PART I - MASTER RULES
PART I - MASTER RULES
The Rules in overview
The ‘Rules’ comprise a multilateral legal agreement between and among the Association and all Nodes.
The Rules include the Master Rules (Part I), the General Rules (Part II), the Enforcement Rules (Part III), the Dispute Resolution Rules (Part IV), and the Interpretive Rules (Part V), but do not include the recitals in the Background to the Rules.
The Rules supersede the Unilateral Contract as between and among the parties to the Rules in relation to its subject matter, without prejudice to any accrued rights and liabilities any party to the Rules may have under that earlier agreement.
Agreement to the Rules
Each Node confirms and communicates its agreement to the Rules when it:
(a) conducts any Network Activity;
(b) uses the Node Software; or
(c) uses or takes any benefit of the Node Software Licence.
In the Rules, the term ‘Relevant Activity’ means any and all of the activities in clause I.2.1.
Any person who has not agreed and does not agree to the Rules should not undertake any Relevant Activity.
Network Activities and Block Reward
Each time a Node conducts a Network Activity, such Node agrees that it will use best endeavours to undertake the following six steps to run the Network set out in the Bitcoin White Paper:
(a) new transactions are broadcast to all Nodes;
(b) each Node collects new transactions into a block;
(c) each Node works on finding a difficult proof-of-work for its block;
(d) when a Node finds a proof-of-work, it broadcasts the block to all Nodes;
(e) nodes accept the block only if all transactions in it are valid and not already spent; and
(f) nodes express their acceptance of the block by working on creating the next block in the chain, using the hash of the accepted block as the previous hash.
Each Node may compete to earn a ‘Block Reward’ by undertaking Network Activities subject to and in accordance with the Rules. This Block Reward may comprise: (i) transaction fees; and (ii) other block incentive fees (‘Block Subsidies’), subject to the Block Subsidies decreasing over time in accordance with the Bitcoin Protocol.
No party to the Rules represents or guarantees that any person will earn any Block Rewards.
Each Node acknowledges that, except as may be provided for expressly in the Rules, no fees, payments, or reimbursements are due or may become due to it, from the Association or any Affiliate of the Association regarding such Node’s performance of any of its obligations under the Rules or its conduct of any Relevant Activity.
Network access criteria
Each Node severally represents and warrants to the Association and to each other Node (which representations will be deemed to be made upon entry to the Rules and repeated by each Node every time such Node carries on any Relevant Activity, as well as at all times that the Rules remain applicable to that Node) that:
(a) the Node’s conduct of any Relevant Activity is in accordance with the Bitcoin Protocol;
(b) if the Node is a legal entity, it is duly organised and validly existing under the laws of the jurisdiction of its organisation and incorporation and, if applicable under such laws, in good standing;
(c) the Node has the power and (in the case of an individual) full capacity to: (i) enter the Rules and any other documentation relating to the Rules; (ii) to perform its obligations under the Rules and any other documentation relating to the Rules; and (iii) it has taken all necessary action to authorise such entry and performance;
(d) all governmental and other consents, licences, authorisations, permits, contracts, and other approvals (if any) that are required to enable the Node to enter into the Rules and any other documentation relating to the Rules and perform its obligations under the same have been obtained by it and are in full force and effect, and all conditions of the same have been complied with;
(e) by the Node entering into the Rules, conducting any Relevant Activity, and performing its obligations or exercising any rights under the Rules, it will not violate any Applicable Laws, any provision of its constitutional documents, or any third-party rights binding on it or any of its Affiliates;
(f) without prejudice to the generality of clause I.4.1(e) above, by the Node entering into the Rules, conducting any Relevant Activity, and performing its obligations or exercising any rights under the Rules, it will not violate any Data Protection Laws;
(g) neither that Node nor any of its Affiliates is a Sanctions Restricted Person; and
(h) the Node’s obligations under the Rules constitute its legal, valid, and binding obligations in accordance with the Rules, enforceable in accordance with their terms subject to applicable bankruptcy, reorganisation, insolvency, moratorium, examinership, fraudulent conveyance laws, or any other similar laws affecting creditors’ rights generally and subject, as to enforceability, to equitable principles of general application (regardless of whether enforcement is sought in a proceeding in equity or at law).
Each Node agrees that its rights under the Rules will be suspended if and for so long as any of its representations or warranties in clause I.4.1 are untrue.
Node responsibilities
Each Node agrees that it will not, directly or indirectly, do or attempt to do any of the following:
(a) conduct any Relevant Activity otherwise than in accordance with the Rules;
(b) misuse, damage, overload, disrupt, or cause a significant adverse effect to the Network or the Network Database;
(c) use any Malicious Code, including any programmes or software that may, in the Association’s reasonable and good faith opinion, interfere adversely with the normal operation of the Network or the collection, storage, processing, or transmission of any data or transactions via the Network; or
(d) access any part of the Network without authorisation or otherwise than in accordance with the Rules.
Each Node further agrees that it will always and at its own cost and without delay:
(a) take all lawful action as may reasonably be required to ensure the application of the Rules to it;
(b) comply in all respects with Applicable Laws in connection with the performance of its obligations under the Rules and its conduct of any Relevant Activity;
(c) without prejudice to that Node’s other obligations under the Rules: (i) follow and abide by the Bitcoin Protocol when conducting any Network Activities; and (ii) act honestly within the meaning of the Bitcoin White Paper;
(d) only carry out Network Activities using either: (i) a version of the Node Software that includes all released functionalities (unless the Association has expressly designated those functionalities as discretionary in writing); or (ii) other software of its own choosing so long as it abides by and is compatible with the Bitcoin Protocol and the Rules, and allows Nodes to receive informational messages broadcast by the Association via the Network (each a ‘Message’);
(e) comply with the applicable terms of any Node Software Licence if it is using the Node Software;
(f) maintain adequate systems, equipment, processes, and controls to allow it to receive and respond to any notices and system notifications from the Association, including Messages, and to perform its obligations under the Rules in an efficient and timely manner;
(g) notify the Association as soon as possible of any potential performance or vulnerability threat of significance to the Association, the Network, or Nodes generally; and
(h) use best endeavours not to introduce material into the Network or Network Database which: (i) is malicious; (ii) the control, ownership, possession, or distribution of is prohibited under Applicable Laws; (iii) is technologically harmful; or (iv) may reasonably result in significant cyber-risks or vulnerabilities to us, the Network, or Nodes generally.
Node acknowledgements
Each Node acknowledges, agrees, and accepts that unless expressly stated elsewhere in the Rules:
(a) the Association is not under any obligation to Nodes or any other person to monitor and enforce compliance with the Rules (or any similar agreement the Association has with a third party), even though the Association may carry out such activities;
(b) nothing in the Rules is to be construed or interpreted as the Association taking or accepting any responsibility or liability for the roles, responsibilities, or obligations of any Node or third parties;
(c) the Association is not obligated to exercise (or to not exercise) any of its powers under the Rules, but if such powers are exercised, the Association undertakes to act with reasonable care and skill in the exercise of the relevant power(s); and
(d) the Association cannot and does not guarantee the Network’s reliability, integrity, or performance.
Nodes’ individual and collective obligations
Unless otherwise expressly provided in the Rules and subject to clause I.7.2, the obligations of each Node under the Rules are independent of the obligations of each other Node, and the liability of each Node will be several and extend only to any loss or damage arising out of its own breach.
A Node’s liability under the Rules will be joint and several together with any other Nodes or third parties which are, in the reasonable and good faith opinion of the Association, acting together with that Node pursuant to an agreement or understanding (whether formal or informal, but not including the Rules).
Any party to the Rules may bring a separate action or actions against any Node under the Rules, or release any claim they have against any other Node, without affecting the liability of any other party to the Rules and irrespective of whether any other party is joined in any such action.
Liability
In this clause I.8 references to liability include all present and future liabilities, actual or contingent, of every kind arising under or in connection with the Rules including liability in contract, tort (including negligence), misrepresentation, restitution, or otherwise.
Nothing in the Rules limits any liability which cannot legally be limited, including liability for: (i) death or personal injury caused by negligence; and (ii) fraud or fraudulent misrepresentation.
Subject to clause I.8.2:
(a) each Node irrevocably releases and forever discharges all other Nodes from all liability arising directly or indirectly from any Step taken by that Node and its Affiliates in good faith according to the express requirements of a Directive;
(b) the Association will have no liability to any Node bringing a claim or prospectively bringing a claim if that Node fails to notify the Association of such claim promptly or in any event no more than six months from the date when that Node was first aware, or ought reasonably to have become aware, of any of its alleged grounds to make a claim, or from the date of the event giving rise to the claim having first occurred (whichever is the earlier). Such notice must be in writing and provide sufficient details for the Association to understand and respond to the proposed claim;
(c) the Association will not be liable to any Node for any step taken reasonably and in good faith in performing (or purporting to perform) any obligation it may have under the Rules or in exercising (or purporting to exercise) any power or discretion it may have under the Rules; and
(d) the Association will not be liable for the following types of loss: (i) loss of profits; (ii) loss of sales or business; (iii) loss of agreements or contracts; (iv) loss of anticipated savings; (v) loss of use or corruption of software, data, or information; (vi) loss of or damage to goodwill; (vii) pure economic loss arising out of or in connection with the Rules; or (viii) indirect or consequential loss.
Suspension
The Association may suspend the rights of, and any obligations owed by any party to, a Node (the ‘Suspended Node’) by notice where the Association determines reasonably and in good faith that:
(a) to do otherwise may be a violation of, be inconsistent with, or expose the Association or the Network to any liability under Applicable Laws;
(b) the Suspended Node has breached any of Part I of the Rules (Master Rules);
(c) the Suspended Node (being an individual) dies or, because of illness or incapacity (whether mental or physical), becomes incapable of managing its affairs or is detained under any mental health legislation; or
(d) the Suspended Node (being a company, corporation, other body corporate, organisation or association) has ceased to exist, is insolvent or unable to pay its debts as they become due, or there is a material risk to that Node’s creditworthiness or financial status.
Governing law
The Rules and any dispute or claim arising out of or in connection with them or their subject matter, existence, negotiation, validity, termination, or enforceability (including any non-contractual disputes or claims) will be governed by and construed in accordance with the law of England and Wales
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