From Volume 88, Number 4 (May 2015)
Property is the law of lists and ledgers. County land records, stock certificate entries, mortgage registries, Uniform Commercial Code filings on personal property, copyright and patent registries of interests in intellectual property, bank accounts, domain name systems, and consumers’ Kindle e-book collections in the cloud are all merely entries in a list, determining who owns what.
Each such list has suffered a traditional limitation. To prevent falsification or duplication, a single entity must maintain the list, and users must trust (and pay) that entity. As a result, transactions must proceed at significant expense and delay. Yet zero or near-zero transaction costs are the fuel of Internet scalability. Property transactions have not yet truly undergone an Internet revolution at least partly because they are constrained by the cost of creating centralized trusted authorities.
This Article reimagines the contours of digital property if that central constraint were removed. There is every reason to believe it can be. Increased interest in cryptocurrencies has driven the development of a series of technologies for creating public, cryptographically secure ledgers of property interests that do not rely on trust in a specific entity to curate the list. Previously, the digital objects that users could buy and sell online were not rivalrous in the same way as offline physical objects, unless some centralized entity such as a social network, digital currency issuer, or game company served the function of trusted list curator. Trustless public ledgers change this dynamic. Counterparties can hand one another digital, rivalrous objects in the same way that they used to hand each other gold bars or dollar bills. No intermediary or curator is needed.