The Blockchain's Legal Implications

The notion of Blockchain

Most of the available definitions are complicated and technical, this notion can seem obscure for the novices (as most lawyers are) who maybe read these lines.

This quote is very enlightening:

The blockchain is a vast, global distributed ledger or database running on millions of devices and open to anyone, where not just information but anything of value money, but also titles, deeds, identities, even votes can be moved, stored and managed securely and privately. Trust is established through mass collaboration and clever code rather than by powerful intermediaries like governments and banks.”

– Dan Tapscott, author of Blockchain Revolution: How the Technology Behind Bitcoin Is Changing Money, Business and the World.

There are two very precious advantages of a Blockchain from the legal point of view:

- Difficulty to hack it: to add a block of operations to the chains, each person maintaining the ledger solves a math problem created by the cryptographic hash function. What makes Blockchain hack proof is the millions of users of Blockchain.

- Impossibility to modify it: when a block is created it is fixed, unchangeable and verified by a timestamp. It is not possible to retroactively change it.

Blockchain can be used in different legal fields

Blockchains can influence most of the fields like in these 3 examples:

• Legal contracts

The lawyers can now use a technology that keeps records and can’t be modified. There won’t be any need to register, certify or prove it, thanks to this new way to create them.

The so-called “Smart contracts” are blockchain based contracts which are automatically executed upon certain specified criteria coded into the contract being met. The blockchain can make use of the different conditions without any legal action by any interested party.

For instance, if a contract provides that its execution depends on a certain condition, let’s say a license to be delivered by an authority, the contract on the blockchain will verify automatically if the license was delivered and then initiate the process to set up the execution.

This new automated kind of contract will obviously save time and money to all the contractors.

Of course, a lot of legal uncertainties remain and will need the legislators’ clarification:

- how to code a notion like “best behavior”,” acting with good faith”;

- which authority would enforce these contracts;

- the elements of capacity, offer and acceptance, certainty, and consideration would also need to be considered…

• Intellectual Property

This technology creates a publicly available, incontestable journal of every submission which could be kept not only by an authority but at a worldwide level for everyone’s benefit. This journal would offer crystal-clear rights which would assure to the owner a peaceful possession.

• Blockchain and family/real-estate law

For the same reasons, the blockchain could be used to replace the actual registers of births, deaths, and weddings.

The entire land registration could also be secured with a blockchain technology.

There can even be wills operated by blockchain as well.

All those registers could update and interact with each other, providing a self-regulating, transparent public ledger of property ownership and the basis of the same following death, wedding, divorce or otherwise.

Any kind of data can be saved or transferred through a blockchain, meaning that most of the legal field will be influenced: banking of course, but also energy, patents legal systems...

Lawyers will have no choice but to master the blockchain technology in the very close future.