It’s a common complaint, both from inventors and lawyers, that the law tends to struggle to keep up with new technologies, especially when they become widespread and assimilated in unexpected ways. It is certainly true that applying decades-old laws in new contexts can present significant challenges. But sometimes, once the technological trappings are stripped of the latest shiny new thing, the courts find a familiar structure underneath and the applicable law becomes clearer.
An example of this emerged recently in the crypto world. The term “crypto” refers to a class of digital assets (including cryptocurrencies and non-fungible tokens or NFTs) backed by an immutable digital ledger called a “blockchain”. No one person or entity controls the blockchain – it is “spread” across multiple servers – and every transaction of the associated asset is recorded there. It is functionally impossible to modify, delete or destroy records once they have entered the blockchain. In theory, this system allows the creation of a digital good that can be linked to an “owner” (who can remain anonymous) and never counterfeited. A “cryptocurrency” (such as Bitcoin) is a digital asset backed by a blockchain, intended to be used as an investment or to purchase goods and services. (Other systems, such as NFTs, attempt to use blockchain technology to ensure the “uniqueness” of a digital object or to protect intellectual property or contractual rights.)