Lesson 11 – How to Create Decentralized Law

In this lesson, an open source process for developing Decentralized Law is presented that is similar to Bitcoin Improvement Proposals.

Four methods for publication and acceptance of Decentralized Law are then discussed after that.

A Legal Wiki is presented as the ideal technology for publishing Decentralized Law, along with a rule-based algorithm for making amendments and keeping laws simple and understandable.

How to Generate Decentralized Law?

In previous lessons, we saw the common practice of using English Law as governing law. However, these governing laws could be replaced (partially) by Decentralized Law.

In order to create Decentralized Law, we must overcome two hurdles. The first is a model for the creation of laws and regulations. The second is a model to publish and accept these laws. A way to create laws could be taken from the best practices in decentralized open source software development proven effective by Bitcoin: the BIP.

Using “BIPs” To Propose Decentralized Law

Bitcoin is a fully decentralized system. As a result, no one developer is responsible for its mechanisms. Adjustments to the protocol start when someone makes a proposal for an amendment to its code, known as a Bitcoin Improvement Proposal (BIP).¹⁾“Bitcoin / Bips,” (Github), https://github.com/bitcoin/bips

The first step is for members of the network to debate the need for this BIP. For this, everybody can participate in an open discussion. Meanwhile, the BIP is tested and scrutinized to ensure its security. During this process, the community at large gets involved. The initiators try to gain support for their project, which often involves politics. At a certain point, the improvement is launched. At this point, it is then up the network to either accept or reject it in what is both a voluntary and democratic process. If enough users accept and use the BIP, it is implemented.

BIP Workflow:²⁾“Bitcoin Improvement Proposals,” (Bitcoinwiki), accessed May 14, 2018, https://en.bitcoin.it/wiki/Bitcoin_Improvement_Proposal [small simplification made]

This process makes Bitcoin respected and trusted by the community. All the while, Bitcoin keeps improving. So far this process has worked well. Why not use it as a foundation for other complex aspects of society?

Using Github to Create Decentralized Law

Github is an interesting tool that is used for open source processes, including BIPs. It is a website that allows software developers from around the world to cooperate on open source software development projects.³⁾“Github,” https://github.com/ It is based on software known as “Git.”

Git is a version control system for tracking changes in computer files and coordinating work on those files by multiple people. It is primarily used for source code management in software development, but can be used to keep track of changes in any set of files.⁴⁾“Git,” (Wikipedia), accessed April 19, 2018, https://en.wikipedia.org/wiki/Git

Git allows for multiple people to cooperate on a single project while keeping track of all changes. It allows for side-projects that can later be merged into the main project. It also allows everyone to see what has happened and how a certain result has been achieved. In addition, there are forums that allow discussions on different aspects of the project.

Given its success in the software community, this process could also be adapted to create law. Legal experts could come together and work on legislation as if they were working on an open source software project. Public discussion of the goals and usability of the law could be made possible.

A particular clause of the law could be sidetracked and discussed. Then, once some form of consensus has been reached, the clause could then be added to the main legislation. Such forms of consensus make future acceptance more likely. Of course, a more user-friendly interface could be created as well for the development of law for less technologically minded people.

Best Practices

On a final note, we must remember that law doesn’t fall from the sky. Great and clear legislation exists in different parts of the world. Thus, existing law could be the input for this process. Next to that, most States already have processes for law creation. Perhaps they can include an open source process to end up with more widely accepted forms of legislation. The technologies are now available.

Using a “Legal Wiki” to Codify Law

The public Wiki is another existing technology that lends itself perfectly to the codification and publication of Decentralized Law. An important example of a Wiki is Wikipedia. Wikipedia uses open source software called MediaWiki that can be used by anyone to create a public Wiki.⁵⁾“MediaWiki,” (Wikipedia), accessed April 19, 2018, https://en.wikipedia.org/wiki/MediaWiki

Wikis are extremely applicable here as they are both lightweight and easy to use, and familiar to the general public. They are perfect for hosting large bodies of text. In addition, it is easy to hyper-link to relevant clauses within the law, to important rulings or to higher laws. This makes them more accessible and usable compared to the current system consisting of random selections of constitutions, books, rulings and separate laws created over time.

Publishing and Accepting Decentralized Law

Next, the proposed legislation must become law. This can simply be achieved by publication and subsequent acceptance. Ideally, its publication is subject to acceptance. This way, only widely supported legislation may become a part of law as we saw in the BIP process. Some ideas on how to publish and accept Decentralized Law are:

1) Static Publication.

It is fashionable to want to create a Blockchain for everything. But law consists of static documents. They are not like crypto-currencies, where transactions need to be secured. In addition, an open source development process in combination with voluntary acceptance guarantees a high level of decentralization.

Therefore, it could be argued that a static publication of any of the versions of Decentralized Private Law should suffice for the task at hand. A respected expert, website or NGO could publish and maintain such laws. Publication within Consensus Jurisdictions or by existing organizations like UNIDROIT could also be possible. As mentioned earlier, industry specific organizations are also likely candidates to create regulatory standards. If needed, these laws―and subsequent versions―could be “time-stamped” on an existing Blockchain such as Ethereum for verification purposes.

2) Voting

Laws could be subject to a voting process. Many different collectives could partake, including a group of industry participants, a social group, a decentralized Consensus Jurisdiction and the inhabitants of certain geographical areas.

3) On Chain

A specific legal blockchain could be created. The “transactions” on this blockchain could be hashes of law publications on a public wiki. Currently, everybody can make amendments to a public wiki. However, a Legal Wiki could be subject to both publication and amendment procedures protected by the blockchain.

For example, a publication could be approved if a certain percentage of the participants agree, or an amendment made if four out of five legislators approve. Multiple projects could compete for the data in the blocks, providing an incentive for network security. Alternatively, an application could be created on top of an existing chain.

4) Prediction Markets

Prediction Markets are another widely theorized way for the future of governance. People can bet on the acceptance or disapproval of a law by depositing a small fee in a smart contract. After all, the publication of a law could be reduced to a yes/no decision. The winners of the vote divide the funds of the losers. Although betting on laws seems radical, the idea is that those with a direct stake in the process have an incentive to make the best decisions, and thus are more likely to be on the “right” side of an uncertain outcome.⁶⁾This appears to be the most important idea in the community on future governance. Popularized b Ralph C. Merkle, “DAOs, Democracy and Governance,” (Cryonics Magazine, July- August, Vol 37:4, pp 28-40, 2016), Version 1.9, http://merkle.com/papers/DAOdemocracyDraft.pdf.
He came up with a framework for using a DAO to implement a prediction model that in turn was theorized by Robin Hanson, “Shall We Vote on Values, But Bet on Beliefs?” Both authors provide a more balanced view of the possibilities of prediction models compared to the projects quoting them.

Amending Decentralized Law

Laws change. Although they are written with the best intentions, they may become outdated as time passes. Some clauses may need to be rephrased while others may be proven redundant. Decentralized Law could address this via the introduction of an amendment process guided by mathematical restrictions.

Rule Based Legal Wiki

Let’s take a piece of law consisting of 1.000 words and 6.000 characters on a rule-based Legal Wiki as an example. The rules could allow for periodical amendments to be made. A restriction could be placed on the amount characters or words that can be changed, such as the total amount of words is only allowed to increase by 10%. In this example, the amended law could have a maximum of 1.100 words. In addition, the acceptance of amendments could be subjected to the publication process mentioned above.

To apply this process to a legal system, a legislator could propose an amendment to a law by redrafting some clauses and adding a few new ones. As the amount of characters is limited, he would ensure that what is proposed falls within the boundaries set out by the system. He would do so by writing clearly and removing unnecessary and difficult words.

This way, Decentralized Law could slowly change over time and be kept relevant, just like the Bitcoin Protocol. In addition, it would ensure that clauses are selected carefully, kept to their essential meaning and are written in simple words. Such a process leads to orderly, accessible and simple legislation that can be understood by anyone. It also prevents out of control legislation by limiting what can be added.

The downside to changing laws could be the legal uncertainty or confusion it causes. This could be tackled by allowing periodic amendments only once every five or ten years. Alternatively, no amendments could be allowed to core areas, or only addendums of a limited size could be allowed. In any case, Decentralized Law makes it easy to figure out which laws were applicable to certain actions or contractual obligations as well as how these have changed―more so than today at least.

Incentives for Making and Maintaining Decentralized Law

In the crypto-space, incentive-based systems have proven to lead to the best outcomes in terms of security and usability. A widely accepted piece of legislation could act as a piece of online real estate, benefiting and promoting the creators.

Consensus Jurisdictions could compete for users by creating state-of-the-art laws and procedures. Users could pay a small fee for the use of these systems. In exchange, they enjoy the protection of a tried and tested legal system that is both well maintained and enforced. Competition would lead to the establishment of the best systems. It would also lead to specialization, as has happened on the Cayman Islands which now have state-of-the-art fund formation regulation.

Now that we understand how to create Decentralized Law, we can look at how Decentralized Law can govern the world.

This article is part of a series of lessons on Decentralized Law (view summary).

Cite this article

Thysse W., “Lesson 11 – How to Create Decentralized Law” (Decentralized Law Lessons, December 28, 2019), available on: https://decentralizedlegalsystem.com/law/creation/

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