Decentralized Finance: The Big Picture
From its inception, Bitcoin was developed as a means to eliminate the middleman and decentralize financial transactions from government regulation. In fact, digital currencies can address the critical issue of the fungibility of money. For example, in the case Crawfurd v. Royal Bank (1749), there was a dispute over the rightful owner of banknotes that were mailed by the defendant with the intention of paying a debt. Instead, the money was found and intercepted by another patron, at which point the question became: Who was entitled to the money? Should it go to the original owner whose destination was never reached, or to the person who found it once that destination was not reached?
In the view of law and economics, the value of money doesn’t change, no matter who owns it. In the case of digital currency, the creator of Bitcoin, Satoshi Nakamoto, sought to create a fungible financial market while eliminating reliance on physical banknotes. However, unlike the limited ability of consumers to retrieve physical banknotes after exchanging them for a service or product, it is possible to reverse engineer digital currency transactions – particularly due to the nature of mining and recent developments regarding the Blockchain and the Metaverse. If there is a process in which digital currencies can be reverse engineered, this threatens to undermine the foundation of decentralization upon which digital currencies were originally built.
The Changing Landscape of Digital Currencies
Both digital currencies and the Metaverse aren’t the first developments of their kind to require rapid change. This is in the sense that they serve as technological frontiers that are projected – if they have not already done so – to become integral to the lives of everyday citizens. As such, it is only natural that attorneys looking to serve their clients’ legal issues related to Blockchain technology and the Metaverse draw precedent from a time when the internet and digital commerce began to require laws to regulate them.
When it comes to thinking about the way laws surrounding the Metaverse are being created, there is also a question of how and if they will continue to facilitate the liberal agenda behind Bitcoin’s inception. For example, Cryptocurrency and Blockchains do this already as Blockchains are not monitored by any one person, group, or company. But, if digital currencies and the Metaverse are not fully decentralized, this brings to the forefront the threat of inequity and unfairness. For example, if the progression of these technologies make it so that every person can have their own avatar existing in the Metaverse, this would have to be made available to everyone in order to maintain a seemingly democratic stance. Even so, if made available, questions of accessibility also arise in terms of ensuring access to all people, regardless of race, class, sexuality, age, financial status, etc.
In conclusion, digital currencies were founded on democratic principles, with the aim of decentralizing the world of finance from the government and other third-party authorities such as banks. Will the development of the Metaverse reflect the original values of the Blockchains upon which it was built? More importantly, will laws designed to regulate this new world do the same? Only time will tell.