Blockchain and the Law: How Blockchain is Changing Legal Systems
Blockchain systems are changing the way practically every industry functions. From fisheries to politics and entertainment– and from banking and finance to food processing – every industry is being impacted by this technological revolution. Another major industry that has much to gain from the arrival of the blockchain technology is that of law. Blockchain has the potential to bring about several changes in the legal system. Let us take a closer look at it:
The first question that needs to be asked is – what is it about blockchain that makes it useful for the legal industry. The reply to this would be – the fact that blockchain technology offer a platform for verification of data, as well as storing it in a secure and incorruptible manner. Further, the decentralized and open nature of the systems – as well as the concept of smart contracts make it quite beneficial for the legal industry.
Benefits of Blockchain For Legal Purposes
Legal professionals and law practitioners have much to benefit from the blockchain technology. Moreover, certain other legal tasks such as enforcement of the contract, etc. can be carried out by using the blockchain technology. Here’s a closer look at some of the benefits of blockchain tech for those in the legal profession –
Ensures No Tampering of the Evidence
One of the biggest benefits of the blockchain technology is that the information that gets stored on it once cannot be tampered with later on. If the law enforcement authorities put up all the documents and paperwork on a digital platform that the blockchain provides, it ensures that there cannot be no tampering moving forward. There have been many instances in the court of law where tampered evidence has resulted in cases being delayed or decisions being affected.
However, thanks to the immutable and incorruptible platform that blockchain technology provides, tampering with the evidence becomes practically impossible. Moreover, the verification of the documents also becomes faster and easier over the blockchain network. In addition to that, the blockchain platform offers a permanent storage for records – so data can easily be accessed even if a case goes on for years, which is not uncommon in countries with large populations and shortage of legal professionals.
Smart contracts are another major benefit of the blockchain technology for legal professionals. A smart contract is a set of commands which are expected to function in a set manner based on various triggers and conditions. It is basically ‘if this, else that’ sort of an automated system – which ensures that legal contracts are followed.
For example, these can be used in enforcing the legal framework in the form of: ‘Merchant has to pay the trader when the goods are delivered’. The merchant stores his funds on the blockchain network .Once the goods reach the merchant, the delivery will be recorded on the blockchain and funds will be released from the blockchain network to the account of the trader. However, in case of a failure of delivery – the merchant can be assured that he pays only for what is delivered to him. Moreover, the trader can also be assured that he will be paid for his goods.
In case there is still a dispute, the matter can go to the court of law – but it will be much simpler to understand considering that all the information is tracked over the smart contracts.
Reduction of Paperwork
This is another aspect of the blockchain technology that is beneficial for the legal industry – but has a wider range of applications across various other industries too. Reduction of paperwork is good for not just the industries but for the environment as well. Digital information is quicker to access (and tamper-proof because it is stored on the blockchain network) – as well as quicker to transmit.
Many a times in the legal world, documents and written information needs to be sent from one place to the other and need to be filed with the court of law. Sometimes this process can take multiple days as physical documents need to be transfered. However, digitizing this framework can help save time of the court – and hence provide quicker judgments. Several other industries such as shipping and exports have also felt the benefits of this digital drive.
Transparency of Transactions
When it comes to financial disputes, blockchain technology offers quite a benefit for the legal professionals. The saying ‘Money leaves a trail’ is more apt with blockchain technology – as open distributed ledgers ensure that everyone knows where the money is flowing from and who the funds are reaching. This is also beneficial when it comes to patents, trademarks, copyrights and other matters related to intellectual property rights.
While sometimes it can get complex when private blockchain platforms are used – law enforcement agencies and intelligence authorities claim that it is quite possible to track the transfer of funds and identify the perpetrators using the blockchain technology. Transparency of transactions is infused into the system – making financial deals quite clear and leaving no scope for any legal confusion.
Newer Avenues for Legal Professionals
With every new development in the world of technology, lawyers and legal practitioners get newer avenues to specialize in. Blockchain technology and cryptocurrencies offer exactly that. A number of lawyers around the world are studying the technology that powers blockchain to understand it better. Recently, Dubai announced that they are setting up the world’s first ‘Blockchain Court’. Hence, newever avenues are opening up for legal practitioners to specialize in!
Governance and Administration
Another legal aspect that cryptocurrencies and blockchain technology can be viewed upon is from the eyes of the government – which is another legal body in a country. Blockchain in governance and administration has been a topic which has been often debated and discussed – but is yet to be implemented in a mainstream manner. The distribution of public funds as well as the payment of taxes are two of the biggest financial administrative reforms that governments can bring about using the blockchain technology.
Different nations have different policies when it comes to cryptocurrencies. Some countries such as China have declared an outright ban on cryptocurrencies – while others such as India remain ambiguous. Japan and Australia, on the other hand, have responded quite positively and allowed the cryptocurrency and blockchain economies to thrive in their countries. Sierra Leone became the first country in the world to hold a Presidential election over the blockchain technology! Blockchain is likely to bring forward several government and administration related legal reforms as well.
Conclusion: Blockchain and Law
Blockchain technology is bringing forward several innovations and reforms across various sectors and industries. The world of law and legal practice too has a large scope for innovation and improvement with blockchain tech. Lawyers, legal practitioners and law enforcers, as well as government officials and administrators should leverage the use of blockchain technology to ensure efficient, modern-day systems.