Thank you for taking the time to explain this, it is a more complex topic than it first seems.
Would the contracts be implemented on the block chain as well so that there say could be some arbitrators, or a voting type system where certain parties vote to shut down an app rather than the centralized approach. Or does that interfere with the legal structure because there's no one company or individual responsible for contract enforcement?
eg say someone uses the nodes for gratuitous spamming or network attacks, could Person A cast a vote to shutdown Person B with an explanation why and then a bunch of highly regarded nodes or arbitrators can all vote based on the presented facts (maybe from both parties) and the app gets shut down if enough votes say "this is a bad app"? Or would the parent UK licence provider step into the picture along with Person A to deal with a bad Person B's app?
Also how would it work if it was a distributed app running on many nodes and across several borders and legal jurisdictions? Or will this not be possible? That seems a bit limiting if so, because then it's a bit like dealing with a data centre for leasing servers without the true distributed computing power that a larger network could provide.
What is tricky is that we are trying to create a distributed structure -- but the network itself is the "central" dependency. Try not to think of what we are doing in terms of what ethereum created with contracts -- that is a horrible bastardization of things (IMHO). All we are trying to do is to create a system of bilateral at will agreements which could be rescinded by either party at any time.... so that a "contract" in the Crown Network is deliberately fragile, whereas a "contract" in ETH is like Proud Words in Carl Sandburg's Primer Lesson.... The contracts in the Crown sense are just a multi-sig process used to represent or reference a specific text or legal agreement which exists in a storage structure off chain.
What all this begins with will be a non-profit being formed in a given legal jurisdiction, and that non-profit making a proposal to the network to represent it / or act as an agent of the network in specific ways, in the relevant legal jurisdiction. The idea is to create a "legal template" for a non-profit and then allow those by-laws / articles of incorporation / etc... to be cloned or copied in different legal jurisdictions. No agent of the network would ever have an exclusive geography, so there could be multiple competing "agents" offering the same services -- like licensing masternodes or titling assets or whatever process they designed. The initial focus is on trying to get non-profits set up for the US, EU and UK as we also develop the software capabilities which we need the legal functions we believe this structure will provide.
So around the core network, we would hope to develop another layer of non-profit entities in different geographies which provide a "bridge" between the ability of hashes to represent information the blockchain to record and secure information, and different legal systems. We have landed on this solution because of the obvious problems with having one non-profit foundation as the "exclusive" representative of the network -- as is the standard currently in leading projects.
Masternode operators will be able to get a license to offer applications to the Crown Network from one of the non-profits representing the network -- a privilege which really just lets them define and collect fees and then be the "bridge" to applications which the node operator may or may not also be provisioning. But then the masternode can cancel the license, or the non-profit can cancel the license. There should probably be some cause for cancellation -- but I would rather not put any requirement in -- I would rather conceive of these "contracts" as bilateral at will agreements. In this way, the non-profit is responsible for itself and the masternode is responsible for itself. A key function of this structure is to be able to isolate legal risk and responsibility -- a notable weakness of the existing "smart contract" structures and a feature which seems more dumb than smart. We need this sort of structure because although the network is global, legal systems and jurisdictions aren't -- so you need to be able to have a structure that can be as messy as the map of legal jurisdictions. This is abhorrent from a logical elegance perspective -- but it is very human.
Hope that makes some sense. It all gives me a headache and I am looking forward to getting the different pieces of this system up and running so that we can see how it works and adapt.
I don't think we really know what will work yet -- all we are trying to do with Crown is set up a platform that will let a bunch of people run a bunch of different experiments. This is the big idea. All the other crypto projects seem to think the answer is for them to push their one brilliant idea on the world. Crown is about building something to let everyone in the world be able to come and try out their brilliant ideas -- because we are just smart enough to know that there are a lot of people smarter than we are... and we are actually curious what people will do with it.
But we also want everyone to be able to keep whatever they create -- and that doesn't work if we piss off every government in the world -- so we are trying to create different bridging structures. But the idea in the long-term is to help create new legal interpretations and not to just passively interpret the law. It all ends up being complicated, but it's a fun puzzle.
In terms of how this would work with a distributed app running across many nodes and jurisdictions -- well, it would work the same way it works now -- that distributed app is actually under the purview of every jurisdiction it is operating in. We won't be changing anything about the basic structure of law. I would point out that if you understand how jurisdiction works, then you instantly should see how ethereum cannot ever be legal.... or the only legal use of ethereum is as a corporate or state control system within a jurisdiction, because it's absence of a concept of jurisdiction means that it cannot (as currently architected) ever be able to bend to the differences in legal codes in different states. The implicit assumption of ethereum is that nation states will bend to it.
In the system we are attempting to build for Crown, each masternode has the responsibility for complying with the laws in it's legal jurisdiction -- or where the individual or business running the node is domiciled/operates. If an app needs to run across multiple jurisdictions, then that is a consideration for the application designer. It is not an issue for the network -- the network will have set up a contract structure to protect it from these risks. As a practical matter, as long as an application isn't facilitating criminal activity, which would be a violation of the licensing agreement and if a masternode ran an application that provided support for a criminal network, it would be the responsibility of the non-profit which issued the license to rescind it...
This whole discussion can get heated and idealistic -- but we are just trying to be pragmatic and take the world as it is, so that we can play a role in creating what it will be.
We're really focused on being a sustainable platform, trying to work with the law instead of avoiding it. That's why darksend (anonymous transactions) has been removed from the code and we're working on providing a legal structure to protect both Masternode hosts and the platform in general.
