Abstract
Transparency and accountability are important aspects to any technological endeavor and are popular topics of research as many everyday items have become ‘smart’ and interact with user data on a regular basis. Recent technologies such as blockchain tout these traits through the design of their infrastructure and their ability as recordkeeping mechanisms. This project analyzes and compares records produced by non-fungible tokens (NFTs), an increasingly popular blockchain application for recording and trading digital assets, and compares them to ‘document standards,’ an interdisciplinary method of contract law, diplomatics, document/interface theory, and evidentiary proof, to see if they live up to the bar that has been set by a body of literature concerned with authentic documents. Through a close reading of the current policies on transparency (i.e., CCPA, GDPR), compliance and recordkeeping (i.e., FCPA, SOX, UETA), and the consideration of blockchain records as user-facing interfaces, this study draws the conclusion that without an effort to design these records with these various concerns in mind and from the perspectives of all three stakeholders (Users, Firms, and Regulators), any transparency will only be illusory and could serve the opposite purpose for bad actors if not resolved.
Highlights
Transparency and accountability are important aspects to any technological endeavor and are popular topics of research as many everyday items have become ‘smart’ and interact with user data on a regular basis
The issues with standard form contracts can be exacerbated in this blockchain environment [6,7], the freedom of contract principle can be exploited to allow for the cementing of unfair terms [8], and, claiming that blockchain produces immutable records when the technology has facilitated nefarious activity can cause all sorts of issues for regulators—especially when these records are used for evidence [5]
The concern here centers around two issues; (1) that the non-fungible tokens (NFTs) record will begin to use standard form contracts for this purpose, which includes all the issues associated with this genre of contract [31,32,33,34,35], (2) that the immutability of the record will enforce these terms beyond even what normative contracts negotiate, not allowing for the flexibility that contracts require, and (3) that the design of the NFT record will further obscure any important information for the User with unfamiliar or deceptive design practices
Summary
Transparency and accountability are important aspects to any technological endeavor and are popular topics of research as many everyday items have become ‘smart’ and interact with user data on a regular basis Recent technologies such as blockchain tout these traits through the design of their infrastructure and their ability as recordkeeping mechanisms. As a blockchain creates a ledger of immutable records, it can be diced up into portions that can be given value as currency (e.g., Bitcoin), can be coded to execute automated transactions (e.g., Ethereum), and can be tied to assets as a record of ownership (e.g., non-fungible tokens or “NFTs”) Past work in this space has discussed the potential dangers of assuming some of these blockchain technologies can replace certain types of documents that have standards and practices which have been around for centuries. Other research has noted the inconsistencies with the technology and some of its claims [5,6,9]
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