I. Introduction

Bitcoin, blockchain, and cryptocurrency: often used interchangeably,[1] there is little question that these terms—and, more importantly, the technology they describe—have captivated the attention of modern society in recent years.[2] But, despite all the noise generated by the “crypto” revolution, many remain wholly unable to answer the following question: What is cryptocurrency?[3] Unfortunately, a coherent answer to this question has escaped even those at the highest level of government and has produced a lack of consensus on important questions concerning cryptocurrency development, use, classification, and regulation.[4] This general lack of clarity, direction, and urgency surrounding cryptocurrency has caused some to question whether existing legal frameworks are fit to accommodate the novel issues that present when existing law is applied to these emerging markets, leading some commentators to characterize the current state of cryptocurrency as the “Wild West” of digital assets.[5]

As during the internet era, the legitimacy of antitrust law in the digital space is being tested once again.[6] The fundamental principles of blockchain technology challenge our traditional understandings of market concentration and consumer protection that imbue antitrust law and create genuine uncertainty as to whether its protections can be applied to effectively regulate competition in decentralized finance (DeFi) markets.[7] This Note addresses this regulatory dilemma known as the “Blockchain–Antitrust Paradox”[8] and will argue that to preserve the relevance of antitrust law in DeFi markets as they become increasingly sophisticated, the current state of antitrust law must take care to adapt along with them.[9]

Current antitrust standards must adapt to allow both the acceleration of judicial experience with the mechanics of cryptocurrency and the regulation of ongoing, arguably anticompetitive activity for the benefit and protection of investors, consumers, and the industry at large.[10] Part II of this Note will begin by providing a high-level overview of blockchain technology to familiarize the reader with the philosophy, technical components, and key concepts surrounding this emerging technology. Part III will briefly analyze Section 1 of the Sherman Antitrust Act (Section 1) to provide insight as to the history, integral components, prevailing theories, and protections offered by existing antitrust law. Part IV will discuss a case of first impression that addressed head-on the Blockchain–Antitrust Paradox and the implications of its outcome. Part V will suggest that effective regulation of anticompetitive conduct in crypto markets is hampered by significant barriers to judicial review presented by current pleading standards and prevailing antitrust jurisprudence.[11] Finally, Part VI will conclude this Note by proposing that current pleading and Section 1 standards should be “hard-forked” to allow for antitrust claims to survive premature dismissal and accelerate judicial literacy and experience with claims in this sector.

II. Demystifying Cryptocurrency

In the simplest terms, cryptocurrency is a form of digital currency that allows people to engage in value transactions without requiring that such transactions be processed, governed, or subject to the regulation of third parties such as banks, credit card processors, or other financial institutions.[12] Cryptocurrency aims to resolve the macroeconomic problems that accompany the security and exchange of tangible currency[13] by creating an alternative marketplace where people can place their trust in a system rather than a middleman to secure and exchange intangible assets.[14] So, how does it work?

A. Crypto Basics

The word “cryptocurrency” comes to us from the discipline of cryptography—the science of keeping information secure by encoding or encrypting it in a format that is not simple to reverse engineer.[15] Cryptocurrencies derive their value from the same place as most fiat currencies: our collective speculation.[16] The key difference between fiat currency and cryptocurrency, however, is the latter’s emphasis on two key elements: intangibility and decentralization.[17] As digital currency, cryptocurrencies are inherently intangible.[18] And without a middleman to secure, exchange, monitor, or regulate transactions of this digital currency, cryptocurrencies are inherently decentralized.[19] To operate efficiently, if at all, decentralized intangible asset systems require trust.[20] To create and ensure trust in this decentralized environment, cryptocurrencies rely on a global network of computers (nodes)[21] to maintain a shared, publicly available “log”[22] of every exchange of their respective digital currency—a blockchain.[23] Every time a new transaction is made it is logged on the blockchain and broadcasted to everyone with access to the network.[24] A natural question one might have at this point is, how are these transactions verified?

Digital asset transactions registered on blockchains are verified through democratic consensus-driven mechanisms such as “Proof of Work” (PoW) or “Proof of Stake” (PoS).[25] While each consensus mechanism has its benefits, the world’s oldest and most popular cryptocurrency, bitcoin, uses PoW to verify its transactions.[26] Under a PoW scheme, the Bitcoin community relies on its collective of members to add verified groups of transactions (blocks) to its blockchain through a process called “mining.”[27] To mine a block, one must first create a block from a pool of unvetted, unconfirmed transactions,[28] then generate a unique, immutable digital signature (hash) for that block using a one-way computational algorithm known as a “hash function.”[29] The difficulty in mining bitcoin lies in the generation of block hashes, which requires the use of highly sophisticated computing hardware programmed to run hash functions and generate block hashes.[30] For every successful block of bitcoin mined, “miners”[31] or “mining pools”[32] are reimbursed in both fees for their services and a sum of bitcoins known as a “block reward.”[33] It is useful when first encountering blockchain technology to conceptualize the blockchain relationship as a series of blocks ordered sequentially in a linear chain. One must be mindful, however, that blockchains have no notion of plot.[34] Instead, blocks of transactions are connected to each other by their hashes, which each contain embedded information of the hash of the block that was mined before it.[35] So, at bottom, PoW validation mechanisms batch transactions in blocks and link each block according to unique hashes to create an orderly chain of transactions, or, as others have put it, “block, meet chain.”[36]

B. Governance and Decision-Making

A key feature of cryptocurrencies is decentralization—the ability to conduct transactions without the need for supervision from a centralized authority.[37] This feature, however, stretches well beyond transaction verification and serves as the foundation for protocol self-regulation or self-governance.[38] As previously explained, Bitcoin’s PoW consensus protocol relies on a democratic system of interactivity and cooperation between interested parties to verify network transactions,[39] but it also relies on this form of network synchronization to reach consensus on upgrades to the protocol itself.[40] Specifically, to reach consensus on competing protocol updates—complete changes to the protocol in some cases—network participants will mine using their preferred protocol to build long chains of validated transactions.[41] This method, known as the “Longest Chain [Wins]” rule, operates as a sort of speech act (a “vote”) where longer chains indicate group preference.[42] In turn, the network will recognize the “chain with most work” as the main chain.[43] As we will find in later stages of this Note, because of technological developments, raw computing power, and competition amongst large mining pools, this seemingly egalitarian, democratic method of governance creates significant disparity in voting power and opportunity for interested parties to manipulate network updates with impunity.[44]

III. The Sherman Antitrust Act

The Sherman Antitrust Act (Sherman Act) was passed by Congress in 1890 to regulate competition in major industries and in response to the creation and exploitation of trusts in nineteenth-century America.[45] At that time, “trusts”—agreements “by which stockholders in several companies [would] transfer their shares to a single set of trustees,” who themselves would manage and control the component companies in exchange for a “specified share of the consolidated earnings of the jointly managed companies”—were pervasive within major industries and severely limited competition by allowing firms to function as monopolies.[46] For that reason, Congress authorized the federal government to restore competition in these markets by dissolving trusts and other similar combinations.[47]

Today, the purpose of the Sherman Act and other federal antitrust laws remains the same: Protect competition for the benefit of consumers by proscribing conduct that works an unfair or unreasonable restraint of trade.[48] Importantly, the Sherman Act does not proscribe all restraints of trade, only such restraints as may pose unreasonable harm to competition and, by consequence, consumer welfare.[49] “Consumer welfare” has become the standard lens through which anticompetitive harm is measured.[50] Although there is significant debate among antitrust academics on the soundness of measuring harm to competition according to consumer welfare,[51] under this prevailing standard, showing an antitrust injury requires a demonstration of some harm to consumers that flows from the alleged anticompetitive conduct.[52] Traditionally, consumers are harmed when firms have the power to unilaterally decrease output, increase prices, or reduce the quality of goods or services.[53]

Over the years, courts have developed and implemented, with varying degrees of success, several “modes of analysis” to assess antitrust claims.[54] At one end of the spectrum, there is some conduct that courts have determined to work such manifest, unreasonable harm to competition that such conduct has been classified as anticompetitive per se.[55] Under a per se analysis, because of the judiciary’s familiarity and experience with the underlying business relationship, evidentiary demands are reduced and a greater number of facts are presumed in the plaintiff’s favor upon proof that a certain type of conduct has occurred.[56] As Justice Black commented in Northern Pacific Railroad Co. v. United States:

[T]here are certain agreements or practices which because of their pernicious effect on competition and lack of any [legitimate business justification] are conclusively presumed to be unreasonable and therefore illegal without elaborate inquiry as to the precise harm they have caused . . . . This [per se] principle . . . not only makes the type of restraints which are proscribed by the Sherman Act more certain . . . but it also avoids the necessity for an incredibly complicated and prolonged economic investigation into the entire history of the industry involved . . . in an effort to determine at large whether a particular restraint has been unreasonable—an inquiry so often wholly fruitless when undertaken.[57]

As implied by Justice Black, however, there will be some industry (or industries) with which the court is fundamentally inexperienced and where the anticompetitive effects of certain business conduct are not intuitively obvious. On the opposite end of the spectrum, then, for conduct that does not fit squarely within the small class of per se anticompetitive conduct, the court has adopted a case-by-case, fact-intensive “rule of reason” analysis. Under the rule of reason, courts consider factors such as the nature of the conduct, intent, the relevant market in which the conduct has taken place,[58] market power,[59] anticompetitive harm, and any procompetitive justifications for the alleged conduct to determine whether it has the purpose or effect of harming competition within the industry.[60] As indicated by Justice Black, full-blown rule of reason analyses are notoriously complicated, expensive, time consuming, and often produce diminishing returns for all parties involved—even leading some plaintiffs to forego claims altogether in the event that a court should find “more detailed treatment” necessary.[61] For this reason, some have advocated for the adoption of a middle ground analysis to occupy the space between these two traditional standards of antitrust review: the “quick look.”[62] The quick look analysis is premised on the idea that, based on the high costs and indeterminate nature of antitrust litigation, in instances where the alleged conduct does not fit neatly into the narrow per se categories, the court may be familiar enough with the business market to make a confident conclusion about its likely effects, thus making a full-blown rule of reason analysis unnecessary.[63] Although promising in theory, the quick look analysis has found little success as a wholly independent, third tier of analysis alongside the traditional canons of anticompetitive theory.[64]

In sum, the Sherman Act is an ever evolving, impactful piece of legislation essential to the proper functioning, security, and validity of our economic system.[65] Recent developments in the digital space, however, have posed significant challenges for antitrust in practice and in theory, causing many to question its adaptability and our general understanding of its guiding principles.

IV. The Blockchain–Antitrust Intersection: United American Corp. v. Bitmain, Inc.

In a case of first impression, the judiciary recently had the opportunity to grapple with the Blockchain–Antitrust Paradox in United American Corp. v. Bitmain, Inc.[66] There, a U.S.-based telecommunication holding and management company, United American Corporation (UAC), brought an action under Section 1 of the Sherman Antitrust Act against several defendants, including Bitmain, Inc. (Bitmain), for their alleged conspiracy to manipulate a network update to the Bitcoin Cash protocol to take control of its blockchain.[67] Specifically, on or about November 15, 2018, the Bitcoin Cash protocol was scheduled for a routine upgrade that would update each of its independent, equally compatible software implementations used by Bitcoin Cash miners.[68] Two Bitcoin Cash implementations—Bitcoin SV (BitSV) and Bitcoin ABC (BitABC)[69]—decided, however, that they would proceed with upgrades that would no longer respect the same rules set.[70] The plaintiff claimed that defendants—a group of individual investors, mining pools, crypto exchanges, and protocol developers—colluded to effectively hijack the Bitcoin Cash blockchain to control and manipulate the hash war that ensued as network participants began to vote on which of the two implementations to follow in favor of defendants’ preferred protocol, BitABC.[71] The alleged plot was carried out as follows:

During the November 15, 2018 Bitcoin Cash network upgrade, [investors] colluded with [mining pools] . . . to reallocate pools of [Defendant] Bitmain Technologies servers from the Bitcoin Core network (“BTC”) to Bitcoin.com’s pools in the Bitcoin Cash network minutes before the implementation of the Bitcoin Cash network upgrade. The effect was to bring pools of servers to mine the upgrade from another network (i.e., “rent” hashing power), that were not previously mining the Bitcoin Cash blockchain, thereby increasing Bitcoin.com’s hashing power by over 4,000%. . . . The reallocation of [Defendant] Bitmain Technologies’ hashing power onto the Bitcoin.com pools could not be accomplished without coordination between [defendants] because the reallocation of extensive amounts of hash power from one pool to another requires preparation by the receiving pool to ensure that it is able to accommodate the spike in hash power on its network.[72]

Notably, unlike its response to other claims, Bitmain did not directly dispute the plaintiff’s claim that receiving pools would have to make advanced preparations to ensure ability to accommodate large spikes in hash power on the Bitcoin Cash network[73] but relied on the absence of significant, direct evidence to support UAC’s claims that it must have coordinated with other defendants in advance to support its pool reallocation and that, in general, renting hash power is not anticompetitive.[74] Thus, because a lack of evidence to the contrary would show that a claim for independent action was at least as probable as a claim for concert of action, defendants moved to dismiss UAC’s suit for failure to state a claim upon which relief could be granted.[75] The court agreed and granted the defendants’ joint motion to dismiss, finding that UAC had not pled sufficient facts to plausibly suggest that Bitmain had committed an antitrust violation under either a per se or rule of reason analysis[76] and that UAC failed to accurately define the relevant product market within which the alleged harm to competition took place.[77]

As the remainder of this Note will discuss, the Bitmain decision highlights two separate but interrelated issues concerning the application of present-day antitrust jurisprudence to regulate anticompetitive activity occurring on public, permissionless blockchains. For one, contrary to the original intent of the Supreme Court,[78] antitrust plaintiffs face significant barriers to court access posed by current federal pleading standards.[79] For another, when applied in the context of cryptocurrency litigation, conventional theories of antitrust harm and judicial review are patently inadequate to capture and define potentially anticompetitive conduct occurring in these markets.[80] The confluence of these two problems leads one to conclude that, under current conditions, it is unlikely that a given plaintiff would be able to allege sufficient facts to plausibly state a claim upon which relief can be granted in this context.

V. The Sherman-Twombly Hard Fork

Despite its distinguished place among the most important canons of American jurisprudence and economic liberty, the Sherman Act is notoriously broad.[81] Because of its ambiguity, great weight is placed upon courts to develop rules defining the parameters of antitrust enforcement.[82] These responsibilities include developing rules of pleading and procedure for antitrust claims.[83] On this point, courts and practitioners alike have long belabored over one deceptively simple question of civil procedure: what must a plaintiff plead to gain access to court?[84] And almost a century after the power to decide that question was left with the Court,[85] its answer remains equally as elusive. Since approximately 1938, when the Court first promulgated the Federal Rules of Civil Procedure (FRCP), pleading requirements have operated along a spectrum of equally specious standards: possibility, plausibility, and probability.[86] Originally, to promote ease of access to judicial review, FRCP 8 required antitrust plaintiffs to provide only a short, plain statement of the underlying claim that incorporated enough facts to suggest the possibility of relief.[87] Following the Court’s tightening of pleading standards in the seminal case of Bell Atlantic Corp. v. Twombly, however, plaintiffs are now required to plead sufficient facts to state a claim for relief that is “plausible on its face.”[88] According to the Court’s interpretation of this standard in Ashcroft v. Iqbal, a claim is facially plausible “when [a] plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged,” which requires showing more than the mere possibility that a defendant acted unlawfully.[89] Despite requiring a greater showing than the simple possibility of liability under the prior notice pleading regime,[90] the Court took care to clarify that it was not exceeding the scope of its authority under the Rules Enabling Act by using this departure to impose a probability requirement upon claimants.[91] In fact, the Court insisted that its new standard was nothing new at all: “The need at the pleading stage for allegations plausibly suggesting (not merely consistent with) agreement reflects the threshold requirement of Rule 8(a)(2) that the ‘plain statement’ possess enough heft to ‘sho[w] that the pleader is entitled to relief.’”[92]

Apart from its objective ambiguity, one problem for the Court in justifying its plausibility standard is that the intellectual exercise of separating plausibility from probability in this context is fundamentally unsound, for the degree to which something is plausible is necessarily predicated on some reasonable measure of what is probable.[93] And although the Court has taken care to identify and describe the line between possibility and plausibility,[94] however loosely, it is silent on where the line on the opposite end of the spectrum should lie.[95] This subtle omission has significant implications: Without clearly identifying a point at which plausibility becomes probability, courts have been free to impose their own varying degrees of plausibility, which in certain settings—as demonstrated by the treatise pleadings common to antitrust[96]—can cause plausibility to look a lot more like probability. A return to Bitmain is useful to contextualize this dilemma.

Bitmain provides an opportunity to observe the shortcomings of the plausibility standard and the effects of excessive judicial discretion at the pleading stage. As mentioned, the plausibility standard necessarily requires courts to rely on some predetermined measure of what is probable.[97] In more concrete terms, as explained by Professor Bahadur:

Mathematically, the probability of event A is represented by a real number in the range from zero to one. An impossible event has the probability of zero and a certain event has a probability of one. . . . So an event is possible [if] it has a greater than 0% chance of happening, or a greater than zero probability. Therefore . . . when the Iqbal Court concluded the plaintiff’s allegations—by being consistent with the theory of recovery alleged in the complaint—rendered the complaint ‘short of the line between possibility and plausibility,’ the Court’s necessary mathematical conclusion is that the probability of discrimination is greater than [zero] but not probabilistically high enough to be plausible. Plausibility is therefore achieved when the complaint reaches a threshold level of probability [or “validity”]. . . .[98]

So, plausibility can be understood as something that has a greater than 50% chance of occurring—something that is “more likely than not” to happen.[99] The natural question, then, is where is a court to derive its probabilistic threshold of certainty to avoid imposing prejudicial degrees of plausibility at the pleading stage?[100] Take for instance the Bitmain court’s review of the mining defendants’ activities.[101] Although the court agreed that UAC’s claims regarding the mining defendants’ alleged parallel conduct were reasonable enough to suggest that discovery could reveal evidence of an agreement, the evidence proffered by UAC to support those claims was insufficient to suggest an agreement over independent action.[102] Thus, the Bitmain court’s necessary conclusion was that although UAC’s claims were sufficient to suggest some objective likelihood of an agreement, absent direct evidence or additional “plus factors”[103] to the contrary, the likelihood of actual agreement was not probabilistically high enough to be plausible.[104] In this way, requiring antitrust plaintiffs to demonstrate at the pleading stage—by way of direct evidence or an indeterminate, purely discretionary number of plus factors—that an agreement is more likely than not establishes a quasi-probability requirement that far exceeds the contemplated scope of court authority under the Rules Enabling Act[105] and the original intent of the FRCP.[106] Additionally, because of the difficulty in “proving” parallel conduct at the pleading stage—a problem compounded by a significant degree of information asymmetry between plaintiffs and defendants in this context—antitrust plaintiffs bringing actions for potential Section 1 violations in the DeFi space will continue to have trouble carrying their burden to make out “plausible” claims for relief. This problem is compounded exponentially when one considers just how unfit traditional antitrust standards and modes of analyses are to regulate conduct in this space.

Cryptocurrencies, in general, were designed to create a decentralized alternative to traditional trust-based e-commerce market paradigms[107] and thus call into question the applicability of anti-trust regulation in this space.[108] Specifically, the concern is that should antitrust law continue to be applied as it is today—that is, with consumer welfare as its guiding principle—it will be quickly become ineffective in our rapidly evolving decentralized landscape.[109] This problem becomes clear when one considers how, as in Bitmain, courts traditionally begin their analyses from the viewpoint of the “consumer.”[110] The natural question with respect to decentralized consensus-driven systems, where participants at all levels of the application contribute to ensure the efficiency of the network,[111] is: Who are the consumers? This is not an easy question to answer and daring to provide one would be beyond the scope of this Note, but it brings necessary attention to how blockchain technology complicates the already speculative task of accurately identifying and defining the traditional “consumer.”[112] Take, for instance, the Bitmain court’s discussion of UAC’s relevant market analysis:

The fact that ‘each form of cryptocurrency has distinctive characteristics’ says little. . . . It tells us nothing that would allow us to discern the extent to which consumers prefer Bitcoin Cash over the multitude of other cryptocurrencies. . . . In addition, there are no factual assertions that plausibly show whether there is cross-elasticity of demand between the market for Bitcoin Cash . . . and the market for Bitcoin Core or other cryptocurrencies, or even fiat currencies. In the words of the Jacobs Court, 'these types of questions [ ] go unanswered in the complaint.[113]

Setting aside the fact that even if these factual assertions were presented to the court it would necessarily be required to have some reasonably well-founded idea about (or “experience” with) the competitive dynamics of crypto markets from which to evaluate the effect, validity, or plausibility of the proffered evidence,[114] the court’s consumer-focused analysis reflects the common practice of the last half century to interpret antitrust law by relying on static conceptions of competition focused entirely on minimizing deadweight loss—the loss of total welfare or social surplus due to monopoly pricing.[115] Viewing the problem through this lens necessarily requires plaintiffs to engage in “‘speculative, possibly labyrinthine, and unnecessary’ analysis of how the restraints’ efficiencies and inefficiencies affect the ill-defined consumer,”[116] an analysis which “engenders ‘a relatively high degree of uncertainty in estimations or assumptions used for quantification of detriment to consumer welfare.’”[117] So, indeed, “[t]hese types of questions [] go unanswered in the complaint,” but for good reason.

As Professor Thibault Schrepel notes in the aptly titled article Is Blockchain the Death of Antitrust Law? The Blockchain Antitrust Paradox, “[w]e are at a stage in our history when we urgently need to make fundamental choices about [our] values.”[118] Bitmain demonstrates that clarifying the role of antitrust regulation of decentralized financial systems is both urgent and necessary if it is to develop alongside this emerging technology in a meaningful way. Until that time, we may continue to expect the round-peg-square-hole application of conventional theories of antitrust harm to new and emerging problems in this area and run the risk of being outpaced by its technological developments.

VI. Conclusion

Bitmain demonstrates for the first time how the dynamics of DeFi markets are susceptible to anticompetitive influence.[119] Under current federal pleading standards and contemporary price-focused measures of harm, it is implausible that similar claims will be pled with enough factual sufficiency to suggest plausibility of harm. Absent the adoption of reduced pleading standards to lower barriers to judicial review for disputes concerning anticompetitive conduct in DeFi markets, and the adoption and implementation of alternative theories of antitrust harm that adequately capture the nature and type of competition occurring on public, permissionless blockchains, the judiciary will likely continue to lack the experience it requires to effectively regulate business conduct and competition in this burgeoning economic sector.

Victor Martinez

1. The terms “bitcoin,” “blockchain,” and “cryptocurrency” have specific, identifiable meanings, not all of which are entirely similar. Making Sense of Bitcoin, Cryptocurrency, and Blockchain, PWC, https://www.pwc.com/us/en/industries/financial-services/fintech/bitcoin-blockchain-cryptocurrency.html [https://perma.cc/UG8V-4MG4] (last visited Sept. 7, 2022). Bitcoin is a specific digital currency that is secured and exchanged through a network of computers that record and validate its transactions—a “blockchain.” Id. “A blockchain is a decentralized ledger” that stores an immutable history of past transactions and can be either public (permissionless) or private (permissioned). See id. Bitcoin refers to the specific units of bitcoin currency. Id. Cryptocurrency, in general, refers to digital currency that uses a blockchain to track payments and other transactions and uses cryptography to verify transactions and prevent tampering and counterfeiting. Id.

2. See generally Sara Wynn, Celebrity Crypto Endorsers Like Kim Kardashian Spark Concern for Unwary Investors: Tom Brady and Gisele Bundchen Are Also Among Those Who Have Promoted Exchanges or Currencies, Roll Call (Oct. 19, 2021, 5:30 AM), https://www.rollcall.com/2021/10/19/celebrity-crypto-endorsers-like-kim-kardashian-spark-concern-for-unwary-investors/ [https://perma.cc/AC5J-3B5S] (commenting on regulatory concerns that “boosting of [crypto] products can entice ill-informed investors and potentially hurt those taken by the allure of the endorsement, rather than the features of the product”); Dave McMenamin & Ohm Youngmisuk, Staples Center to Become Crypto.com Arena in Reported $700 Million Naming Rights Deal, ESPN (Nov. 17, 2021), https://www.espn.com/nba/story/_/id/32650662/staples-center-become-cryptocom-arena-rich-naming-rights-deal [https://perma.cc/R7G3-ZF98]; Yvonne Lau, Cryptocurrencies Hit Market Cap of$3 Trillion for the First Time as Bitcoin and Ether Reach Record Highs, Fortune (Nov. 9, 2021, 12:32 AM), https://fortune.com/2021/11/09/cryptocurrency-market-cap-3-trillion-bitcion-ether-shiba-inu/ [https://perma.cc/E7XN-UBGE].

3. See generally 98% of Survey Respondents Can’t Pass a Basic Crypto Literacy Assignment, Globe Newswire (Nov. 1, 2021, 8:00 AM), https://www.globenewswire.com/en/news-release/2021/11/01/2324362/0/en/98-of-Survey-Respondents-Can-t-Pass-a-Basic-Crypto-Literacy-Assessment.html/ [https://perma.cc/C33Q-NZX8] (commenting on findings from Cryptoliteracy.org’s inaugural crypto literacy month and literacy benchmark, comparing crypto knowledge and attitudes in the United States, Brazil and Mexico).

4. See generally Todd Phillips & Alexandra Thornton, Congress Must Not Provide Statutory Carveouts for Crypto Assets, Ctr. for Am. Progress (Mar. 1, 2022), https://www.americanprogress.org/article/congress-must-not-provide-statutory-carveouts-for-crypto-assets/ [https://perma.cc/5R85-RRSS].

5. See Gary Gensler, Remarks Before the Aspen Security Forum, SEC (Aug. 3, 2021), https://www.sec.gov/news/public-statement/gensler-aspen-security-forum-2021-08-03 [https://perma.cc/VS23-NLSG] (“Right now, we just don’t have enough investor protection in crypto. Frankly, at this time, it’s more like the Wild West.”).

6. See Thibault Schrepel, Is Blockchain the Death of Antitrust Law? The Blockchain Antitrust Paradox, 3 Geo. L. Tech. Rev. 281, 321–23 (2019).

7. Id. at 284–85 (“Blockchain’s technological underpinnings, however, are a radical departure even from those of the Internet. The Internet . . . challenged the legal system by substantially increasing the speed at which the law needed to be applied. . . . With blockchain, it is not just about speed: the very nature of the technology raises fundamental questions about antitrust law and how individuals conduct transactions. . . . [T]he decentralized nature of blockchain forces us to consider the legitimacy of antitrust law, which rests on centralized legal structures and enforcement that are inconsistent with blockchain’s trustless nature; although, antitrust is still needed. This is the blockchain antitrust paradox.” (emphasis added)).

8. See id. at 285.

9. On the one hand, as with the gradual application of antitrust laws to internet regulation, there is promise that existing regulatory frameworks may provide adequate solutions to the problems encountered at this intersection over time. See id. at 322, 325, 327. On the other hand, however, considering the philosophical, technological, and functional underpinnings of blockchain technology, the exponential rate of development and innovation of digital markets, and the general lack of substantive judicial clarity in this arena tends to suggest that relying on past experience may be misguided. See id. at 335–37.

10. See, e.g., supra note 5 and accompanying text.

11. See generally infra Part V.

12. Satoshi Nakamoto, Bitcoin: A Peer-to-Peer Electronic Cash System 5–6 (2008), https://bitcoin.org/bitcoin.pdf [https://perma.cc/E85Z-4HR3] [hereinafter White Paper]; Marco Iansiti & Karim R. Lakhani, The Truth About Blockchain, Harv. Bus. Rev., Jan.–Feb. 2017, at 121, 126.

13. See, e.g., Neel Mehta et al., Bubble or Revolution? The Present and Future of Blockchain and Cryptocurrencies 8–11 (2d ed. 2020) (commenting on how “tangible money is insecure, inconvenient, easy to fake, and impractical for digital payments” and how, whatever solutions centralized financial institutions provide to these problems, they introduce problems of their own such as “fees, lack of accessibility, and a different form of insecurity”).

14. Id. at 14.

15. Cryptography, Techopedia, https://www.techopedia.com/definition/1770/cryptography [https://perma.cc/Z8CT-EDJB] (Feb. 6, 2018).

16. Mehta et al., supra note 13, at 41 (noting that many things—including money—do not have an objective value that exists outside of our collective speculation as to their value: “Most of the money we use today has the same philosophical problem as Bitcoin. If you are stranded in the jungle or on Mars, a \$20 bill is just a useless piece of paper. But if you’re in a store, you can get pizza, socks . . . and all manner of other goods in exchange for that [same] piece of paper. . . . [Essentially] you think this thing has value because you know that other people think it has value”); Yuval Noah Harari, Homo Deus: A Brief History of Tomorrow 144–45 (2016) (noting how money is only as valuable as society agrees to make it: “Intersubjective entities depend on communication among many humans rather than on the beliefs and feelings of individual humans. . . . Money, for example, has no objective value. You cannot eat, drink or wear a dollar bill. Yet as long as billions of people believe in its value, you can use it to buy food, beverages and clothing”); Yuval Noah Harari, Sapiens: A Brief History of Humankind 186 (2015) (“[W]ith money as an alchemist, you can turn land into loyalty, justice into health, and violence into knowledge.”).

17. The principles of intangibility and decentralization as applied to currency predate cryptocurrencies. Centuries ago, on the small island of Yap in the Pacific Ocean, the Yapese—the Micronesian ethnic group native to the main island of Yap—developed a system of trade centered around the use of large discs carved from limestone deposits called “Rai Stones” as currency. Jacob Goldstein & David Kestenbaum, The Island of Stone Money, NPR (Dec. 10, 2010, 4:28 AM), https://www.npr.org/sections/money/2011/02/15/131934618/the-island-of-stone-money/ [https://perma.cc/QKT7-HQ3N]. Because of the size of many of these Rai Stones, trade of this currency often did not involve changing of hands. Id. “So[,] imagine there’s this great big stone disc sitting in a village. One person gives it to another person. But the stone doesn’t move. It’s just that everybody in the village knows the stone now has a new owner.” Id. This archaic currency and its method of trade sheds an important light on the principles of intangibility and decentralization. Rai Stones were an “intangible” form of currency because their physical location had no effect on their trade and “decentralized” because the Yapese did not rely on a single person, entity, or institution to track transactions. See Mehta et al., supra note 13, at 40–42. You owned a Stone if a majority of your fellow villagers agreed (verified) that you did. See id. at 40–41.

18. Mehta et al., supra note 13, at 15.

19. Id.

20. Id. at 14.

21. “Nodes” are computational devices—such as phones, computers, etc.—that run cryptocurrency software and maintain crypto networks. See id. at 285; see also Daniel Cawrey, What Are Bitcoin Nodes and Why Do We Need Them?, CoinDesk (Sept. 11, 2021, 5:44 AM), https://www.coindesk.com/markets/2014/05/09/what-are-bitcoin-nodes-and-why-do-we-need-them/ [https://perma.cc/W6V5-25RT] (“[W]hat’s often lost in translation [when discussing crypto networks] is the sheer amount of machinery that is needed to maintain this global infrastructure. For example, in order to validate and relay transactions, bitcoin requires more than a network of miners processing transactions, it must broadcast messages across a network using ‘nodes.’”).

22. The easiest way to conceptualize this “log” is:

[A]s a giant Google spreadsheet shared with everyone in the world, with one row per transaction. . . . [E]very Bitcoin user in the world has a copy of this spreadsheet stored on their computers. Each time someone makes a new transaction, the transaction is broadcast to everyone, and everyone’s computers download new versions of the spreadsheet.

Mehta et al., supra note 13, at 15–16.

23. See supra note 1.

24. See supra note 21 and accompanying text.

25. See generally Xiang Fu et al., A Survey of Blockchain Consensus Algorithms: Mechanism, Design and Applications, Sci. China Inf. Scis., Feb. 2021, at 1, 1–7 (discussing the variety of blockchain consensus mechanisms).

26. See White Paper, supra note 12, at 3; James Royal & Brian Baker, 12 Most Popular Types of Cryptocurrency, Bankrate (Sept. 16, 2022), https://www.bankrate.com/investing/types-of-cryptocurrency/ [https://perma.cc/Z8CJ-SY9Y]. See generally Niaz Chowdhury, Inside Blockchain, Bitcoin, and Cryptocurrencies (2020).

27. Mehta et al., supra note 13, at 1617 (“Because Bitcoin thinks of itself as a digital version of gold and verifiers put in work to extract brand-new money, this verification process is called mining, and the verifiers are known as miners. (You’re mining with a computer instead of a pick and a shovel, but the business model is roughly the same.)”).

28. Unconfirmed crypto transactions are preserved in a pool of transactions called a “memory pool” or “mempool” before they are grouped into blocks, mined, and placed on the blockchain. See, e.g., Mempool Size (Bytes), Blockchain.com, https://www.blockchain.com/charts/mempool-size [https://perma.cc/N7ZR-XQ7K] (last visited Aug. 28, 2022); Mehta et al., supra note 13, at 24–25.

29. Id. at 2426.

30. Hash functions use three inputs to generate the hash for a given block: part of the hash from the previous block, the transactions, and a special number called a “nonce.” The difficulty here is that

[T]he hash value is different for each nonce, and you’re only allowed to add your block to the chain if your hash starts with the right number of zeroes. So if the nonce you picked doesn’t lead to a good hash, you have to try again and again. . . . Trying to guess the right nonce for Bitcoin mining is [hard]. [E]ach nonce gives you [roughly] a [one] in 66,000,000,000,000,000,000,000 . . . chance of mining a block. [That number] isn’t far off from the number of stars in the universe.

See id. at 2430.

31. See supra note 27 and accompanying text.

32. Jake Frankenfield, Mining Pool, Investopedia, https://www.investopedia.com/terms/m/mining-pool.asp [https://perma.cc/CH4B-H9VP] (Jan. 15, 2022) (“A mining pool is a joint group of cryptocurrency miners who combine their computational resources over a network to strengthen the probability of . . . successfully mining for cryptocurrency.”).

33. Mehta et al., supra note 13, at 16–17 (commenting on how the “block reward” feature incentivizes the tedious computational work and expense of mining cryptocurrency). Originally, when the bitcoin transaction rate was low, mining bitcoin could be accomplished using your standard desktop computer. See, e.g., The History and Future of Bitcoin Mining, Genesis Block (Mar. 3, 2021, 5:28 PM), https://genesisblockhk.com/the-history-and-future-of-bitcoin-mining/ [https://perma.cc/ME7G-Y3GC] (“Ordinary CPUs [are] no longer able to run at the speed needed to meet the increased difficulty of the mining algorithm.”). This is impossible today, however, and crypto mining has flourished—for better or for worse—into a multibillion-dollar industry. Michelle Lim, Market Cap of Crypto Mining Firms Surged 121% This Year: CoinShares Research, Forkast (Sept. 3, 2021, 7:55 AM), https://forkast.news/headlines/market-cap-crypto-miners-surged-coinshares/ [https://perma.cc/P6D4-D28P].

34. Mehta et al., supra note 13, at 19.

35. Id. at 19–20.

36. Id. at 21.

37. See supra note 17 and accompanying text.

38. See generally Bitcoin Forks: Upgrades and Radical Blockchain Changes, Gemini: Cryptopedia, https://www.gemini.com/cryptopedia/bitcoin-fork-protocol-upgrades-blockchain-changes [https://perma.cc/B3PK-QSJC] (Dec. 6, 2021).

39. See supra notes 24–35 and accompanying text.

40. See Kartik Nayak, Nakamoto’s Longest-Chain Wins Protocol, Decentralized Thoughts (Oct. 15, 2021), https://decentralizedthoughts.github.io/2021-10-15-Nakamoto-Consensus/ [https://perma.cc/Y385-LWSG] (“The key intuition behind Nakamoto’s protocol is to ask a majority of the parties what should be committed.”).

41. Naturally, not all network participants will agree with every update made to their blockchain’s base protocol. These disagreements can cause blockchains to “split” or “fork” when updates are made to a blockchain protocol but not all participants (“nodes”) agree to adopt them. See Bitcoin Forks: Upgrades and Radical Blockchain Changes, supra note 38. Some nodes will continue mining under the original protocol, while some will mine under the new (updated) protocol. Id. These splits are commonly known as “soft forks.” Id. Sometimes, however, protocol updates are so drastically different from the original protocol that they disrupt the core operation of the network and create entirely new blockchains. Id. The key distinction between these “hard forks” and the previously mentioned “soft forks” is that the former are not backwards compatible—i.e., nodes that accept the updated protocol are not running software that is compatible with the nodes that did not (or the underlying protocol). Id.

42. See generally Shawn Dexter, Longest Chain—How Are Blockchain Forks Resolved?, Mango Rsch. (June 19, 2018), https://www.mangoresearch.co/blockchain-forks-explained/ [https://perma.cc/3GSR-5JH3].

43. Id.

44. See Mehta et al., supra note 13, at 85–86 (noting that “Bitcoin mining has gotten prohibitively competitive” and has seemingly produced a mining “arms race” amongst network participants, a significant diversion from the “gentleman’s agreement” originally contemplated by Satoshi’s white paper); see also Nayak, supra note 40 (“[I]t is unclear why we should be building chains to learn about how a majority of the parties think.”).

45. Tim Wu, The Curse of Bigness: Antitrust in the New Gilded Age 24–25, 30–31 (2018); see also 15 U.S.C. § 1 (“Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal.”).

46. Sherman Antitrust Act (1890), U.S. Nat’l Archives & Recs. Admin., https://www.archives.gov/milestone-documents/sherman-anti-trust-act [https://perma.cc/CUX5-4JWW] (last visited Sept. 8, 2022) (“For example, on January 2, 1882, the Standard Oil Trust was formed. Attorney Samuel Dodd of Standard Oil first had the idea of a trust. A board of trustees was set up, and all the Standard [Oil] properties were placed in its hands. Every stockholder received 20 trust certificates for each share of Standard Oil stock. All the profits of the component companies were sent to the nine trustees, who determined the dividends. The nine trustees elected the directors and officers of all the component companies . . . [allowing] Standard Oil to function as a monopoly.”); see also Wu, supra note 45, at 24–25.

47. Sherman Antitrust Act (1890), supra note 46.

48. The Antitrust Laws, FTC, https://www.ftc.gov/tips-advice/competition-guidance/guide-antitrust-laws/antitrust-laws [https://perma.cc/J8XQ-MCXZ] (last visited Jan. 26, 2022). The Sherman Act protects competition through the proscription of contracts, combinations, and conspiracies between firms to restrain trade (under section 1) and single firm monopolization, attempted monopolization, or combinations or conspiracies to monopolize relevant markets (under section 2). A conspiracy will involve an express or implied agreement between two or more independent competitors pursuing separate economic interests that has the purpose or effect of working an unreasonable restraint of trade or competition in a relevant market. 15 U.S.C. §§ 1–2. See generally FTC, Antitrust Guidance for Collaborations Among Competitors (2000), https://www.ftc.gov/sites/default/files/documents/public_events/joint-venture-hearings-antitrust-guidelines-collaboration-among-competitors/ftcdojguidelines-2.pdf [https://perma.cc/5RJR-KY62] [hereinafter Antitrust Guidance]. An unreasonable restraint of trade will include all per se illegal activity and—in the absence of evidence indicating a clear per se violation—other activity that has the purpose or effect of harming competition by increasing the ability or incentive to raise price above or reduce output, quality, service, or innovation below what would likely prevail in the absence of the agreement. Id.

49. See The Antitrust Laws, supra note 48 (“For instance, in some sense, an agreement between two individuals to form a partnership restrains trade, but may not do so unreasonably, and thus may be lawful under the antitrust laws.”).

50. See John O. McGinnis & Linda Sun, Unifying Antitrust Enforcement for the Digital Age, 78 Wash. & Lee L. Rev. 305, 367 (2021); see also Reiter v. Sonotone Corp., 442 U.S. 330, 343 (1979) (“Congress designed the Sherman Act as a ‘consumer welfare prescription.’” (quoting Robert H. Bork, The Antitrust Paradox: A Policy at War with Itself 66 (1978)).

51. See, e.g., Barak Orbach, Foreword: Antitrust’s Pursuit of Purpose, 81 Fordham L. Rev. 2151, 2152–54 (2013) (arguing that “since the introduction of the [consumer welfare] standard, antitrust has been searching for its purpose” and the Supreme Court has been “applying this standard ever since [Sonotone] although it has never considered its (lack of) meaning or soundness”); see also Robert H. Lande, A Traditional and Textualist Analysis of the Goals of Antitrust: Efficiency, Preventing Theft from Consumers, and Consumer Choice, 81 Fordham L. Rev. 2349, 2393 (2013) (prescribing “consumer choice”—the elimination of practices that artificially restrict the choices that the free market would have provided—as the goal of competition policy).

52. See Lina M. Khan, Amazon’s Antitrust Paradox, 126 Yale L.J. 710, 721 & n.43 (2017) (“Today, showing antitrust injury requires showing harm to consumer welfare, generally in the form of price increases and output restrictions.”). Chairwoman Khan also notes, importantly, that the consumer welfare standard as defined by Robert Bork—and adopted by the Supreme Court in Sontone—is not “consumer surplus” but “total welfare.” Id. at 720–21, 720 n.38. The implication being, of course, that “outcomes [under the consumer welfare standard] that might otherwise be understood to harm consumers are not thought to reduce consumer welfare.” Id. at 720 & n.38.

53. Id. at 721.

54. Herbert Hovenkamp, The Rule of Reason, 70 Fla. L. Rev. 81, 121 (2018).

55. See United States v. Topco Assocs., Inc., 405 U.S. 596, 607–08 (1972) (“It is only after considerable experience with certain business relationships that courts classify them as per se violations of the Sherman Act. One of these classic examples of a per se violation of § 1 is an agreement between competitors at the same level of the market structure to allocate territories in order to minimize competition.” (citation omitted) (citing Jerrold G. Van Cise, The Future of Per Se in Antitrust Law, 50 Va. L. Rev. 1165 (1964))).

56. See Hovenkamp, supra note 54, at 121–22 (noting that the per se rule lies on the “extreme” end of the spectrum of analysis “under which both power and anticompetitive effects will be presumed upon proof that a certain type of conduct has occurred” (emphasis added)).

57. N. Pac. Ry. Co. v. United States, 356 U.S. 1, 5 (1958).

58. A threshold measure in any antitrust claim is the determination of where (in what “relevant market”) the alleged harm to competition has taken place. See generally Antitrust Guidance, supra note 48. A relevant market is comprised of two interrelated subcomponents: (1) the relevant geographic market; and (2) the relevant product market. Glenn William Brown, Jr., Comment, Relevant Geographic Market Delineation: The Interchangeability of Standards in Cases Arising Under Section 2 of the Sherman Act and Section 6 of the Clayton Act, 1979 Duke L.J. 1152, 1153. A geographic market is the area of effective competition in which a product or its reasonably interchangeable substitutes are traded. Id. at 1158 n.34. Defining relevant product market is more complex and incorporates several factors that include, among others: (1) the product’s characteristics and uses; (2) cross elasticity of demand (reasonable interchangeability); and (3) evidence of customer, competitor, and/or the alleged monopolist’s perception as to the reasonable substitutability of the product. William MacLeod, The Relevant Product Market After Brown Shoe: A Framework of Analysis for Clayton and Sherman Act Cases, 12 Loy. U. L.J. 321, 321–26 (1981). At bottom, a product market will usually be composed of products that are reasonably interchangeable (substitutable) with one another, such that a price increase in one induces a meaningful quantity increase in another. Id. at 327. In practice, a claim under the Sherman Act that does not properly plead both subcomponents in a relevant market analysis will automatically fail. See Thurman Indus., Inc. v. Pay 'N Pak Stores, Inc., 875 F.2d 1369, 1373 (9th Cir. 1989).

59. “Market Power” is the power to control price or reduce output in a given market and will generally correspond to a firm’s market share within that market. See generally Thomas G. Krattenmaker et al., Monopoly Power and Market Power in Antitrust Law, 76 Geo. L.J. 241 (1987).

60. See Hovenkamp, supra note 54, at 124 & n.235 (discussing Justice Breyer’s dissent in California Dental Ass’n v. FTC and his articulation of the rule of reason analysis, consolidating it into “four classical subsidiary antitrust questions: (1) What is the specific restraint [i.e., conduct] at issue? (2) What are its likely anticompetitive effects? (3) Are there offsetting procompetitive justifications? [and] (4) Do the parties have sufficient market power to make a difference?”); see also United States v. Socony-Vacuum Oil Co., 310 U.S. 150, 224–25, 224 n.59 (1940) (noting that, in reviewing the underlying price-fixing scheme, although the Court had treated the exertion of power to fix prices as a necessary component of the offense, that did “not mean [to indicate] that both a purpose and a power to fix prices are necessary for the establishment of a conspiracy under § 1 of the Sherman Act. . . . Price-fixing agreements may or may not be aimed at complete elimination of price competition. The group making those agreements may or may not have power to control the market. But the fact that the group cannot control the market prices does not necessarily mean that the agreement as to its prices has no utility to the members of the combination”).

61. N. Pac. Ry. Co., 356 U.S. at 5; see also Hovenkamp, supra note 54, at 123 n.227 (noting that the FTC dismissed its complaint against the California Dental Association (CDA) after a court denied its request for a shorter inquiry into CDA’s allegedly anticompetitive practices and required a full rule of reason analysis); Cal. Dental Ass’n v. FTC, 526 U.S. 756, 780–81 (1999) (“As the circumstances here demonstrate, there is generally no categorical line to be drawn between restraints that give rise to intuitively obvious inference of anticompetitive effect and those that call for more detailed treatment.”).

62. Cal. Dental Ass’n, 526 U.S. at 781 (“What is required, [apart from strict per se or rule of reason analysis] is an enquiry meet for the case, looking to the circumstances, details, and logic of a restraint. The object is to see whether the experience of the market has been so clear, or necessarily will be, that a confident conclusion about the principal tendency of a restriction will follow from a quick (or at least quicker) look, in place of a more sedulous one. And of course what we may see vary over time, if rule-of-reason analyses in case after case reach identical conclusions.”).

63. See id.; see also Hovenkamp, supra note 54, at 122.

64. See Hovenkamp, supra note 54, at 123 (“Only three Supreme Court decisions have explicitly acknowledged the quick look, and then only to reject it under the circumstances.”). As Hovenkamp aptly notes, a prevailing reason why the Supreme Court has been reluctant to embrace the quick look analysis is that its principles are fundamentally ambiguous—the analysis follows no single set of requirements, and it encourages courts to engage in greater evidentiary shortcuts than a full-blown rule of reason analysis would allow. See id. at 125–26. Despite the Court’s reluctance to adopt the quick look analysis as a separate, stand-alone mode of analysis, several cases have been decided along similar lines. See id. at 128 (“For example, the [National Society of Professional Engineers v. United States] case condemned a professional association’s restriction on competitive bidding. The proffered defense . . . was tantamount to an admission that the restraint was [patently anticompetitive]. The Supreme Court concluded that the rule of reason would not countenance such a defense. In the process the prohibition on competitive bidding became the unrebutted prima facie and final case. While the Court did not speak of a ‘quick look’ or articulate its mode of analysis, it was clearly applying something that fell between per se and full rule of reason analysis.” (citations omitted)).

65. The Supreme Court has gone so far as to describe the Sherman Act as “a charter of [economic] freedom [that] has a generality and adaptability comparable to that found to be desirable in constitutional provisions.” See Appalachian Coals, Inc. v. United States, 288 U.S. 344, 359–60 (1993); see also United States v. Topco Assocs., Inc., 405 U.S. 596, 610 (1972) (describing the Sherman Act in particular as the “Magna Carta of free enterprise”).

66. See generally Konstantinos Stylianou, What Can the First Blockchain Antitrust Case Teach Us About the Crypto-Economy?, Jolt: Digest (Apr. 26, 2019), https://jolt.law.harvard.edu/digest/what-can-the-first-blockchain-antitrust-case-teach-us-about-the-crypto-economy [https://perma.cc/6W2K-FCBS]; see also Jones Day Talks: Takeaways from a Landmark Cryptocurrency Antitrust Case, Jones Day (June 2021), https://www.jonesday.com/en/insights/2021/06/jones-day-talks-takeaways-from-a-landmark-cryptocurrency-antitrust-case [https://perma.cc/2K9S-FN7Y].

67. United Am. Corp. v. Bitmain, Inc., 530 F. Supp. 3d 1241, 1249, 1252 (S.D. Fla. 2021).

68. Id. at 1252.

69. The Bitcoin ABC rules set sought to preserve Bitcoin Cash’s basic structure and immunize it from major developments in the future, while the Bitcoin SV rules set wanted to increase block size and scalability. See Amended Complaint at 11–12, Bitmain, Inc., 530 F. Supp. 3d 1241 (No. 18-cv-25106). Because the size of a block determines how many transactions can be confirmed on the network interval, larger blocks provide for more transactions and lower user cost—i.e., transaction fees—per transaction. Id.

70. Bitmain, Inc., 530 F. Supp. 3d at 1252.

71. Id. at 1251–53.

72. See Amended Complaint, supra note 69, at 15–16.

73. See Defendants’ Joint Motion to Dismiss First Amended Complaint and Incorporated Memorandum of Law at 10–11, Bitmain, Inc., 530 F. Supp. 3d 1241 (No. 18-cv-25106).

74. Id. at 11.

75. Id. at 12–13.

76. Bitmain, Inc., 530 F. Supp. 3d at 1274–75.

77. Id. at 1267–69 (“The relevant product market is not well-plead. Yes, the Complaint alleges that Defendants’ conduct took place in the Bitcoin Cash market but the contours of that market are not clear.”). As previously mentioned, accurately pleading a relevant product market is an essential component of any antitrust claim—without it, the action must fail. Id. at 1266, 1271 (“Before the Court can evaluate harm to competition, it must know the market where this alleged harm has taken place. . . . UAC, therefore, must ‘identify the relevant market in which the harm occurs.’” (first citing Levine v. Cent. Fla. Med. Affiliates, Inc., 72 F.3d 1538, 1551 (11th Cir. 1996); then quoting Jacobs v. Tempur-Pedic Intern., Inc., 626 F.3d 1327, 1336 (11th Cir. 2010)); see also United States v. Topco Assocs., Inc., 405 U.S. 596, 607–08 (1972).

78. In 1934, through the Rules Enabling Act, Congress empowered the U.S. Supreme Court to promulgate federal rules of practice, procedure, and evidence for cases in the U.S. district courts. See 28 U.S.C. § 2072(a) (“The Supreme Court shall have the power to prescribe general rules of practice and procedure and rules of evidence for cases in the United States district courts . . . and courts of appeals.”). Operating under the same authority, the Supreme Court in 1938 promulgated the Federal Rules of Civil Procedure. See Anne E. Ralph, Not the Same Old Story: Using Narrative Theory to Understand and Overcome the Plausibility Pleading Standard, 26 Yale J.L. & Humans. 1, 3 (2014). With regard to pleadings (under Rule 8), the Court ventured to simplify pleading requirements that formerly consisted of hyper-technical, formalistic “fact pleading[s]” and create a uniform, liberal standard based primarily on “notice” for the purpose of guaranteeing access to the court system. Id. Elaborating on the liberal construction of Rule 8, the Court in Conley v. Gibson went on to clarify that “a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.” Id. at 4 (emphasis omitted) (quoting Conley v. Gibson, 355 U.S. 41, 45–46 (1957)). Thus, following Conley the generally accepted view of pleading standards in federal courts was that, to survive a motion to dismiss and entitle plaintiff to discovery, a pleading need only contain sufficient (not necessarily specific) facts that could possibly suggest that the plaintiff could be entitled to relief. Id. at 4–5.

79. See Herbert Hovenkamp, The Pleading Problem in Antitrust Cases and Beyond, 95 Iowa L. Rev. Bull. 55, 56–57 (2010) (describing how current pleading standards have in some instances produced antitrust complaints running in excess of 100 pages to assure that plaintiffs have plead enough factual matter to survive dismissal). These standards harken back to the days of “fact pleadings” where plaintiffs were required to stipulate not only precisely all facts that would entitle them to a claim for relief but distinguish “ultimate facts” from evidentiary facts or legal conclusions. See Mark D. Robins, The Resurgence and Limits of the Demurrer, 27 Suffolk U. L. Rev. 637, 642 (1993) (discussing fact pleadings and how this ridged pleading system “led to hopelessly formalistic disputes over what constituted an ultimate fact and whether it was even possible to distinguish law from fact”).

80. See Schrepel, supra note 6, at 337–38 (“Blockchain challenges the raison d’etre of antitrust law. . . . To address [the concern of the legitimacy of antitrust law with respect to blockchain technology], a way must be found to decentralize antitrust law and antitrust authorities. . . . Antitrust authorities can no longer rely on pyramidal structures nor continue to operate in a closed circle on the model of nation-state-led government. Antitrust law as we know it must die and be reborn. If not, it soon will be illegitimate.”).

81. See Hovenkamp, supra note 54, at 87 (“[A]ntitrust statutes provide almost no guidance about the formation of specific antitrust rules of illegality. The Sherman Act says nothing useful on the subject.”).

82. See id. (noting how the loose language of the Sherman Act “makes the court’s role unusually important in the development of antitrust rules. They are charged both with creating the substance of antitrust and with fashioning appropriate rules of pleading and procedure, including assignment of proof burdens”).

83. See id.

84. See Daniel W. Robertson, In Defense of Plausibility: Ashcroft v. Iqbal and What the Plausibility Standard Really Means, 38 Pepp. L. Rev. 111, 112 (2010).

85. See supra note 78.

86. See generally Conley v. Gibson, 355 U.S. 41, 47–48 (1957). Cf. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007); Swierkiewicz v. Sorema N.A., 534 U.S. 506, 513 (2002) (discussing how Rule 9 of the Federal Rules of Civil Procedure requires “greater particularity in all averments of fraud or mistake,” a standard that reaches beyond plausibility into probability).

87. See supra note 78. These facts were not required to be excessively detailed or “specific” and would suffice as long as they gave defendants proper notice of the plaintiff’s claim and the ground upon which it rested. See Conley, 355 U.S. at 47 (“[T]he Federal Rules of Civil Procedure do not require a claimant to set out in detail the facts upon which he bases his claim. To the contrary, all the Rules require is a ‘short and plain statement of the claim’ that will give the defendant fair notice of what the plaintiff’s claim is and the grounds upon which it rests.” (quoting Fed. R. Civ. P. 8(a)(2))).

88. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (“To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” (quoting Twombly, 550 U.S. at 570)). It is significant here to cite to Ashcroft v. Iqbal to demonstrate the fact that while it was unclear whether the Court intended for the new plausibility standard to control only antitrust cases (Twombly), the Court later clarified its position in Iqbal when it decided that this standard would apply to all federal cases. See Rory Bahadur, The Scientific Impossibility of Plausibility, 90 Neb. L. Rev. 435, 438–39 (2011) (“As a pleading standard, plausibility was birthed in Twombly and developed in Iqbal.”). The plausibility standard is the prevailing standard for all cases and controversies not subject to heightened pleading requirements of FRCP Rule 9(b). See id. at 451 n.122.

89. Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 556).

90. Id. After Twombly and Iqbal, plaintiffs are required to plead sufficient facts to “nudge” claims “[over] the line from conceivable to plausible.” See id. at 680.

91. Id. at 678–79 (“The plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that the defendant has acted unlawfully.”). Tellingly, by taking the time to clarify this point, the Iqbal Court recognized that its plausibility requirement could naturally be read as imposing heightened pleading requirements for cases and controversies not specifically delineated in FRCP Rule 9(b)—an act that would clearly “abridge, enlarge or modify” a plaintiff’s substantive due process rights in violation of the Rules Enabling Act and the scope of the Court’s authority granted thereunder. See 28 U.S.C. §§ 2072(a)–(b); see also Bahadur, supra note 88, at 456 (noting that if the Court was imposing a probability standard, this act “would be abhorrent to the constitutionally based division of labor in the federal court system because the judge, rather than the jury, would be answering the question of whether or not the allegations in the complaint are more likely accurate than not”).

92. Twombly, 550 U.S. at 557.

93. Possibility asks, of course, whether something may happen. Plausibility, however, asks a different question of how likely something is to happen. See Bahadur, supra note 88, at 456–57 (“Plausibility is therefore achieved when [something] reaches a threshold level of probability.”).

94. Iqbal, 556 U.S. at 678 (“Where a complaint pleads facts that are ‘merely consistent with’ a defendant’s liability, it ‘stops short of the line between possibility and plausibility of entitlement to relief.’” (internal quotations omitted) (quoting Twombly, 550 U.S. at 557)); see also supra notes 90–91.

95. In both Twombly and Iqbal, the Court’s only mention of the “probability requirement” is in stating that it is not imposing a probability requirement. See generally Twombly, 550 U.S. at 556; Iqbal, 556 U.S. at 678 (restating Twombly).

96. See supra note 77 and accompanying text; see also United Am. Corp. v. Bitmain, Inc., 530 F. Supp. 3d 1241, 1258 (S.D. Fla. 2021) (noting that UAC’s complaint contained “78 paragraphs of [factual] allegations”).

97. See supra note 91 and accompanying text.

98. See Bahadur, supra note 88, at 456–57 (emphasis added).

99. Id. at 466.

100. See supra note 91 and accompanying text. As described above, plausibility has a minimum threshold of approximately 51% probability. Bahadur, supra note 88, at 466–70. Thus, without an upper probabilistic measure of certainty to limit plausibility, it follows logically that courts can require a showing of likelihood anywhere between 51% and 100% certainty without necessarily imposing a probability requirement.

101. Bitmain, Inc., 530 F. Supp. 3d at 1274–75.

102. Id. at 1260–61.

103. In antitrust law, “plus factors” consist of evidence, direct or circumstantial, that tends to show parallel conduct by collusion over independent conduct. See id. at 1259–60. For a detailed description of plus factors, see generally Christopher R. Leslie, The Probative Synergy of Plus Factors in Price-Fixing Litigation, 115 Nw. U. L. Rev. 1581 (2021).

104. Bitmain, Inc., 530 F. Supp. 3d at 1261 (“The graphics do not suggest an agreement . . . over independent action.”). On its face, this is a “more likely than not” requirement far surpassing 51% probability.

105. See supra note 91 and accompanying text.

106. See supra note 86 and accompanying text.

107. See supra Part II; see also White Paper, supra note 12, at 1 (“Commerce on the Internet has come to rely almost exclusively on financial institutions serving as trusted third parties to process electronic payments. While the system works well enough for most transactions, it still suffers from the inherent weaknesses of the trust based model. . . . What is needed is an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party.”).

108. Some commentators have suggested that this disconnect may well scrap any meaningful possibility for antitrust regulation of blockchain applications. See supra note 80 and accompanying text. Others, however, have argued (rightfully) that trust is still an integral component of network efficiency and functionality across cryptocurrencies. See Paul Vigna & Michael J. Casey, The Truth Machine: The Blockchain and the Future of Everything 64 (2018) (“Blockchain technology doesn’t remove the need for trust. In fact, if anything it’s an enabler of more trustful relations. What it does is widen the perimeter of trust.”).

109. See Schrepel, supra note 6, at 333 (“[I]f maintained as it operates today, [antitrust law] will quickly become ineffective for technical reasons.”).

110. See Maurice E. Stucke, Reconsidering Antitrust’s Goals, 53 B.C. L. Rev. 551, 575 (2012).

111. See supra Part II.

112. See, e.g., Stucke, supra note 110, at 573 (noting how it is difficult to define exactly who consumers are: “If antitrust’s goal is to promote consumer welfare, then a dispute arises over how to define the consumer. If the consumer is anyone who uses economic goods, or ‘refers to all direct and indirect users who are affected by the anticompetitive agreements, [behavior] or mergers in question,’ then everyone—from the poorest individual to the wealthiest corporate monopoly—is a consumer. . . . If the consumer, however, is said to include poor individuals but exclude wealthy monopolies . . . then the definition becomes more political and subjective. Therefore, the way in which the consumer is defined leads to different interpretations of the consumer welfare standard” (citations omitted) (quoting Int’l Competition Network, Competition Enforcement And Consumer Welfare—Setting The Agenda 32 (2011) [hereinafter ICN Survey]).

113. United Am. Corp. v. Bitmain, Inc., 530 F. Supp. 3d 1241, 1269 (S.D. Fla. 2021) (quoting Jacobs v. Tempur-Pedic Intern., Inc., 626 F.3d 1327, 1338 (11th Cir. 2010)).

114. See supra notes 85–104 and accompanying text.

115. See Stucke, supra note 110, at 563; see also J. Gregory Sidak & David J. Teece, Dynamic Competition in Antitrust Law, 5 J. Comp. L. & Econ. 581, 600 (2009) (“Put succinctly, competition policy rooted in static economic analysis sees the policy goal as minimizing the [deadweight loss] triangles from monopoly.”); What Is ‘Deadweight Loss,’ Econ. Times, https://economictimes.indiatimes.com/definition/deadweight-loss [https://perma.cc/68KU-4C5B] (last visited Mar. 16, 2022) (defining deadweight loss).

116. See Stucke, supra note 110, at 576 (quoting Hon. Richard D. Cudahy & Alan Delvin, Anticompetitive Effect, 95 Minn. L. Rev. 59, 60–61 (2010)).

117. Id. (quoting ICN Survey, supra note 112, at 43).

118. Schrepel, supra note 6, at 334 (quoting Lawrence Lessig, Code: And Other Laws of Cyberspace, Version 2.0 8 (2006)).

119. See generally Stylianou, supra note 66.