The Challenge of Technology-based Decentralization to the Traditional Legal Paradigm

This chapter explores the core challenge that blockchain-based decentralization presents to traditional legal frameworks. Legal systems rely on the identification of subjects – whether natural persons, legal entities, or State authorities – to whom rights, obligations, and consequences can be assigned. This principle of attribution is foundational to nearly every facet of law, including criminal responsibility, contractual obligations, property rights, and regulatory enforcement. However, blockchain technology and autonomous decentralized systems fundamentally undermine this assumption by operating without identifiable centres of accountable authority. Decentralized Autonomous Organisations and Decentralized Finance protocols function autonomously, transcending territorial boundaries and human intermediaries, yet they typically fall under State jurisdictional structures. The argument is made that the fundamental operations of law – determining applicable rules, adjudicating disputes, and enforcing judgments – are predicated on the existence of ‘centres of attribution.’ This situation creates a fundamental tension between the aspirations of decentralization and the operational requirements of law, raising the question of whether the challenges posed by Blockchain can be reconciled with the essential principles of legal order.