“Private law” can be created (right now) to govern cryptocurrencies and their applications…
There are four main sources of law: natural law, positive law (governments), international law and private law. Contemporary private law offers the flexibility to create private legal systems. Rulings can be enforced worldwide due to the New York Convention (1959).
Over the years, a number of decentralized legal applications have been developed. Most lack the legal framework to be used in the real world.
1. Projects focusing on decentralized jurisdictions ignore that all current jurisdictions are tied to physical locations. There is one alternative: jurisdiction by consent. People can organize themselves in so called “Consensus Jurisdictions”.
2. Projects focusing on decentralized arbitration ignore governing laws and legal frameworks. Without this, a decentralized arbitration ruling cannot be enforced.
3. Smart contracts aren’t contracts in the eyes of the law. They need to be merged with a human language (wet code) contract into “Smart Contract Blocks”.
4. Decentralized Corporations and DAOs aren’t persons in the eyes of the law. As such, they cannot own property, engage in contracts, and perform the tasks often attributed to them. Solving this problem will be complex.
Fortunately, decentralized legal applications number 1-3 can easily be governed by a private legal framework that is enforceable in the real world due to the New York Convention. This is called the “Decentralized Legal System”. Laws can be created and codified using open source software and processes also used for the development of Bitcoin.
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