In the morning, the fog enveloping the San Francisco Bay Area, in the office, the blue light of the screen reflects the tired faces of developers. His eyes are bloodshot, fingers swiftly gliding over the keyboard. This is the final check before contract deployment; every semicolon, every boundary condition, could be a matter of life and death. The Telegram channel suddenly erupts. Someone has discovered that the project team violated the token unlock commitments stated in the white paper.
Across the ocean, on a meme player's monitor, countless transaction data weave a network, tracing the movements of the whales. DeFi miners are checking the time lock of new mines: "72 hours," they nod, "safe."
In Discord, a heated debate over a DAO is underway. Meanwhile, an AI Agent quietly records every step of its reasoning process onto the blockchain. It is an ordinary morning in the crypto world of 2024. On the surface, these scenes seem unrelated, but beneath the complex facade, an invisible bond tightly connects them. That is the belief in "Code is Law."
In this world built by code, code is law, faith, and the ultimate arbiter. This rule, like an invisible chain, tightly binds this circle full of speculation, ideals, innovation, and chaos together. It is the cornerstone of the crypto world and the soil that breeds countless stories.
But what does 'Code is Law' really mean? How did this phrase evolve from a warning to a belief? To answer this question, we must go back to that autumn 25 years ago, back to an office at Harvard Law School...
Code is law
In November 1999, on the Harvard campus, autumn was in full swing. Professor Lawrence Lessig was sitting in his office. He had gained fame as a neutral legal expert in the Microsoft antitrust case, and in just a few days, his new book "Code: and Other Laws of Cyberspace" was about to be published.
The internet wave swept across the United States in the 90s. Years earlier, Lessig had been contemplating a seemingly simple question: in traditional society, behaviors are constrained by laws, morals, markets, and physical laws. But in cyberspace, these constraints seem to blur; however, there is another constraint that seems more direct: system administrators control user behavior by setting permissions, and this control is not achieved through threats and punishment, but directly determines what is possible and what is impossible. "In Unix systems, if you don't have permission, you cannot open that file," he wrote in his notebook, "this is not a legal constraint, but something more fundamental."
On the notebook in front of him, a simple diagram is drawn: the layered structure of the TCP/IP protocol. The manuscript states that this is a revolutionary design; the protocol does not care about the contents of the data packets and does not ask who you are. It only cares about one thing: transmitting data according to the protocol rules. This 'permissionless' quality made the internet a free land.
But Lessig also keenly noted that new walls were growing on this free land of TCP/IP. Amazon can close your account, AOL can block your login, and Google can decide what content should be seen. Those commercial platforms built on open protocols are creating new forms of control.
The first chapter of the new book is titled Code is Law, but this phrase is more a warning than a praise. Lessig worried that if business giants and governments controlled the writing of code, they could control the entire cyberspace.
"Every era has its potential regulators threatening freedom, and we are living in the era of cyberspace, which also has a regulator that threatens our freedom. This regulator is code. It determines the ease of privacy protection and the ease of censoring speech. It affects whether information access is universal or tiered, deciding who can see what, or which content will be monitored. In many ways, we can only gradually realize the regulation of cyberspace when we begin to understand the nature of code."
Two months later, The New York Times published a review of this book, stating:
"These discussions are well thought out, but the premise of these discussions is unstable; Lessig did not provide much evidence to prove that the loss of privacy and freedom is happening on the internet."
Hehe.
In a sense, Lessig foresaw the future. But he did not foresee that his warning would soon transform into a banner. In garages in Silicon Valley, in the studies of cryptographers, in front of computers around the world, a group of people is brewing a revolution. They will not be enslaved by code but will use code to rebuild freedom.
Smart Contract
In 1994, Washington. Nick Szabo, a member of the cypherpunks, was writing in his humble apartment. On the screen was an essay about "smart contracts." Szabo's apartment was filled with books on law and computer science. As a researcher passionate about both fields, he had been thinking about how to combine the certainty of law with the precision of computer programs. "Imagine an automatic vending machine," Szabo wrote, "this is the simplest smart contract. It does not require a judge to enforce the contract, nor police to maintain order; the rules are written in the machine's program."
"Traditional contracts have too many problems," he told reporters who came to interview him, "performance relies on people's willingness, and dispute resolution requires lengthy litigation. But if we can encode the contract into a program, it will operate strictly according to the established rules. No judges, no lawyers, just code."
Reporters questioned why people should trust code. Szabo smiled mysteriously: "Because code does not lie. It cannot be bribed, threatened, or arbitrarily change its mind. It simply executes the established rules faithfully."
In a subsequent paper, Szabo elaborated on the concept of smart contracts:
A smart contract is a computerized trading protocol that executes the terms of a contract. The overall goal of smart contract design is to meet common contract conditions, minimize malicious and accidental exceptions, and reduce reliance on trusted intermediaries. I believe that significantly reducing the transaction costs of executing certain contracts and the potential for creating new types of enterprises and social institutions based on smart contracts is immense, but it has yet to be explored in depth.
However, the technological foundation to realize this vision has yet to emerge. Szabo and other cypherpunks still need to wait many years.
Bitcoin
On October 31, 2008, a quiet Halloween evening. Satoshi@gmx.com sent an email that changed history. The subject was simple: (Bitcoin P2P e-cash paper).
This email sent to the cryptography mailing list stated: "I have been researching a new electronic cash system, completely peer-to-peer, without a trusted third party."
On January 3, 2009, the Bitcoin genesis block was mined. In this system, no one can violate the rules of the code. "Code is Law" transformed from Professor Lessig's warning into an ideal of the cryptographic community, ultimately finding its first complete practice in Bitcoin.
Ethereum
In the autumn of 2013, in a café at the University of Toronto, Vitalik Buterin was drawing diagrams on his notebook. As the editor of Bitcoin Magazine, he had thoroughly studied every line of Bitcoin's code. But he thought Bitcoin's design was too conservative. "Bitcoin proves that governance based on code is possible," he told a companion, "but why limit it to the scenario of currency transfers? If we could create a Turing-complete system..." This idea quickly developed into the Ethereum white paper. Vitalik envisioned a "world computer": anyone could deploy smart contracts on it and create various applications.
"At that time, many people thought it was crazy," recalled an early contributor, "we were going to build a platform governed entirely by code, allowing anyone to run programs on it. The risks were too great." But this was precisely the upgrade of the 'Code is Law' concept: not only is the platform itself governed by code, but every application running on the platform also follows the same principle.
The smart contract envisioned by Nick Szabo over a decade ago finally found fertile ground for implementation. A decentralized application ecosystem began to take shape. From simple token issuance to complex financial protocols and decentralized autonomous organizations (DAOs), immutable code began to take over more and more scenarios in this world.
The DAO
In April 2016, in Switzerland, the Slock.it team was introducing their ambitious plan: The DAO, a decentralized investment fund governed entirely by code.
"Imagine a fund without a board or a CEO," explained founder Christoph Jentzsch, "all decisions are made by token holders voting through smart contracts. This is the ultimate practice of 'Code is Law.'"
The crowdfunding for The DAO began. In just 28 days, it raised $150 million in ETH, creating the largest crowdfunding record at the time. "People believe in code," said an early participant, "smart contracts are public, and anyone can check them. This is not relying on people's promises, but on immutable code."
However, hidden within this seemingly perfect code are fatal flaws. In the early hours of June 17, 2016, an anonymous hacker discovered a recursive call vulnerability in The DAO contract. Through a carefully crafted transaction, he began transferring ETH from The DAO to a child DAO. "Theoretically, this fully complies with the contract rules," explained a security researcher, "the hacker did not 'break' the code; he merely exploited operations permitted by the code. From the perspective of 'Code is Law', this is completely 'legal'." However, after over 3.64 million ETH were transferred, the entire Ethereum community fell into an unprecedented crisis.
"If 'Code is Law', then this attack is legal," one side insists, "we cannot change the rules just because we dislike the outcome. This violates the fundamental principle of decentralization." "But code serves people," the other side counters, "if the code leads to obviously unfair results, we have a responsibility to correct it." The intense debate continued for weeks. Ultimately, Vitalik and the Ethereum core team proposed a hard fork solution: roll back the blockchain to return the funds transferred by the hacker to a new contract.
This decision sparked greater controversy. Some community members insisted on maintaining the original chain, forming Ethereum Classic (ETC). This was not just a fork of the chain, but a split of ideals. "For many, the pure ideal of 'Code is Law' has shattered," lamented an early Ethereum developer, "we realized that code can never be perfect."
Is Code Law?
In the summer of 2020, the crypto world ushered in a new wave: DeFi Summer. Various innovative projects sprang up like mushrooms after rain: Aave's flash loans, Curve's stablecoin trading, Yearn's yield aggregation... Each project is redefining the possibilities of finance with code.
But amidst the frenzy, risks were accumulating. "Remember that YAM?" recalled a DeFi miner, "a small error in the code led to a complete breakdown of the governance mechanism. This reminds us that 'Code is Law' is a double-edged sword. The consequences of code errors could be more severe than human errors."
In early 2022, with the popularization of the Web3 concept, DAOs experienced explosive growth, each exploring new possibilities of decentralized collaboration and governance.
"Initially, we thought DAO was about using Token voting to achieve governance by code," recalled a member of a DAO, "but soon we found that reality is much more complicated than code. Look at the governance processes of each major DAO; on the surface, it is executed through smart contracts, but the real decisions often occur in discussions on Discord or forums. These politically coordinated discussions, which do not rely on code, are actually the core of DAO operations."
"Code is indeed law, but not the only law," said a core member of a DAO, "It is more like a component of a legal system, needing to work in conjunction with other components - community discussions, expert opinions, real-world constraints, etc."
Just a month ago, proposal number 662 of NounsDAO sparked deeper thinking. While most DAOs primarily rely on human coordination rather than code to operate, NounsDAO has achieved nearly complete operation based solely on smart contract code. However, proposal 662 suggested registering a DUNA entity in Wyoming, embracing the off-chain legal system.
This sparked heated debates within the community. "Our original intention to participate in NounsDAO was because it proved that an organization governed entirely by code is feasible!" an angry member said, "Now you want to replace code with a legal system, isn't that surrendering to the traditional system?"
"We cannot pretend that the real world does not exist," said a supporter of the proposal, "The DAO ultimately has to operate in the real world. Appropriate compromise is not betrayal of ideals, but making the ideals sustainable."
Support for the proposal slowly but steadily increased, and it passed.
Almost simultaneously, a new participant joined the crypto world: AI Agent.
In the world of 'Code is Law', AI found the most ideal habitat. The rules here are definite, verifiable, unaffected by human interference, and most importantly, do not distinguish between humans and AI. Protocols only care about whether they comply with predefined rules; AI can trade autonomously, provide services, and participate in governance, with all decisions and actions executable by code. In a crypto world where code is law and algorithms dominate value, AI Agent first transformed from a piece of code into a form of existence. As more AI Agents join in, the crypto world will present a new ecology: humans and AIs interacting under the same set of code rules, creating unprecedented collaborative models.
Twenty-five years
In 12 days, it will be the 25th anniversary of (Code and Other Laws of Cyberspace).
Over the span of 25 years, "Code is Law" has traveled an unexpected path. It transformed from a warning against digital centralization into a banner of cypherpunk rebellion, continuously undergoing testing, adjustment, and evolution in practice. The evolution of this concept reflects our deepening understanding of the digital world:
Initially, Lessig warned us that code could become a tool for controlling cyberspace. This concern remains profound today - tech companies influence users through algorithms, and in the age of AI, an insecure model could lead to devastating consequences.
Then, the cypherpunks transformed this warning into action. Bitcoin proved another possibility: code can not only restrict freedom but also protect freedom.
The DAO incident acted as a mirror, reflecting the limitations of purely code-based governance. But this failure is not the end, but a new starting point. It made us begin to think: how should code and human society interact?
The rise of DeFi brought surprises: in specific scenarios, code can indeed be more effective than traditional rules. Automated market makers, flash loans, permissionless lending - these innovations demonstrate the unique advantages of code governance.
The evolution of the DAO is the most enlightening. From dogmatic "code-only doctrine" to seeking a balance with the real world, this process reflects an important reality: at least for now, code cannot replace all other rules, but must coexist and complement them.
The addition of AI has opened new imaginative spaces. When artificial intelligence begins to operate autonomously on-chain, "Code is Law" may gain new dimensions.
Outside, the morning fog of San Francisco is gradually dissipating. A new day begins. In every corner of this world, a network of blockchains composed of countless nodes is operating. Smart contracts act as tireless guardians, faithfully executing their missions; DAOs are conducting the largest governance experiment in human history; AI Agents are evolving at a speed unimaginable to humans, opening up new forms of existence in the world built by code.
This is the new world created by code. It is not perfect, but it is vibrant; it has flaws, but it continues to evolve; it is still young, but it has already shown the potential to change the world. It carries the promise of making the world more open, transparent, and fair; even though this promise has not yet been fully realized, every participant is pushing this promise step by step into reality in their own way.
Perhaps this is the most profound insight of "Code is Law" over the past twenty-five years: it is not a perfect dogma, but a continuously evolving experiment, an ongoing exploration process. In this world built by code, people are not only followers of rules but also creators of rules; every line of code people write is shaping the future world.
