8 See e.g. Shawn J Bayern, ‘Dynamic Common Law and Technological Change: The
Classification of Bitcoin’ (2011) 71 Washington & Lee Law Review Online Edition
22, 22; Reuben Grinberg, ‘Bitcoin: An Innovative Alternative Currency’ (2011) 4
Hastings Science and Technology Law Journal 160; Ed Howden, ‘The CryptoCurrency Conundrum: Regulating an Uncertain Future’ (2015) 29 Emory International Law Review 741; Eric P Pacy, ‘Tales from the Cryptocurrency: On Bitcoin,
Square Pegs, and Round Holes’ (2014) 49 New England Law Review 121. Brito et al.
examine bitcoin from a policy perspective in their comprehensive article. See Jerry
Brito, Houman B Shadab and Andrea Castillo, ‘Bitcoin Financial Regulation: Securities, Derivatives, Prediction Markets, and Gambling’ (2014) 6 The Columbia Science
and Technology Law Review 144, 148. De Filippi observes that although regulation
of cryptocurrencies is needed, at the current stage self-regulation would probably
provide better results, as it would not hinder future innovation. See Primavera De
Filippi, ‘Bitcoin: A Regulatory Nightmare to a Libertarian Dream’ (2014) 3 Internet
Policy Review, available at http://policyreview.info/articles/analysis/bitcoin-regula
tory-nightmare-libertarian-dream accessed 27 June 2018. Interestingly enough, the
ECJ also took a position regarding cryptocurrencies in October 2015. In its preliminary ruling the court made an analogy between virtual and traditional currencies, as it
ruled that the trade of virtual currencies is exempt from value added tax, as is the case
with traditional currency. See Skatteverket v David Hedqvist [2015] ECJ C-264/14.
9 Frank A Pasquale and Glyn Cashwell, ‘Four Futures of Legal Automation’ (2015) 63
UCLA Law Review Discourse 26, 36–37.
10 J Fairfield (n 6), 38.
11 It should be noted that the concept of smart contracts is not new, although the
blockchain infrastructure for their realization is. Legal scholar Nick Szabo defined
smart contracts in 1995 as ‘A set of promises, including protocols within which the
parties perform on the other promises. The protocols are usually implemented with
programs on a computer network, or in other forms of digital electronics, thus these
contracts are “smarter” than their paper-based ancestors. No use of artificial intelligence is implied.’ See Nick Szabo, ‘Smart Contracts Glossary’ (1995), available at
http://www.fon.hum.uva.nl/rob/Courses/InformationInSpeech/CDROM/Litera
ture/LOTwinterschool2006/szabo.best.vwh.net/smart_contracts_glossary.html
(accessed 27 June 2018).
12 The legal status quo of smart contracts is undecided, as there are no policy proposals
and case law and legal research on the new phenomenon is still scarce. Also, a uniform
definition of the term is lacking. However, Fairfield examines the potential of smart
contracts for better consumer protection, as blockchain applications could improve
consumers’ ability to negotiate their own contractual terms in e-commerce. See Fairfield (n 6) 43.
13 For a concrete example of drafting a smart contract on the Ethereum platform, see
Koulu, ‘Blockchains and Online Dispute Resolution: Smart Contracts as an Alternative
to Enforcement’ (2016) 13 SCRIPTed 40.
14 David Siegel, ‘Understanding The DAO Attack’ (Coindesk, 25 June 2016) available at
https://www.coindesk.com/understanding-dao-hack-journalists/ (accessed 27 June
2018).
15 Jordan Pearson, ‘Someone “Accidentally” Locked Away $300M Worth of Other
People’s Ethereum Funds’ (Motherboard Vice, 11 July 2017), available ab https://
motherboard.vice.com/en_us/article/ywbqmg/parity-multi-signature-wallet-vulner
ability-300-million-hard-fork (accessed 27 June 2018) 7.
16 De Filippi (n 8).
17 Alan Cunningham, ‘Decentralistion, Distrust & Fear of the Body – The Worrying Rise
of Crypto-Law’ (2016) 13 SCRIPTed 235, 244.
18 ibid 252–257.
190 New ways forward?
Classification of Bitcoin’ (2011) 71 Washington & Lee Law Review Online Edition
22, 22; Reuben Grinberg, ‘Bitcoin: An Innovative Alternative Currency’ (2011) 4
Hastings Science and Technology Law Journal 160; Ed Howden, ‘The CryptoCurrency Conundrum: Regulating an Uncertain Future’ (2015) 29 Emory International Law Review 741; Eric P Pacy, ‘Tales from the Cryptocurrency: On Bitcoin,
Square Pegs, and Round Holes’ (2014) 49 New England Law Review 121. Brito et al.
examine bitcoin from a policy perspective in their comprehensive article. See Jerry
Brito, Houman B Shadab and Andrea Castillo, ‘Bitcoin Financial Regulation: Securities, Derivatives, Prediction Markets, and Gambling’ (2014) 6 The Columbia Science
and Technology Law Review 144, 148. De Filippi observes that although regulation
of cryptocurrencies is needed, at the current stage self-regulation would probably
provide better results, as it would not hinder future innovation. See Primavera De
Filippi, ‘Bitcoin: A Regulatory Nightmare to a Libertarian Dream’ (2014) 3 Internet
Policy Review, available at http://policyreview.info/articles/analysis/bitcoin-regula
tory-nightmare-libertarian-dream accessed 27 June 2018. Interestingly enough, the
ECJ also took a position regarding cryptocurrencies in October 2015. In its preliminary ruling the court made an analogy between virtual and traditional currencies, as it
ruled that the trade of virtual currencies is exempt from value added tax, as is the case
with traditional currency. See Skatteverket v David Hedqvist [2015] ECJ C-264/14.
9 Frank A Pasquale and Glyn Cashwell, ‘Four Futures of Legal Automation’ (2015) 63
UCLA Law Review Discourse 26, 36–37.
10 J Fairfield (n 6), 38.
11 It should be noted that the concept of smart contracts is not new, although the
blockchain infrastructure for their realization is. Legal scholar Nick Szabo defined
smart contracts in 1995 as ‘A set of promises, including protocols within which the
parties perform on the other promises. The protocols are usually implemented with
programs on a computer network, or in other forms of digital electronics, thus these
contracts are “smarter” than their paper-based ancestors. No use of artificial intelligence is implied.’ See Nick Szabo, ‘Smart Contracts Glossary’ (1995), available at
http://www.fon.hum.uva.nl/rob/Courses/InformationInSpeech/CDROM/Litera
ture/LOTwinterschool2006/szabo.best.vwh.net/smart_contracts_glossary.html
(accessed 27 June 2018).
12 The legal status quo of smart contracts is undecided, as there are no policy proposals
and case law and legal research on the new phenomenon is still scarce. Also, a uniform
definition of the term is lacking. However, Fairfield examines the potential of smart
contracts for better consumer protection, as blockchain applications could improve
consumers’ ability to negotiate their own contractual terms in e-commerce. See Fairfield (n 6) 43.
13 For a concrete example of drafting a smart contract on the Ethereum platform, see
Koulu, ‘Blockchains and Online Dispute Resolution: Smart Contracts as an Alternative
to Enforcement’ (2016) 13 SCRIPTed 40.
14 David Siegel, ‘Understanding The DAO Attack’ (Coindesk, 25 June 2016) available at
https://www.coindesk.com/understanding-dao-hack-journalists/ (accessed 27 June
2018).
15 Jordan Pearson, ‘Someone “Accidentally” Locked Away $300M Worth of Other
People’s Ethereum Funds’ (Motherboard Vice, 11 July 2017), available ab https://
motherboard.vice.com/en_us/article/ywbqmg/parity-multi-signature-wallet-vulner
ability-300-million-hard-fork (accessed 27 June 2018) 7.
16 De Filippi (n 8).
17 Alan Cunningham, ‘Decentralistion, Distrust & Fear of the Body – The Worrying Rise
of Crypto-Law’ (2016) 13 SCRIPTed 235, 244.
18 ibid 252–257.
190 New ways forward?