How Blockchain Technology Will Impact Our Legal System

Only a few deny the huge impact blockchains will have on many areas of social and corporate life. Even outside the IT world, professionals have quickly acknowledged the potential of blockchain technology, which builds the backbone of digital currencies such as the bitcoin, for use in a vast amount of other areas. For example, there are many blockchain-based projects and applications in supply chain management, mobility services and data management in IoT use cases.

The underlying technologies of blockchains

The technical characteristics of blockchains can be summarized as follows: a blockchain is a distributed network of servers ("nodes"), where information is mirrored on all participating computers. There is no single entity that has control over the entire system (often referred to as middleman) so that changes to the blockchain can only be implemented by the participants controlling together the majority of the computing power. Blockchains are ledgers that record transactions with information about the sender and recipient of a digital coin or token, the amount or number, and the exact date and time of the transaction. Numerous network computers verify each transaction through laborious calculations. To increase security, blockchains make extensive use of cryptography. Ultimately, what may be essential to the success of blockchain technology, and especially to digital currencies, is that it has solved the so-called problem of double spending: it prevents multiple use of a digital coin simply by replicating digital copies. Blockchains appear to be much more secure and resilient against hacking attempts or manipulations than centralized servers under the control of a few. And security is what lawyers like, too.

For that reason, it makes sense to evaluate if there are blockchain use cases that relate to how we document legally relevant facts or transactions.

Blockchain-based legal registries

At first, what comes to mind are all sorts of registers that document the status, identity, or rights of a person or legal entity, namely commercial registers, land registries, civil registries, share registers, and patent or trademark registers. Secondly, if blockchains are secure and allow the registration of information, they could also be used for securing evidence that can be presented in court proceedings. Examples are screenshots of websites, photos or any other digital or digitized content, and of course contracts. It has to be noted that...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT