Blockchain technology, governance and law: taming the algorithmic leviathan

This thesis examines the conceptual and practical tensions arising from the integration of blockchain technology into established systems of public and corporate governance. Originally developed within cypherpunk circles as a tool of radical decentralization, blockchain aimed to replace fallible human intermediaries with automated coordination secured through cryptography. The principle often summarized as “Code is Law” envisioned governance based on trustless systems and immutable rules. However, this research argues that blockchain’s disruptive ambitions have largely been absorbed and reshaped by existing legal and institutional frameworks. Rather than replacing traditional governance structures, blockchain is undergoing cautious institutional adaptation, demonstrating the enduring primacy of legal norms and the rule of law over purely algorithmic governance. The thesis traces this transformation across four chapters. The first chapter explores blockchain’s ideological origins, highlighting its emergence as a response to perceived failures of centralized authority in state and corporate institutions. It introduces the concept of Lex Cryptographia, a vision of governance based on self-executing code. The second chapter examines how this vision confronts the realities of public law and identifies a “Governance Paradox”: blockchain’s defining characteristics—immutability and decentralization—conflict with the legal system’s need for discretion, reversibility, and institutional accountability. Consequently, governments tend to adopt permissioned blockchain systems that integrate the technology while reinforcing state authority. The third chapter analyzes Decentralized Autonomous Organizations (DAOs) as the most ambitious attempt to implement “Code is Law” in private governance. It shows that these systems often experience governance failures, including concentration of power among large token holders and the emergence of informal technocratic elites. The 2016 collapse of “The DAO” demonstrated that off-chain human intervention ultimately overrides algorithmic rules. The final chapter evaluates DAOs through corporate law, describing them as a “Legal Misfit” lacking legal personality and limited liability, thereby exposing participants to significant legal risk.