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Code is Law

Key Points

  • Blockchain technology and Smart Contracts have the potential to unlock a new era of human flourishing.
  • The value that Smart Contract Platforms introduce is Code is Law; the ability to Build Unstoppable Applications.
  • If positively engaged with, Code is Law will be hugely beneficial; those who attempt to stifle its adoption will be left behind.
  • Change is likely to disrupt powerful institutions, who may fight against technology that threatens their position.
  • Only blockchains committed to Code is Law are suitable to take on this challenge; others will become captured.
  • Today, most blockchain projects, including Ethereum™, are not committed to Code is Law, undermining their value proposition.


For Ethereum Classic, principles come first, and ETC's story begins with a phrase that most succinctly captures its core philosophy; Code is Law.

Code is Law puts the "Unstoppable" in "Build Unstoppable Applications", a philosophy lauded enthusiastically by The Ethereum Project up until The DAO Hack. But what exactly is Code is Law, and why did Etherians outside of Ethereum Classic decide to abandon it?

A Vision for the Future

Many who think deeply about the potential of blockchain technology have a "eureka" moment, where it all clicks, and the wild valuations of the cryptocurrency space suddenly feel a little meager. They realize a future can exist where all agreements between people are ultimately governed not by corruptible institutions but by the cold hard logic of Smart Contract code.

In this future, individuals decide for themselves which contracts they wish to engage with, rather than rolling the dice via the geographical monopolies they happen to be born into. There are no middlemen as rent-seeking in all areas is replaced by disintermediation, market competition, and price optimization. This reality is fairer, cheaper, interoperable, and global. It becomes a universal solvent that lubricates the ossified machinery of old.

A new era of human flourishing is unleashed, as society is unshackled from the inefficiency and opacity of corruption. It will be nothing short of a new renaissance, a beaming ray of hope in the face of darker alternatives, and to top it off, it is achievable within our lifetimes.

Virtual Jurisdictions

In this future, one or more global "virtual jurisdictions" exist, over and above, in some cases instead of, the geography-based legal frameworks that operate today. These new jurisdictions will be preferred as they offer something their traditional alternatives cannot provide consistently: transparency, fairness and incorruptibility.

Unlike the legal jurisdictions that exist today that are regularly manipulated by the whims of the powerful, future virtual jurisdictions will be governed by the principle of Code is Law, meaning that for the first time, humanity can operate under actual, as opposed to the guise of, Rule of Law, codified not in esoteric and misinterpretable legal texts, but in pure mathematics.

Code is Law is made possible by blockchain technology, and is a straightforward concept that keeps these virtual jurisdictions sovereign. It means that the code of a Smart Contract is the ultimate arbiter of the outcome of an on-chain interaction, as opposed to some overriding force from outside the network. As a result, applications are unstoppable, and run exactly as programmed without downtime, censorship, or third party interference.

When individuals voluntarily engage with Smart Contracts on a chain that follows Code is Law, they accept the outcome of whatever logic is defined within those contracts. If a contract is poorly written or has a mistake, it is not the responsibility of the wider network to "make whole" parties who are not happy with a given outcome. In short, there are no do-overs, bailouts or refunds, unless pre-programmed.

The Value of Blockchains

Upon reflection, it becomes apparent that Code is Law is the only way that Smart Contracts can be fairly or usefully interpreted. On blockchains that do not uphold Code is Law, the outcome of transactions is not governed by individual choice via contract code, but ultimately at the behest of "governance" from the legacy system, including all the drawbacks that introducing a blockchain was meant to alleviate.

For those who want to "Build Unstoppable Applications", the apparent truth is that Code is Law is the very thing that makes blockchains valuable. It is why they exist. Without Code is Law, there are much more efficient ways to "Build Stoppable Applications", such as Amazon Web Services, so why bother with a blockchain at all?

Not without a Fight

While these new systems will unlock immense value for the vast majority, they are bound to be opposed by those who unfairly benefit from the status quo.

In transparent and incorruptible Code is Law jurisdictions, those who cannot provide real value on a level playing field will go extinct. For this reason, in a futile attempt to stop progress, truly decentralized blockchains will experience significant pushback from incumbent institutions for whom this fairer reality poses an existential threat.

If history is anything to go by, attempts will be made to stifle the adoption of these empowering new technologies. Projects that are not sufficiently decentralized, those that are not Sovereign Grade, will become captured by the very institutions they promise to disrupt. This is why Code is Law and the high degree of decentralization required to underpin it must be the primary goal of blockchains that wish to survive and provide long term value.

Where Code isn't Law

The concept of Code is Law is potentially provocative and disruptive to the existing global order, but it need not be reflexively rallied against. Like all powerful technologies, how and where they are applied determines who benefits from their application. Like the internet before blockchain, the genie is out of the bottle. This will undoubtedly change the existing landscape, but society will benefit by engaging with the technology positively.

How we engage depends on recognizing the boundaries of Code is Law, and understanding that, like the embers of a fire, it can only exist in unique circumstances and has to be nurtured and matured into the raging source of light it has the potential to become.

The Old World

The phrase isn't only Code is Law. The concept of Code is Law is ambivalent about how any particular local constabulary handles the unstoppability of Smart Contracts in their off-chain jurisdiction. Cryptocurrency theft, for example, is considered illegal in many places, and Code is Law proponents can consistently support the return of stolen funds while also opposing the reversing of malicious transactions.

As there are many legal jurisdictions and various approaches to policing, Code is Law blockchains recognize that to remain globally relevant and accessible, they must be neutral and follow their own contractual agreements. Off-chain concerns are outside the responsibility of the chain, whose only role is to ensure that transactions are not reversible through third party interference with the protocol.

Code is Law blockchains are opt-in systems that can have off-chain consequences that depend on how they are used. In the same way that fire can be used for both warmth and destruction, as a new technological primitive, restricting its use will only hinder the restrictor, who will be left behind as others take advantage of it. There is no question that a big challenge exists in figuring out how the world interfaces with this new tech, but that depends on cultural biases and is not necessarily within the control of technologists. In any case, please don't shoot the messenger.

Outside the Contract Layer

A common misconception about Code is Law is that it applies to all parts of a blockchain's technology stack, including the node clients' code. This is nonsensical, as blockchain nodes are written in conventional programming languages and operate in traditional execution environments, where code couldn't be law if it wanted to. Instead, blockchain clients are written to participate in a given blockchain's protocol, whose operation creates a new decentralized execution environment; a Contract Layer that sits on top, where Code is Law can operate.

9 out of 10 Chains

Some chains have abandoned the idea of Code is Law entirely. Indeed, the vast majority of blockchain projects today do not give much if any priority to unstoppability, decentralization or censorship resistance, and are therefore unable to deliver on the bright future alluded to above. These projects may certainly carve out niches in areas that won't shake things up too much, but the moment they pose a threat to powerful incumbents, they will be easily manipulated, captured or otherwise compromised, and will therefore ultimately fail to deliver seriously monumental change.

Sadly, this is true for ETC's younger, albeit weightier sibling, Ethereum™, a project that once shared these principles, but after only a year, split away, rebooting a new chain with new rules, going down a new path, and explicitly disavowing Code is Law.

To understand what happened, we must now reflect on Ethereum Classic's shared history with Ethereum™ and revisit the incident that led to ETC's genesis.

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The content on this website is user-generated and solely for informational purposes. Do not interpret any content as an endorsement of any product or service. There's "no official anything" in Ethereum Classic. Always do your own research, and remember: don't trust, verify!