Legal Terms for Crypto 2.0 Project

Generic Disclaimer of Liability

Ethereum’s Vitalik Buterin inspires me to offer a contribution to the cryptocurrency community (a.k.a. Crypto 2.0). Buterin observes how many different projects are underway within the community, working on cryptocurrencies, blockchains, smart contracts, distributed ledgers, decentralized consensus and the like. 

These projects include Bitcoin, myriad altcoins, Bitshares, Ethereum, Counterparty and others. More projects will come. 

Many of these projects are open source. Many of them celebrate their informality. Legal formalities were scarce when Satoshi Nakamoto launched Bitcoin.

Buterin recommends that the folks working in their different projects (he calls them “silos”) make their projects inter-operate, all for the greater good. Particular projects may come to specialize in offering browsers, blockchain services or decentralized applications (DApps) that can help other projects.

Generic Legal Terms

For such projects, here (tentatively) are legal terms to publish conspicuously to stakeholders.

Project Terms

1. This Project is built and used by a community of people from all over the world. 

2. The Project includes the data, work, ideas, protocols, software, processes and documentation that are contributed to it. Original contributions to the Project are open source and public domain forever. 

3. The Project is offered “as-is.” The Project, its contributors, leaders, promoters and users disclaim all liability and all warranties, whether express or implied. There is no assurance that the Project will be accurate or error free, will achieve any particular result or complies with any particular law or property right. You use, rely on or contribute to the Project at your own risk. 

4. The Project may discontinue or change at any time.  

5. If any portion of these Terms is held to be invalid or unenforceable, the remaining portions remain in full force and effect.

Analysis of the Terms

The foregoing is a generic form. It is short so that it is more likely to be read. It strives to cope with legal risk in furtherance of the project.

It condenses terms for services and terms for software into a single unified statement. For some projects the distinction between services and software makes little sense. In fact there may be no “service” per se. The project assembles software so that a freeform community of miners (workers or voters) can use it in a process to achieve a result, such as a consensus vote on what time it is or the execution of a transaction.

Yet, the project may be more than just software, which is the subject of a traditional open-source license.

Risk Begone!

One goal of these Terms is to reduce the potential (theoretical) liability of some project stakeholders to other stakeholders. Some malcontents may claim that others promised they'd get rich but the riches never materialized. The malcontents might try to sue in a court, or just complain in public.

The Terms above aim to curb the risk of liability on the part of any party. But it does not eliminate the risk.
electronic contract
Legal Notice

Property Ownership Might Be Disputed.

A second goal is to reduce the possibility of unexpected claims of ownership to something. But it does not eliminate the possibility.

The terms say, “Original contributions to the Project are open source and public domain forever.” That sentence does not guarantee that no one can claim ownership to something, such as ideas or code. It applies only to “original” contributions. So if Jane contributes proprietary code that was stolen from Phil, then that code would not be an original contribution. Phil might still claim ownership. 

Further, Nick might muddy the topic of ownership (of the code he contributes) by widely declaring: “The ‘open source and public domain’ terms of the Project do not apply to the code that I contribute. The code that I contribute is copyrighted and patented by me.” Nick's unruly declaration raises unsettling issues over how legal terms are negotiated in an online community.

Your Project May Need Something Different.

The generic Project Terms above are not customized for the needs of any particular project. Some projects will be wise to have different or additional terms. For example:
  • Certain terms that are specific to software, and other terms that are specific to services.
  • Reference to a particular license or terms, such as (for open-source software) the GNU General Public License.
  • Notice that the project uses technology such as a particular algorithm under a specified license.
  • More formality and detail to confirm that all contributions to the project and its software are open source and free.
  • Explicit limitation of liability to a certain amount. The Mozilla Public License (MPL) referenced below limits liability to $500.
  • Choice of law. The MPL chooses California law.

The Project Terms above are obviously for a free, open-source project. A proprietary project or a project that is charging fees may need different or additional terms. Appropriate terms might look like a license that commonly comes with proprietary software or a service agreement for paid services.

Disclaimer and Caution

Notice: This blog post is just public discussion. It is not legal advice for any particular situation, and I am not your lawyer. If you need legal advice, you should retain a lawyer.
public warning
Legal notice modifies risk because it warns people
before they take action that could cause them injury.

I am skeptical that the Project Terms above would protect someone such as a project leader who is intentionally deceiving people.

I consider the Project Terms I publish above to be in the public domain. You may use them any way you wish. But you are responsible, not me.

Feedback Invited

What do you think? I welcome discussion and feedback. I may revise the Terms above, so check back from time to time.

Footnote: The Project Terms published above are inspired by and these things connected with Mozilla Firefox: 

  • “About Your Rights,” accessible through Firefox address bar at “about:rights”
  • “Mozilla Firefox Web-Based Information Services,” accessible through Firefox address bar at “about:rights#webservices”
  • Mozilla Public License, Version 2.0

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