Is Raw Blockchain Data Legally Equivalent to a Written Award?

Table of Links

Abstract and I. Introduction

II. Award Form and Content

III. Electronic Signatures, Writing Requirement, and Authentication

IV. Can Multisig Arbitration be Seen as an Autonomous Legal Order?

V. Conclusion

Appendix A: Multisig Transaction on Bitcoin Testnet Example

Appendix B: Breakdown of BTC Stored in 2/3 Multisig Accounts

B. HOW COULD AN ELECTRONIC AWARD BE CONSIDERED TO BE “IN WRITING?”

Many jurisdictions have adopted the UNCITRAL Model Law on Electronic Commerce or similar laws[32], which view electronic records as valid and enforceable[33]. Where a law, or a legal obligation, requires information to be evidenced “in writing,” this requirement can be met by an electronic record if the information contained therein is subsequently retrievable at a later time[34]. Furthermore, an electronic record could be considered to be “original” if: (a) there is reliable assurance of the integrity of the information from the time when it was first generated and (b) the information is capable of being represented[35].

For the United Kingdom, under Section 7(c)(2) of the ECA 2000, an “electronic document” is defined as anything stored in electronic form, including text, and Section 7(c)(1), states that in any legal proceedings, an electronic document is admissible as evidence if it relates to the authenticity of an electronic transaction. Black’s Law Dictionary defines a transaction as “[t]he act or an instance of conducting business or other dealings; esp., the formation, performance, or discharge of a contract[36].”

The definition of a transaction is broad enough to include raw data of a multisig transaction. The data results from the execution of a contractual obligation of multisig participants. Furthermore, the multisig transaction is made up of hexadecimal data with digits from 0 to 9 and characters A to F to represent 16 possible values[37]. If a single number or letter is converted to a different value, the TXID will be changed and the altered TXID would not be found in a blockchain explorer. The raw transaction data is a unique value that is validated as a true transaction by many computers in a network, in a sense, raw transaction data is more temper-resistant than traditional paper awards. The integrity of raw transaction data is reliably assured from the time when it is first committed to a block and the information is represented in a complete and unaltered state in a permanent distributed ledger. As such, a party attempting to prove the existence of an award can introduce the raw data as evidence to establish the authenticity of a multisig transaction. Thus, like electronic signatures, a court may hold that the raw data of a multisig transaction is compelling proof to establish the existence of an award that has the functional equivalence of an award in writing.

---

[32] 72 States and a total of 151 jurisdictions have adopted UNCITRAL Model Law on Electronic Commerce (1996) with additional article 5 bis as adopted in 1998 <https://uncitral.un.org/en/texts/ecommerce/modellaw/electronic_commerce/ status> l.a.d. 04/17/2019. In the United States, the Electronic Signatures in Global and National Commerce Act (ESIGN) follows a similar approach of the Model Law.

[33] UNCITRAL Model Law on Electronic Commerce (1996), Article 5.

[34] UNCITRAL Model Law on Electronic Commerce (1996), Article 6.

[35] UNCITRAL Model Law on Electronic Commerce (1996), Article 8.

[36] Garner, Bryan A. (Editor) (2009) Black’s Law Dictionary, 9. Edition, Eagan, West.

[37] Bryant, Randal E./O’Hallaron, David R (2015) Computer Systems: A Programmer’s Perspective, 3. Edition, London, Pearson. In C programming language, letters could be written in upper or lower case.