Crypto Maximalism = RoboCops
By embracing a #CodeIsLaw ideology, many cryptonaires are promulgating a potentially oppressive vision of law. This happens largely subconsciously, which points to a bigger problem that we must solve before it’s too late.
#CodeIsLaw, in Brief
In a separate piece titled #CodeIsLaw … Maybe, we explored the origins of the #CodeIsLaw mantra, ideology, and movement.
If you’re looking for a backgrounder on #CodeIsLaw or #CodeAsLaw, we encourage you to read that short story first.
In brief, the #CodeIsLaw movement argues that in the so-called “smart contract” context, the instructions, terms, and conditions that are hard-coded into a particular crypto instrument need to be enforced exactly as the code says. Other terms and theories synonymous with this view of CryptoLaw include: (1) strong immutability, (2) self-regulating crypto, (3) self-enforcing smart contracts, and so on.
As a meme, #CodeIsLaw has a little bit of baggage because of its association with an ongoing spat between Ethereum Classic (ETC) & Ethereum (ETH) communities, and so many crypto folks who make #CodeIsLaw arguments don’t expressly use the term.
But if they advance a vision of crypto legal relations that are hard-coded into particular crypto platforms, apps, and projects — it’s safe to lump these theories together under a phrase that seems to capture the essence of the thing: “Crypto maximalism.”
Vitalik Buterin’s views on “self-enforcing contracts” can be described as such. Indeed, anyone who uses the term “self-enforcing smart contract” without qualification can be classified as a crypto maximalist.
Crypto maximalists believe that computer “code” can be “law,” that code can supplant law, and that, in many contexts, code should supplant law.
In our view, this vision of the future inevitably leads to RoboCops.
If you have the intellectual stamina to work through a 15-minute read with us, we’ll explain how this will likely play out, and why you should be alarmed.
What’s the Problem, Officer RoboCop?
The main problem we observe in current #CodeIsLaw maximalist discourse is a very cartoonish and inaccurate vision of “law,” lawyers, and legal institutions.
The easiest illustration of this is the myth of self-enforcing contracts, as though it was currently possible to create autonomous legal regimes that would insulate “crypto legal relations” (property, contract, etc.) from “the Law” (the flesh-and-blood material manifestations of existing legal institutions, including prosecutors, police officers, lawyers, judges, armies, etc.).
As we’ve tried to explain in numerous places (including here, & here, & here), this vision of, say, contract law simply does not comport with existing contract law practice in common law and civilian legal families.
The crux of the problem is that many crypto folks (including many self-proclaimed #CryptoLawyers) seem to misunderstand the very nature, functions, and limits of law.
One of the best examples of the conceptual gulf between crypto conceptions of law and Law’s conception of law is in the realm of self-proclaimed “smart contracts.”
What crypto folks think of as self-executing contracts typically refers to agreements with quantifiable and programmable conditions and performance obligations. These potential agreements can be structured so that fulfillment of certain conditions results in the automatic implementation of particular protocols and/or performance obligations.
Many crypto analysts call self-executing contracts self-enforcing contracts (hence, “Code Is Law”), but that’s not technically true. And it’s a consequential mistake.
In an abstract sense, the above can be called “self-execution,” “self-implementation,” “automated performance,” and so on.
But under no current conception of law can ‘smart contracts’ be considered self-’enforcing’ legal instruments.
Contract “enforcement” is a Legalese term. Legally speaking, contract enforcement can only be done by legal actors (of which there are many) in various legal institutional ways (of which there are also many).
Enforcement = invocation of law enforcement mechanisms (legitimate use of force or threat of the use of force).
We understand that semantically, conceptually, institutionally, etc., this understanding of “contract enforcement” is radically different from the way lay people often understand “enforcement.”
Here’s why this distinction is so important.
Potato, Potaaato; SmartContract, Tomato
Lay people misuse Legalese all the time; most times this misuse is totally harmless.
Most times, misuse of Legalese is totally harmless.
From the perspective of contracting parties, it often doesn’t really matter whether a “smart contract” is “legally enforceable” when: (a) neither party disputes that their instrument is an enforceable contract, or (b) neither party disputes that it their instrument is not an enforceable contract.
Please note that parties may adopt the postures above at any time before the purported execution of their supposed “smart contract,” and/or during the executory/performance stage of their supposed “smart contract,” and/or following performance of their supposed “smart contract.”
Further, parties may adopt these postures (both say “yes, there’s a contract;” or both claim, “no, there’s no contract) irrespective of what the so-called “smart contract” calls itself.
When parties don’t have a dispute, and everything is going according to plan, the actual legal form of their particular instrument or instruments may be interesting in an abstract intellectual sense (and/or it may be interesting to regulators for purposes of taxation, oversight, control, etc.) — but it really does not matter.
#SmartContract = Legal Gamesmanship
In the event of a dispute, however, legal terminology matters greatly. Legal forms matter greatly. Legal postures matter greatly.
Parties’ subjective intent, however, matters far less than parties think.
Thus, it doesn’t matter how “smart” a particular “smart contract” architecture claims to be. A house built on sand will not stand. Without strong conceptual foundations, current “smart contracts” simply crumble under the mildest of stresses.
The reason why is because “smart contracts” currently don’t have actual enforcement mechanisms backing them up aside from existing legal enforcement mechanisms: institutions like flesh-and-blood court personnel, arbitral bodies, law firms, etc.
Where a “smart contract” dispute is of a sufficiently large caliber, all bets are off. In those instances, parties employ the services of the best lawyers they can afford to hire, and their lawyers go to war.
The war can be fought in online dispute resolution forums initially. But legal warriors know that, often, the best way to gain advantage over their adversaries is by invoking the looming threat of legal battles across multiple battle fields.
The strongest litigators are able to actually launch multiple formal attacks simultaneously, keeping their opponents off kilter by highlighting the self-proclaimed stronger party’s capacity to withstand significant losses in a legal war of attrition.
Litigator for A: “You can’t just file a request for preliminary injunctive relief; our smart contract requires us to arbitrate all legal disputes in a formal crypto governance forum.”
Litigator for B: “It’s cute that you think we can’t do this. We just did, in jurisdictions X, Y, and Z. Your move, A!”
Crypto determinists may view these levels of gamesmanship, ambiguity, and uncertainty as major bugs in our current socio-legal system.
In many instances, the above can be and is a major impediment to smooth market or social relations; protracted litigation does heighten transaction costs and overall uncertainty. Lawyers will be among the first to admit that.
Law Is Friction, But Friction Is Often Good
Law does “add friction” to social and market relations. Legal process is frustrating and often unjust to non-lawyers.
But current global legal dispute resolution mechanisms have unique and largely unacknowledged advantages.
As cumbersome and expensive and unpredictable as they are, the world’s legal systems undeniably work to channel heated personal and commercial disputes towards more-or-less peaceful (though, again, expensive and protracted) dispute resolution outcomes.
Delays and “friction” in current legal dispute resolution systems can actually be seen as a feature in various global governance operating systems because burdensome and unpredictable formal dispute resolution mechanisms serve to channel parties away from these very same formal dispute resolution processes.
When everyone knows the real costs of war, war is less likely.
This argument shouldn’t be seen as a wholesale defense of existing law, legal systems, and legal institutions. As stressed above, there are many problems plaguing the world’s legal systems. Many legal institutions are structured in ways that continue to disenfranchise and oppress entire populations.
Instead, the main point above is twofold: (a) in disputes of consequence, good lawyers will exploit all available options for winning — no matter how purportedly “self-contained,” “smart,” or “autonomously enforcing” a given crypto instrument claimed to be; (b) current legal systems are so complex, multi-dimensional, and so deeply constitutive of our socio-economic reality that any attempt to extract oneself from them is simply impossible.
For proof of (b), see (a).
CryptoLaw to the Rescue
Even after being shown (a) and (b) above, crypto maximalists will insist that choice (c) is nonetheless possible, and desirable.
Choice (c) is the crypto belief that it’s possible to transcend current flesh-and-blood law and legal institutions by merely “coding around law.” Whether rooted in crypto-anarchy or particular veins of libertarianism, adherents of choice (c) stridently maintain that they can create hyper-legal and hyper-formal (1) crypto constitutions (see, e.g., the ongoing debate over the EOS Constitution), (2) ‘smart contracts,’ (3) self-contained “legal systems;” (4) crypto dispute resolution forums; and even (5) self-sovereign CryptoState(s).
The rights-based argument goes as follows:
Cryptonaire: We cryptofolks have certain natural and inalienable rights, such as the right to property, contract, and individual autonomy. Because we have freedom of contract, we have the freedom to create self-sufficient legal systems, taking ourselves completely outside of the strictures of existing legal regimes.
During global scaling and various transition & maturation stages, #CodeIsLaw maximalists will likely concede that #CryptoLaw can and/or should exist alongside existing law.
With time, however, CryptoLaw will outperform existing legal systems in various quantitative benchmarks (much faster “fully automated” docket processing, much lower cost of administration, implementation of micro-remedial nudges, incentives & penalties, and so on). These are some of the promises made by OpenLaw and many other budding LegalTech projects. Then everyone will see that algorithmic justice is much more efficient, fair, and equitable than the sloppy and messy human forms of justice we have today!
The response of every experienced and responsible lawyer to this should be the following:
Smart CryptoLawyer: Ummm, yes, it’s possible to try and build this form of “tech utopia,” but please remember that in the event of a sufficiently large scale dispute, I will make use of all available CryptoLaw and traditional procedural pathways to block the opponent and to try to score YOU all available legal remedies. Law is inescapable.
Despite the fact that maintaining access to existing legal remedies alongside “Crypto remedies” is in cryptonaires’ own material interests, #CodeIsLaw maximalists want to take the law into their own hands entirely.
Many in the community seem irrationally committed to the ideology of immutable code-based law, self-regulation, self-governance, and self-enforcement. We explore several ideological reasons for this in our essay, #CodeIsLaw … Maybe.
Below is one more reason.
Lex-scapism Is Power
The main reasons cryptonaires seem so high on their own supply is because ‘legal escapism’ (lexscapism) and ‘alegal’ activity is what made them extremely wealthy to begin with.
Because wealth is a common proxy for power, many cryptonaires genuinely believe they have earned the power to take the law into their own hands.
To some extent, this belief is justified.
Mo’ Money, Mo’ Law; My Money, My “Law”
Before crypto, the power to create money out of thin air belonged to sovereigns, the actual rulers of the world. When Bitcoin tweaked that paradigm by introducing an (initially) alegal form of money, “the Law’s” initial ambivalence towards Bitcoin gave rise to a false belief that Law would remain ambivalent towards Bitcoin.
Having pulled off one of the greatest gambits in monetary history, Bitcoin maximalists and new generations of cryptonaires set out to see how much more they could get away with. Building on the demonstrable success of Bitcoin, platforms like Ethereum started selling “smart contract” and “self-sustained legal system” terminology and Blockchain architectures to the world.
But Wait, My “Law” Has No Remedies!
The problem, of course, is that after the initial sales pitch wears off, and investors start suffering major losses in particular ‘smart contract’ arrangements, the purportedly “self-contained” legal structure of any contract (‘smart’ or otherwise) starts showing its semi-permeable essence.
It’s at this point of a serious legal dispute about contract formation, interpretation, modification, breach, damages, etc. that folks are expected to learn that contracts are never exclusively private law instruments, just like constitutions are never exclusively public law forms: all legal forms and instruments are just fluid shades of gray.
In order to get legal remedies, one has to tap back into Law.
This insight can be used offensively, as a way of plugging back into the existing global legal matrix to fight particular battles. But it can also be used defensively, as a way of blocking others from seeking legal remedies — like an arbitration provision raised to the power of a fully enforceable choice of law clause.
This is where RoboCop knocks on your door.
Knock, Knock, RoboCop
To get a good flavor for how this will shake out and how it will feel, we encourage you to read RoboCop in the most stereotypical robot voice you can muster. As for the Debtor voice, you’re encouraged to use your own, irrespective of your net worth, because the below can happen to any of us.
RoboCop: Knock, knock!
Debtor: Who’s there?
RoboCop: CryptoCop is here, your 56.2472 BTC debt to Coinbase is past due; I’m here to collect on the CryptoJudgment that Coinbase secured against you in the matter of Coinbase v. Debtor filed and arbitrated in CryptoCourt. Would you like to see hash to verify my credentials?
Debtor: Screw your credentials, I already told CryptoCourt and Coinbase customer service that it wasn’t me who took out that loan; my computer was hacked, and the same thing happened to millions of us back in the Great Blackout of 2023. I didn’t incur the debt, I owe you nothing.
RoboCop: My scope of enforcement is limited to collection judgment; I have no subject matter jurisdiction over alleged hacking; we know your balances are insufficient to cover the 56.2472 BTC debt, so I am authorized to collect your automobile and other valuables. I am authorized to use force, please do not interfere with my collection!
Debtor: Dude, I need my car to get to work.
RoboCop (before driving off in Debtor’s car): Please contact Coinbase customer service. Have a great CryptoDay, Debtor! Please don’t forget that today, you’ll get 3 YelpCoins if you rate my service 3 stars or higher.
RepoBots, EvictionBots & “Auto Debt Collection”
Starting with law, you should know that the nice artificial line between criminal law and civil law (contract, property, tort) has been steadily eroding.
Around the world, “criminalization of poverty” isn’t a bumper sticker slogan; it’s a well studied and well understood empirical fact. In the developed world, in states like Arkansas, landlords enjoy statutory rights that allow them to get sheriffs to lock up tenants who the landlords swear haven’t paid rent.
The criminalization of the unlawful detainer action in Arkansas is so antithetical to bedrock conceptions of civil v. criminal jurisdiction that Human Rights Watch dispatched investigators to understand how this was possible in the home of the “rule of law” — the heartland of the United States.
Yes, today’s landlords have legal powers to invoke law enforcement mechanisms to lock up tenants who they say haven’t paid rent.
Yes, your memory is correct, the name that comes to mind is: debtor’s prison.
And no, the Arkansas example is not exceptional; if anything, it’s a sign of a growing trend.
Now, instead of a human landlord calling a human sheriff to evict human tenants (including kiddos), and locking the human debtor in a jail run by a human warden, imagine RoboCop doing the same pursuant to a self-enforcing ‘smart’ tenancy contract where the ‘parties’ opted out of LawLaw and, instead, tapped into CryptoLaw.
A world without human rights watchers, human empathy, human “sources of friction,” human “points of failure,” human exercise of discretion, without humans practicing law in their own imperfect conceptions of given humanistic aims … that future is just a technocratic hell.
George Lucas gave us a glimpse of that world back in 1971 (& if you’ve made it this far into the article, you’ll really enjoy that film). Today, the crypto maximalists who are laboring so hard to create fully trustless computing, to finally give us scalable #CodeAsLaw, are simultaneously accelerating the arrival of CryptoPolice.
Most of this is happening unwittingly, subconsciously, path-dependently. That’s what makes it so disturbing.
But, CryptoLaw Is So Emancipatory!
In defense, crypto maximalists are likely to invoke their best pals, game theory and logic. They can argue that in the two scenarios above (an enforcement of judgment/collection matter & forceful eviction matter) the individuals on the receiving end of RoboCop’s baton had individual autonomy, and Liberty, and free will prior to entering into those ‘smart contracts.’
The power to enter into a ‘smart contract’ necessarily implies the power to reject ‘smart contracts.’ In many of the world’s constitutions, this is a fundamental freedom of contract and due process right!
Further, in the landlord-tenant example, the same ‘smart contract’ instruments that the landlords will use to verify and prove nonpayment by tenants, are the same tools that tenants can use to prove payment and, thus, more easily avoid jail.
Like any tool, crypto is a double-edged sword; it can be used by different actors for penal aims and emancipatory aims, simultaneously.
Current and future legal indeterminacy is why we must resist the seduction of game theoretical models that will claim to predict the efficiency of particular RoboCop/enforcement regimes, or AI-generated statistical models that suggest “optimal acceptable error rates” for false positive “convictions.”
So … RoboCop … Bad?
In theory, the emancipatory potential of CryptoLaw is vast. This includes autonomous enforcement by RoboCops.
Just imagine social ills like pollution and littering. We wouldn’t be, per se, bothered by the sight of a RoboCop drone flying after a truck that just dumped trash at an illegal dumpsite.
If there are enough human oversight mechanisms and sufficient human appellate review built into a particular crypto instrument, we suspect that most people would be in favor of more effective law enforcement. Everyone seems to be better off as a result.
There’s only one problem with blanket CryptoLaw theories that promise self-enforcement and wide-scale emancipation:
History shows that those in power have a curious urge to remain in power. The same is likely true for RoboCops.
This last point isn’t an argument against CryptoLaw; it’s a warning to CryptoLaw.