Abstract
Blockchain technology, originally conceived as a means of enabling peer-to-peer coordination without trusted intermediaries, has evolved into a foundational infrastructure with applications extending well beyond cryptocurrencies—from decentralized finance and digital identity to supply-chain management, dispute resolution, and decentralized artificial intelligence. This report examines blockchain not only as a technical innovation but as a sociolegal phenomenon that challenges established frameworks of governance, accountability, and regulation. It argues that the promise of decentralization warrants careful qualification: while blockchain systems often achieve technical decentralization, their governance frequently remains concentrated among core developers, validators, large token holders, and infrastructure providers.
From a legal standpoint, blockchain’s pseudonymous, transnational, and code-based architecture explains why it has been presented as an “alegal””territory. Yet courts and legislatures continue to reassert legal authority —unevenly but unmistakably— wherever blockchain systems intersect with human actors and institutions. Landmark cases such as Mango Markets, Uniswap, Tulip Trading, and Tornado Cash reveal an unsettled jurisprudence on developer liability, the legal status of smart contracts, and the treatment of DAOs, with no coherent liability framework yet solidifying.
Regulatory responses span four principal strategies: observational approaches, regulation by enforcement, proactive legislation (notably the EU’s MiCA), and outright prohibition. Each confronts a common structural tension between decentralized architectures and legal frameworks built around identifiable, territorially anchored intermediaries. The central question is no longer whether blockchain technologies should be regulated—litigation and legislation have settled that point—but how frameworks can meaningfully govern a technology deliberately engineered to resist the intermediaries and territorial anchors on which regulation depends. The report concludes that blockchain has become a contested zone in which code, legal norms, and social coordination interact in ways no existing framework was designed to handle, and that the path forward lies in adaptive arrangements addressing three concrete challenges: defining sound governance for decentralized systems, clarifying the legal status of computer code, and establishing credible accountability mechanisms.
We are greatly indebted to the Project Liberty Institute for their support of the Program on Governance of Emerging Technologies, which made this report possible.
