there are multiple existential threats to crypto, and we need to have a platform for having those discussions that will encourage dissent, not downvote it. Reddit and Twitter are clearly not those platforms.
We thought the newly crypto-backed CBR could serve as a safe space for this type of crypto-speak, from the first announcements threads, onward. But the jury is still out on whether CBR appreciates the enormity of its new role, and whether BigCrypto appreciates the consequential legal entanglements & quasi-alliances they’ve formed.
Right after we posted the first response, before any of the blowback, we added another short post, asking for patience and understanding, calling for a “legal audit” of sorts, warning about an overlooked “socio-legal dimension” to the security and integrity of the Ethereum network.
The responses of EthTraders were essentially: “booooo! This is why these self-important pompous lawyers suck! boooo!” Here’s the thread, see for yourself:
In War, Everyone Loses
As the karma plummets for our insolent attempt to … say congratulations … our ability to broadcast our nonprofit’s projects is effectively neutered. This doesn’t just hurt CleanApp Foundation — it hurts the entire crypto community because we’re sharing insights that are key to unlocking crypto’s small “missing killer app” problem — like using crypto to solve the world’s most intractable environmental and civic ills.
When communities silence dissent, they sow the seeds of their own demise.
Complaining about subreddit rules may seem fickle until you consider that these “rules” are as constitutive of “crypto governance” as anything else out there today.
We wrote on Reddit because many crypto teams, including Ethereum, expressly ask their communities to post on Reddit. These are governance moves as much as convenience moves by Ethereum and other crypto teams.
Even War Is Law
How a crypto community handles critique on Reddit is a reflection of organizational tradeoffs, values, and governance practices. These practices are suggestive of what will go on inside a given DAO or dapp sub-community, and how particular stakeholders may exert formal and informal levers of influence when exercising formal or informal proof-of-stake (POS) rights.
If you think this is exaggeration or overkill, then you don’t understand (1) the real-world effects of today’s cyber-governance regimes, and/or (2) the remarkably legalistic ways through which they function.
For those not familiar with Reddit, see for yourselves. Here’s the intro to Ethereum’s subreddit,
Please note Ethereum’s insistence on community governance rules and the specialized/fragmented discursive space. The warning is clear: “make sure you are fully synchronized” and that you buy into this governance and overall organizational scheme, including at least eight (8) further Ethereum subreddits, or else.
Please take a look at the size and frenetic activity of the community, and this is just one of eight of the sorta-official Ethereum reddit communities, not to mention activity on other social networks, and numerous other channels for crypto folks to meet, to collaborate, and also, to wage war. Like real war (where people lose limbs and lives), these ‘CryptoWars’ are bound up in their own rules and customs and slang.
Those with greater access to these rules and subreddit vernaculars have more power, and will use this power to strengthen their position in anticipation of future CryptoWars by all means necessary, including changing the rules. Victor’s justice gives the victor advantage in subsequent campaigns, but even those who suffer losses in war will often use their limited means to continue their campaigns for justice, relying on earlier versions of rules and practices, current versions of rules and customs, and good faith arguments for future changes to rules and behaviors.
The Role of Wartime Consigliere
A big point of this piece is to explain the real-world effects of these often-subconscious path-dependent institutional practices.
We’ve already shown how exclusivity practices can impede faster growth. Now, please consider how de facto marginalization and lack of opportunity can also destroy crypto projects long before they get a chance to make their appeal to their respective market audiences.
It doesn’t matter if you’re being offered a financial incentive to open up your hard drive to a blockchain cloud storage app like Plasma or Sia. The economics might make sense on paper. But when your hoped-for users sense that they are getting scraps and that the real gains flow to individuals who exercised their founder discretion with a bit too much self-interest, your project can fail long before it even has a chance to prove its ultra-secure new approach to encryption.
The best crypto lawyers in the world are having these conversations with their clients, counseling them about ‘optics,’ ‘reasonableness,’ ‘discretion,’ ‘expectation interests,’ user ‘reliance’ and ‘compliance pulls’ — in addition to the standard crypto lawyer fare of warning about “regulatory risks” and “new approaches to doing Howey,” at $350–500 an hour, or along equity lines.
In crypto’s current transition phase towards legitimacy, mass global adoption, and further market integration, procedural regularity and openness aren’t just aspirational ideals; they are core expectations of a growing user base that will only continue to ask more and more questions.
When institutions and leaders fail to answer questions and fail to follow their own rules, they heighten their legal exposure. When forums like /r/ethtrader are supposed to be limited to price discussion and market talk, but it’s ok for “core devs” and “Vitalik” to chat about Stanford, the signal to the community is that certain rules are more binding than others, and that certain individuals may, in fact, be sort of’, you know, above the rules, because of how central they were to creating the rules.
What are these rules? “Don’t worry, community member, you’ll see them when we sanction you for breaching them.” Postures like these (from dev teams towards one another, dev teams towards contributors, or contributors vis-a-vis contributors) are unnecessarily bellicose and completely unsustainable.
The result is incoherence, the first step towards the collapse of institutional rule of law. To appreciate the effects of these practices on a daily basis, please consider the sheer sizes of the subscriber base (350K+) and active online contributors (4.5K) in these forums, and forums like Twitter/Git/etc.
Now consider how many potential good faith contributors have been disincentivized from further best-efforts, have abandoned contributing altogether, and how many great ideas get downvoted into oblivion because a given contributor may be a recent arrival to the community or made the fatal mistake of posting in the wrong subreddit despite observing what looks like a Wild West free-for-all in existing members’ practices.
Great lawyers have panoramic vision. They can spot problem areas like this in seemingly localized contexts like Reddit or Twitter and are able to extrapolate worrying trends. They can suggest ways to pivot that are totally imperceptible to outsiders, but that have clear reinforcement effects.
Effective wartime consiglieres know that the best way to win a fight is to preemptively disarm potential opponents and to channel the peace dividends into greater growth. Sustainably profitable growth further disarms future would-be opponents.
If you’re still reading, it means you see the value of these pragmatic postures. If true, we’re grateful for that, because, at times, watching the crypto discoursive space is like peering into the darkest Hobbesian corner of The Garden of Earthly Delights. Or, paraphrasing a famous Memphis-based rapper, “You know it’s hard out there for a dev, when she’s tryin’ to get this money for the rent.”
We hope you’re starting to see some the bigger themes and stakes at play when you retain lawyers with deep expertise in a narrow field of law, and lawyers with thinner expertise but stretched over far wider legal terrain.
We needed to make this point clearer. Because we need karma to go on doing what we think we need to do to save crypto and the world, we did what is so often necessary in today’s ultra-combative online public forums. We doubled down.
After spending a lot of time and energy developing and refining the critique, trying to find the right register, we found a dedicated subreddit — EthLaw.
Reasoning that we had finally found our people, we wrote.
Critique on EthLaw
In a separate post titled, Here’s Why Vitalik Needs Better Lawyers, ASAP, we outlined an argument urging caution with respect to legal forms:
Mining Crypto Legal Forms
Big picture, the original post was an attempt to continue a public conversation about the way that the Ethereum community (which is still vocally committed to “decentralization,” individual & institutional autonomy, “self-sustaining legal regimes”) was now also doing conventional legalistic alliances through, presumably, conventional legal forms like contract.
With our good faith bona fides (hopefully) established, we can speak even more bluntly:
Everyone in the crypto space should be curious to know whether the EF-Stanford contract is a “smart contract,” and if so, just how smart.
If what comes to mind is (1) whether the Ethereum Foundation gave “Ether” to Stanford, and/or (3) whether the EF-Stanford relationship will be managed through a “dapp,” and/or (3) [?], then we’ve started to move in the right direction. There is no point of arrival, and the point isn’t to immediately start looking for answers to the narrow questions above. Rather,
We should consider how these assumptions constrain our imaginations. We should question our assumptions. In this sense, the questions themselves can become answers.
If you go back to the original announcements and recall that other blockchain development teams are also involved, you should add the following questions:
(4) when they pooled their respective sources of funding to “underwrite” Stanford’s CBR, did the Ethereum Foundation, Protocol Labs, the Interchain Foundation, OmiseGO, DFINITY Stiftung and PolyChain Capital create a “dapp” or “smart contract” between themselves, to keep one another honest over the course of these of these next five years, to provide transparency/oversight mechanisms, to involve their respective communities in the decision-making processes of the CBR?
(5) did the teams do their “underwriting” in “fiat” or “crypto” — on what terms?
(6) did other teams have opportunities to “underwrite” this project? will they?
(7) what were/are the criteria for inclusion/exclusion?
(8) what governance rights in CBR did the contributors receive in exchange for their contributions?
(9) if there are governance rights, how will they be exercised?
(10) what are the incentive structures applied to the founding blockchain contributors for assuring their continued best efforts towards the overall success of CBR?
(11) […]
All of these questions should be familiar because these are the questions everyone says they care about when doing due diligence on “dapps,” “DAOs,” and “ICOs.” And yet the Reddit threads and Twitter feeds show very little of this due diligence analysis when it comes to Ethereum or other major platforms.
The few souls who try to nudge the founders to internalize the critiques that the founders themselves are promulgating get snuffed out by disciples all too eager to pay obeisance to a given founder or to protect an investment in the success of a given project, instead of taking time to understand how applying these critiques can radically boost a project’s current and future utility (and, valuation).
There’s another explanation at play, but one that will have to await further analysis. It could be that the relative dearth of socio-legal critique of main crypto projects on crypto communities’ own terms is due to the fact that the individuals who have taken the time to learn crypto communities’ own terms are too busy getting rich off this knowledge, sacrificing bigger long term social and financial gain for near term profit-taking.
If that’s so, we’ll restate our core normative recommendation of this whole piece:
Crypto needs better lawyers, ASAP.
All lawyers know that in the near term, it makes little sense to bite the hand that feeds you. Great lawyers, by contrast, know that if you take the effort to forego short term profit-taking and invest in long-term institution building, nine times out of ten, you’ll wake up with your breakfast in bed.
This is Why Lawyers Suck
We understand the way that non-lawyers react to these critiques.
The questions above are key reasons why people hate lawyers; but they are also the reason why lawyers are the first non-coder/non-infrastructural expense item on a crypto-development team’s budget.
Good legal questions are designed to expose the tensions, ambiguities and blind spots in the matter under examination. Great lawyers get excited by questions like the ones above, and they get turned on when they reach the ellipsis […] after question #11, because they know the “dishonest [legal] node” is looking at that same ellipsis, thinking of legal strategies and tactics to beat you.
Think of what good lawyers do as similar to the work that white hat hackers do. They scour your entire system — all of your I/O processes — for all known and unknown, but conceivable vulnerabilities. The crypto/broader IT development community rewards hackers with “bug bounties” because they want to incentivize ways of finding different potential points of failure long before they become actual points of failure.
When hackers report points of failure, they are rewarded with bug bounties. When good faith legal analysts try to report points of failure in organizational/institutional code, there’s no bug bounty, or even begrudging acknowledgement of a potential problem area and “need to improve.”
In today’s crypto development space, if you’re the bearer of supposedly bad news, you’re penalized — stripped of all the Reddit karma you had, blocked from further elaborating the complex threat matrix around us in a coherent, organized, threaded/chained way.
Oh, the irony.
In Legalese, Usage is Key
To understand why it’s so important for crypto go through these so-called bottom-up legal audits, it’s important to recall that law and legalese are forms of socially-constituted code. This is the point we started on, it’s a point we’ve emphasized throughout this piece, and it’s a point we’ll close on.
In Legalese, usage is the key to power.
How legal actors use terms determines their place in various legal and social hierarchies. Often, lawyers rank or rate their peers (and by extension, their peers’ clients) based on these seemingly subjective projections of power. In transnational legal practice, a lawyer’s baseline competence in Legalese determines whether the lawyer (and by extension, their clients) obtain a seat at the proverbial table.
The best way to illustrate some of the points we’ve been making is to do a basic legal doctrinal critique of the CBR announcement, to see what we can scrounge up in terms of actionable legal firepower. In reading the following examples and critiques, please keep this in mind.
Law is power; knowledge of law = access to power.
Here’s how the Stanford news release described CBR’s funding.
Legal Formalism 101
Let’s start by noting that “underwriting” is a legal form, rooted in Anglo-American casualty/contract common law; “gift” is a legal form, rooted in Anglo-American common law of property. We invoke Anglo-American common law because of knowledge of Stanford’s likely legal institutional practice of “homing” to familiar bodies of substantive law in its formal contracting practice, but that’s an assumption. A good lawyer who deals with any of the above entities wouldn’t assume anything and would ask what law governs that supposed gift.
Next, the two forms — contract v. gift — are generally understood as one another’s opposite in contexts like this. So, which is it? The line between gift and contract is very slippery in Anglo-American contract law, with cases in similar higher educational contexts creating quasi-contractual obligations and other lines of cases creating purely donative/gift-like legal instruments.
But whether this is a gift or a contract between Stanford & E+5 and/or Ethereum Foundation, Protocol Labs, the Interchain Foundation, OmiseGO, DFINITY Stiftung and PolyChain Capital vis-a-vis one another is of fundamental importance. If any of the arrangements can be viewed as contracts, for instance, it may allow any of the E+5 projects to invoke various third party beneficiary and implied contractual theories of obligation versus any of the parties the aggrieved entity wants to pursue.
The key point, again, is that any of the aggrieved parties within this cluster (and any aggrieved party outside of this cluster who may feel threatened by this cluster) may potentially assert various legal challenges. An assertion of rights like that could cripple this research center, potentially rendering it a failure long before it has a chance to realize its potential.
Bigger picture, are the parties aware that moves like this in academia typically presage small scale institutional “arms races,” which inevitably leads to further alliance/cartel formation? Did the parties consider the global implications of this move, if so, what came out of those deliberations?
Anti-Formal Formalism
Here’s how Vitalik described the arrangement on Twitter:
This is just one especially vivid instance of conceptual dissonance between how EF approaches institution-building, how existing apex institutions like Stanford understand institution-building, and how the crypto community sees institution-building efforts between these respective apex players.
When selling the virtues of Ethereum, the godfather of “smart contracts” uses more legal forms than most lawyers do in an honest week of work. Hyper-formal talk of jurisdiction, contract, and self-sustaining legal systems are at the heart of most of Buterin’s public presentations.
But when it comes to Stanford, or Ethereum’s own internal resource development programs, it’s all about “supporting” “initiatives” and developing innovative “Hackternship” programs that “may be followed on with additional funding and/or collaboration when [unspecified] milestones are achieved [because] we believe this will provide tight feedback loops for [unspecified] impact to the ecosystem.”
There is no indication that the dissonance is intentional, a part of some legal strategy of disorientation and concerted indeterminacy. But if true, if this is just casual talk by a casual coder (it isn’t), this doesn’t resolve any of the aforementioned concerns; it highlights the core problem with status quo use and abuse of Legalese.
When there is [the law], there is going to be a flame; when there is a flame, someone’s bound to get burned.
Here’s another example from the same thread:
Please note the nice spread between “$25 or $30m total” from one of the world’s foremost advocates for verifiable ledger accuracy, transparency, and computational proof. And, while we’re at, it, please note that the support to Stanford and “Hackternship” “grantees” comes in USD fiat valuations —because, it’s not like we can fund institutions or motivate individuals to contribute to a collaborative coding project through alternative means, right?
The net effect is like listening to Bill Gates praise the virtues of Windows, only to see him then boot up his MacBook, because, “it’s just more convenient, and the keyboard is nicer.”
It’s disorienting, it’s unstable, and it shakes faith in our ability to quickly arrive at the conceptual clarity and discipline that is so sorely needed in the crypto space.
The above isn’t nitpicking or hair-splitting. It’s legal signal analysis. In crypto’s current stage of development, using a dollar sign is as much a declarative legal act as it a casual communicative act. Using a disjunctive “or” to casually suggest that one does not know whether it’s $25m or $30m isn’t problematic because of the possible subtext, “… but with this chump change, who’s counting.” It’s problematic because it exposes cracks in the ethos of verifiability/transparency/accuracy that the crypto community has tried to insist are (or should be) core tenets — normatively as well as legally.
It’s not Vitalik’s job to be on guard about potential legal signaling errors; that’s the lawyers’ job. Far beyond Ethereum, if crypto lawyers are unconsciously letting these types of errors persist in broad conceptual designs, if they’re letting these types of errors creep into fairly big institutional moments (formation of a joint research project with major blockchain devs & world’s leading CS department; enterprise adoption of, say, Ethereum by BigTech players like Amazon), then it’s up to the community to demand that the respective legal houses be brought to order.
What we’ve tried to show is that in the hands of a creative lawyer, myriad good faith precedent-based legal arguments can be built up around any one of those propositions. Next, there so many aggressive crypto-skeptics and market “victims” that it’s only a matter of when, not if, the first waves of legal assaults start washing over the crypto space.
We’ve developed our argument sufficiently well to drive this core message home.
With so much capital pouring into the crypto space, and so much market volatility, (1) any steps that can be taken to lower overall systemic legal risk, should be taken. These (2) “peace dividends” should be reinvested in bringing social hyperutility to market as soon as practicable. (3) The above is the best strategy for assuring a relatively smooth global rollout of Blockchain technology and adoption by eager billions of users.
Instead of a healthy, “oh, yeah, that makes sense,” the community’s response thus far has been to shoot the messenger. We’re done with being shot, we have far more important work to do. If you need help, you know where to find the crew that’s bringing you this warning.
Critique as a Means & an End
To recap, this hasn’t been a critique of crypto leaders’ or leading crypto teams’ underlying motivations (which seem largely benevolent and creative). This is not a critique of the effectiveness of the overall Ethereum/CBR/BigCrypto institution-building efforts (which are demonstrably strong). But it is a critique of particularly glaring conceptual slippage that seems to pass without objection in crypto discourse.
For a community whose external-facing image is one of robustness, attention to detail, and accuracy, the relationship with some of society’s most foundational building blocks — the legal concept of “contract” — is just sloppy.
From a legal perspective, this slippage is a recipe for disaster. It’s not just about how to characterize support to institutions or individuals — whether that act is “supporting,” “funding,” “underwriting,” “gifting,” “contracting” and so on.
As this story makes clear, the consequences of playing fast and loose with legalese go far deeper than that.
How you use legal terms influences how much of a threat you pose to existing institutional structures, how effective you will be in implementing your vision, and how smoothly the implementation will go.
Forcing conceptual discipline upon oneself and one’s team helps to maintain focus on core value/utility propositions that your team is working to advance. It makes you smarter.
Learning from better lawyers allows you to be open to many more unorthodox value/utility propositions — keys than can unlock far more success than existing legal frameworks even allow us to imagine. At that point, our vision for crypto can go beyond “something meaningful” for society, towards concretely emancipatory gains for society.
