How to cite blockchains and NFTs?
Any new technology sooner or later ends up in court, and crypto is no exception. Today, judges around the world are hearing cases involving everything from stolen bitcoins to crypto contract disputes to who gets to keep NFTs in a divorce. But as more lawyers become familiar with crypto and blockchain, they face a new problem: how to describe them in court documents.
While the challenge of citing blockchain data might only seem relevant to legal nerds, it has real-world implications. Citations — which can link to previous cases, journal articles, or other sources — are the building blocks of legal precedent, and as more disputes about NFTs end up in court, judges and attorneys need a reliable way to find them.
In the few NFT cases that have come to court, the citations do not point to a blockchain — which would provide a definitive account of transactions related to the NFT — but to a website or just a written description. That includes a high-profile case this summer in which the Justice Department charged an executive at NFT marketplace OpenSea with insider trading.
Blockchain and NFT-related cases aren’t the first in which attorneys have wrestled with how to cite emerging technology. In the 1990s, important sources of information and evidence began to appear on the so-called World Wide Web. In response, popular citation guides such as the blue book— usually edited by law students — established standards for citing online sources, similar to those that have long existed for books, journals, and other parts of the law.
Now that blockchains and NFTs are becoming more common, the first standard quote for them has arrived thanks to some crypto-inquisitive law students.
Citing “token standards” and “smart contract IDs”
Alexandra Champagne is a senior in law at McGill University in Montreal. She is also the citation editor at the McGill LawJournal, which published Canadian Guide to Unified Legal Citation (aka the McGill Guide), Canada’s most widely used legal citation guide, similar to the blue book used in the US
As she pondered changes to the next edition of the guide, Champagne realized that the legal world has yet to grapple with crypto — an area she and other staffers at the magazine have dabbled in their personal lives, including one editor who bought NFTs. While blue book and other guides contain rules for citing online sources, in the case of NFTs, simply referring to a website may not be sufficient.
Like champagne said Wealth, Blockchains and smart contracts (used to create and transmit NFTs) are a new and different technology from the internet. And since blockchains create a permanent, public, and tamper-proof record of technology, it made sense to tie them into a legal citation system. For this purpose, she and her colleagues have developed citation rules that contain references to blockchain-specific elements such as token standards – for example Bitcoin or Ethereum – and the strings, so-called smart contract IDs, that refer to the NFT in the blockchain. Here is a screenshot of the upcoming standard:
As you can see above, the guide includes example quotes for famous NFTs, like the one artist Beeple sold for $69 million and one from the Bored Ape set, popular with celebrities.
The new blockchain and citation rules come into effect with the 10th edition of the McGill Guide will be published by Thomson Reuters next year.*
On request from Wealth, Editors at the blue book said the guide has not yet explored a citation format for blockchain-based data, but that they will recommend future editors to consider the question before an updated edition is published in 2025.
Blockchains and “permalinks”
Jennifer Allison, a librarian at the Harvard Law School Library, says that while researching NFT citations, she came across an article in a legal journal that discusses the topic. The article contained an image of an NFT describing it as a “tokenized representation of a mural” but with a citation simply pointing to a webpage at OpenSea.
said Alison wealth that the issue of NFT citation is likely to arise more frequently as digital assets become the subject of litigation over insider trading, breach of contract, and even probate. She says lawyers and judges might be content for now to simply describe NFTs as a different work of art by providing the title and where it was sold – but over time that will likely prove insufficient.
“A painting does not have the same digital footprint as an NFT, and the citation model proposed by McGill seems to better inform the user of what exactly is being cited and how the reader can find it, or more information about it,” Allison said via e-mail. Mail.
Allison also addressed the issue of “link rot” – a term used to describe the phenomenon of URLs becoming corrupted or unusable. By 2013, Link Rot had become a major issue for the country’s highest court, which presided over it New York Times to publish an article titled “In Supreme Court Opinions, Web Links Going Nowhere,” which revealed that half of the websites cited in the court’s decision were no longer working.
In response to that blue book and other citation guides called for references to websites that should contain so-called permalinks—a duplicate URL but maintained by Harvard or other university libraries. The idea is that the permalink will always work, even if the original link no longer works. Today, the system has become the standard for courts and academic publishers.
However, in the case of smart contracts and NFTs, it is unclear whether permalinks will be necessary, as blockchains are inherently designed to be permanent and immutable. In case future citation editors require a secondary source for locating NFTs, one option could be to integrate decentralized file storage services like Arweave or Filecoin tied to different blockchains.
It will likely be years before all of this happens, but for now it seems inevitable that blockchains will become a source of authority for the legal system, much as the web did two decades ago.
“We don’t know what unique forms of technology will emerge from the blockchain that may not even be tangentially tied to a specific URL,” explains McGill’s Champagne. “Having a way to cite blockchain technology that directly references the smart contract, token ID, etc. will hopefully provide authors with a sustainable approach to convey information to their readers.”
*Citation reproduced with permission from Thomson Reuters Canada Limited Canadian Guide to Uniform Legal Citation, 10th edition/Manuel canadien de la reference juridique 10E edition; Release planned for 2023.
This story was originally published on Fortune.com
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