Computer Law Commons^™

After Ftx: Can The Original Bitcoin Use Case Be Saved?, Mark Burge

Faculty Scholarship

Bitcoin and the other cryptocurrencies spawned by the innovation of blockchain programming have exploded in prominence, both in gains of massive market value and in dramatic market losses, the latter most notably seen in connection with the failure of the FTX cryptocurrency exchange in November 2022. After years of investment and speculation, however, something crucial has faded: the original use case for Bitcoin as a system of payment. Can cryptocurrency-as-a-payment-system be saved, or are day traders and speculators the actual cryptocurrency future? This article suggests that cryptocurrency has been hobbled by a lack of foundational commercial and consumer-protection law that …

Governing Smart Cities As Knowledge Commons - Introduction, Chapter 1 & Conclusion, Brett M. Frischmann, Michael J. Madison, Madelyn Sanfilippo

Book Chapters

Smart city technology has its value and its place; it isn’t automatically or universally harmful. Urban challenges and opportunities addressed via smart technology demand systematic study, examining general patterns and local variations as smart city practices unfold around the world. Smart cities are complex blends of community governance institutions, social dilemmas that cities face, and dynamic relationships among information and data, technology, and human lives. Some of those blends are more typical and common. Some are more nuanced in specific contexts. This volume uses the Governing Knowledge Commons (GKC) framework to sort out relevant and important distinctions. The framework grounds …

The Failure Of Market Efficiency, William Magnuson

Faculty Scholarship

Recent years have witnessed the near total triumph of market efficiency as a regulatory goal. Policymakers regularly proclaim their devotion to ensuring efficient capital markets. Courts use market efficiency as a guiding light for crafting legal doctrine. And scholars have explored in great depth the mechanisms of market efficiency and the role of law in promoting it. There is strong evidence that, at least on some metrics, our capital markets are indeed more efficient than they have ever been. But the pursuit of efficiency has come at a cost. By focusing our attention narrowly on economic efficiency concerns—such as competition, …

Too Much Of A Good Thing? A Governing Knowledge Commons Review Of Abundance In Context, Michael J. Madison, Brett M. Frischmann, Madelyn Sanfilippo, Katherine J. Strandburg

Articles

The economics of abundance, along with the sociology of abundance, the law of abundance, and so forth, should be re-framed, linked, and situated in a common context for empirical rather than conceptual research. Abundance may seem to be a new, big thing, between anxiety over information overload, Big Data, and related technological disruptions. But scholars know that abundance is an ancient phenomenon, which only seemed to disappear as twentieth century social science focused on scarcity instead. Restoring the study of abundance, and figuring out how to solve the problems that abundance might create, means shedding disciplinary blinders and going back …

Government By Code? Blockchain Applications To Public Sector Governance, Pedro Bustamante, Meina Cai, Marcela Gomez, Colin Harris, Prashabnt Krishnamurthy, Wilson Law, Michael J. Madison, Ilia Murtazashvili, Jennifer Brick Murtazashvili, Tymofiy Mylovanov, Nataliia Shapoval, Annette Vee, Martin B. H. Weiss

Articles

Studies of blockchain governance can be divided into analyses of the governance of blockchains (such as rules and power dynamics within a given network) and governance by blockchains (such as how blockchains can be implemented to improve self-governance of community-based peer production networks). Less emphasis has been placed on applications of distributed ledgers to public sector governance. Our review clarifies that the decentralization and distributive features that enable blockchains to link up loosely connected private organizations and public agencies to improve efficiency and transparency of government transactions. However, most blockchain applications lack clear advantages over the conventional digital recording of …

Blockchain Networks As Knowledge Commons, Ilia Murtazashvili, Jennifer Brick Murtazashvili, Martin B. H. Weiss, Michael J. Madison

Articles

Researchers interested in blockchains are increasingly attuned to questions of governance, including how blockchains relate to government, the ways blockchains are governed, and ways blockchains can improve prospects for successful self-governance. Our paper joins this research by exploring the implications of the Governing Knowledge Commons (GKC) framework to analyze governance of blockchains. Our novel contributions are making the case that blockchain networks represent knowledge commons governance, in the sense that they rely on collectively-managed technologies to pool and manage distributed information, illustrating the usefulness and novelty of the GCK methodology with an empirical case study of the evolution of Bitcoin, …

Computational Complexity And Tort Deterrence, Joshua C. Teitelbaum

Georgetown Law Faculty Publications and Other Works

Standard formulations of the economic model of tort deterrence constitute the injurer as the unboundedly rational bad man. Unbounded rationality implies that the injurer can always compute the solution to his care-taking problem. This in turn implies that optimal liability rules can provide robust deterrence, for they can always induce the injurer to take socially optimal care. In this paper I examine the computational complexity of the injurer's care-taking problem. I show that the injurer's problem is computationally tractable when the precaution set is unidimensional or convex, but that it is computationally intractable when the precaution set is multidimensional and …

Beyond Algorithms: Toward A Normative Theory Of Automated Regulation, Felix Mormann

Faculty Scholarship

The proliferation of artificial intelligence in our daily lives has spawned a burgeoning literature on the dawn of dehumanized, algorithmic governance. Remarkably, the scholarly discourse overwhelmingly fails to acknowledge that automated, non-human governance has long been a reality. For more than a century, policymakers have relied on regulations that automatically adjust to changing circumstances, without the need for human intervention. This article surveys the track record of self-adjusting governance mechanisms to propose a normative theory of automated regulation.

Effective policymaking frequently requires anticipation of future developments, from technology innovation to geopolitical change. Self-adjusting regulation offers an insurance policy against the …

Is Data Localization A Solution For Schrems Ii?, Anupam Chander

Georgetown Law Faculty Publications and Other Works

For the second time this decade, the Court of Justice of the European Union has struck a blow against the principal mechanisms for personal data transfer to the United States. In Data Protection Commissioner v Facebook Ireland, Maximillian Schrems, the Court declared the EU-US Privacy Shield invalid and placed significant hurdles to the process of transferring personal data from the European Union to the United States via the mechanism of Standard Contractual Clauses. Many have begun to suggest data localization as the solution to the problem of data transfer; that is, don’t transfer the data at all. I argue …

Transactional Scripts In Contract Stacks, Shaanan Cohney, David A. Hoffman

All Faculty Scholarship

Deals accomplished through software persistently residing on computer networks—sometimes called smart contracts, but better termed transactional scripts—embody a potentially revolutionary contracting innovation. Ours is the first precise account in the legal literature of how such scripts are created, and when they produce errors of legal significance.

Scripts’ most celebrated use case is for transactions operating exclusively on public, permissionless, blockchains: such exchanges eliminate the need for trusted intermediaries and seem to permit parties to commit ex ante to automated performance. But public transactional scripts are costly both to develop and execute, with significant fees imposed for data storage. Worse, bugs …

Back To The Future Of Cyber Insurance, Tom Baker

All Faculty Scholarship

Written for an insurance trade publication, this brief essay identifies five ways that insurers manage uncertainty in selling cyber insurance: (1) providing valuable services beyond risk transfer; (2) contract design, (3) rapid iteration of pricing and forms, (4) limits management and reinsurance, and (5) claims disputing. Cyber insurers provide easy-to-price loss prevention and mitigation services so that the value proposition includes more than the (difficult to price) risk transfer. Cyber insurers design their contracts to include narrowly defined categories of coverage, typically with separate limits and with claims-made coverage for liability risks, and traditional insurers design their contracts to limit …

Paul Baran, Network Theory, And The Past, Present, And Future Of Internet, Christopher S. Yoo

All Faculty Scholarship

Paul Baran’s seminal 1964 article “On Distributed Communications Networks” that first proposed packet switching also advanced an underappreciated vision of network architecture: a lattice-like, distributed network, in which each node of the Internet would be homogeneous and equal in status to all other nodes. Scholars who have subsequently embraced the concept of a lattice-like network approach have largely overlooked the extent to which it is both inconsistent with network theory (associated with the work of Duncan Watts and Albert-László Barabási), which emphasizes the importance of short cuts and hubs in enabling networks to scale, and the actual way, the Internet …

Regulating Robo Advice Across The Financial Services Industry, Tom Baker, Benedict G. C. Dellaert

All Faculty Scholarship

Automated financial product advisors – “robo advisors” – are emerging across the financial services industry, helping consumers choose investments, banking products, and insurance policies. Robo advisors have the potential to lower the cost and increase the quality and transparency of financial advice for consumers. But they also pose significant new challenges for regulators who are accustomed to assessing human intermediaries. A well-designed robo advisor will be honest and competent, and it will recommend only suitable products. Because humans design and implement robo advisors, however, honesty, competence, and suitability cannot simply be assumed. Moreover, robo advisors pose new scale risks that …

Common Carriage’S Domain, Christopher S. Yoo

All Faculty Scholarship

The judicial decision invalidating the Federal Communications Commission's first Open Internet Order has led advocates to embrace common carriage as the legal basis for network neutrality. In so doing, network neutrality proponents have overlooked the academic literature on common carriage as well as lessons from its implementation history. This Essay distills these learnings into five factors that play a key role in promoting common carriage's success: (1) commodity products, (2) simple interfaces, (3) stability and uniformity in the transmission technology, (4) full deployment of the transmission network, and (5) stable demand and market shares. Applying this framework to the Internet …

The Tax Treatment Of Tokens: What Does It Betoken?, David J. Shakow

All Faculty Scholarship

Digital tokens have been used to raise substantial amounts of money. But little attention has been paid to the tax consequences surrounding their issuance and sale. There are significant potential tax liabilities lurking in the use of digital tokens. But, because of the anonymity inherent in the blockchain structures used for the issuance of tokens and payments for them, there is a significant question as to whether those tax liabilities will ever be collected.

Regulating By Robot: Administrative Decision Making In The Machine-Learning Era, Cary Coglianese, David Lehr

All Faculty Scholarship

Machine-learning algorithms are transforming large segments of the economy, underlying everything from product marketing by online retailers to personalized search engines, and from advanced medical imaging to the software in self-driving cars. As machine learning’s use has expanded across all facets of society, anxiety has emerged about the intrusion of algorithmic machines into facets of life previously dependent on human judgment. Alarm bells sounding over the diffusion of artificial intelligence throughout the private sector only portend greater anxiety about digital robots replacing humans in the governmental sphere. A few administrative agencies have already begun to adopt this technology, while others …

Blockchain, Bitcoin, And Vat In The Gcc: The Missing Trader Example, Richard Thompson Ainsworth, Musaad Alwohaibi

Faculty Scholarship

Blockchain is coming to tax administration and will cause fundamental change. This article considers the potential for blockchain technology as it applies to the introduction of a value added tax in the Gulf Cooperation Council.

Blockchain technology disrupts centralized ledgers. Blockchain improves efficiency, security and transparency. Perhaps no centralized ledger system presents more challenges than that of the modern tax administration. The central data storage system of a modern tax authority contains all return, payment, and audit activity for all taxpayers arranged tax-by-tax for three years or longer periods of time.

It is likely that blockchain will come first to …

Open Source, Modular Platforms, And The Challenge Of Fragmentation, Christopher S. Yoo

All Faculty Scholarship

Open source and modular platforms represent two powerful conceptual paradigms that have fundamentally transformed the software industry. While generally regarded complementary, the freedom inherent in open source rests in uneasy tension with the strict structural requirements required by modularity theory. In particular, third party providers can produce noncompliant components, and excessive experimentation can fragment the platform in ways that reduce its economic benefits for end users and app providers and force app providers to spend resources customizing their code for each variant. The classic solutions to these problems are to rely on some form of testing to ensure that the …

Vatcoin: The Gcc's Cryptotaxcurrency, Richard Thompson Ainsworth, Musaad Alwohaibi, Mike Cheetham

Faculty Scholarship

Bitcoin is the world’s first peer-to-peer cryptocurrency. VATCoin is similar, but it is used in tax compliance. Both Bitcoin and VATCoin are distributive ledger applications built upon blockchain technology. Bitcoin’s ledger is public; VATCoin’s is private. If adopted, VATCoin could well become the world’s first government-mandated cryptotaxcurrency. Unlike Bitcoin, VATCoin will not be a speculative currency. It is always fixed to the home currency.

This paper proposes that the Gulf Cooperation Council (GCC) adopt VATCoin in its VAT Framework. The GCC is expected to have multiple 5% VATs in place by January 1, 2018. There is an ample amount of …

Modularity Theory And Internet Regulation, Christopher S. Yoo

All Faculty Scholarship

Modularity is often cited as one of the foundations for the Internet’s success. Unfortunately, academic discussions about modularity appearing in the literature on Internet policy are undertheorized. The persistence of nonmodular architectures for some technologies underscores the need for some theoretical basis for determining when modularity is the preferred approach. Even when modularity is desirable, theory must provide some basis for making key design decisions, such as the number of modules, the location of the interfaces between the modules, and the information included in those interfaces.

The literature on innovation indicates that modules should be determined by the nature of …

Cloud Computing, Contractibility, And Network Architecture, Christopher S. Yoo

All Faculty Scholarship

The emergence of the cloud is heightening the demands on the network in terms of bandwidth, ubiquity, reliability, latency, and route control. Unfortunately, the current architecture was not designed to offer full support for all of these services or to permit money to flow through it. Instead of modifying or adding specific services, the architecture could redesigned to make Internet services contractible by making the relevant information associated with these services both observable and verifiable. Indeed, several on-going research programs are exploring such strategies, including the NSF’s NEBULA, eXpressive Internet Architecture (XIA), ChoiceNet, and the IEEE’s Intercloud projects.

The Self, The Stasi, The Nsa: Privacy, Knowledge, And Complicity In The Surveillance State, Richard Warner, Robert H. Sloan

All Faculty Scholarship

We focus on privacy in public. The notion dates back over a century, at least to the work of the German sociologist, Georg Simmel. Simmel observed that people voluntarily limit their knowledge of each other as they interact in a wide variety of social and commercial roles, thereby making certain information private relative to the interaction even if it is otherwise publicly available. Current governmental surveillance in the US (and elsewhere) reduces privacy in public. But to what extent?

The question matters because adequate self-realization requires adequate privacy in public. That in turn depends on informational norms, social norms that …

Moore’S Law, Metcalfe’S Law, And The Theory Of Optimal Interoperability, Christopher S. Yoo

All Faculty Scholarship

Many observers attribute the Internet’s success to two principles: Moore’s Law and Metcalfe’s Law. These precepts are often cited to support claims that larger networks are inevitably more valuable and that costs in a digital environment always decrease. This Article offers both a systematic description of both laws and then challenges the conventional wisdom by exploring their conceptual limitations. It also explores how alternative mechanisms, such as gateways and competition, can permit the realization benefits typically attributed to Moore’s Law and Metcalfe’s Law without requiring increases in network size.

Wickard For The Internet? Network Neutrality After Verizon V. Fcc, Christopher S. Yoo

All Faculty Scholarship

The D.C. Circuit’s January 2014 decision in Verizon v. FCC represented a major milestone in the debate over network neutrality that has dominated communications policy for the past decade. This article analyzes the implications of the D.C. Circuit’s ruling, beginning with a critique of the court’s ruling that section 706 of the Telecommunications Act of 1996 gave the Federal Communications Commission (FCC) the authority to mandate some form of network neutrality. Examination of the statute’s text, application of canons of construction such as ejusdem generis and noscitur a sociis, and a perusal of the statute’s legislative history all raise questions …

A Brief Overview Of The Nebula Future Internet Architecture, Tom Anderson, Ken Birman, Robert Broberg, Matthew Caesar, Douglas Comer, Chase Cotton, Michael J. Freedman, Andreas Haeberlen, Zachary G. Ives, Arvind Krishnamurthy, William Lehr, Boon Thau Loo, David Mazieres, Antonio Nicolosi, Jonathan M. Smith, Ion Stoica, Robbert Van Renesse, Michael Walfish, Hakim Weatherspoon, Christopher S. Yoo

All Faculty Scholarship

NEBULA is a proposal for a Future Internet Architecture. It is based on the assumptions that: (1) cloud computing will comprise an increasing fraction of the application workload offered to an Internet, and (2) that access to cloud computing resources will demand new architectural features from a network. Features that we have identified include dependability, security, flexibility and extensibility, the entirety of which constitute resilience.

NEBULA provides resilient networking services using ultrareliable routers, an extensible control plane and use of multiple paths upon which arbitrary policies may be enforced. We report on a prototype system, Zodiac, that incorporates these latter …

Possible Paradigm Shifts In Broadband Policy, Christopher S. Yoo

All Faculty Scholarship

Debates over Internet policy tend to be framed by the way the Internet existed in the mid-1990s, when the Internet first became a mass-market phenomenon. At the risk of oversimplifying, the Internet was initially used by academics and tech-savvy early adopters to send email and browse the web over a personal computer connected to a telephone line via networks interconnected through in a limited way. Since then, the Internet has become much larger and more diverse in terms of users, applications, technologies, and business relationships. More recently, Internet growth has begun to slow both in terms of the number of …

Toward A Closer Integration Of Law And Computer Science, Christopher S. Yoo

All Faculty Scholarship

Legal issues increasingly arise in increasingly complex technological contexts. Prominent recent examples include the Stop Online Piracy Act (SOPA) and the Protect Intellectual Property Act (PIPA), network neutrality, the increasing availability of location information, and the NSA’s surveillance program. Other emerging issues include data privacy, online video distribution, patent policy, and spectrum policy. In short, the rapid rate of technological change has increasingly shown that law and engineering can no longer remain compartmentalized into separate spheres. The logical response would be to embed the interaction between law and policy deeper into the fabric of both fields. An essential step would …

The Taxation Of Cloud Computing And Digital Content, David Shakow

All Faculty Scholarship

“Cloud computing” raises important and difficult questions in state tax law, and for Federal taxes, particularly in the foreign tax area. As cloud computing solutions are adopted by businesses, items we view as tangible are transformed into digital products. In this article, I will describe the problems cloud computing poses for tax systems. I will show how current law is applied to cloud computing and will identify the difficulties current approaches face as they are applied to this developing technology.

My primary interest is how Federal tax law applies to cloud computing, particularly as the new technology affects international transactions. …

Is There A Role For Common Carriage In An Internet-Based World?, Christopher S. Yoo

All Faculty Scholarship

During the course of the network neutrality debate, advocates have proposed extending common carriage regulation to broadband Internet access services. Others have endorsed extending common carriage to a wide range of other Internet-based services, including search engines, cloud computing, Apple devices, online maps, and social networks. All too often, however, those who focus exclusively on the Internet era pay too little attention to the lessons of the legacy of regulated industries, which has long struggled to develop a coherent rationale for determining which industries should be subject to common carriage. Of the four rationales for determining the scope of common …

The Electronic Silk Road: How The Web Binds The World In Commerce, Anupam Chander

Georgetown Law Faculty Publications and Other Works

On the ancient Silk Road, treasure-laden caravans made their arduous way through deserts and mountain passes, establishing trade between Asia and the civilizations of Europe and the Mediterranean. Today’s electronic Silk Roads ferry information across continents, enabling individuals and corporations anywhere to provide or receive services without obtaining a visa. But the legal infrastructure for such trade is yet rudimentary and uncertain. If an event in cyberspace occurs at once everywhere and nowhere, what law applies? How can consumers be protected when engaging with companies across the world?

In this accessible book, cyber-law expert Anupam Chander provides the first thorough …