Larry Catá Backer (Pennsylvania State University — Penn State Dickinson Law) and Daniil Rose (Pennsylvania State University) have posted Blockchain Regulatory Systems—Conceptual and Operational Challenges on SSRN. Here is the abstract:
This article challenges one of the most common assumptions in contemporary blockchain discourse: that code can be understood as a “rule” analogous to law. It argues instead that code is better conceived as a system, an environment, or even an ecology of layered rule frameworks through which regulation is produced, translated, and enforced. In the process of its creation, the human and human systemicity is displaced and subordinated. In the blockchain context, what is often described as the “Rule of Code” is not a singular rule of or by code but an interactive multilingual system of command that follows its own logic. From that premise, the article reorients the debate between Rule of Law and Rule of or by Code. The real conflict is not between two neatly opposing sovereigns, but between different regulatory ecologies that organize meaning in fundamentally different ways. The paper begins by framing blockchain as more than a technical tool, introducing it as a site where law, code, language, semiotics, and governance intersect in ways that unsettle conventional regulatory assumptions. It then develops its core argument through a series of analytical sections on the threats to the Rule of Code, the relationship between legitimacy and coded systems, and what the authors call the “Sacher-Torte” model, which shows how blockchain operates through layered communicative and regulatory environments rather than a single rule structure. Finally, the paper turns to the dialectic between traditional legal ordering and coded systems, concluding that the real challenge is not choosing between law and code, but understanding how human regulation can still operate at the points where these distinct systems meet and produce effects in the world.
Lawrence Solum