The Jurat is a Legal3 pioneer that started as a collaboration between blockchain engineers and attorneys. It has a unique mission in the crypto world: making digital assets safer and more valuable by bridging the gap between blockchain and the law. The vision is to bring legal compliance to the blockchain so that owners, developers, and operators can recover from bad actors and work together to protect their rights in every transaction. This post will explore the process of creating decentralized legal compliance and why it can benefit individual users and the industry overall.
Crypto’s Wild Wild West
The lack of coherence between the legal and blockchain worlds has caused considerable damage. Every year, billions of dollars are lost to on-chain scams and exploits, depriving everyday people of their hard-earned savings and leaving them with little to no hope of recovering their assets.
Crypto is ripe for such crimes because it is anonymous, and there is no authority to enforce the law or protect individual users. This state of affairs stands in contrast to the banking system, which, for all its many faults, does have methods for re-crediting customers’ accounts in case of a theft, mistake, or illegal transaction. Not so with blockchains, where criminals can act with almost complete impunity, unconcerned that law enforcement will catch up. Further, many of these crimes are committed by high-profile hacking groups and international criminal organizations, some of which are connected to sanctioned governments such as North Korea and Russia.
Another Day, Another Hack
A quick search for crypto hacks and scams will throw up dozens of new hits each week. It is not uncommon for these hacks to cause tens or even hundreds of millions of dollars in losses. Most of these crimes will go unpunished as law enforcement lacks the resources needed to apprehend the anonymous criminals and bring them to justice. This absence of legal enforcement on the blockchain incentivizes criminals to strike again and again while leaving victims without hope.
JTC: Bringing Justice to the Blockchain
The JTC blockchain is a branch of Bitcoin that gives its users on-chain access to the legal system through its native coin, $JTC. The blockchain uses specialized nodes capable of interacting with court dockets and understanding court orders. In this way, $JTC coins can be recovered in the event of a hack, scam, or loss of private keys while preserving the pillars of decentralization, transparency, and anonymity for each user.
Let’s use the recent $60 million Zaif hack, which targeted dozens of users on the popular Japanese crypto exchange, to illustrate how JTC’s legal remedies function. While users on Zaif essentially have no options in terms of legal recourse, let’s imagine they had been operating with JTC assets.
A user who lost their JTC assets to the hack would start by creating a Jurat ID using the Jurat web UI and then submit the ID to a court as part of a lawsuit. The ID specifies the transaction that the user wants the court to order. For example, send ten coins from the hacker’s wallet back to the victim’s wallet.
If the user wins the case, the judge will include the ID in their final ruling, which the nodes will access through the public docket. The ruling is relayed to the miners and automatically implemented on-chain in a decentralized and autonomous manner using a Proof-of-Work (PoW) consensus mechanism.
The victim of the hack would be compensated by returning their assets.
The journey from being hacked to being compensated is clear with Jurat.
“Asking the Courts or Government for Help Is Wrong,” the Flawed Bitcoin Maxi Argument
An argument against bridging courts and blockchains from some so-called “purists” is that it goes against the fundamental principles of Satoshi’s vision by putting the government in control. The argument misunderstands the role of courts in the blockchain in several ways.
First, courts cannot access the blockchain’s protocols, so they cannot alter how it functions. Satoshi famously used decentralization to ensure that no central authority could inflate the number of bitcoins beyond the 21 million cap. No court order can change that limitation because the court orders only function at the transactional level, i.e., between two users. Therefore, court involvement in enforcing legal remedies for users is entirely consistent with Satoshi’s plan.
Second, courts already have the legal authority to enforce the law between users of a blockchain, just as they have the legal authority to enforce the law between users of a bank. The only problem is that the courts almost always lack an effective means to exercise their authority because the anonymous hackers will not appear in court, and no intermediary is involved, as with a bank. Thus, $JTC provides a tool for courts but does not change the users’ legal rights. It just makes those rights accessible.
Third, courts operate under the protection of due process, meaning that no judicial transaction will take place on the blockchain unless and until the parties have had a full opportunity to present their positions and provide evidence. This same due process protects all other forms of property like houses and cars, etc. Just as homeowners are protected from government officials seizing their homes, cryptocurrency owners are protected from officials interfering with their digital assets.
Finally, the absence of legal protections between users is not an intentional design feature of Satoshi’s invention. Instead, it is an unaddressed need that holds back mass adoption.
Most potential users are unwilling to adopt blockchain payments because they do not want to expose their assets to lawlessness. While avoiding bank charges and keeping one’s savings in cryptocurrency would be beneficial, a bank can return your funds if someone commits fraud against your account or steals from you. The Bitcoin network cannot help at all. Likewise, the CFO of a major corporation may want to hold digital assets on balance or even use crypto for cross-border payments but cannot afford the risk of liability to shareholders if the company accidentally exposes its wallet to hackers.
The one missing piece for these and other use cases is the ability to enforce legal rights as the owner of a digital asset. The Jurat protocol solves that problem by enforcing the law through courts while maintaining decentralization.
$JTC: A Legally Savvy Crypto with Bitcoin’s Feature
The $JTC coin is the JTC blockchain’s native currency, much like $BTC on Bitcoin. It was issued at a 1:1 ratio with $BTC at the time of the Jurat fork on January 8th, 2022. Because it adheres to the Bitcoin core protocols, it has the same open account structure, the same immutable ledger, and the same scarcity – only 21 million $JTC will ever exist. This means that $JTC can be used as a store of value and a means of exchange, just like $BTC, but with the added feature of legal enforcement between users.
Final Thoughts on Jurat’s Melding of Blockchain and Law
Blockchain technology offers many advantages to consumers and businesses and can improve the financial situation of people across the globe. However, the chasm between blockchain and the law has dampened enthusiasm for on-chain payments, causing financial mayhem for many users and drawing scrutiny from regulators. The $JTC ecosystem can help by giving users access to courts on-chain without sacrificing the benefits of decentralization.
