V. Buterin: Blockchain as Antitrust

David Kemp

Buterin and his co-author Schrepel called for an unbiased review of blockchain acting as antitrust by lawmakers worldwide. They have provided extensive arguments in favor of distributed ledger technology contribution towards fair power distribution on the market. In the following article, NewsBlockchain team will review the most prominent ideas from the newly-published work.

Their article called "Blockchain Code as Antitrust" has made quite a stir in the crypto community and among government officials from all around the world. The prejudice against the use of blockchain and shrugging it off as too technological, too complicated, or perhaps even too "anarchic " is well-known. And even though the topic of blockchain use is consistently used to gain attention, gather more guests to talks or conferences, raise the stock of a company and to be more relevant, it is still banned and restricted by a lot of laws.

The objective of main antitrust laws worldwide

The laws on antitrust are created with consumer welfare in mind. The US or European laws against monopolies share the same main points. As Mr. Vitalii Buterin points out, they seek to eliminate the possibility of multiple companies joining together to manipulate the market. Illegal centralization may give these companies an upper hand in most cases in their segment. This will harm the consumer, because of potential unfair prices, dictating the rules and norms for a certain area, and slowing down the progress and the development due to lack of competition.

The second harmful thing that lawmakers aim to prohibit is companies pushing out their competition and forcing them out of the market in order to become the monopolist. In general, the antitrust laws are designed to prevent the concentration of power in one hands.

The centralization that happened due to the lack of other offers on the market does not make such a company at fault. 

How Blockchain can provide decentralization

Nor Buterin, nor his co-author Schrepel, Harvard faculty associate, are not stating that the blockchain aims to achieve decentralization at all costs. It is not an objective of the antitrust laws as well. However, it is the most efficient way of solving the problem of concentration of power in one hands. It is not a moral principle.

Antitrust laws are aimed to increase consumer welfare. It may do so by providing a trusted connection between two parties and a clear, transparent transactions.

By providing access to everyone and not usually limited by one country, blockchain will create a fair environment even for countries with poor antitrust laws.

Requirements for Blockchain that ensure decentralization

There are private and public blockchains. They should comply with certain requirements to serve as antitrust. According to the article, the joining process should not be legally restricted for new users. Consider whether a potential party needs to purchase software to gain access to the available functions. If there is a pay-wall or legal barrier for joining, it is more prone to power centralization in one hands.

You should also consider that not everybody plays by the rules. The article authors ask to consider the level of protection against third-party interference and illegal power obtaining. Resistance to such attacks is another step towards fair power and market distribution.

Technology can only help if it is allowed to do so. If it is burdened with unnecessary and redundant restrictions and obligations, it will not be able to serve its purpose as antitrust. Lawmakers should consider supporting initiatives and giving an opportunity for this necessary tool to develop. Schrepel and his co-author ask to consider the importance of potential common good.

The article co-authors argue that law and blockchain should not be pitted against each other and cannot be viewed as the polar opposites. With the right approach and certain freedom (for example, "sandboxes" for developing with less governmental restrictions), distributed ledger technology can be a useful tool for antitrust and power concentration in one hands.