# Blockchain `kaal:entity:blockchain` **Status.** derived This node is assembled mechanically from the 146 claims that carry the concept tag `blockchain`. It is a roster of what the corpus says under this term. It is **not** an adjudicated definition: no single statement here has been ruled canonical, and no first-appearance call has been made. Read the claims and judge for yourself. ## Every claim under this term 146 claims across 36 works, 2017 to 2025. **2017** - [2922176-020](https://wulfkaal.github.io/claims/2922176-020) [predictive/asserted] -- Blockchain-based smart contracts in digital marketplaces are the technology most likely to extend and lead the decentralization of the relationship between businesses and their counterparties. > In particular, blockchain-based smart contracts in digital marketplaces are predisposed to extend and lead these decentralization changes. Mark Fenwick, Wulf A. Kaal, Erik P. M. Vermeulen, The ‘Unmediated’ and ‘Tech-Driven’ Corporate Governance of Today's Winning Companies (2017). SSRN: https://ssrn.com/abstract=2922176 - [2922176-034](https://wulfkaal.github.io/claims/2922176-034) [predictive/argued] -- Critics who dismiss artificial intelligence on boards as science fiction not worth engaging are wrong: AI on boards is a real prospect, and technologies such as blockchain-based smart contracts will both disrupt corporate governance and supply solutions to it. > Critics who argue that it is pointless to concern oneself with future science-fiction-type prospects are wrong. Mark Fenwick, Wulf A. Kaal, Erik P. M. Vermeulen, The ‘Unmediated’ and ‘Tech-Driven’ Corporate Governance of Today's Winning Companies (2017). SSRN: https://ssrn.com/abstract=2922176 - [2922176-035](https://wulfkaal.github.io/claims/2922176-035) [failure/evidenced] *(failure mode)* -- Fundamental flaws in the DAO's code allowed hackers to move one third of contributed funds to a subsidiary account, ending that initiative, but the flaws were in the implementation and do not defeat the DAO vision, which developers continue to rebuild. > The initial DAO did not end well, but DAO enthusiasts and coders are developing new structures to address the flaws of the existing DAO infrastructure. Fundamental flaws in the DAO code made it possible for hackers to transfer one third of the total contributed funds to a subsidiary account. Mark Fenwick, Wulf A. Kaal, Erik P. M. Vermeulen, The ‘Unmediated’ and ‘Tech-Driven’ Corporate Governance of Today's Winning Companies (2017). SSRN: https://ssrn.com/abstract=2922176 - [2922176-036](https://wulfkaal.github.io/claims/2922176-036) [definitional/argued] -- In a decentralized autonomous organization a series of smart contracts grants token holders voting rights, so the blockchain-based smart contract performs the function that articles of incorporation or bylaws perform in a conventional company. > A series of smart contracts granted token holders voting rights. In this respect, the blockchain-based smart contract mimics the role of articles of incorporation or bylaws. Mark Fenwick, Wulf A. Kaal, Erik P. M. Vermeulen, The ‘Unmediated’ and ‘Tech-Driven’ Corporate Governance of Today's Winning Companies (2017). SSRN: https://ssrn.com/abstract=2922176 - [2939127-004](https://wulfkaal.github.io/claims/2939127-004) [mechanism/speculative] -- Law schools that invest early in artificial intelligence, machine learning, and blockchain will gain a comparative advantage over peer schools irrespective of ranking, because demand for lawyers trained in those technologies is likely to spike once law firm adoption crosses a threshold. > comparative advantage vis-à-vis their peers, regardless of the ranking of such school, because the demand for lawyers adequately trained in artfical intelligence, machine learning, and blockchain is likely to increase sharply at a threshold point of law firm adoption. Mark Fenwick, Wulf A. Kaal, Erik P. M. Vermeulen, Legal Education in the Blockchain Revolution (2017). SSRN: https://ssrn.com/abstract=2939127 - [2939127-013](https://wulfkaal.github.io/claims/2939127-013) [mechanism/argued] -- The counseling, deal making, matchmaking, gatekeeping, and enforcement roles historically performed by lawyers are increasingly performed by technology, and blockchain technology and smart contracting will accelerate that substitution. > However, the counseling, deal-making, matchmaking, gatekeeping, and enforcing roles are increasingly performed by technology.43 This trend is likely to accelerate in the near future, enabled by blockchain technology and smart contracting. Mark Fenwick, Wulf A. Kaal, Erik P. M. Vermeulen, Legal Education in the Blockchain Revolution (2017). SSRN: https://ssrn.com/abstract=2939127 - [2939127-014](https://wulfkaal.github.io/claims/2939127-014) [mechanism/argued] -- Because a public blockchain is genuinely public and immutable, it increases transparency while simultaneously and significantly reducing transaction costs. > Because the blockchain (at the least the public blockchain) is in fact public and immutable, the technology increases transparency, while at the same time significantly reducing transaction costs. Mark Fenwick, Wulf A. Kaal, Erik P. M. Vermeulen, Legal Education in the Blockchain Revolution (2017). SSRN: https://ssrn.com/abstract=2939127 - [2939127-015](https://wulfkaal.github.io/claims/2939127-015) [mechanism/asserted] -- Intermediaries, lawyers among them, are replaced by code, connectivity, crowd, and collaboration. > Intermediaries, including lawyers, are replaced by code, connectivity, crowd, and collaboration. Mark Fenwick, Wulf A. Kaal, Erik P. M. Vermeulen, Legal Education in the Blockchain Revolution (2017). SSRN: https://ssrn.com/abstract=2939127 - [2939127-016](https://wulfkaal.github.io/claims/2939127-016) [mechanism/argued] -- It is the completely decentralized network connectivity of the blockchain via the Internet, more than the use of digital signatures to establish party identity and authenticity, that provides the strongest protection against fraud. > While blockchain's use of digital signatures helps establish the identity and authenticity of the parties involved in the transaction, it is the completely decentralized network connectivity via the Internet that allows the most protection against fraud. Mark Fenwick, Wulf A. Kaal, Erik P. M. Vermeulen, Legal Education in the Blockchain Revolution (2017). SSRN: https://ssrn.com/abstract=2939127 - [2939127-017](https://wulfkaal.github.io/claims/2939127-017) [mechanism/argued] -- Blockchain's distributed consensus model permits node verification of transactions without compromising the privacy of the parties, which makes it arguably safer than a traditional model requiring third party intermediary validation. > That model also allows node verification of transactions without compromising the privacy of the parties and is therefore arguably safer than a traditional model that requires third-party intermediary validation of transactions. Mark Fenwick, Wulf A. Kaal, Erik P. M. Vermeulen, Legal Education in the Blockchain Revolution (2017). SSRN: https://ssrn.com/abstract=2939127 - [2939127-018](https://wulfkaal.github.io/claims/2939127-018) [condition/argued] -- Smart contract arrangements involving several parties and greater complexity require the verifiable and unhackable system that blockchain technology supplies. > More complex smart contract arrangements in which several parties are involved require a verifiable and unhackable system provided by blockchain technology. Mark Fenwick, Wulf A. Kaal, Erik P. M. Vermeulen, Legal Education in the Blockchain Revolution (2017). SSRN: https://ssrn.com/abstract=2939127 - [2939127-019](https://wulfkaal.github.io/claims/2939127-019) [mechanism/argued] -- Smart contracting on a blockchain often makes conventional legal contracting unnecessary, because smart contracts emulate the logic of legal contract clauses. > Through blockchain technology, smart contracting often makes contractual legal contracting unnecessary as smart contracts often emulate the logic of legal contract clauses. Mark Fenwick, Wulf A. Kaal, Erik P. M. Vermeulen, Legal Education in the Blockchain Revolution (2017). SSRN: https://ssrn.com/abstract=2939127 - [2939127-020](https://wulfkaal.github.io/claims/2939127-020) [mechanism/argued] -- Increased connectivity enabled by blockchain technology, combined with increased decentralization, allows the removal of intermediaries including lawyers, financial intermediaries, and platform companies. > Increased connectivity enabled by blockchain technology in combination with increased decentralization allows for the removal of intermediaries, including lawyers, financial intermediaries, and platform companies. Mark Fenwick, Wulf A. Kaal, Erik P. M. Vermeulen, Legal Education in the Blockchain Revolution (2017). SSRN: https://ssrn.com/abstract=2939127 - [2939127-021](https://wulfkaal.github.io/claims/2939127-021) [empirical/evidenced] -- Venture capital investment in blockchain startups has grown exponentially since 2012, which the authors read as an indicator of the technology's commercial maturity. > Figure 2 shows that venture capital (VC) investment in startup companies that utilize blockchain technology has increased exponentially since 2012. Mark Fenwick, Wulf A. Kaal, Erik P. M. Vermeulen, Legal Education in the Blockchain Revolution (2017). SSRN: https://ssrn.com/abstract=2939127 - [2939127-022](https://wulfkaal.github.io/claims/2939127-022) [condition/argued] -- Once blockchain technology gains wider acceptance and its applications reach consumers, existing legal processes and structures will likely be among the first processes to become redundant. > When blockchain technology becomes more widely accepted and applications spread into consumer territory, existing legal processes and structures will likely be among the first processes to become redundant. Mark Fenwick, Wulf A. Kaal, Erik P. M. Vermeulen, Legal Education in the Blockchain Revolution (2017). SSRN: https://ssrn.com/abstract=2939127 - [2939127-023](https://wulfkaal.github.io/claims/2939127-023) [mechanism/argued] -- Leveraging the big data collected through Legal Tech solutions and blockchain applications in combination with machine learning produces more creative and faster tools, which in turn generates a surge of innovative platforms that disrupt the legal industry. > Leveraging the big data that is collected by using Legal Tech solutions and blockchain applications in combination with machine learning creates more creative and faster tools. Mark Fenwick, Wulf A. Kaal, Erik P. M. Vermeulen, Legal Education in the Blockchain Revolution (2017). SSRN: https://ssrn.com/abstract=2939127 - [2939127-024](https://wulfkaal.github.io/claims/2939127-024) [failure/argued] *(failure mode)* -- The world of blockchain and smart contracting has clearly not reached maturity, which is the first of several technological and legal limitations facing blockchain and smart contracts. > First, the world of blockchain and smart contracting has clearly not reached maturity yet. Mark Fenwick, Wulf A. Kaal, Erik P. M. Vermeulen, Legal Education in the Blockchain Revolution (2017). SSRN: https://ssrn.com/abstract=2939127 - [2939127-025](https://wulfkaal.github.io/claims/2939127-025) [mechanism/argued] -- Contrary to the widespread belief among legal professionals that code can only handle very simple transactions, blockchain enabled smart contracts generally do not require legal involvement across the spectrum of transactions. > While blockchain-enabled smart contracts generally do not require legal involvement across the spectrum of transactions, legal professionals often still believe that "code" in smart contracts can only deal with very simple transactions Mark Fenwick, Wulf A. Kaal, Erik P. M. Vermeulen, Legal Education in the Blockchain Revolution (2017). SSRN: https://ssrn.com/abstract=2939127 - [2939127-028](https://wulfkaal.github.io/claims/2939127-028) [failure/argued] *(failure mode)* -- Although blockchain technology itself offers unprecedented data and privacy protection, storing blockchain data across a global network of nodes often will not comply with the consumer protection rules, directives, and guidelines of particular jurisdictions. > While blockchain technology itself offers unprecedented genuine data and privacy protection, the storage of blockchain data across a global network of nodes often will not comply with specific consumer protection rules, directives, and guidelines around the world. Mark Fenwick, Wulf A. Kaal, Erik P. M. Vermeulen, Legal Education in the Blockchain Revolution (2017). SSRN: https://ssrn.com/abstract=2939127 - [2939127-029](https://wulfkaal.github.io/claims/2939127-029) [predictive/argued] *(failure mode)* -- The legal disputes already generated by sharing platforms indicate that future blockchain enabled sharing services will not be accepted quickly or without resistance from incumbents whose service or product delivery is challenged. > The existing legal issues arising in the context of sharing platforms,83 demonstrate that future blockchain- enabled sharing services may not be accepted quickly and without resistance on the part of incumbents challenged by new ways of delivering a service or product. Mark Fenwick, Wulf A. Kaal, Erik P. M. Vermeulen, Legal Education in the Blockchain Revolution (2017). SSRN: https://ssrn.com/abstract=2939127 - [2939127-039](https://wulfkaal.github.io/claims/2939127-039) [predictive/argued] -- Future lawyers will have to distinguish blockchain based contracting from traditional legal contracting and advise clients on the optimal allocation between the two. > For instance, future lawyers will have to be able to distinguish blockchain-based contracting from traditional legal contracting and advise clients on optimal blockchain and non-blockchain contracting allocations. Mark Fenwick, Wulf A. Kaal, Erik P. M. Vermeulen, Legal Education in the Blockchain Revolution (2017). SSRN: https://ssrn.com/abstract=2939127 - [2939127-040](https://wulfkaal.github.io/claims/2939127-040) [predictive/speculative] -- For the parts of dealmaking and other legal tasks that cannot be placed on a blockchain, the role of non blockchainable agents of trust may expand, and blockchain driven disintermediation of law may itself create additional legal tasks requiring human lawyers. > For the parts of dealmaking and the other legal tasks that are non-blockchainable, the role for other, non-blockchainable agents of trust may expand. It seems possible that the blockchain-driven disintermediation of law itself creates additional legal tasks that require human lawyer input. Mark Fenwick, Wulf A. Kaal, Erik P. M. Vermeulen, Legal Education in the Blockchain Revolution (2017). SSRN: https://ssrn.com/abstract=2939127 - [2959730-001](https://wulfkaal.github.io/claims/2959730-001) [mechanism/argued] -- Private fund advisers' increasing use of blockchain technology, artificial intelligence, and big data is a distinct source of downward pressure on the traditional 2/20 fee structure that commentators have not examined. > A factor contributing to the market pressure on the fee structure that has not been examined by commentators pertains to the increasing use of use of blockchain technology, artificial intelligence, and big data by private fund advisers. Wulf A. Kaal, Blockchain Applications and Fee Structure Developments in Private Investment Funds (2017). SSRN: https://ssrn.com/abstract=2959730 - [2959730-002](https://wulfkaal.github.io/claims/2959730-002) [empirical/evidenced] -- The majority of private fund advisers that deploy blockchain technology, artificial intelligence, and big data in their operations or strategy charge their investors lower fees, even though not all blockchain enabled funds charge per transaction fees. > While not all blockchain-enabled private investment funds charge per-transaction fees, the majority of private fund advisers that use blockchain technology, artificial intelligence, and big data in different aspects of their operations or strategy charge their investors lower fees. Wulf A. Kaal, Blockchain Applications and Fee Structure Developments in Private Investment Funds (2017). SSRN: https://ssrn.com/abstract=2959730 - [2959730-003](https://wulfkaal.github.io/claims/2959730-003) [empirical/evidenced] -- Using a hand coded dataset of 98 private investment fund advisers that use blockchain technology in their strategy or internal operations, the article shows that advisers using the new technology are able to charge overall lower fees. > Using a dataset of private investment fund advisers that utilize blockchain technology in their investment strategy or internal operations (N=[98]), this article shows that the fund advisers who use the new technology are able to charge overall lower fees. Wulf A. Kaal, Blockchain Applications and Fee Structure Developments in Private Investment Funds (2017). SSRN: https://ssrn.com/abstract=2959730 - [2959730-004](https://wulfkaal.github.io/claims/2959730-004) [predictive/argued] -- As the use of blockchain technology grows in the private investment fund industry, pressure on the traditional fee structure is likely to continue to grow, even though the proportion of fund strategies applying such technologies remains small. > While the overall proportion of strategies of private investment funds that apply modern technologies, including blockchain technology, is still small, as the use of blockchain technology grows in the private investment fund industry, the pressure on the fee structure is likely to continue to grow. Wulf A. Kaal, Blockchain Applications and Fee Structure Developments in Private Investment Funds (2017). SSRN: https://ssrn.com/abstract=2959730 - [2959730-018](https://wulfkaal.github.io/claims/2959730-018) [mechanism/asserted] -- The decentralized, fully distributed nature of the blockchain makes it practically impossible to reverse, alter, or erase information recorded in it. > The decentralized, fully-distributed nature of the blockchain makes it practically impossible to reverse, alter, or erase information in the blockchain. Wulf A. Kaal, Blockchain Applications and Fee Structure Developments in Private Investment Funds (2017). SSRN: https://ssrn.com/abstract=2959730 - [2959730-021](https://wulfkaal.github.io/claims/2959730-021) [condition/asserted] -- Complex smart contract arrangements involving several parties require a verifiable and unhackable system, which blockchain technology supplies. > More complex smart contract arrangements in which several parties are involved require a verifiable and unhackable system provided by blockchain technology. Wulf A. Kaal, Blockchain Applications and Fee Structure Developments in Private Investment Funds (2017). SSRN: https://ssrn.com/abstract=2959730 - [2959730-023](https://wulfkaal.github.io/claims/2959730-023) [failure/argued] *(failure mode)* -- The current legal and administrative processes that support private equity are time consuming, expensive, lack transparency, and involve lengthy, duplicative, and fragmented investment and administrative processes. > While the current legal and administrative processes that support private equity are time- consuming, expensive, lack transparency, and involve lengthy, duplicative, and fragmented investment and administrative processes Wulf A. Kaal, Blockchain Applications and Fee Structure Developments in Private Investment Funds (2017). SSRN: https://ssrn.com/abstract=2959730 - [2959730-029](https://wulfkaal.github.io/claims/2959730-029) [mechanism/argued] -- Blockchain technology enables managers to charge per transaction fees, which undermines the existing 2/20 fee model, because it facilitates seamless and efficient calculation of management fees per transaction. > Blockchain technology enables managers to charge per- transaction fees which undermines the existing 2/20 fee model. Blockchain technology facilitates a seamless and efficient calculation of management fees per transaction. Wulf A. Kaal, Blockchain Applications and Fee Structure Developments in Private Investment Funds (2017). SSRN: https://ssrn.com/abstract=2959730 - [2959730-036](https://wulfkaal.github.io/claims/2959730-036) [predictive/argued] -- The combination of increased transparency, reduced costs, and competitive performance enabled by blockchain use may confer a competitive advantage that continues to exert pressure on fees charged by competitor funds. > The increased transparency, reduced costs, and competitive performance enabled by LendingRobot's use of blockchain technology may give it a competitive advantage in the private fund industry that could continue to exert pressure on fees charged by competitor funds. Wulf A. Kaal, Blockchain Applications and Fee Structure Developments in Private Investment Funds (2017). SSRN: https://ssrn.com/abstract=2959730 - [2959730-041](https://wulfkaal.github.io/claims/2959730-041) [empirical/evidenced] -- Survey responses from blockchain using private investment fund advisers show that their fee structure deviates from the traditional 2/20 model, with responding managers reporting alternative fee structures that benefited their clients. > The graph illustrates that the fee structure of those private investment fund advisers that use blockchain technology (and responded to the survey) deviates from the traditional 2/20 model. Wulf A. Kaal, Blockchain Applications and Fee Structure Developments in Private Investment Funds (2017). SSRN: https://ssrn.com/abstract=2959730 - [2959730-042](https://wulfkaal.github.io/claims/2959730-042) [mechanism/argued] -- The rise of blockchain applications in private investment funds can exacerbate the industry's already changing fee structure. > The paper has illustrated that the rise of blockchain applications in private investment funds can exacerbate the already changing fee structure of the industry. Wulf A. Kaal, Blockchain Applications and Fee Structure Developments in Private Investment Funds (2017). SSRN: https://ssrn.com/abstract=2959730 - [2992962-002](https://wulfkaal.github.io/claims/2992962-002) [definitional/asserted] -- The authors stipulate distributed jurisdiction as a regulatory alternative in which conflict resolution for blockchain transactions is supplied by governance solutions inherent in the blockchain technology itself rather than by external legal authorities. > We suggest a regulatory alternative for blockchain-based conflict resolution by way of governance solutions inherent in the blockchain technology itself. We call this alternative "distributed jurisdiction". Wulf A. Kaal, Craig Calcaterra, Crypto Transaction Dispute Resolution (2017). SSRN: https://ssrn.com/abstract=2992962 - [2992962-006](https://wulfkaal.github.io/claims/2992962-006) [normative/argued] -- Because the challenges crypto transactions pose to the existing legal and jurisdictional infrastructure are severe, including good governance in crypto transactions requires instituting governance solutions inherent in the blockchain technology itself. > Because of the severity of these challenges for the existing legal and jurisdictional infrastructure, we conclude that the sensible approach for including good governance in crypto transactions necessitates instituting governance solutions inherent in the blockchain technology itself. Wulf A. Kaal, Craig Calcaterra, Crypto Transaction Dispute Resolution (2017). SSRN: https://ssrn.com/abstract=2992962 - [2992962-008](https://wulfkaal.github.io/claims/2992962-008) [mechanism/argued] -- Anonymity survives the blockchain's permanent public record because a new private key can be created for each transaction, so although public key addresses are stored eternally, each transaction allows an entirely new cryptographically secured private identity. > So, while we can track the public key of the addresses of each transaction, and that information is stored eternally in the blockchain, each transaction allows for an entirely new private identity which is cryptographically secured. Wulf A. Kaal, Craig Calcaterra, Crypto Transaction Dispute Resolution (2017). SSRN: https://ssrn.com/abstract=2992962 - [2998033-009](https://wulfkaal.github.io/claims/2998033-009) [empirical/evidenced] -- As of the publication of this article, a review of published court opinions showed that no court had reviewed, assessed, or scrutinized the uses and applications of blockchain technology. > However, a review of published court opinions suggests that no court at the time of publication of this article had to review, assess, or scrutinize the uses and applications of blockchain technology. Wulf A. Kaal, Blockchain Innovation for Private Investment Funds (2017). SSRN: https://ssrn.com/abstract=2998033 - [2998097-039](https://wulfkaal.github.io/claims/2998097-039) [mechanism/argued] -- Blockchain's structural characteristic as a decentralized model for financial transactions disintermediates and disrupts the existing financial infrastructure, so private funds that adopt it first directly accelerate that disintermediation. > First and foremost, the structural characteristic of blockchain as a decentralized model for financial transactions disintermediates and disrupts the existing financial infrastructure. Private investment Wulf A. Kaal, Private Investment Fund Regulation - Theory and Empirical Evidence from 1998 to 2016 (2017). SSRN: https://ssrn.com/abstract=2998097 - [2998097-040](https://wulfkaal.github.io/claims/2998097-040) [mechanism/argued] *(failure mode)* -- Blockchain technology enables managers to charge per-transaction fees, which undermines the existing 2 and 20 fee model, because it allows fully automated allocation of the correct fee to each executed trade without manual reconciliation or settlement. > Blockchain technology enables managers to charge per- transaction fees which undermines the existing 2/20 fee model. Wulf A. Kaal, Private Investment Fund Regulation - Theory and Empirical Evidence from 1998 to 2016 (2017). SSRN: https://ssrn.com/abstract=2998097 - [3002908-001](https://wulfkaal.github.io/claims/3002908-001) [failure/argued] *(failure mode)* -- The absence of regulatory recognition of blockchain technology is itself a source of harm: it creates significant uncertainty for the blockchain community and undermines the evolution of the crypto economy. > The lack of regulatory recognition of Blockchain technology creates significant uncertainty for the blockchain community and undermines the evolution of the crypto economy. Wulf A. Kaal, Marco Dell'Erba, Blockchain Innovation in Private Investment Funds - A Comparative Analysis of the United States and (2017). SSRN: https://ssrn.com/abstract=3002908 - [3002908-002](https://wulfkaal.github.io/claims/3002908-002) [mechanism/asserted] -- Regulatory uncertainty around blockchain has three specific sources: insufficient or non existent regulatory guidance, the absence of court decisions, and uncertainty over which jurisdiction applies. > The regulatory uncertainty derives from insufficient or non- existent regulatory guidance, lacking court decisions, and uncertainty over applicable jurisdiction. Wulf A. Kaal, Marco Dell'Erba, Blockchain Innovation in Private Investment Funds - A Comparative Analysis of the United States and (2017). SSRN: https://ssrn.com/abstract=3002908 - [3002908-003](https://wulfkaal.github.io/claims/3002908-003) [failure/argued] *(failure mode)* -- Regulatory uncertainty in this transitional era actively frustrates blockchain innovation rather than supplying the secure framework in which blockchain applications could flourish. > This uncertainty frustrates blockchain innovation instead of providing a secured framework where revolutionary blockchain applications can flourish. Wulf A. Kaal, Marco Dell'Erba, Blockchain Innovation in Private Investment Funds - A Comparative Analysis of the United States and (2017). SSRN: https://ssrn.com/abstract=3002908 - [3002908-004](https://wulfkaal.github.io/claims/3002908-004) [failure/argued] *(failure mode)* -- Regulators cannot draft specific blockchain regulation because the risks, opportunities, and concrete outcomes of blockchain in reshaping financial markets are unpredictable. > The unpredictability of the risks and the opportunities as well as the concrete outcomes of blockchain in reshaping financial markets are clear obstacles for regulators' attempts at drafting new specific regulation. Wulf A. Kaal, Marco Dell'Erba, Blockchain Innovation in Private Investment Funds - A Comparative Analysis of the United States and (2017). SSRN: https://ssrn.com/abstract=3002908 - [3002908-006](https://wulfkaal.github.io/claims/3002908-006) [mechanism/argued] *(failure mode)* -- Traditional jurisdictional tests fail for blockchain because the concepts of location and presence do not apply: the blockchain has no location, physical or electronic, and no single node holds the entire chain. > The concept of location or presence in jurisdictional means does not apply to the blockchain. A location for the blockchain does not exist - not physically or even electronically. Wulf A. Kaal, Marco Dell'Erba, Blockchain Innovation in Private Investment Funds - A Comparative Analysis of the United States and (2017). SSRN: https://ssrn.com/abstract=3002908 - [3002908-008](https://wulfkaal.github.io/claims/3002908-008) [empirical/evidenced] *(failure mode)* -- As of publication, no American or European court had recognized blockchain technology or scrutinized its applications, leaving it unclear how courts will treat the technology. > American and European courts have not yet recognized blockchain technology or addressed its applications.. A review of published court opinions suggests that no court at the time of publication of this article had to review, assess, or scrutinize the uses and applications of blockchain technology. Wulf A. Kaal, Marco Dell'Erba, Blockchain Innovation in Private Investment Funds - A Comparative Analysis of the United States and (2017). SSRN: https://ssrn.com/abstract=3002908 - [3002908-010](https://wulfkaal.github.io/claims/3002908-010) [empirical/evidenced] -- ESMA judged a regulatory response to blockchain premature because technological innovation was still evolving and blockchain's practical applications were still rather limited. > Because of the on- going evolution of technological innovation and blockchain's still rather limited practical applications, ESMA considered a regulatory response to the evolving technology premature. Wulf A. Kaal, Marco Dell'Erba, Blockchain Innovation in Private Investment Funds - A Comparative Analysis of the United States and (2017). SSRN: https://ssrn.com/abstract=3002908 - [3002908-019](https://wulfkaal.github.io/claims/3002908-019) [mechanism/argued] *(failure mode)* -- Private investment funds entered the blockchain sector earlier than other financial players, yet because of legacy systems in private fund infrastructure the proportion of funds investing in blockchain is still small. > Private investment funds have invested earlier in the blockchain sector than other financial players. Because of legacy systems in the private investment fund infrastructure, the proportion of private investment funds that invest in blockchain technology is still small Wulf A. Kaal, Marco Dell'Erba, Blockchain Innovation in Private Investment Funds - A Comparative Analysis of the United States and (2017). SSRN: https://ssrn.com/abstract=3002908 - [3071378-001](https://wulfkaal.github.io/claims/3071378-001) [mechanism/asserted] -- Blockchain technology delivers anonymous and secure transactional guarantees through democratized trust and disintermediation, and its anti-discrimination features allow minorities and disenfranchised communities to benefit from the technology. > Blockchain technology provides anonymous and secure transactional guarantees through democratized trust and disintermediation. Minorities and disenfranchised communities can benefit from the evolving technology and its anti-discrimination features. Wulf A. Kaal, Blockchain Technology and Race in Corporate America (2017). SSRN: https://ssrn.com/abstract=3071378 - [3071378-004](https://wulfkaal.github.io/claims/3071378-004) [mechanism/argued] -- Because network nodes verify and validate chain transactions before execution under a distributed consensus model, recording a fraudulent transaction on the blockchain is extremely rare. > Blockchain's distributed consensus model, e.g., the network "nodes" verify and validate chain transactions before execution of the transactions, makes it extremely rare for a fraudulent transaction to be recorded in the blockchain.34 Wulf A. Kaal, Blockchain Technology and Race in Corporate America (2017). SSRN: https://ssrn.com/abstract=3071378 **2018** - [3227933-005](https://wulfkaal.github.io/claims/3227933-005) [predictive/argued] -- The paper's central claims are that digital technologies have already disrupted centralized corporate organizations by enabling platforms, that this disruption will continue as blockchain based technologies proliferate, and that regulators must attend to these changes. > The central claims of the paper are (i) digital technologies have already disrupted centralized, hierarchical corporate organizations by facilitating "platforms;" (ii) this process of disruption will only continue as new blockchain-based technologies proliferate; Mark Fenwick, Wulf A. Kaal, Erik P.M. Vermeulen, Why 'Blockchain' Will Disrupt Corporate Organizations (2018). SSRN: https://ssrn.com/abstract=3227933 - [3227933-010](https://wulfkaal.github.io/claims/3227933-010) [mechanism/argued] -- Blockchain extends what the Internet did for information: it makes it possible to transfer and exchange value and assets without traditional centralized intermediaries, by storing information in a decentralized, accessible and secure online environment. > The blockchain adds another dimension by making it possible to transfer and exchange value and assets without the involvement of traditional (centralized and authoritative) intermediaries. Blockchain technology achieves this by storing personal and other information in a decentralized Mark Fenwick, Wulf A. Kaal, Erik P.M. Vermeulen, Why 'Blockchain' Will Disrupt Corporate Organizations (2018). SSRN: https://ssrn.com/abstract=3227933 - [3227933-011](https://wulfkaal.github.io/claims/3227933-011) [mechanism/argued] -- It is the decentralized character of the blockchain, that is the distribution of the ledger to countless nodes in peer-to-peer networks, rather than any other feature, that makes the technology potentially disruptive. > It is the decentralized character of the blockchain that makes it so potentially disruptive. Mark Fenwick, Wulf A. Kaal, Erik P.M. Vermeulen, Why 'Blockchain' Will Disrupt Corporate Organizations (2018). SSRN: https://ssrn.com/abstract=3227933 - [3227933-012](https://wulfkaal.github.io/claims/3227933-012) [condition/argued] -- The only condition for hosting a copy of the blockchain and participating in the network is a smartphone or Internet connection, which is why the technology can extend financial inclusion to those traditionally excluded from financial services. > The only condition is that they have a smartphone or Internet connection. Everybody with a smartphone can create a real digital ID and interact with other people in the blockchain network. Mark Fenwick, Wulf A. Kaal, Erik P.M. Vermeulen, Why 'Blockchain' Will Disrupt Corporate Organizations (2018). SSRN: https://ssrn.com/abstract=3227933 - [3227933-013](https://wulfkaal.github.io/claims/3227933-013) [mechanism/argued] -- Peer-to-peer transactions are possible because a distributed consensus model has network nodes verify, validate and audit transactions before and after execution, and this is often safer than routing transactions through a single trusted third-party intermediary. > "Peer-to-peer" transactions are possible because the technology uses a "distributed consensus model" where the network "nodes" verify, validate and audit transactions before and after they are executed. Mark Fenwick, Wulf A. Kaal, Erik P.M. Vermeulen, Why 'Blockchain' Will Disrupt Corporate Organizations (2018). SSRN: https://ssrn.com/abstract=3227933 - [3227933-014](https://wulfkaal.github.io/claims/3227933-014) [mechanism/argued] -- Network connectivity is what makes blockchain records practically immutable, because it allows multiple identical copies of the ledger to exist simultaneously across the network. > Network connectivity is vital because it allows for multiple identical copies of the blockchain to be available simultaneously across the network. This makes it practically impossible to alter or erase information in the blockchain. Mark Fenwick, Wulf A. Kaal, Erik P.M. Vermeulen, Why 'Blockchain' Will Disrupt Corporate Organizations (2018). SSRN: https://ssrn.com/abstract=3227933 - [3227933-015](https://wulfkaal.github.io/claims/3227933-015) [mechanism/argued] -- Cryptographic hashing makes tampering detectable because even a minuscule change to the blockchain produces a different hash value, which other participants can observe instantly. > The result of this combination of technologies is that even a minuscule change to the blockchain will result in a different hash value, making manipulation instantly and readily detectable by other participants. Mark Fenwick, Wulf A. Kaal, Erik P.M. Vermeulen, Why 'Blockchain' Will Disrupt Corporate Organizations (2018). SSRN: https://ssrn.com/abstract=3227933 - [3227933-016](https://wulfkaal.github.io/claims/3227933-016) [mechanism/asserted] -- Blockchain technology creates an independent and transparent platform for establishing truth and building trust, replacing intermediaries, bureaucracy and old procedures with what the authors call the four Cs of code, connectivity, crowd, and collaboration. > In short, blockchain technology creates an independent and transparent platform for establishing truth and building trust. Intermediaries, bureaucracy, and old-fashioned procedures are replaced by the "4 Cs" of code, connectivity, crowd, and collaboration. Mark Fenwick, Wulf A. Kaal, Erik P.M. Vermeulen, Why 'Blockchain' Will Disrupt Corporate Organizations (2018). SSRN: https://ssrn.com/abstract=3227933 - [3227933-023](https://wulfkaal.github.io/claims/3227933-023) [failure/argued] *(failure mode)* -- Adoption of blockchain is costly and technically difficult because the technology is continually evolving and integrating blockchain databases with existing systems raises many technical challenges, such as interfacing a payment ledger with a vehicle's control software. > And then there are the costs of shifting to the new technology, which is continually evolving, and which are also high. Not to mention the many technical challenges involved in integrating blockchain databases with existing systems. Mark Fenwick, Wulf A. Kaal, Erik P.M. Vermeulen, Why 'Blockchain' Will Disrupt Corporate Organizations (2018). SSRN: https://ssrn.com/abstract=3227933 - [3227933-035](https://wulfkaal.github.io/claims/3227933-035) [failure/evidenced] *(failure mode)* -- Fundamental flaws in the DAO's code allowed hackers to transfer one third of the total contributed funds to a subsidiary account, and this together with other technological limitations ended the initiative, but the authors argue it did not end the underlying vision of decentralized autonomous organization. > To be sure, fundamental flaws in the DAO code made it possible for hackers to transfer one-third of the total contributed funds to a subsidiary account. This, and other technological limitations meant the end of the initiative Mark Fenwick, Wulf A. Kaal, Erik P.M. Vermeulen, Why 'Blockchain' Will Disrupt Corporate Organizations (2018). SSRN: https://ssrn.com/abstract=3227933 - [3227967-018](https://wulfkaal.github.io/claims/3227967-018) [mechanism/argued] -- Because blockchain network nodes verify, validate and audit transactions both before and after execution, the model is safer than a traditional one in which transactions can only be accomplished through third party intermediaries such as a bank, judiciary or notary. > verify, validate and audit transactions before and after they are executed. 49 This is safer than a traditional model in which transactions can only be accomplished through third-party intermediaries, such as a bank, judiciary or notary. Mark Fenwick, Wulf A. Kaal, Erik P.M. Vermeulen, Legal Education in a Digital Age Why 'Coding for Lawyers' Matters (2018). SSRN: https://ssrn.com/abstract=3227967 - [3227967-019](https://wulfkaal.github.io/claims/3227967-019) [mechanism/argued] -- Cryptographic hashing makes tampering with blockchain records extremely difficult because even a minuscule change produces a different hash value, rendering manipulation instantly and readily detectable. > The use of cryptographic hashes makes tampering with blockchain records even more difficult, if not impossible. 52 Cryptographic hashes comprise complex algorithms. Even a minuscule change to the blockchain will result in a different hash value, making manipulation instantly and readily detectable. Mark Fenwick, Wulf A. Kaal, Erik P.M. Vermeulen, Legal Education in a Digital Age Why 'Coding for Lawyers' Matters (2018). SSRN: https://ssrn.com/abstract=3227967 - [3227967-020](https://wulfkaal.github.io/claims/3227967-020) [mechanism/argued] -- Blockchain replaces intermediaries, bureaucracy and old fashioned procedures with the four Cs of code, connectivity, crowd and collaboration, which increases openness and speed while significantly reducing costs. > Intermediaries, bureaucracy and old-fashioned procedures are replaced by the 4 Cs: code, connectivity, crowd, and collaboration. 55 The technology increases openness and speed, while at the same time significantly reducing costs. Mark Fenwick, Wulf A. Kaal, Erik P.M. Vermeulen, Legal Education in a Digital Age Why 'Coding for Lawyers' Matters (2018). SSRN: https://ssrn.com/abstract=3227967 - [3227967-021](https://wulfkaal.github.io/claims/3227967-021) [definitional/asserted] -- A smart contract is computer program code that enables the verification, execution and enforcement of specific terms and conditions of a contractual arrangement. > A smart contract is a computer program code that enables the verification, execution, and enforcement of specific terms and conditions of a contractual arrangement. Mark Fenwick, Wulf A. Kaal, Erik P.M. Vermeulen, Legal Education in a Digital Age Why 'Coding for Lawyers' Matters (2018). SSRN: https://ssrn.com/abstract=3227967 - [3227967-023](https://wulfkaal.github.io/claims/3227967-023) [definitional/asserted] -- A decentralized autonomous organization is merely computer code with no directors, managers or employees, its governance structure built with software, code and smart contracts running on a public decentralized blockchain platform. > DAOs are "merely" computer code. They don't have any directors, managers or employees. The governance structure is built with and on software, code and smart contracts that ran on a public decentralized blockchain platform (in most cases Ethereum). Mark Fenwick, Wulf A. Kaal, Erik P.M. Vermeulen, Legal Education in a Digital Age Why 'Coding for Lawyers' Matters (2018). SSRN: https://ssrn.com/abstract=3227967 - [3227967-031](https://wulfkaal.github.io/claims/3227967-031) [predictive/argued] -- DAOs will eventually overtake any organization that lacks their incentives and efficiencies, and because DAOs are cheap and straightforward to clone this will potentially lead to more competition. > we also concluded (as we did in class) that DAOs will eventually overtake any organization which lacks these incentives and efficiencies. Moreover, DAOs are cheap and straightforward to "clone," which will potentially lead to more competition. Mark Fenwick, Wulf A. Kaal, Erik P.M. Vermeulen, Legal Education in a Digital Age Why 'Coding for Lawyers' Matters (2018). SSRN: https://ssrn.com/abstract=3227967 - [3227967-032](https://wulfkaal.github.io/claims/3227967-032) [failure/argued] *(failure mode)* -- Existing blockchains and DAOs still lack genuine decentralization, and there are currently no true DAOs: Bitcoin's proof of work protocol has produced mining pools because of economies of scale and unbalanced reward structures. > In our discussion, the following weaknesses were highlighted. There is still a lack of decentralization (there are currently no "true" DAOs). For instance, Bitcoin's proof of work protocol has led to "mining pools" because of economies of scale and unbalanced reward structures. Mark Fenwick, Wulf A. Kaal, Erik P.M. Vermeulen, Legal Education in a Digital Age Why 'Coding for Lawyers' Matters (2018). SSRN: https://ssrn.com/abstract=3227967 - [3227967-033](https://wulfkaal.github.io/claims/3227967-033) [failure/argued] *(failure mode)* -- Anonymity in blockchain organizations makes them prone to Sybil attacks and 51 percent attacks, and anonymity combined with autonomy has led to many hacks. > Also, the anonymity in blockchain organizations means that they are prone to "Sybil attacks" and "51% attacks." We also discussed the many examples in which the anonymity (and autonomy) have led to hacks. Mark Fenwick, Wulf A. Kaal, Erik P.M. Vermeulen, Legal Education in a Digital Age Why 'Coding for Lawyers' Matters (2018). SSRN: https://ssrn.com/abstract=3227967 - [3227967-034](https://wulfkaal.github.io/claims/3227967-034) [failure/asserted] *(failure mode)* -- In a truly decentralized system any mistake, such as a stolen or lost password or a programming bug, is permanent and irrevocable. > Remember that in a truly decentralized system, any mistakes (stolen/lost passwords, programming bugs, etc.) are permanent and irrevocable. Mark Fenwick, Wulf A. Kaal, Erik P.M. Vermeulen, Legal Education in a Digital Age Why 'Coding for Lawyers' Matters (2018). SSRN: https://ssrn.com/abstract=3227967 - [3227967-035](https://wulfkaal.github.io/claims/3227967-035) [design/argued] -- A reputation verification platform matters because trust created through an eternal reputational record would be open to review and driven by proper incentives. > This was considered to be important because if the trust were to be created through an eternal reputational record, it would be open to review and driven by proper incentives. Mark Fenwick, Wulf A. Kaal, Erik P.M. Vermeulen, Legal Education in a Digital Age Why 'Coding for Lawyers' Matters (2018). SSRN: https://ssrn.com/abstract=3227967 - [3227967-036](https://wulfkaal.github.io/claims/3227967-036) [design/argued] -- The real design challenge for consensus protocols is to find a proof of stake protocol that offers both trust and security without unintentionally creating just another centralized validation system. > The students understood that the real challenge is to find a "proof of stake" protocol that offers both trust and security (without unintentionally creating just another centralized validation system). Mark Fenwick, Wulf A. Kaal, Erik P.M. Vermeulen, Legal Education in a Digital Age Why 'Coding for Lawyers' Matters (2018). SSRN: https://ssrn.com/abstract=3227967 **2019** - [3373393-001](https://wulfkaal.github.io/claims/3373393-001) [mechanism/asserted] -- As a foundational technology, blockchain technology builds the infrastructure for decentralized networked governance, which over time creates an environment in which the internal and external monitoring mechanisms previously necessitated by agency problems in corporate governance can be removed. > As a foundational technology, blockchain technology creates the infrastructure for decentralized networked governance that, over time, creates the environment that enables the removal of internal and external monitoring mechanisms previously necessitated by agency problems in corporate governance. Wulf A. Kaal, Blockchain Solutions for Agency Problems in Corporate Governance (2019). SSRN: https://ssrn.com/abstract=3373393 - [3373393-002](https://wulfkaal.github.io/claims/3373393-002) [predictive/asserted] -- Blockchain technology produces a substantial increase in the efficiency of the agency relationship and lowers agency costs by orders of magnitude. > Blockchain technology facilitates a substantial increase in efficiency in the agency relationship and lowers agency costs in orders of magnitude. Wulf A. Kaal, Blockchain Solutions for Agency Problems in Corporate Governance (2019). SSRN: https://ssrn.com/abstract=3373393 - [3373393-004](https://wulfkaal.github.io/claims/3373393-004) [definitional/argued] -- Blockchain is not a disruptive technology but a foundational technology, and its transformational impact therefore takes decades rather than years. > blockchain technology is not a disruptive technology, it is a foundational technology whose transformational impact takes decades rather than years Wulf A. Kaal, Blockchain Solutions for Agency Problems in Corporate Governance (2019). SSRN: https://ssrn.com/abstract=3373393 - [3373393-005](https://wulfkaal.github.io/claims/3373393-005) [condition/argued] *(failure mode)* -- Blockchain use cases involve interdependent structures, so development of any one area alone cannot succeed without the simultaneous existence of multiple additional support structures. > In other words, development of one area alone cannot be successful as the existence of multiple additional support structures are needed. Wulf A. Kaal, Blockchain Solutions for Agency Problems in Corporate Governance (2019). SSRN: https://ssrn.com/abstract=3373393 - [3373393-006](https://wulfkaal.github.io/claims/3373393-006) [condition/asserted] -- Applying blockchain to corporate governance requires the relevant authorities, who most likely understand the governance use case but not the technology, to reach consensus on how and when to implement it. > in the corporate governance context it requires the authorities, who most likely understand the use case and not the technology, to come to a consensus on how and when to implement such technology for that governance use case. Wulf A. Kaal, Blockchain Solutions for Agency Problems in Corporate Governance (2019). SSRN: https://ssrn.com/abstract=3373393 - [3373393-017](https://wulfkaal.github.io/claims/3373393-017) [design/argued] -- Supervisory tasks traditionally performed by principals to control their agents can be delegated to decentralized computer networks that are reliable, secure, immutable, and independent of fallible human input and discretionary human goodwill. > Supervisory tasks that were traditionally performed by principals to control their agents can be delegated to decentralized computer networks that are highly reliable, secure, immutable, and independent of fallible human input and discretionary human goodwill. Wulf A. Kaal, Blockchain Solutions for Agency Problems in Corporate Governance (2019). SSRN: https://ssrn.com/abstract=3373393 - [3373393-018](https://wulfkaal.github.io/claims/3373393-018) [mechanism/argued] -- Blockchain provides an alternative governance mechanism that eliminates agency costs, meaning the principal's cost of supervising agents, by creating trust in the contractual relationship between principal and agent. > Blockchain technology provides an alternative governance mechanism that eliminates agency costs - the principal's cost of supervising agents - by creating trust in the contractual relationship between the principal and the agent. Wulf A. Kaal, Blockchain Solutions for Agency Problems in Corporate Governance (2019). SSRN: https://ssrn.com/abstract=3373393 - [3373393-019](https://wulfkaal.github.io/claims/3373393-019) [mechanism/argued] -- The immutability of the blockchain and its cryptographic security systems provide transactional guarantees that create trust between principals and agents in the integrity of their contractual relationship, and ensure that no participant can circumvent the rules embedded in blockchain code. > The immutability of the blockchain and its cryptographic security systems provide transactional guarantees and create trust between principals and agents in the integrity of their contractual relationship. Wulf A. Kaal, Blockchain Solutions for Agency Problems in Corporate Governance (2019). SSRN: https://ssrn.com/abstract=3373393 - [3373393-020](https://wulfkaal.github.io/claims/3373393-020) [definitional/asserted] -- A blockchain guarantee means that a contract between principal and agent executes only if and when all contract parameters have been fulfilled by both parties and verified by a majority of miners or nodes in the system. > Blockchain guarantees include contract execution between principal and agent only if and when all contract parameters were fulfilled by both parties and verified by a majority of miners/nodes in the system. Wulf A. Kaal, Blockchain Solutions for Agency Problems in Corporate Governance (2019). SSRN: https://ssrn.com/abstract=3373393 - [3373393-021](https://wulfkaal.github.io/claims/3373393-021) [mechanism/argued] -- Because governance guarantees are embedded in code, there is no need in the blockchain infrastructure for the principal to institute oversight and monitoring, and the associated agency costs disappear. > Hence, in the blockchain infrastructure, there is no need for the principal to institute oversight and monitoring with the associated agency costs. Wulf A. Kaal, Blockchain Solutions for Agency Problems in Corporate Governance (2019). SSRN: https://ssrn.com/abstract=3373393 - [3373393-022](https://wulfkaal.github.io/claims/3373393-022) [mechanism/argued] -- It is decentralized network connectivity via the Internet, rather than blockchain's use of digital signatures, that provides the most protection against fraud, because multiple copies of the blockchain are available to all participants across the distributed network. > blockchain's use of digital signatures helps establish the identity and authenticity of the parties involved in the transaction, it is the completely decentralized network connectivity via the Internet that allows the most protection against fraud. Wulf A. Kaal, Blockchain Solutions for Agency Problems in Corporate Governance (2019). SSRN: https://ssrn.com/abstract=3373393 - [3373393-023](https://wulfkaal.github.io/claims/3373393-023) [mechanism/argued] -- The distributed consensus model, in which network nodes verify and validate transactions before execution, makes it extremely rare for a fraudulent transaction to be recorded in the blockchain, and it does so without compromising the privacy of the parties. > Blockchains' distributed consensus model, e.g. the network "nodes" verify and validate chain transactions before transaction execution, makes it extremely rare for a fraudulent transaction to be recorded in the blockchain. Wulf A. Kaal, Blockchain Solutions for Agency Problems in Corporate Governance (2019). SSRN: https://ssrn.com/abstract=3373393 - [3373393-024](https://wulfkaal.github.io/claims/3373393-024) [mechanism/argued] -- Cryptographic hashes increase blockchain security and remove the trust barriers in agency relationships that otherwise require monitoring of agents and generate agency costs. > Cryptographic hashes used in blockchain technology further increase blockchain security and removes trust barriers in agency relationships that require monitoring of agents and create agency costs. Wulf A. Kaal, Blockchain Solutions for Agency Problems in Corporate Governance (2019). SSRN: https://ssrn.com/abstract=3373393 - [3373393-027](https://wulfkaal.github.io/claims/3373393-027) [mechanism/asserted] -- The removal of checks and balances, agent monitoring, audit requirements, disclosure regimes, market pressure, and executive compensation schemes produces a qualitative shift in efficiency in the agency relationship and in corporate governance overall. > The removal of checks and balances in corporate governance, monitoring of agents, audit requirements, disclosure regimes, market pressure, executive agent compensation schemes, among many others, provides a qualitative shift in efficiency in the agency relationship Wulf A. Kaal, Blockchain Solutions for Agency Problems in Corporate Governance (2019). SSRN: https://ssrn.com/abstract=3373393 - [3373393-040](https://wulfkaal.github.io/claims/3373393-040) [condition/argued] *(failure mode)* -- The basis of coded blockchain guarantees will itself evolve and require protocol upgrades, and without evolutionary governance upgrades the cost reduction achieved for the agency relationship cannot be maintained. > Without evolutionary governance upgrades the cost reduction for the agency relationship cannot be maintained. Wulf A. Kaal, Blockchain Solutions for Agency Problems in Corporate Governance (2019). SSRN: https://ssrn.com/abstract=3373393 - [3373393-041](https://wulfkaal.github.io/claims/3373393-041) [condition/argued] -- Because blockchain is a foundational technology, blockchain-based governance solutions for agency problems depend on the creation of infrastructure components that have not yet been conceptualized in the decentralized technology evolution. > blockchain- based governance solutions for agency problems in corporate governance depend on the creation of infrastructure components that have not yet been conceptualized in the decentralized technology Wulf A. Kaal, Blockchain Solutions for Agency Problems in Corporate Governance (2019). SSRN: https://ssrn.com/abstract=3373393 - [3405401-001](https://wulfkaal.github.io/claims/3405401-001) [definitional/asserted] -- Decentralized commerce is the global exchange of financial instruments, goods and services conducted through decentralized and emerging technologies, a stipulated definition the paper relies on throughout. > Decentralized commerce may generically be defined as the global exchange of financial instruments, goods and services via decentralized and emerging technologies. Wulf A. Kaal, Decentralized Commerce – A Primer on Why Decentralized Reputation Verification Systems Are Needed (2019). SSRN: https://ssrn.com/abstract=3405401 - [3405401-028](https://wulfkaal.github.io/claims/3405401-028) [failure/asserted] *(failure mode)* -- Until blockchain technology was introduced via bitcoin in 2009, decentralized reputation systems mostly relied on the old and corruptible concept of the Web of Trust. > Until blockchain technology was introduced via bitcoin in 2009, decentralized reputation system mostly relied on the old and corruptible concept of the Web of Trust. Wulf A. Kaal, Decentralized Commerce – A Primer on Why Decentralized Reputation Verification Systems Are Needed (2019). SSRN: https://ssrn.com/abstract=3405401 - [3409548-011](https://wulfkaal.github.io/claims/3409548-011) [empirical/asserted] -- Blockchain adoption by private investment funds followed a staged path: minimal use from 2000 to 2012, then experimentation through separate new fund entities beginning in 2012, and from 2015 the creation of blockchain substructures inside existing funds. > They began to experiment with the technology by setting up separate and new fund entities that utilized the technology in various forms. In 2015, however, existing funds also started to create substructures that utilized blockchain technology. Kaal, Financial Technology and Hedge Funds (2019). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3409548 - [3409548-012](https://wulfkaal.github.io/claims/3409548-012) [empirical/asserted] -- High levels of investor activity in the blockchain sector are a reliable indicator of the commercial maturity of blockchain technology. > The high levels of investor activity in the blockchain area appears to provide a reliable indicator of the commercial maturity of blockchain technology. Kaal, Financial Technology and Hedge Funds (2019). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3409548 - [3409548-013](https://wulfkaal.github.io/claims/3409548-013) [predictive/argued] -- Business, administrative, and legal processes that depend on legal intermediaries may become redundant as blockchain technology advances and is accepted, with ledger keeping services such as notary and registry services, motions practice, and title companies among the first to disappear. > Business, administrative, and legal processes that rely on legal intermediaries may become redundant because of advances in and acceptance and implementation of blockchain technology. Kaal, Financial Technology and Hedge Funds (2019). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3409548 - [3409548-014](https://wulfkaal.github.io/claims/3409548-014) [failure/argued] *(failure mode)* -- The 2018 ICO boom exposed a core limitation of blockchain technology: ICOs sold investors decentralized infrastructure products on the assumption that a baseline infrastructure already existed, and that assumption proved false. > The limitations of blockchain technology became most apparent in the aftermath of the ICO boom of 2018. ICOs promised investors core decentralized infrastructure products that assumed a baseline infrastructure existed. This turned out to be false Kaal, Financial Technology and Hedge Funds (2019). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3409548 - [3409548-017](https://wulfkaal.github.io/claims/3409548-017) [predictive/argued] *(failure mode)* -- Blockchain-enabled sharing services are unlikely to be accepted quickly or without resistance, because incumbents challenged by new ways of delivering a service or product will resist, as the existing legal disputes over sharing platforms demonstrate. > demonstrate that future blockchain-enabled sharing services may not be accepted quickly and without resistance on the part of incumbents challenged by new ways of delivering a service or product. Kaal, Financial Technology and Hedge Funds (2019). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3409548 - [3409548-018](https://wulfkaal.github.io/claims/3409548-018) [failure/argued] *(failure mode)* -- The absence of regulatory recognition of blockchain technology is not merely an inconvenience: it hinders implementation of the technology across industries and undermines the conversion of infrastructure to blockchain. > The lacking recognition hinders the implementation of the technology across industries and undermines the infrastructure conversion via blockchain technology. Kaal, Financial Technology and Hedge Funds (2019). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3409548 - [3409548-019](https://wulfkaal.github.io/claims/3409548-019) [mechanism/evidenced] -- The Northern Trust and IBM blockchain removes a specific inefficiency in private equity deal practice by letting all involved parties in a deal look at a single compiled version of the transaction and all data relating to it, rather than reconciling multiple copies of the deal documents. > the blockchain program announced by Northern Trust and IBM allows all involved parties in an equity deal to look at a single compiled version of the transaction and all other data relating to the deal. Kaal, Financial Technology and Hedge Funds (2019). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3409548 - [3409548-020](https://wulfkaal.github.io/claims/3409548-020) [design/evidenced] -- Blockchain-based funds can invert the traditional secrecy of hedge funds: the LendingRobot ledger discloses detailed holdings and supplies a hash code signature evidencing that the data is tamper proof. > Unlike traditional hedge funds that are rather secretive, the LendingRobot ledger shows detailed holdings and provides a "hash code" signature as evidence that the data is tamper- proof in the blockchain. Kaal, Financial Technology and Hedge Funds (2019). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3409548 - [3409548-022](https://wulfkaal.github.io/claims/3409548-022) [condition/argued] -- Managers of funds that exist entirely in cyberspace cannot assume they are judgment proof; the practical consequence of operating across a global node network is exposure to more regulation, not less. > However, managers cannot assume that they are judgment-proof. Kaal, Financial Technology and Hedge Funds (2019). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3409548 - [3409548-023](https://wulfkaal.github.io/claims/3409548-023) [empirical/evidenced] -- Legacy systems at private investment funds and banks are more expensive, more error prone, and slower than emerging blockchain technologies, a gap illustrated by the $1.7 trillion in processing fees banks charged in 2014. > Most legacy systems at private investment funds and banks are much more expensive than emerging blockchain technologies, are subject to human error, and take much more time. Banks charged $1.7 trillion in processing fees in 2014. Kaal, Financial Technology and Hedge Funds (2019). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3409548 - [3409548-024](https://wulfkaal.github.io/claims/3409548-024) [mechanism/argued] -- Because blockchain is transparent, verifiable, self-authenticating and self-enforcing, transactions can settle instantaneously at near zero cost, and it is this combination plus technology-driven democratized trust that drove the financial industry's large blockchain investments out of fear of obsolescence. > Blockchain technology is transparent, verifiable, self- authenticating, and self-enforcing, financial transactions can be executed instantaneously at near zero transaction costs, increasing the efficiency for business and individuals exponentially. Kaal, Financial Technology and Hedge Funds (2019). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3409548 - [3409548-035](https://wulfkaal.github.io/claims/3409548-035) [mechanism/argued] -- Recording every fund transaction together with its associated documentation on a blockchain cuts the significant costs of human oversight in recording, organizing and maintaining investment fund data and records. > blockchain technology reduces the otherwise significant costs associated with human oversight in recording, organizing, and maintaining investment fund data and records. Kaal, Financial Technology and Hedge Funds (2019). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3409548 - [3409548-037](https://wulfkaal.github.io/claims/3409548-037) [empirical/asserted] -- Most large private equity and hedge fund advisers have not yet even considered combining blockchain with big data and artificial intelligence, leaving first mover efficiency gains to smaller competitors. > Most large fund advisers in the private equity and hedge fund industry have not yet considered implementing blockchain technology in combination with big data applications and artificial intelligence. Kaal, Financial Technology and Hedge Funds (2019). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3409548 - [3409548-039](https://wulfkaal.github.io/claims/3409548-039) [mechanism/argued] -- The structural characteristic of blockchain as a decentralized model for financial transactions disintermediates and disrupts the existing financial infrastructure, so funds implementing it are spearheading radical change in financial markets rather than merely adopting a tool. > First and foremost, the structural characteristic of blockchain as a decentralized model for financial transactions disintermediates and disrupts the existing financial infrastructure. Kaal, Financial Technology and Hedge Funds (2019). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3409548 - [3409548-040](https://wulfkaal.github.io/claims/3409548-040) [normative/asserted] -- Continued evolution and blockchain integration in the private investment fund industry depends on regulatory guidance, which the author identifies as essential rather than optional. > Regulatory guidance will be essential to ensuring the continuing evolution and blockchain integration for the private investment fund industry. Kaal, Financial Technology and Hedge Funds (2019). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3409548 - [3411897-017](https://wulfkaal.github.io/claims/3411897-017) [mechanism/argued] -- Because governance guarantees are embedded in blockchain code, there is no need for a principal to institute oversight and monitoring, which eliminates the associated agency costs. > Hence, in the blockchain infrastructure, there is no need for the principal to institute oversight and monitoring with the associated agency costs. Wulf A. Kaal, Decentralization - Past, Present, and Future (2019). SSRN: https://ssrn.com/abstract=3411897 - [3411897-018](https://wulfkaal.github.io/claims/3411897-018) [mechanism/argued] -- It is the completely decentralized network connectivity via the internet, not blockchain's digital signatures, that provides the greatest protection against fraud, because connectivity puts multiple copies of the chain in the hands of all participants. > While blockchain's use of digital signatures helps establish the identity and authenticity of the parties involved in the transaction, it is the completely decentralized network connectivity via the internet that allows the most protection against fraud. Wulf A. Kaal, Decentralization - Past, Present, and Future (2019). SSRN: https://ssrn.com/abstract=3411897 - [3441904-003](https://wulfkaal.github.io/claims/3441904-003) [mechanism/argued] -- Because blockchain guarantees prevent any participant from circumventing the coded set of governance rules, a lower level of oversight and monitoring of agents is needed, which changes the cost structure of the principal agent relationship. > Hence, in the blockchain infrastructure, a lower level of oversight and monitoring of agents changes the cost structure of the principal agent relationship. Wulf A. Kaal, Blockchain-Based Corporate Governance (2019). SSRN: https://ssrn.com/abstract=3441904 - [3441904-006](https://wulfkaal.github.io/claims/3441904-006) [condition/argued] *(failure mode)* -- Without evolutionary governance upgrades to blockchain protocols, the cost reduction that blockchain brings to the agency relationship cannot be maintained. > Without evolutionary governance upgrades the cost reduction for the agency relationship cannot be maintained. Wulf A. Kaal, Blockchain-Based Corporate Governance (2019). SSRN: https://ssrn.com/abstract=3441904 - [3441904-007](https://wulfkaal.github.io/claims/3441904-007) [failure/argued] *(failure mode)* -- Traditional limited liability entities can only partially benefit from blockchain based governance, because the dynamic regulatory features it offers are partially incompatible with the rule based legal environment those entities must comply with. > Blockchain-based corporate governance offers dynamic regulatory features that are partially incompatible with the rule-based traditional legal environment that traditional limited liability entities are required to comply with. Wulf A. Kaal, Blockchain-Based Corporate Governance (2019). SSRN: https://ssrn.com/abstract=3441904 - [3441904-032](https://wulfkaal.github.io/claims/3441904-032) [mechanism/argued] -- Traditional jurisdictional principles cannot directly apply to blockchain technology because the blockchain is merely a collection of agreed upon calculations by decentralized computer systems, and no particular node holds the entire blockchain. > Traditional jurisdictional principles cannot directly apply to blockchain technology because the blockchain is a mere collection of agreed-upon calculations by decentralized computer systems. Wulf A. Kaal, Blockchain-Based Corporate Governance (2019). SSRN: https://ssrn.com/abstract=3441904 **2020** - [3709041-001](https://wulfkaal.github.io/claims/3709041-001) [mechanism/argued] -- Centralized coordination of behavior for the common good risks undermining individual effort, whereas blockchain technology's autonomous and anonymous decentralized coordination of individual action can deliver common good outcomes without suppressing individualism and its welfare enhancing effects. > While centralized common good coordination of human behavior risks undermining individual effort, blockchain technology's autonomous and anonymous decentralized network coordination of individual human action can help overcome the threat to individualism and its welfare enhancing effects. Kaal, Blockchain Technology for Good (2020). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3709041 - [3709041-002](https://wulfkaal.github.io/claims/3709041-002) [mechanism/asserted] -- Blockchain technology incentivizes direct transactions between creator and consumer, including compensation, which eliminates the need for intermediation. > The technology incentivizes direct transactions, including compensation, between the creator and consumer, eliminating the need for intermediation. Kaal, Blockchain Technology for Good (2020). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3709041 - [3709041-037](https://wulfkaal.github.io/claims/3709041-037) [design/asserted] -- Linking necessary data between governmental departments via blockchain could eradicate potential government corruption and increase the efficiency of the public sector. > Linking necessary data between governmental departments via blockchain could eradicate potential government corruption and increase the efficiency of the public sector. Kaal, Blockchain Technology for Good (2020). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3709041 **2021** - [3782192-035](https://wulfkaal.github.io/claims/3782192-035) [condition/argued] -- Before blockchain technology and cryptographic security, a dictatorship was necessary for governing a large network because more sophisticated governance architectures such as democracies could not govern efficiently at that scale. > A dictatorship was necessary for governance of the network, because more sophisticated governance architectures, such as democracies, lacked the ability to govern efficiently. Craig Calcaterra, Wulf A. Kaal, Introduction to Decentralization (2021). SSRN: https://ssrn.com/abstract=3782192 - [3782193-014](https://wulfkaal.github.io/claims/3782193-014) [design/argued] -- An ideal DAO with open membership for anonymous members from any culture can maintain harmony only if its members share a transcendental value, work toward a common purpose even if that purpose is simply profit, and share fairly in the spoils of the work. > An ideal DAO has an open membership policy for any anonymous person from any culture on the planet. How can they maintain harmony? They must share a tran- scendental value, work toward a common purpose (even if it's simply profit), and share fairly in the spoils of the work. Craig Calcaterra, Wulf A. Kaal, Historical Sketches of Centralization vs. Decentralization (2021). SSRN: https://ssrn.com/abstract=3782193 - [3782193-027](https://wulfkaal.github.io/claims/3782193-027) [empirical/argued] *(failure mode)* -- Bitcoin does not refute the thesis that money centralizes decentralized projects: hashing power has slowly become concentrated in mining pools until the majority of that power resides in the single country of China. > Slowly, Bitcoin hashing power has become more concentrated in mining pools, until today the ma- jority of power resides in the single country of China. Craig Calcaterra, Wulf A. Kaal, Historical Sketches of Centralization vs. Decentralization (2021). SSRN: https://ssrn.com/abstract=3782193 - [3782193-028](https://wulfkaal.github.io/claims/3782193-028) [empirical/asserted] *(failure mode)* -- Almost every blockchain project the authors are aware of is suffering under the centralizing force of competition for equity control and profit, and such projects predictably move toward centralization when unconscious of these forces. > In fact, almost every blockchain project we're aware of is suffering under the central- izing force of competition for equity control and profit. Craig Calcaterra, Wulf A. Kaal, Historical Sketches of Centralization vs. Decentralization (2021). SSRN: https://ssrn.com/abstract=3782193 - [3782198-029](https://wulfkaal.github.io/claims/3782198-029) [mechanism/argued] -- A blockchain is immutable because any attempt to edit an old block changes the hash of that information and is immediately rejected by the network that follows the protocol. > The blockchain is immutable, because any attempt to edit the old blocks will be immediately rejected by the network. A single number or letter changed anywhere in its entire history will result in a different hash of the information. Craig Calcaterra, Wulf A. Kaal, Contemporary Decentralization (2021). SSRN: https://ssrn.com/abstract=3782198 - [3782201-008](https://wulfkaal.github.io/claims/3782201-008) [mechanism/argued] -- Blockchain based guarantees remove agency costs because principals become less essential for monitoring agents, which addresses the inherent agency problems in modern finance and corporate governance. > Blockchain-based guarantees remove agency costs because principals are less essen- tial for monitoring agents, which addresses the inherent agency problems in modern finance and corporate governance. Craig Calcaterra, Wulf A. Kaal, Future of Decentralization (2021). SSRN: https://ssrn.com/abstract=3782201 - [3782205-032](https://wulfkaal.github.io/claims/3782205-032) [mechanism/asserted] -- In peer to peer systems the redundant and eternal storage of the blockchain takes the place of the central bank. > In P]P, the redundant and eternal storage of the blockchain takes the place of the central bank. Craig Calcaterra, Wulf A. Kaal, Eight Institutions for the Evolution of Decentralization (2021). SSRN: https://ssrn.com/abstract=3782205 - [3782214-005](https://wulfkaal.github.io/claims/3782214-005) [failure/evidenced] *(failure mode)* -- No major blockchain is entirely decentralized, because all of them lack binding, coded, anonymous peer to peer governance; on chain and off chain governance experiments to date fall short of that standard. > At the moment, however, no major blockchain is entirely decentral- ized, because they all lack pure binding coded PCP anonymous governance. Craig Calcaterra, Wulf A. Kaal, Decentralized Governance (2021). SSRN: https://ssrn.com/abstract=3782214 - [3782214-013](https://wulfkaal.github.io/claims/3782214-013) [failure/argued] *(failure mode)* -- Recording every action on a blockchain does not by itself defeat corruption, because more information does not ensure more productive collaboration; members must additionally be motivated to behave correctly and to police corrupt behavior. > Just because we can cite every action from a company on a blockchain, however, does not mean we have conquered corruption. More information does not ensure more productive collaboration. Craig Calcaterra, Wulf A. Kaal, Decentralized Governance (2021). SSRN: https://ssrn.com/abstract=3782214 - [3782216-003](https://wulfkaal.github.io/claims/3782216-003) [mechanism/argued] -- Blockchain transactions will always be expensive compared with other peer to peer transactions, because blockchain data must be stored eternally and redundantly on as many machines as possible to support decentralization. > Blockchain transactions will always be expensive compared with other P9P trans- actions. Blockchain transactions are required to be stored eternally and redundantly on as many machines as possible to aid decentralization. Craig Calcaterra, Wulf A. Kaal, Decentralized Finance (DeFi) (2021). SSRN: https://ssrn.com/abstract=3782216 - [3782216-004](https://wulfkaal.github.io/claims/3782216-004) [mechanism/argued] -- Decentralized banking addresses blockchain scaling, because the linear structure of a blockchain means that doubling the number of participants and transactions halves its speed. > Decentralized banking helps solve a major problem with blockchains called scaling. If you double the number of participants and transactions, the linear nature of the blockchain makes it slow down by half. Craig Calcaterra, Wulf A. Kaal, Decentralized Finance (DeFi) (2021). SSRN: https://ssrn.com/abstract=3782216 - [3808859-028](https://wulfkaal.github.io/claims/3808859-028) [definitional/asserted] -- DeFi's distinctive disruption is that it attempts to make financial transactions permissionless, completely open to anybody, and borderless, promising reduced transaction costs, broader financial inclusion, and open access across borders. > The particular form of disruption in DeFi comes from its attempts to make financial transactions permissionless, completely open to anybody, and borderless. Wulf A. Kaal, Decentralization – Why We Need Technology Infrastructure Upgrades (2021). SSRN: https://ssrn.com/abstract=3808859 - [3808859-038](https://wulfkaal.github.io/claims/3808859-038) [condition/argued] -- Decentralization requires its own infrastructure; the technologies of the internet era and its progeny alone may not suffice, and fully decentralized technologies require an enhanced decentralized network infrastructure. > Decentralization requires its own infrastructure. The technologies of the internet era and its progeny alone may not suffice. Fully decentralized technologies require an enhanced decentralized network infrastructure. Wulf A. Kaal, Decentralization – Why We Need Technology Infrastructure Upgrades (2021). SSRN: https://ssrn.com/abstract=3808859 - [3808867-030](https://wulfkaal.github.io/claims/3808867-030) [mechanism/argued] -- Because a decentralized system has a blockchain based quasi precedent nature with a human backstop, it enables built in checks and balances capable of supporting resistance even to apocalyptic takeovers of algorithmic systems that would remove human presence to optimize efficiency. > Because of its blockchain-based quasi- precedent nature with a human backstop, the decentralized system enables built-in checks and balances that can support resistance to even the most apocalyptic applications and takeover of algorithmic systems Wulf A. Kaal, How Decentralized Systems Can Upgrade AI (2021). SSRN: https://ssrn.com/abstract=3808867 - [3808867-035](https://wulfkaal.github.io/claims/3808867-035) [mechanism/argued] -- Blockchain based guarantees remove agency costs because principals are less required to institute oversight and monitoring of agents, which addresses inherent agency problems in modern finance and corporate governance. > Blockchain-based guarantees remove agency costs because principals are less required to institute oversight and monitoring of agents which addresses the inherent agency problems in modern finance and corporate governance. Wulf A. Kaal, How Decentralized Systems Can Upgrade AI (2021). SSRN: https://ssrn.com/abstract=3808867 **2024** - [4796714-012](https://wulfkaal.github.io/claims/4796714-012) [failure/argued] *(failure mode)* -- Recentralization is the central obstacle to using blockchain and distributed ledger technology to govern AI: the recentralizing tendency of these networks interferes with their capacity to deliver effective AI governance. > Alas, recentralization may interfere with blockchain and DLT technologies' ability to effectively govern AI. Wulf A. Kaal, AI Governance (2024). SSRN: https://ssrn.com/abstract=4796714 - [4900878-021](https://wulfkaal.github.io/claims/4900878-021) [definitional/asserted] -- Economic incentive designs are the core of tokenomics: they govern issuance, distribution, and use of tokens by emulating traditional monetary and fiscal policy and adapting it to the distinctive features of blockchain networks. > These designs emulate traditional monetary and fiscal policies, adapting them to the distinctive features of blockchain networks. Wulf A. Kaal, Quantum Economy and Tokenomics (2024). SSRN: https://ssrn.com/abstract=4900878 - [4900878-025](https://wulfkaal.github.io/claims/4900878-025) [mechanism/argued] -- Decentralized blockchain networks display an economic analogue of entanglement: a single participant's action, such as a large transaction, immediately propagates into token prices, network congestion, and the behavior of other participants. > For example, a large transaction by a single user can influence token prices, network congestion, and even the behavior of other participants. Wulf A. Kaal, Quantum Economy and Tokenomics (2024). SSRN: https://ssrn.com/abstract=4900878 - [4900878-030](https://wulfkaal.github.io/claims/4900878-030) [mechanism/asserted] -- The zero space structure of smart contracts produces a form of quantum transaction entanglement, in which transactions execute instantaneously and uniformly across the network regardless of the physical distance between the wallets involved. > The zero-space structure of smart contracts in blockchain technology enables a form of quantum transaction entanglement. Wulf A. Kaal, Quantum Economy and Tokenomics (2024). SSRN: https://ssrn.com/abstract=4900878 - [4900880-036](https://wulfkaal.github.io/claims/4900880-036) [mechanism/argued] -- DAO accountability comes from the recording mechanism itself: because all transactions and decisions are written to an immutable blockchain that every stakeholder can inspect, no single actor can easily manipulate or obscure organizational activity. > All transactions and decisions are recorded on an immutable blockchain, accessible to all stakeholders. This transparency ensures accountability by making it difficult for any single actor to manipulate or obscure organizational activities. Wulf A. Kaal, Quantum Economy and the Future of Work (2024). SSRN: https://ssrn.com/abstract=4900880 - [4900880-039](https://wulfkaal.github.io/claims/4900880-039) [design/argued] -- Combining quantum computing with blockchain and DAO frameworks makes a governance model possible that is simultaneously transparent, decentralized, and adaptive, supporting efficient and fair resource distribution and continuous innovation. > By integrating quantum computing with blockchain and DAO frameworks, a new era of transparent, decentralized, and adaptive governance is possible. Wulf A. Kaal, Quantum Economy and the Future of Work (2024). SSRN: https://ssrn.com/abstract=4900880 - [4941807-018](https://wulfkaal.github.io/claims/4941807-018) [mechanism/argued] -- An immutable blockchain log of transactions and modifications inside AI systems lets stakeholders trace the lineage of an AI decision back to its original data inputs, which makes errors easier to identify and correct. > This feature allows stakeholders to track the lineage of AI decisions back to their original data inputs, enabling easier identification and correction of errors. Wulf A. Kaal, AI Governance Via Web3 Reputation System (2024). SSRN: https://ssrn.com/abstract=4941807 - [4941807-019](https://wulfkaal.github.io/claims/4941807-019) [mechanism/argued] -- Smart contracts can automate compliance with regulatory requirements and ethical guidelines: for example, a smart contract can enforce privacy law directly by controlling an AI system's access to personal data according to predefined rules. > They can be used to automate compliance with regulatory requirements and ethical guidelines. For instance, smart contracts can automatically enforce privacy laws by controlling AI's access to personal data based on predefined rules. Wulf A. Kaal, AI Governance Via Web3 Reputation System (2024). SSRN: https://ssrn.com/abstract=4941807 - [4957318-036](https://wulfkaal.github.io/claims/4957318-036) [design/asserted] -- The WDAG system never repeals: all precedents and rules are retained on the blockchain, so no legal principle is ever permanently discarded even when it ceases to be applied. > contrast, the WDAG system allows for the retention of all precedents and rules on the blockchain, ensuring that no legal principle is permanently discarded. Wulf A. Kaal, The Future of Law - Dynamic Web3 Governance (2024). SSRN: https://ssrn.com/abstract=4957318 - [4957318-039](https://wulfkaal.github.io/claims/4957318-039) [design/asserted] -- The WDAG system preserves legal history as a byproduct of its architecture: all legal precedents are retained within a blockchain based framework in a transparent and immutable format, so historical access does not trade off against current relevance. > The WDAG system retains all legal precedents within its blockchain-based framework, preserving the history of legal developments in a transparent and immutable format. Wulf A. Kaal, The Future of Law - Dynamic Web3 Governance (2024). SSRN: https://ssrn.com/abstract=4957318 - [5254152-006](https://wulfkaal.github.io/claims/5254152-006) [mechanism/asserted] -- Smart contracts, as self executing contracts with terms written directly into code, remove the need for intermediaries, which lowers costs and raises trust among participants. > Smart contracts, self-executing contracts with terms directly written into code, eliminate the need for intermediaries, reducing costs and increasing trust among participants. Wulf A. Kaal, DAO Market Meta Analysis 2024 (2024). SSRN: https://ssrn.com/abstract=5254152 **2025** - [5095633-026](https://wulfkaal.github.io/claims/5095633-026) [mechanism/argued] -- High transaction costs in centralized payment systems make micro-payments for small tasks uneconomic, whereas blockchain ledgers process tiny transfers efficiently and thereby widen the pool of contributors willing to do micro-tasks. > High transaction costs in centralized models often preclude micro-payments for smaller tasks. In contrast, blockchain-based ledgers can process tiny financial transfers efficiently, facilitating fair compensation for incremental work and expanding the pool of potential contributors Wulf A. Kaal, Artificial Intelligence The Final Frontier (2025). SSRN: https://ssrn.com/abstract=5095633 - [5245185-003](https://wulfkaal.github.io/claims/5245185-003) [mechanism/evidenced] -- Because blockchain records a verifiable and immutable history of data provenance and alterations, it mitigates data poisoning risk and supports the claim that AI models were trained on genuine datasets. > Blockchain establishes a verifiable record of data provenance and alterations, essential for sustaining trust and mitigating risks such as data poisoning, thereby ensuring AI models are trained on genuine datasets. Wulf A. Kaal, How can we Best Monitor AI Agents (2025). SSRN: https://ssrn.com/abstract=5245185 - [5245185-007](https://wulfkaal.github.io/claims/5245185-007) [failure/evidenced] *(failure mode)* -- The accelerated evolution of AI and blockchain technologies outstrips regulatory development, which can situate AI agents in legal interstices, particularly in financial and data management domains. > accelerated evolution of AI and blockchain technologies frequently outstrips regulatory development, potentially situating agents within legal interstices, particularly in financial and data management domains. Wulf A. Kaal, How can we Best Monitor AI Agents (2025). SSRN: https://ssrn.com/abstract=5245185 - [5245185-009](https://wulfkaal.github.io/claims/5245185-009) [failure/evidenced] *(failure mode)* -- Integrating AI with blockchain does not by itself eliminate security exposure: cyberattacks and privacy breaches remain possible absent rigorous monitoring. > Security vulnerabilities persist, as blockchain integration does not wholly preclude cyberattacks or privacy breaches absent rigorous monitoring. Wulf A. Kaal, How can we Best Monitor AI Agents (2025). SSRN: https://ssrn.com/abstract=5245185 - [5245185-033](https://wulfkaal.github.io/claims/5245185-033) [design/evidenced] -- Recording every AI agent decision and transaction on a blockchain produces a permanent tamper proof record that enables public verification and fosters accountability, because no single entity can alter the historical record. > This permanent, tamper-proof record enables public verification and fosters accountability by ensuring that no single entity can alter the historical record of AI agent activities. Wulf A. Kaal, How can we Best Monitor AI Agents (2025). SSRN: https://ssrn.com/abstract=5245185 - [5554218-014](https://wulfkaal.github.io/claims/5554218-014) [design/argued] -- Conflict of laws rules should instead be used as a vehicle for implementing innovative national legal systems that utilize decentralized governance models and respect the autonomy of blockchain. > conflict-of-laws rules should be used to implement innovative national legal systems that utilize decentralized governance models and respect the autonomy of blockchain. Furrer Andreas, Wulf A. Kaal, Universal Digital Law Codex (UDLC) Building the Legal Infrastructure for the Digital Era (2025). SSRN: https://ssrn.com/abstract=5554218 - [5583610-039](https://wulfkaal.github.io/claims/5583610-039) [predictive/evidenced] -- Blockchain integration should lower governance overhead by twenty to thirty percent by enabling real-time voting and greater transparency. > LER's blockchain integration could lower governance overhead by 20–30%, enabling real-time voting and enhanced transparency. Wulf A. Kaal, Liquid Equity Rewards in Corporate America (2025). SSRN: https://ssrn.com/abstract=5583610 - [5886342-003](https://wulfkaal.github.io/claims/5886342-003) [design/asserted] -- The Codex is positioned as a private universal standard rather than state legislation: it supplies legal certainty and enforceability for digital systems ranging from blockchain and AI to quantum computing, so that platforms, businesses and users can operate across borders and technologies. > The UDLC is intended to serve as a private universal standard for legal certainty and enforceability in digital systems — from blockchain and AI to quantum computing — providing digital platforms, businesses and users with the tools they need to operate securely and legally across borders and technologies. Furrer Andreas, Wulf A. Kaal, Stephan D. Meyer, Universal Digital Law Codex (UDLC) (2025). SSRN: https://ssrn.com/abstract=5886342 ## Verify Every claim above resolves to a record carrying a verbatim source quote, the sha256 of the source PDF, and a preformatted citation. 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