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Volume 19 - Issue 3
Toward Decentralized Commercial Law For Digital Assets
Technology affects various facets of the society and law. It has been tightly coupled in a symbiotic relationship with commercial law, including the Uniform Commercial Code (U.C.C.). While the conceptual framework of the U.C.C. and its realist ethos has fostered innovation since the 1950s, recent technological advances pose new challenges. In particular, digital assets traded in decentralized blockchain systems promise to engender a wide array of applications, prompting new business practices. A number of efforts have been recently undertaken to address the fundamental challenges to established legal concepts posed by these technological advances. All these efforts march forward grappling with a similar set of substantive issues, including what actions should the law recognize for a transferee to acquire a digital asset, such as Bitcoin. This article identifies the appropriate form in which commercial law should be expressed, including rules and standards. It identifies decentralized legislative solutions embedded in the U.C.C., analyzes how they have supported the growth of systems for the holding and transfers of various types of electronic records, and then applies the relevant solutions to particular issues concerning the use of digital assets, defined as controllable electronic records, in commercial transactions. Decentralization of systems pits centralized commercial law in the form of bright-line and mandatory rules against decentralized solutions of party autonomy, standards, and system rules that enable parties to tailor the law to their needs. The article argues that rules in the form of principled norms should govern the legal effect of transfers on third-party claims, particularly non-participants in systems. It isolates a particular type of a standard that it labels a “technology standard” which enables the system design to concretize the standard ex ante. Technology standards are suitable to establish when and how a person acquires rights to a digital asset. The highest form of decentralized legislative solutions in the form of system rules would be appropriate only for central bank digital currencies that have the characteristics of the systematically important institutions. This article argues that decentralization of commercial law does not undercut one of the primary aims of the U.C.C., which is to make the law uniform, and enables evolution of the relevant regulatory rules.
Beacons: A Viable Solution to the Ever-Evolving Problem of Corporate Data Breaches
In an increasingly virtual world, data breaches continuously plague large corporations. These companies have few options to keep their data out of the hands of persistent hackers, who often discover ways around any safeguards that may be in place. It seems as though any measures companies are currently able to employ merely delay the inevitable breach that will bring with it the potential loss of both customers’ data and their faith in the privacy and security of their information. These attacks can be debilitating to corporations; thus, it seems only fair to provide them the ability to take active measures to defend against cybercriminals. Some have argued that allowing hacking victims to retaliate against their attackers could help reduce cybercrime. Others suggest that these counterstrikes may lead to an increased prevalence of attacks rather than deter initial attackers. This note will argue that the use of beacons—code hidden in a company’s files that alerts the company of the files’ theft— should be permitted as an effective and proportional cyber-self-defense measure.
Student Speech Online: A Matter of Public Concern
The Supreme Court’s recent decision in Mahanoy Area School District v. B. L. ex rel. Levy partially answered the long-standing question of when schools can police student speech that takes place online. But Mahanoy largely ignored decades of scholarship, and opinions by lower courts, all of which assumed online speech was governed by the Court’s earlier student speech cases—especially the seminal Tinker v. Des Moines Independent Community School District. This Note argues that Mahanoy and Tinker are consistent with each other, and both are consistent with the Court’s decisions governing another distinctive kind of speech: public employee speech. It introduces a framework for online student speech that is based on the framework for public employee speech, one focused on official duties and public concern. By grounding student speech in the public employee framework, I harmonize Mahanoy’s idiosyncratic approach with established law.