The Dutch Blockchain Research Agenda

applications | blockchain | ecosystem | frontpage | governance | media appearances | papers | papers | Partner search | people | Research Notes

In the last few months Balazs was participating in the creation of the Dutch Blockchain Research Agenda for NWO, the Dutch Science Agency.

The Agenda spells out the research priorities, and topics where more interdisciplinary research is needed.  To quote the Agenda: “Given the complex fabric of technological and societal questions around blockchain, future research seems to require at least the awareness of this multi-disciplinarity, or even seek collaboration across the boundaries of disciplines. Blockchain research carries many challenges on the level of research design and methodology. As is the case with systems focused research, the proper demarcation of scope of future research projects and programmes is essential. This scope also sets the disciplinary mix that needs to be involved. At the same time, it should be ensured that the required disciplinary progress can happen, especially since different disciplines require research at different time scales.

Since blockchain technology is a moving target, in terms of research methodology one must also consider more exploratory, theory generating,
high risk and open-ended approaches, including tools such as mathematical modelling and analysis, business modelling, techno-economic analysis, functional and non-functional design and testing, action research, simulations and experiments in research labs and living labs, horizon scanning, etc. As this research agenda includes both fundamental and applied research, it requires active involvement from non-academic stakeholders from public bodies, industry, market sectors and the general public.

Another methodological challenge is the futureproofing of research. In such a volatile field, it is often difficult to distinguish issues relevant only in the short term, versus long term blockchain specific problems, versus fundamental research questions that cut across multiple digital technologies and have been and will be with us for decades.

There are several streams of investment that fuel research in the blockchain technology domain. Private investment through venture capital and
ICOs (crowdsourcing) as well as public investment by governments, universities, and research funding bodies should be aligned in a smart way.
In that context it seems inevitable to identify the fields that Dutch academia, research institutes and research departments of Dutch organisations are
best positioned to answer, either because they already excel in certain domains, or because they want to build skills and research capacity through
strategic investment.

The Agenda is now public And can be downloaded from here:
 Dutch Blockchain Research Agenda

Critical Analysis of Law

law | papers | Research Notes

Vol 5, No 1 (2018): New Economic Analysis of Law

Guest edited by Frank Pasquale (University of Maryland, Law), the special issue on New Economic Analysis of Law features illuminating syntheses of social science and law. What would law & economics look like if macro-, as opposed to micro-, economics were a primary concern of scholars? Do emerging online phenomena, such as algorithmic pricing and platform capitalism, promise to perfect economic theories of market equilibrium, or challenge their foundations? How did simplified economic models gain ideological power in policy circles, and how can they be improved or replaced? This issue highlights scholars whose work has made the legal academy more than an “importer” of ideas from other disciplines—and who have, instead, shown that rigorous legal analysis is fundamental to understanding economic affairs.

Source: Critical Analysis of Law

The Politics of Blockchain | SpringerLink

blockchain | critique | law | papers | politics | Research Notes

The aim of this supplement is to explore and critique this ‘blockchain ecosystem’, the politics it tries to hide, and the legal and regulatory ramifications it inaugurates. The following essays do not portray blockchain as providing all, if any, of the answers to the world’s problems. Instead, the challenge is in part to understand the tensions faced by law and regulation in defining blockchain within the ongoing networking, digitalisation, and datafication of the social. Success in this regard will be measured in the coming months and years by the grip that regulatory authorities and governments are able to maintain on the various strands of blockchain research, development, application, implementation, and conduct—a grip, moreover, that is able to be maintained alongside the regulatory conundrums that continue to plague the wider field of network technologies which are themselves still evolving, mutating, impacting, but not necessarily benefiting community or public interest ahead of private, commercial power. Understanding the extent to which law and regulation will play a role in securing democratic accountability of these powerful and far-reaching technologies is or ought to be a key concern for blockchain scholars and practitioners of all stripes.

Source: The Politics of Blockchain | SpringerLink

Baseline Territorial Sovereignty and Cyberspace by Sean Watts, Theodore T. Richard :: SSRN

decentralization | papers | regulation | Research Notes


The question of how territorial sovereignty operates in the interconnected yet diffuse, virtual yet material, and novel yet ubiquitous realm of cyberspace has proved enormously contentious. State practice in cyberspace presents a confusing array of behavior and justifications for conduct that runs along the enduring legal fault lines of territorial sovereignty. This article examines the legal history of sovereignty, emerging State cyber practice, and early legal views taken with respect to the application of sovereignty to cyberspace.

We concede contextual variations and exceptions to the integrity of territorial sovereignty have evolved for specialized domains such as the seas. However, we identify in territorial sovereignty a baseline rule of conduct and a corresponding duty on the part of States to refrain from interference with the integrity of conditions in other States’ territory. We argue that based on historical origins, legal evolution, international litigation, and recent State expressions concerning applicability of international law to cyberspace, the baseline rules of territorial sovereignty should be currently understood as a rule of conduct that generally prohibits States’ nonconsensual interference with the integrity of cyber infrastructure on the territory of other States.

We acknowledge that States may soon adapt sovereignty to operate differently in cyberspace, as they have in other contexts of international relations. However, in the absence of a lex specialis of cyber sovereignty and until States resort to deliberate international lawmaking, the baseline guarantee of territorial integrity provides a principled and normatively desirable understanding of sovereignty and how it relates to cyberspace. We urge States to act quickly to reaffirm their commitment to baseline Westphalian norms of territorial sovereignty in cyberspace while crafting, through accepted means of international legal development, a nuanced and effective doctrine of territorial sovereignty in cyberspace. A sound approach will acknowledge the binding legal character of territorial sovereignty as a limit on foreign interference but offer an emerging cyber-specific understanding much like that developed for other domains that have challenged national security and peaceful interactions between States.

Keywords: Cyberspace, Cyber, Sovereignty, Public International Law, State Responsibility, Computer, Violation of Sovereignty, Network

Source: Baseline Territorial Sovereignty and Cyberspace by Sean Watts, Theodore T. Richard :: SSRN

On Radical Markets

algorithms | blockchain | decentralization | discourse | ecosystem | governance | opinion | papers | politics | regulation | Research Notes | smart contracts

Another Kind of Radical Market

The book as a whole tends to focus on centralized reforms that could be implemented on an economy from the top down, even if their intended long-term effect is to push more decision-making power to individuals. The proposals involve large-scale restructurings of how property rights work, how voting works, how immigration and antitrust law works, and how individuals see their relationship with property, money, prices and society. But there is also the potential to use economics and game theory to come up with decentralized economic institutions that could be adopted by smaller groups of people at a time.

Perhaps the most famous examples of decentralized institutions from game theory and economics land are (i) assurance contracts, and (ii) prediction markets. An assurance contract is a system where some public good is funded by giving anyone the opportunity to pledge money, and only collecting the pledges if the total amount pledged exceeds some threshold. This ensures that people can donate money knowing that either they will get their money back or there actually will be enough to achieve some objective. A possible extension of this concept is Alex Tabarrok’s dominant assurance contracts, where an entrepreneur offers to refund participants more than 100% of their deposits if a given assurance contract does not raise enough money.

Prediction markets allow people to bet on the probability that events will happen, potentially even conditional on some action being taken (“I bet $20 that unemployment will go down if candidate X wins the election”); there are techniques for people interested in the information to subsidize the markets. Any attempt to manipulate the probability that a prediction market shows simply creates an opportunity for people to earn free money (yes I know, risk aversion and capital efficiency etc etc; still close to free) by betting against the manipulator.

Posner and Weyl do give one example of what I would call a decentralized institution: a game for choosing who gets an asset in the event of a divorce or a company splitting in half, where both sides provide their own valuation, the person with the higher valuation gets the item, but they must then give an amount equal to half the average of the two valuations to the loser. There’s some economic reasoning by which this solution, while not perfect, is still close to mathematically optimal.

One particular category of decentralized institutions I’ve been interested in is improving incentivization for content posting and content curation in social media. Some ideas that I have had include:

  • Proof of stake conditional hashcash(when you send someone an email, you give them the opportunity to burn $0.5 of your money if they think it’s spam)
  • Prediction markets for content curation(use prediction markets to predict the results of a moderation vote on content, thereby encouraging a market of fast content pre-moderators while penalizing manipulative pre-moderation)
  • Conditional payments for paywalled content (after you pay for a piece of downloadable content and view it, you can decide after the fact if payments should go to the author or to proportionately refund previous readers)

And ideas I have had in other contexts:

Twitter scammers: can prediction markets incentivize an autonomous swarm of human and AI-driven moderators to flag these posts and warn users not to send them ether within a few seconds of the post being made? And could such a system be generalized to the entire internet, where these is no single centralized moderator that can easily take posts down?

Some ideas others have had for decentralized institutions in general include:

I would be interested in hearing Posner and Weyl’s opinion on these kinds of “radical markets”, that groups of people can spin up and start using by themselves without requiring potentially contentious society-wide changes to political and property rights. Could decentralized institutions like these be used to solve the key defining challenges of the twenty first century: promoting beneficial scientific progress, developing informational public goods, reducing global wealth inequality, and the big meta-problem behind fake news, government-driven and corporate-driven social media censorship, and regulation of cryptocurrency products: how do we do quality assurance in an open society?

All in all, I highly recommend Radical Markets(and by the way I also recommend Eliezer Yudkowsky’s Inadequate Equilibria) to anyone interested in these kinds of issues, and look forward to seeing the discussion that the book generates.

Blockchain: The Birth of Decentralized Governance by Benito Arruñada, Luis Garicano 

blockchain | governance | papers | quantitative analysis | Research Notes


By allowing networks to split, decentralized blockchain platforms protect members against hold up, but hinder coordination, given that adaptation decisions are ultimately decentralized. The current solutions to improve coordination, based on “premining” cryptocoins, taxing members and incentivizing developers, are insufficient. For blockchain to fulfill its promise and outcompete centralized firms, it needs to develop new forms of “soft” decentralized governance (anarchic, aristocratic, democratic, and autocratic) that allow networks to avoid bad equilibria.

Keywords: blockchain, platforms, networks, hold-up, coordination, relational capital, incomplete contracts, decentralized governance

Source: Blockchain: The Birth of Decentralized Governance by Benito Arruñada, Luis Garicano :: SSRN

Digital Art as ‘Monetised Graphics’: Enforcing Intellectual Property on the Blockchain | SpringerLink

applications | blockchain | copyright | papers | Research Notes

In a global economic landscape of hyper-commodification and financialisation, efforts to assimilate digital art into the high-stakes commercial art market have so far been rather unsuccessful, presumably because digital artworks cannot easily assume the status of precious object worthy of collection. This essay explores the use of blockchain technologies in attempts to create proprietary digital art markets in which uncommodifiable digital artworks are financialised as artificially scarce commodities. Using the decentralisation techniques and distributed database protocols underlying current cryptocurrency technologies, such efforts, exemplified here by the platform Monegraph, tend to be presented as concerns with the interest of digital artists and with shifting ontologies of the contemporary work of art. I challenge this characterisation, and argue, in a discussion that combines aesthetic theory, legal and philosophical theories of intellectual property, rhetorical analysis and research in the political economy of new media, that the formation of proprietary digital art markets by emerging commercial platforms such as Monegraph constitutes a worrisome amplification of long-established, on-going efforts to fence in creative expression as private property. As I argue, the combination of blockchain-based protocols with established ambitions of intellectual property policy yields hybrid conceptual-computational financial technologies (such as self-enforcing smart contracts attached to digital artefacts) that are unlikely to empower artists but which serve to financialise digital creative practices as a whole, curtailing the critical potential of the digital as an inherently dynamic and potentially uncommodifiable mode of production and artistic expression.

Source: Digital Art as ‘Monetised Graphics’: Enforcing Intellectual Property on the Blockchain | SpringerLink

Towards a Philosophy of Financial Technologies | SpringerLink

finance | papers | Research Notes

This special issue introduces the study of financial technologies and finance to the field of philosophy of technology, bringing together two different fields that have not traditionally been in dialogue. The included articles are: Digital Art as ‘Monetised Graphics’: Enforcing Intellectual Property on the Blockchain, by Martin Zeilinger; Fundamentals of Algorithmic Markets: Liquidity, Contingency, and the Incomputability of Exchange, by Laura Lotti; ‘Crises of Modernity’ Discourses and the Rise of Financial Technologies in a Contested Mechanized World, by Marinus Ossewaarde; Two Technical Images: Blockchain and High-Frequency Trading, by Diego Viana; and The Blockchain as a Narrative Technology: Investigating the Social Ontology and Normative Configurations of Cryptocurrencies, by Wessel Reijers and Mark Coeckelbergh.

Source: Towards a Philosophy of Financial Technologies | SpringerLink

Environmentalism in Cryptoanarchism: Gridcoin Case Study by Usman Chohan :: SSRN

cryptocurrencies | papers | politics | Research Notes

This paper discusses the intersection of environmentalism and cryptoanarchism, in the form of Gridcoin, a cryptocurrency which aims to mitigate the environmental impact of cryptocurrency mining, through the implementation of two methods: a Proof-of-Research scheme and a Proof-of-Stake protocol. This raises questions about the need for an environment-friendly consideration of the costs of cryptocurrency mining.

Source: Environmentalism in Cryptoanarchism: Gridcoin Case Study by Usman Chohan :: SSRN