The immutability of blockchain ledgers and smart contracts have a “dark side,” argues UPenn professor Kevin Warbach.
Blockchain technology crystallizes the rise of “algorithmic power” that today presents a major challenge to traditional forms of sovereignty, legal authority and state-led governance.
So goes the argument in a new post for the Oxford University Faculty of Law blog on June 1 by Kevin Warbach, a professor of legal studies and business ethics at the Wharton School, University of Pennsylvania.
Professor Warbach’s forthcoming book, “After the Digital Tornado: Networks, Algorithms, Humanity,” will argue that blockchain technology could wreak unintentional havoc if its characteristics are not understood and tackled directly.
For Warbach, the immutability of blockchain ledgers and the use of smart contracts — self-executing software code — have an implicit “dark side.”
While they are designed to overcome the weaknesses of human or institutional intermediaries, the alternative they create has its own inherent tensions:
“Contracts of any consequence are generally incomplete; that is to say, they do not precisely specify outcomes for every possible scenario.