COALA’s Regulation Tech Working Group focuses on two goals: (1) to investigate and elaborate blockchain-based techno-legal tools and legal frameworks that deploy technological advances to support current regulatory and policy goals; and (2) to explore how blockchain technologies can be specifically deployed for institutional governance.
In this subgroup, we explore the spectrum of ways in which we can leverage blockchain technologies to address the growing deficit of accountability and trust in both public and private institutions by creating incorruptible systems. We have identified two ways in which this can be achieved:
Blockchain-Assisted Governance (ex-post governance mechanisms)
- Using blockchain technologies as a means to improve existing governance structures within an institution, by improving the transparency, auditability, and accountability of its operations.
- Integrating blockchain technologies in traditional governance systems: e.g. What are the various use cases of blockchain technology in corporate and institutional governance that can increase the transparency / trust / accountability of existing organizations?
- Using blockchains to improve the governance of existing institutions: e.g. Improving the transparency of governance structures; improving the verifiability / auditability of pledged actions, and increasing the efficiency / rigidity / of procedural rules via automation and self-execution.
Blockchain-based Governance (ex-ante governance mechanisms)
- Leveraging new opportunities that blockchain technologies provide for the establishment of a new operational layer for human interaction that can support, complement and perhaps replace current, less trustworthy governance structures.
- Blockchain technology as a lower-level operational layer that establishes the rules and procedures that everyone must follow. In this context, the blockchain acts as the underlying framework on which the decision-making process is done.
- However —without AI— technology is unable to make decisions. We thus maintain the need for an upper-level governance layer: e.g. Who has the right to make decisions? What is the weight of each participant in the system? What are the power dynamics that can be found in the system? (Cf. Bitcoin: hashing power, TheDAO: plutocracy)
- One important problem of market-driven governance models is the risk of centralization: e.g. What kind of governance systems can we implement on top of a blockchain-based system, in order to preserve the decentralized character of it? How to avoid the emergence of oligopolies?
The working group addresses these questions by investigating the use of blockchain technology and smart contracts for enhanced information security and institutional governance, with particular focus on the new opportunities for technological due process and institutional accountability that these technologies provide.
The goal is to identify key areas where smart contracts can outperform existing processes in traditional (legacy) institutions through the use and deployment of decentralized ledger technologies, transparent and tamper-resistant databases, multi-signatures, automated logic, and so forth. Improvements include reduced transaction costs, increased efficiency, enhanced verifiability and auditability of transactions, and, more generally, a greater degree of transparency and accountability.
The working group also aims to explore a new generation of security concerns that emerged in parallel with the use of blockchain technologies for distributing and decentralizing control. It does so by identifying and elaborating security standards and key management practices (key generation, storage, usage, access and compromise policies) for blockchain-based applications.
Techno-Legal Tools & Frameworks:
In this subgroup, we investigate and elaborate specific regulatory and policy frameworks for blockchain technology that will balance promote innovation and growth whilst preventing systemic risk and protecting consumers and entrepreneurs against economic harm and illegal activity. The working group addresses questions in the following macro areas:
- What is the purpose of existing regulations and what are the specific methods used to address specific risk and concerns?
- To what extent can we rely on technical and contractual means to deploy a system of internal validation and self-regulation that complies with policy goals underlying current sectoral regulations?
- Under what circumstances are consumer protection requirements (e.g. safety and soundness) met by technological advances (e.g., blockchain-based applications) in the context of organizational governance?
- How can decentralized identity and reputation frameworks be leveraged to increase trust and reduce privacy harm for Internet-based companies?
- To what extent can blockchain technologies be deployed to achieve regulatory and policy goals?
- How can we leverage blockchain-based solutions to evolve legal and regulatory frameworks?