21 Irrefutable Laws of Blockchain


A guide to classification, evaluation, and understanding blockchain-based systems. The foundational impact of blockchain will change your business model. Do you have the tools to determine how?

Everyone has heard about Bitcoin. If you’ve been curious about new markets, you’ve experimented with either crypto-exchanges, ICOs, or Bitcoin futures.

Your challenge as a CIO is to understand not just what blockchain technology can do but, more specifically, how it can be applied to transformation. The 21 Irrefutable Laws of Blockchain that I outline below establish core principles to help you classify, evaluate, and understand blockchain-based systems.

The “diffusion of innovations” is a theory that helps us explain how, why, and at what rate new ideas and technology spread. Among the five established adopter categories outlined in this theory, CIOs commonly fall into the category of early adopters. If given the choice, most CIOs would drive innovation immediately. However, our focus on strategy detaches us from hands-on experience with technology. As a result, when questions arise, answers aren’t as quick to surface.

It’s challenging for CIOs to understand and answer these six questions about blockchain technology:

  1. What’s the relative advantage of this technology compared to current offerings?
  2. How compatible is this new technology with our legacy systems and processes?
  3. Is this technology over-engineered or too complex for its fitness-for-use?
  4. What would a pilot look like to test this technology?
  5. How would we assess or observe this technology to determine its utility?
  6. Does this technology have the potential for reinvention—to be used for unintended or currently unknown applications?

Are you comfortable answering these questions? How about presenting those answers at your next senior leadership team meeting? Since I started writing about the power of blockchain technology, I’ve received thousands of questions from curious leaders across the globe. These questions have ranged from, “What’s blockchain?” to “How can I understand if this technology fits into my existing business model?” to “If we changed our business model and leveraged blockchain, would the value that our platform produces increase?” Each question has a baked-in imperative to source data, gather information, and assemble new insights to build knowledge.

In most cases, we have mental models we can lean on to evaluate technology. We apply the model based largely on the existing research literature or being close to technology leaders from whom to gather insights.

If I asked you, “What’s the value to your customers of offering Fitbits?” you’d be quick to come back with benefits like tracking water intake, foods consumed, workouts, sleep, heart rate, weight, distance traveled, and more. Alternatively, if I asked, “What’s the value that nanobot micromotors may have on patient outcomes by 2020?” identifying those benefits becomes slightly more difficult. Eventually, you’d come up with benefits such as delivering a medical payload inside living creatures or maybe the ability to deliver a nanoparticle compound directly into the gut tissue.

If you were asked, “How do we apply r-nome-mechanics to the biotech space for technology and business model transformation?” you might pause a while before generating a single coherent benefit. This would be mainly because I just created that fantasy technology two minutes ago. Your experience of having no idea how to answer was very similar to how CIOs feel when fielding questions about how blockchain technologies may transform their business.

CIOs need better tools and principles to frame the value system that leveraging blockchain technologies can provide.

The 21 Irrefutable Laws of Blockchain were developed to assist executives—mainly CIOs—in their quest to understand and apply blockchain technology to their business. We need a new perspective to classify, evaluate, and understand blockchain-based systems.

The 21 Irrefutable Laws of Blockchain

The Power of Blockchain for Healthcare: How Blockchain Will Ignite The Future of Healthcare was the first book published on the benefits of blockchain for healthcare. In it, I  mention the 21 Irrefutable Laws of Blockchain.

  1. The Law of Value: The ecosystem must generate or hold physical or digital units of value.
  2. The Law of Others: Demand-side economies of scale impact the ecosystem’s unit of value.
  3. The Law of Intermediation: The platform must match producers with consumers.
  4. The Law of Exchange: Producers and consumers must exchange value.
  5. The Law of Reward: Ecosystem participation must be recognized for service, effort, or achievement.
  6. The Law of Use: Free market design must encourage spending units of value.
  7. The Law of Proof: The requestor must take steps to ensure authenticity.
  8. The Law of Consensus: Ecosystem decisions must be reached through agreement.
  9. The Law of Acceleration: The ability to scale in relation to ecosystem demand will affect adoption.
  10. The Law of Trust: The end state of an interaction must be permanent.
  11. The Law of Diffusion: Ecosystem adoption grows in relation to the value created.
  12. The Law of Participation: Human and machine interaction should co-exist.
  13. The Law of Repudiation: A permanent ledger limits ecosystem conflict.
  14. The Law of Replication: Ecosystem value exchanges can’t be rejected without cause.
  15. The Law of Fees: A cost must be incurred by the requestor.
  16. The Law of Immutabilities: Ecosystem elements must be protected from change.
  17. The Law of Autonomy: Ecosystem portability will encourage interoperability.
  18. The Law of Decentralization: Consumers and producers share state ownership of the units of value.
  19. The Law of Relevance: An ecosystem that no longer adds value for producers and consumer will cease to exist.
  20. The Law of Vulnerabilities: If ecosystem exploits exist, they will be found.
  21. The Law of Incentives: Producers should have a reason to produce.

Over the next several weeks and months, I’ll elaborate on each law and explain its applicability when classifying, evaluating, and understanding blockchain-based systems.


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Peter B. Nichol, empowers organizations to think different for different results. You can follow Peter on Twitter or his personal blog Leaders Need Pancakes or CIO.com. Peter can be reached at pnichol [dot] spamarrest.com.

Peter is the author of Learning Intelligence: Expand Thinking. Absorb Alternative. Unlock Possibilities (2017), which Marshall Goldsmith, author of the New York Times No. 1 bestseller Triggers, calls “a must-read for any leader wanting to compete in the innovation-powered landscape of today.”

Peter also authored The Power of Blockchain for Healthcare: How Blockchain Will Ignite The Future of Healthcare (2017), the first book to explore the vast opportunities for blockchain to transform the patient experience.

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Peter is a healthcare business and technology executive, recognized for Digital Innovation by CIO 100, MIT Sloan, Computerworld, and the Project Management Institute. As Managing Director at OROCA Innovations, Peter leads the CXO advisory services practice driving digital strategies.

Peter was honored as an MIT Sloan CIO Leadership Award Finalist in 2015 and is a regular contributor to CIO.com on innovation. As Head of Information Technology, Peter was responsible for Connecticut’s Health Insurance Exchange’s (HIX) industry-leading digital platform transforming consumerism and retail oriented services for the health insurance industry. Peter championed the Connecticut marketplace digital implementation with a transformational cloud-based SaaS platform and mobile application recognized as a 2014 PMI Project of the Year Award finalist, CIO 100, and awards for best digital services, API, and platform. He also received a lifetime achievement award for leadership and digital transformation, honored as a 2016 Computerworld Premier 100 IT Leader.

Peter has a B.S. in C.I.S from Bentley University and an MBA from Quinnipiac University, where he graduated Summa Cum Laude. He earned his PMP® in 2001 and is a certified Six Sigma Master Black Belt, Business Relationship Management Professional (BRMP) and Certified Scrum Master. As a Commercial Rated Aviation Pilot and Master Scuba Diver, Peter understands first hand, how to anticipate change and lead boldly.