or to such address as the Association specifies for that purpose on the Website; and
* (f) effective at 9:00am UTC on the seventh Business Day after posting: if sent by pre-paid registered post, including airmail, to: BSV Association, Grafenauweg 6, 6300 Zug, Switzerland.
2. All notices under the Rules will, unless sent electronically, be signed by or on behalf of the sender. Notices which are sent electronically (other than pursuant to II.14.1(d)) will be digitally authenticated by the sender.
3. All notices provided under the Rules will be in English or accompanied by a certified translation.
4. This clause II.14 does not apply to the service on the Association of any notice of legal proceedings or other documents in any legal action, arbitration, or other form of dispute resolution process.
15. **Severability**
1. In the event any clause of the Rules is for any reason found invalid or unenforceable in any respect, such invalidity or unenforceability will not affect the validity of any remaining clauses, which will remain in full force and effect as if the invalid or unenforceable clause was never a part of the Rules.
16. **Language**
1. The Rules are made in the English language. Where there is any conflict in meaning between the English language version of the Rules or any translation in any other language, the English language version will prevail, and the translation will be for reference only.
# PART III - ENFORCEMENT RULES
## PART III - ENFORCEMENT RULES
1. **Directives**
1. Subject to clause III.6, the Association may in its absolute discretion issue a direction to a Node requiring it to take a Step or Steps (a ‘Directive’) where there is:
* (a) an Enforcement Event;
* (b) a Direct Decision Event; or
* (c) an Indirect Decision Event.
2. In the Rules, the term ‘Directive Event’ refers to any of the events in clause III.1.1. These Directive Events are defined below.
2. **Nodes’ obligation to follow Directives**
1. Subject to clauses III.6 and III.2.2, each Node will promptly comply with the requirements of any Directive applicable to it following receipt of notice of the Directive and in any event no later than any time for compliance which is specified in the notice of the Directive.
2. Any Directive will take effect immediately upon notice to a Node or Nodes unless otherwise expressly stated in the notice of the Directive.
3. **Enforcement Event**
1. An ‘Enforcement Event’ occurs in respect of any one or more Nodes when the Association reasonably determines in good faith that one or both of the following has occurred:
1. (a) a breach by the relevant Node(s) of any of Part I of the Rules (Master Rules), clause II.1 (Affiliates), clause II.7 (Indemnity), or clause III.2 of these Rules; or
2. (b) any representation or warranty in the Rules given by the relevant Node(s) is false or misleading when made, repeated, or deemed to have been made or repeated.
4. **Direct Decision Event**
1. A ‘Direct Decision Event’ occurs when the Association receives a Decision that the Association reasonably determines in good faith is a Direct Decision.
2. A ‘Direct Decision’ is a Decision that:
* (a) has the force of law, has been recognised, or is enforceable in England and Wales or Switzerland;
* (b) has as one of its subjects the Association or its Affiliates or their respective property or activities; and
* (c) relates to or concerns the Network, the Network Database, the conduct of any Relevant Activity by any Node(s), or the ownership, possession, transfer, content, or control of BSV.
5. **Indirect Decision Event**
1. An ‘Indirect Decision Event’ occurs when the Association receives a Decision which the Association reasonably determines in good faith is an Indirect Decision.
2. An ‘Indirect Decision’ is a Decision that:
* (a) has the force of law, has been recognised, or is enforceable in England and Wales or Switzerland;
* (b) is not a Decision which has as one of its subjects the Association or its Affiliates or their respective property or activities; and
* (c) relates to or concerns the Network, the Network Database, the conduct of any Relevant Activity by any Node(s), or the ownership, possession, transfer, content, or control of BSV.
6. **Restrictions on Directives**
1. The Association may not issue a Directive where there has been no Directive Event.
2. A Directive may only require a Node or Nodes to do any or all of the following steps (each a ‘Step’):
* (a) freeze specified coins in unspent transaction outputs;
* (b) blacklist or whitelist specific IP addresses as peer connections in the Node Software;
* (c) reassign frozen coins; or
* (d) invalidate specified blocks.
3. A Node is only required to take an action that the Association has reasonably determined in good faith is necessary to achieve one or more of the following purposes (each a ‘Purpose’):
| Directive Event | Purpose |
| ----------------- | -------------------------------------------------------------------------------------------------------------------------------------- |
| Enforcement Event | To ensure compliance with the Rules. |
| Direct Decision | To give effect to or enforce the Direct Decision or avoid the Association breaching or potentially breaching the Direct Decision. |
| Indirect Decision | To give effect to or enforce the Indirect Decision insofar as it concerns ownership, possession, transfer, content, or control of BSV. |
7. **Information obligations**
1. Each Node agrees that it will notify the Association promptly of any circumstances which are reasonably likely to give rise to a Directive Event.
2. Each Node agrees that, on demand by the Association, it will promptly provide the Association with any information the Association may reasonably request in connection with the Rules or any Enforcement Event.
3. Nothing in this clause III.7 requires a Node to disclose information where the disclosure by that Node would breach Applicable Laws.
# PART IV - DISPUTE RESOLUTION RULES
## PART IV - DISPUTE RESOLUTION RULES
1. **Arbitration**
1. Any dispute, controversy, or claim arising out of, or in relation to, the Rules, including regarding the existence, validity, invalidity, breach, or termination thereof, will be resolved by arbitration in accordance with the Swiss Rules of International Arbitration of the Swiss Arbitration Centre in force on the date on which the Notice of Arbitration is submitted in accordance with those rules (the ‘**Swiss Rules**’). In particular:
1. (a) the number of arbitrators will be one or three;
2. (b) when designating or appointing an arbitrator, the parties, the arbitrators, and the Arbitration Court of the Swiss Arbitration Centre, in view of securing the appointment of a qualified, independent and impartial arbitrator, are invited to consider the opportunity, as appropriate, of designating or appointing arbitrators of the P.R.I.M.E. Finance Panel of Experts and any of the specialised panels that P.R.I.M.E. Finance may form to deal with particular categories of blockchain or digital assets-related cases;
3. (c) the seat of the arbitration will be Zug, Switzerland;
4. (d) the arbitration proceedings will be conducted in English;
5. (e) the law applicable to the arbitration agreement will be the law of England and Wales; and
6. (f) the rules on expedited proceedings as set out in Article 42 of the Swiss Rules will apply where the amount in dispute does not exceed the amount specified for their application in the Swiss Rules or where the parties to the arbitration agree in writing that those rules do not apply.
2. **Binding nature**
1. The arbitration agreement in clause IV.1 is binding on each Node, irrespective of when that Node first undertakes or undertook a Relevant Activity.
3. **Changes**
1. This Part IV (Dispute Resolution Rules) (including the arbitration agreement in clause IV.1) is subject to change in accordance with clause II.5 of the Rules.
2. Any changes to this Part IV (Dispute Resolution Rules) will not result in the arbitration agreement in clause IV.1 ceasing to have binding effect.
# PART V - INTERPRETIVE RULES
## Part V - Interpretive Rules
1. **Principles of interpretation**\
\
The following principles of interpretation apply to the Rules:
* (a) references to parties are to the Association and Nodes, and not to any third parties;
* (b) references to a person will include a natural person, corporate, or unincorporated body (whether or not such body has a separate legal personality);
* (c) references to a company will include any company, corporation, or other body corporate, wherever and however incorporated or established;
* (d) a reference to any of a Node’s obligations under the Rules will include an obligation not to procure, permit, or suffer that thing to be done;
* (e) a reference to writing or written excludes fax but includes being recorded by any means and, includes email and messages in any human-readable format or representing words in any visible form sent through the Network;
* (f) a reference to signing includes an electronic signature, but only where signed through a secure operating system or platform which, in the Association’s reasonable opinion: (i) allows the signature to be uniquely linked to the signatory and capable of identifying them; and (ii) provides a link to the signed data in such a way that any subsequent change in the data is detectable;
* (g) any reference to a legal term for any action, remedy, method of judicial proceeding, legal document, legal status, court, official, or any legal concept or thing will, in respect of any jurisdiction other than England and Wales, be deemed to include a reference to that which most nearly approximates to the legal term in that jurisdiction which is equivalent to that in England and Wales;
* (h) unless the context otherwise requires, words in the singular will include the plural, and words in the plural will include the singular;
* (i) unless the context otherwise requires, the words ‘or’ and ‘and’ will be interpreted such that ‘A or B’ means ‘A or B or both,’ ‘either A or B’ means ‘A or B, but not both,’ and ‘A and B’ means ‘both A and B’; and
* (j) any words following the terms including, include, in particular, for example, or any similar expression will be interpreted as illustrative and will not limit the sense of the words preceding those terms.
2. **Glossary**
The following definitions apply to the Rules:
| Term | Definition |
| -------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |
| Affiliate: | any entity that directly or indirectly Controls, is Controlled by, or is under common Control with, another entity; |
| Applicable Laws: | in respect of any Node:
(a) any laws, legislation, regulation, by-law, or subordinate legislation;
(b) any rule or principle of the common law or equity;
(c) any binding order, judgment, or decree of any court, or arbitrator or tribunal, having jurisdiction or contractual authority over that Node or the Association (as applicable) or any of that Node’s or the Association’s assets, resources, or business (as applicable); or
(e) any direction, policy, decision, rule, or order that is binding on that Node or the Association and that is made or given by any governmental, regulatory, or supervisory authority;
in each case as amended, extended, or re-enacted and which:
(i) has the force of law in any part of the world where that Node or the Association (as the case may be) is located or does business or conducts any Relevant Activity; and
(ii) are binding on that Node or the Association (as applicable) or either of that Node’s or the Association’s assets (as applicable) in any part of the world;
|
| Association and we, our, or us: | each has the meaning set out in recital A of the Background to the Rules; |
| Bitcoin Protocol: | the protocol implementation of the Bitcoin White Paper as set out at: ; |
| Bitcoin White Paper: | has the meaning set out in recital A of the Background to the Rules; |
| Bitcoin, Bitcoin SV, or BSV: | has the meaning set out in recital A of the Background to the Rules; |
| Block Reward: | has the meaning set out in clause I.3.2 of the Rules; |
| Block Subsidy: | has the meaning set out in clause I.3.2 of the Rules; |
| Business Day: | a day other than a Saturday, Sunday, or public holiday in England or Switzerland; |
| Change Notice: | has the meaning set out in clause II.5.2 of the Rules; |
| Control: | the beneficial ownership of more than 50% of the issued share capital of a company or the legal or de-facto power to direct or cause the direction of the affairs of a company or entity, and ‘Controls’ and ‘Controlled’ will be interpreted accordingly; |
| Data Protection Laws: | (a) any laws, legislation, regulation, by-law, or subordinate legislation;
(b) any binding order, judgment or decree of any court or arbitrator or tribunal having jurisdiction or contractual authority any party’s assets, resources, or business (as applicable); or
(c) any direction, policy, decision, rule, or order that is binding on any party and that is made or given by any governmental, regulatory, or supervisory authority;
in each case which relates to the processing of Personal Data and as amended, extended or re-enacted, including the Privacy and Electronic Communications Regulations 2003 (as amended by SI 2011 no. 6), the Data Protection Act 2018 and Regulation 2016/679 of 27 April 2016 of the European Parliament and of the Council on the protection of individuals with regard to the processing of personal data and on the free movement of such data as each is amended in accordance with the Data Protection, Privacy and Electronic Communications (Amendments etc) (EU Exit) Regulations 2019 (as amended by SI 2020 no. 1586) and incorporated into UK law under the UK European Union (Withdrawal) Act 2018 and which:
(i) has the force of law in any part of the world where any party (as the case may be) is located or does business or conduct any Relevant Activity; and
(ii) is binding on any party (as applicable) or any party’s assets (as applicable) in any part of the world;
|
| Decision: | any order, judgment, decree, direction, or requirement of any kind issued by a court or a competent tribunal, including any tribunal of arbitration or adjudication; |
| Direct Decision: | has the meaning set out in clause III.4.2 of the Rules; |
| Direct Decision Event: | has the meaning set out in clause III.4.1 of the Rules; |
| Directive: | has the meaning set out in clause III.1.1 of the Rules; |
| Directive Event: | has the meaning set out in clause III.1.2 of the Rules; |
| Enforcement Event: | has the meaning set out in clause III.3.1 of the Rules; |
| Indirect Decision: | has the meaning set out in clause III.5.2 of the Rules; |
| Indirect Decision Event: | has the meaning set out in clause III.5.1 of the Rules; |
| Intellectual Property Rights:
| patents, utility models, rights to inventions, copyright, and neighbouring and related rights, moral rights, trademarks, and service marks, business names, and domain names, rights in get-up and trade dress, goodwill, and the right to sue for passing off or unfair competition, rights in designs, rights in computer software, database rights, rights to use, and protect the confidentiality of, confidential information (including know-how and trade secrets), and all other intellectual property rights, in each case whether registered or unregistered and including all applications and rights to apply for, and be granted, renewals, or extensions of, and rights to claim priority from, such rights, and all similar or equivalent rights or forms of protection which subsist or will subsist now or in the future in any part of the world; |
| Malicious Code: | code, files, scripts, agents, or programmes intended to do harm to the Network, the Association, other Nodes, or third parties (or made with reckless indifference as to whether they may cause such harm), and whether effected by means of automatic devices, scripts, algorithms, or any similar manual processes; |
| Message: | has the meaning set out in clause I.5.2(d) of the Rules; |
| Network: | (a) the Bitcoin blockchain (and any test blockchains) containing block height #556767 with the hash
‘000000000000000001d956714215d96ffc00e0afda4cd0a96c96f8d802b1662b’ and that contains the longest persistent chain of blocks which are valid under the Rules; or
(b) all relevant communication channels between peers;
|
| Network Activities: | has the meaning set out in recital D of the Background to the Rules; |
| Network Database: | the distributed ledger relating to the Network; |
| Node: | has the meaning set out in recital D of the Background to the Rules, but does not include the Association; |
| Node Software: | any software made available in the Repository on the Repository or elsewhere under the Node Software Licence, any prior version of that software, and any software derived from the same; |
| Node Software Licence: | has the meaning set out in recital G of the Background to the Rules; |
| Personal Data: | has the meaning given to it under Data Protection Laws; |
| Purpose: | has the meaning set out in clause III.6.3 of the Rules; |
| Relevant Activity: | has the meaning set out in clause I.2.2 of the Rules; |
| Repository: | the Association’s Github repository made available at , or such other code repository as the Association may specify for the purposes of the Rules; |
| Rules: | has the meaning set out in clause I.1 of the Rules, as varied from time to time in accordance with clause II.5 of the Rules; |
| Sanctions Authority: | Switzerland, the United Nations, the European Union (or any of its member states), the United Kingdom, and in each case their respective sanctions, governmental, judicial, or regulatory institutions, agencies, departments, and authorities, including the Swiss State Secretariat for Economic Affairs, the Swiss Federal Council, the United Nations Security Council, His Majesty’s Treasury, the United Kingdom’s Office of Financial Sanctions Implementation, and the United Kingdom’s Department of International Trade; |
| Sanctions List: | any of the lists issued or maintained by a Sanctions Authority designating or identifying persons that are subject to Sanctions, in each case as from time to time amended, supplemented, or substituted; |
| Sanctions Restricted Person: | a natural person or legal entity that is: (a) listed on any Sanctions List; (b) resident, domiciled, or located in, or incorporated, or organised under the laws of, a country or territory that is the target of any Sanctions; (c) a government of any country or territory that is the target of any Sanctions, or an agency or instrumentality of such a government; (d) otherwise identified by a Sanctions Authority as being subject to Sanctions; or (e) is at least 50% owned (whether legally or beneficially) and/or Controlled by any person or entity which falls into the foregoing categories or is acting or purporting to act on behalf of any such person or entity; |
| Sanctions: | any economic, financial, or trade sanctions laws, regulations, embargoes, or restrictive measures administered, enacted, or enforced by any Sanctions Authority, including any such law or regulation enacted, promulgated, or issued by any Sanctions Authority after the date of the Rules and including any enabling legislation, executive order, or regulation promulgated under or based under the authorities of any of the foregoing by any Sanctions Authority; |
| Step: | has the meaning set out in clause III.6.2 of the Rules; |
| Suspended Node: | has the meaning set out in clause I.9 of the Rules; |
| Swiss Rules: | has the meaning set out in clause IV.1.1 of the Rules; |
| Unilateral Contract: | has the meaning set out in recital B of the Background to the Rules; |
| Website: | the Association’s website at bsvblockchain.org/network-access-rules or such other website or online portal as the Association may specify for the purposes of the Rules. |
| | |
# Frequently Asked Questions
Alongside the release of the new Network Access Rules, this FAQ aims to help nodes and other interested parties better understand the new rules and what they mean for them clearly and concisely.
**Disclaimer**
*The content of these documents is provided for informational purposes only and is not intended to modify or supersede the contractual rights or obligations of any party to the Network Access Rules. Parties are encouraged to carefully review the Network Access Rules to verify the accuracy of the information presented here. It is assumed that, where necessary, parties will seek guidance from their legal counsel and any other advisors they consider necessary.*
*Any statements here do not purport and should not be considered to be a guide to, advice on, or explanation of all relevant issues or considerations relating to the contractual relationship established by the NAR. The BSV Association assumes no responsibility for any use to which the BSV network is put by any miner or other third party.*
# FAQ for miners
Are the Network Access Rules a contract?
The Network Access Rules (NAR) within the BSV blockchain are foundational to its operation, serving as a critical legal and operational framework. These rules are not just guidelines but form a multilateral contract between and among the BSV Association (BSVA) and each node participating in the network. Acceptance of the contract is implicit, established by the very act of a node joining and engaging in relevant activities (including network activities) within the BSV ecosystem.
When a node decides to partake in the BSV network, it inherently agrees to abide by the NAR. This agreement is not formalised through a traditional contract signing; rather, it is a contract that is agreed, confirmed, and automatically in force once a node commences network activities. These network activities include essential functions such as collecting, validating, and accepting blocks, compiling transactions into blocks, attempting to find a proof-of-work for a block, or broadcasting a block to the wider network. Further, if a node uses the node software or takes advantage of the node software license then the contract will also take effect.
This contractual relationship, designed for and compatible with blockchain technology, is pivotal for the BSV network. It ensures that every node, by participating in the network, consents to and is bound by a set of predefined rules and standards. These rules are designed to maintain network integrity, security, and functionality. They confirm the legal framework within which nodes operate, providing clarity and consistency in how the network functions.
The NAR encompass various aspects of network operation, including compliance with laws, adherence to technical standards, and the execution of network activities as per the original Bitcoin Protocol. This comprehensive approach ensures that every participant in the network contributes to a stable, secure, and legally compliant blockchain environment. By agreeing to the NAR, nodes are committing to uphold the principles and protocols that define the BSV network, first laid out in the original Bitcoin White Paper.
What role do mining nodes play in the enforcement of the Network Access Rules?
Mining nodes play a crucial role in the enforcement of the Network Access Rules (NAR). While the decision-making process for NAR is the responsibility of the BSV Association (BSVA), which acts as the steward of the BSV network and is the sole entity authorised to amend the NAR, miners participate in the enforcement of these rules.
Mining nodes enforce the NAR by implementing directives received through the Alert System, which is managed by the BSVA. These directives may only be issued by the BSVA in specific situations as specified in the NAR. Miners' compliance and execution of these directives contribute significantly to maintaining network integrity and help ensure that only honest and lawful transactions are recorded on the BSV blockchain.
Miners are also empowered under NAR to bring contractual claims against other miners who have breached NAR. NAR even contemplates the possibility of miners bringing claims against the BSVA to enforce its provisions.
How do the Network Access Rules impact the day-to-day operations of miners on the BSV network?
The Network Access Rules (NAR) do not alter the day-to-day operations of miners on the BSV network. Miners are already obligated to adhere to these standards and protocols as part of their routine activities. These obligations primarily include following the six steps outlined in section 5 of the Bitcoin White Paper to operate the network under the original Bitcoin Protocol and ensuring compliance with relevant laws. Additionally, miners must respond to various directives, which may encompass security updates and alerts that can impact their mining operations.
In essence, the NAR serve as a framework to enforce these pre-existing behaviours and requirements. Their purpose is to safeguard the network's integrity for the benefit of honest miners and users with a view to ensuring that all participants continue to operate in accordance with understood and binding rules, established legal standards, and best practices.
How do miners stay compliant with the Network Access Rules?
Miners should always run software – whether that be the node software or other software – which allows for receiving alert messages through the Alert System, to facilitate information sharing for security threats, and promptly implement any security directives to ensure both compliance and security of the network.
How does the Alert System affect mining rewards and block propagation for miners?
The Alert System may issue directives that could impact block validation or propagation (e.g., freezing certain unspent transaction outputs (UTXOs)). Compliance with these alerts may therefore temporarily affect mining rewards. However, this procedure is designed to ensure long-term network integrity and value.
For example, a message may be published that directs nodes to invalidate a specific block that includes a transaction that transfers funds which have a freeze order against them since such funds have been identified to be proceeds of crime. In this case the miner who broadcasts that block will lose the block reward from that block and another proof of work solution will need to be found by nodes that do not attempt to transfer coins under the applicable freeze order.
Are there any incentives for miners related to enforcing the Network Access Rules?
Miners are incentivised to comply with the Network Access Rules (NAR) to maintain their mining rewards and network participation as well as to have clarity at being covered by the NAR. The NAR are designed such that they do not impede or adversely impact honest nodes in the long run. They incentivise nodes to have awareness about any current freeze orders and to be as well connected to other nodes as possible so that they will never inadvertently build a block with a double spend in it. There also exists the natural incentive for nodes to ensure the BSV Blockchain is compliant under existing regulatory requirements, to ensure its long term growth and stability.
Are there any consequences for miners who do not follow the Network Access Rules?
Consequences may include blocks being invalidated, losing connections as an eligible peer, or other enforcement actions for non-compliance *(all within the confines of the restrictions on the BSV Association (BSVA)’s powers set out in the Network Access Rules (NAR)).*
Having blocks a miner produced deemed invalid means the money that was spent to produce the block is wasted since no block reward will be received. This will ensure that miners want to follow the directives issued through the Alert System.
What is the function of the BSV Association?
The BSV Association (BSVA) serves as the principal steward of the BSV network, entrusted with multiple critical functions. Here’s an overview of its key functions:
* **Stewardship:** The BSVA’s primary function is to steward the BSV network. This involves communicating essential information and updates to miners and other network participants, primarily through the Alert System. This system is crucial for disseminating important security updates, alerts, and guidance to maintain the network's integrity and efficiency.
* **Educational Support and Software Development:** The BSVA also focuses on providing educational resources and supporting software development initiatives. This function is vital in equipping the BSV community with the necessary knowledge and tools to optimise network participation and foster technological innovation within the blockchain space.
* **Enforcement of the Network Access Rules (NAR):** As a party to the NAR, the BSVA has well-defined duties and obligations towards network miners and nodes, as set out in NAR. The association ensures that these rules are adhered to, and it can be held accountable for any breaches or overreaching actions. This enforcement is key to maintaining a fair, secure, and orderly network.
* **Compliance with Legal Directives**: A significant part of the BSVA’s role involves enforcing legal directives, particularly regarding the freezing or reassignment of unspent transaction outputs (UTXOs). Utilising the Alert System, the BSVA facilitates network compliance with relevant court orders, thereby aligning the BSV network with relevant legal standards and regulatory requirements.
In essence, the BSVA's role is to ensure that the BSV network operates within a secure, legal, and efficient framework, balancing the needs of network participants with the overarching goal of maintaining a stable and trustworthy blockchain environment.
What are the implications for miners operating in jurisdictions with strict regulatory requirements related to digital assets?
Miners in strict regulatory environments must ensure that their operations, including compliance with the Network Access Rules (NAR), align with all applicable local laws.
How can miners ensure the security of their mining infrastructure in the context of the Alert System?
The Alert System adds to the security of all core infrastructure of the network by identifying and alerting all honest participants of malicious behaviour. By listening and acting upon validly signed alerts, honest nodes contribute to the overall security of the BSV network.
Miners, for example, who repeatedly violate the NAR, or who use their infrastructure for processing sanctioned frozen transactions or double spends, may find themselves in breach of applicable laws concerning the prohibited transfer of money.
Who are the alert key holders?
Five parties are designated by the BSV Association (BSVA), who hold mobile devices that are used to sign alert messages only under the circumstances specified in the NAR and within the boundaries specified therein. These parties are responsible to be available on an ad hoc basis for real time responses, and are ultimately responsible for approving the sending of alert messages to the network. A message is signed when it has three out of the five keyholders sign.
The goal is to have a diverse group of key holders who can collectively ensure the security and integrity of the alert system. For security their keys will be rotated on a scheduled basis.
**Disclaimer**
*The content of this document is provided for informational purposes only and is not intended to modify or supersede the contractual rights or obligations of any party to the Network Access Rules. Parties are encouraged to carefully review the Network Access Rules to verify the accuracy of the information presented here. It is assumed that, where necessary, parties will seek guidance from their legal counsel and any other advisors they consider necessary.*
*Any statements here do not purport and should not be considered to be a guide to, advice on, or explanation of all relevant issues or considerations relating to the contractual relationship established by the NAR. The BSV Association assumes no responsibility for any use to which the BSV network is put by any miner or other third party.*
# FAQ for legal professionals
The following does not constitute legal advice. All relevant issues cannot be considered. The assumption is that, where appropriate, miners will consult with their legal advisers and any other adviser they deem appropriate.
What legal frameworks and precedents support the implementation of the Network Access Rules (NAR) on a blockchain network?
Advice has been taken and every effort made to ensure that the implementation of the NAR is supported by traditional English law contract principles, such as those underlying contracts intended to have multilateral effect. NAR concerns an expanding universe of participants where engagement in relevant activities (including network activities) confirms acceptance. The NAR structure and language draws significantly on established precedents in this regard from the derivatives and other global financial markets.
How does the BSV Association (BSVA) plan to address potential legal challenges or disputes related to the Network Access Rules?
The Network Access Rules include arbitration as a preferred mechanism for dispute resolution.
What is the process for resolving legal disputes concerning digital assets to be frozen or reassigned, or digital assets which have already been frozen or reassigned?
BSVA may issue a directive requiring miners to freeze or reassign digital assets provided this does not contradict the various restrictions on the BSVA’s power to do so in the NAR. An example of where the BSVA is likely to do so is where it is served with a court order or arbitral decision which it is binding on it and enforceable in Switzerland or England & Wales. BSVA itself does not resolve any underlying disputes concerning digital assets on the BSV network. Where it chooses to act, its role is akin to that of an enforcing body.
If a miner does not agree with freezing or reassignment of specific digital assets by BSVA, it is free to request that BSVA review the case. Miners are also empowered to commence arbitration under NAR should they consider that their rights under NAR have been violated. Arbitration is frequently used in contractual disputes, and is particularly useful in the context of debates involving specialist subjects such as digital assets.
Can the Alert System be considered a form of digital asset regulation, and if so, how does it comply with existing regulatory standards?
No. The Alert System operates as a contractual mechanism aimed at enforcing the NAR and ensuring network integrity within the BSV network. Compliance with broader regulatory standards is, however, supported by a broader undertaking in the NAR that requires adherence with all applicable laws.
What legal regimes govern the implementation of the Network Access Rules on a global blockchain network?
The interpretation of the Network Access Rules (NAR) is governed by English law. Miners also commit to comply with all other applicable laws as defined in the NAR. The enforceability of orders and decisions made or recognised by English or Swiss courts is also expressly contemplated.
Are there any legal protections in place for individuals or entities affected by asset freezes or recoveries?
The Network Access Rules (NAR) provide a limitation of liability clause that offers legal protections to individuals or entities complying with directives in good faith.
By what legal standards are the actions and responsibilities of alert key holders and the BSV Association to be judged?
The actions and responsibilities of alert key holders and the BSVA are aligned with legal standards, ensuring that directives are issued in a manner that is reasonably determined in good faith. The BSVA, as the entity ultimately responsible for how Alert System is used on the BSV network is also bound by the NAR and Swiss law.
How does the BSV Association ensure transparency and accountability in its regulatory role on the BSV network?
The BSVA fosters transparency and accountability by making the Network Access Rules (NAR) publicly available, following due process for issuing directives and regularly making relevant information available to nodes and other interested parties. These due processes mirror the transparency expected in multilateral contexts.
Are there any legal obligations for network nodes in different jurisdictions regarding compliance with the Network Access Rules?
Nodes are obligated to comply with the NAR and with applicable laws in their jurisdictions. This obligation reflects a recognition of the varied legal landscapes in which nodes operate and the need for the NAR to be adaptable to different legal systems. There may be instances where assets are known to be transferred in or out of sanctioned jurisdictions. Specific legal advice may be sought by the BSVA for how to direct actions in countries that have and have not ratified the sanctions.
However, here again, the facts will always be important, and guidance as to all relevant considerations cannot be given. The assumption is that, where appropriate, miners will consult with their legal advisers and any other adviser they deem appropriate.
**Disclaimer**
*The content of this document is provided for informational purposes only and is not intended to modify or supersede the contractual rights or obligations of any party to the Network Access Rules. Parties are encouraged to carefully review the Network Access Rules to verify the accuracy of the information presented here. It is assumed that, where necessary, parties will seek guidance from their legal counsel and any other advisors they consider necessary.*
*Any statements here do not purport and should not be considered to be a guide to, advice on, or explanation of all relevant issues or considerations relating to the contractual relationship established by the NAR. The BSV Association assumes no responsibility for any use to which the BSV network is put by any miner or other third party.*
# FAQ for the general audience
What is the function of the BSV Association (BSVA)?
The BSV Association (BSVA) serves as the principal steward of the BSV network, entrusted with multiple critical functions. Here’s an overview of its key functions:
* **Stewardship:** The BSVA’s primary function is to steward the BSV network. This involves communicating essential information and updates to miners and other network participants, primarily through the Alert System. This system is crucial for disseminating important security updates, alerts, and guidance to maintain the network's integrity and efficiency.
* **Educational Support and Software Development:** The BSVA also focuses on providing educational resources and supporting software development initiatives. This function is vital in equipping the BSV community with the necessary knowledge and tools to optimise network participation and foster technological innovation within the blockchain space.
* **Enforcement of Network Access Rules (NAR):** As a party to the NAR, the BSVA has well-defined duties and obligations towards network miners and nodes, as set out in NAR. The association ensures that these rules are adhered to, and it can be held accountable for any breaches or overreaching actions. This enforcement is key to maintaining a fair, secure, and orderly network.
* **Compliance with Legal Directives**: A significant part of the BSVA’s role involves enforcing legal directives, particularly regarding the freezing or reassignment of unspent transaction outputs (UTXOs). Utilising the Alert System, the BSVA facilitates network compliance with relevant court orders, thereby aligning the BSV network with relevant legal standards and regulatory requirements.
In essence, the BSVA's role is to ensure that the BSV network operates within a secure, legal, and efficient framework, balancing the needs of network participants with the overarching goal of maintaining a stable and trustworthy blockchain environment.
What are the Network Access Rules, and how do they impact the BSV blockchain?
The Network Access Rules (NAR) on the BSV blockchain is a multilateral contract between and among the BSVA (the steward of the network) and the nodes. The NAR overseen by the BSVA, are a set of guidelines that dictate how participants operate honestly within the network. The network rules are built off the six steps to run the network covered in section 5 of the Bitcoin White Paper. Adhering to these six steps and the NAR that have been built upon them will be crucial for maintaining a secure and orderly system, thereby impacting network reliability and user trust in the BSV blockchain.
How does the Alert System work, and what is its role in BSV blockchain security?
The Alert System serves as a critical security feature within the BSV blockchain, playing an important role in maintaining blockchain security and ensuring the network's robust operation. It operates by allowing the BSVA to issue warnings, directives, and important network updates when necessary to address various situations.
The Alert System's primary function is to provide technical means for remedying breaches of the NAR by nodes. It achieves this by re-introducing the Alert Key Mechanism to the BSV network. In essence, the BSVA utilises this mechanism to send directives and messages to all network nodes, requesting them to take specific actions as outlined in the NAR. These NAR represent the agreed-upon terms and conditions that nodes have accepted when joining the BSV blockchain and engaging in relevant activities (including network activities).
The messages sent through the Alert System can take various forms. Some messages are purely informative, providing updates on upcoming software changes or other important developments. Others are issued as directives in predefined situations, as explicitly defined in the NAR. These situations may include responding to threats such as double-spend attacks on the BSV network.
Additionally, the Alert System facilitates actions related to the freezing, releasing, and confiscating of unspent transaction outputs (UTXOs). These actions are enabled to help ensure compliance with court orders and legal requirements, further enhancing the BSV network's security and integrity.
What is the concept of freezing and unfreezing assets on a blockchain and why is it necessary?
Freezing assets on a blockchain involves temporarily disabling transactions for specific digital assets to comply with legal directives. Unfreezing assets restores their transaction capabilities. This mechanism is a necessary part of the enforcement processes that have been adopted to effect compliance with legal directives.
What distinguishes the BSV blockchain's approach to governance from other blockchain networks?
The BSV blockchain, under the stewardship of the BSVA, adopts a structured approach to governance with clearly defined rules and processes.
As stewards of the Bitcoin Protocol, the BSVA undertakes responsibility to act in the best interest of the BSV network, setting the core design of the Bitcoin Protocol in stone such that users can build upon the network with confidence. In addition to aiding network and protocol stability, the BSVA are also the issuers of the NAR which create an enforceable multilateral agreement that miners commit to by performing their network activities. The NAR specify the conditions under directives can be disseminated through the Alert System, specifying steps which miners must take to stay compliant with the NAR.
This approach is in contrast with other blockchain developer groups that are less likely to assume a similar level of responsibility. Instead, we see fewer proactive steps towards accepting such responsibility and an absence of any strong interest in creating a fixed and clearly defined protocol.
Under the stewardship model, and the role of the BSVA and the NAR, a regulatory-compliant framework is created for BSV, supporting the enforceability and respect of applicable laws and regulations – a commitment sorely absent in blockchain to date.
A key aspect of BSV Blockchain is that the underlying protocol remains "set in stone", and is unalterable by the BSV Association or anyone else. The BSVA is committed to this stability, in stark contrast to other blockchain networks.
How do the Network Access Rules facilitate the growth and wider adoption of the BSV blockchain?
The development of the NAR is critical for the BSV blockchain's widespread adoption, particularly for real-world applications that require robust governance mechanisms such as rollback and asset recovery. These rules provide the necessary clarity and reliability that enterprises and large-scale users demand.
Are there any potential risks or challenges associated with the implementation of the Network Access Rules?
Implementing the NAR involves balancing the need for a secure and orderly public blockchain while ensuring the rules are fair and not overly restrictive. The most significant challenges are anticipated to be the complexity of multijurisdictional enforcement orders between states sanctioned by some and not by others.
How can individuals and businesses benefit from the enhanced security provided by the Alert System?
The enhanced security from the Alert System means individuals and businesses can operate on the BSV blockchain with increased confidence, knowing that there are measures in place to protect against fraud, unauthorised transactions, and other security threats.
What role does the community play in overseeing and influencing the Network Access Rules?
While the BSVA is responsible for the final structure of the NAR, community feedback, use cases, and insights are valuable and appreciated. They can help inform the BSVA of the BSV network’s practical needs and user experiences, contributing to the refinement of the current rules. The BSVA reserves its right to amend the NAR but with the intention not to change any of the fundamentals in the Bitcoin Protocol.
**Disclaimer**
*The content of this document is provided for informational purposes only and is not intended to modify or supersede the contractual rights or obligations of any party to the Network Access Rules. Parties are encouraged to carefully review the Network Access Rules to verify the accuracy of the information presented here. It is assumed that, where necessary, parties will seek guidance from their legal counsel and any other advisors they consider necessary.*
*Any statements here do not purport and should not be considered to be a guide to, advice on, or explanation of all relevant issues or considerations relating to the contractual relationship established by the NAR. The BSV Association assumes no responsibility for any use to which the BSV network is put by any miner or other third party.*