How Blockchain Technology will Modify the Legal Sector
Blockchains are now transforming legal processes in various ways and, above all, questioning the efficacy of the current legal system. While some developers build solutions that substitute intermediary activity in the legal sector, various analysts consider how to apply the law in the case of blockchains.
Prevalence of international law
The principle of blockchain technology is decentralization and power distribution, so they operate with peer networks (P2P) and do not have a fixed physical location. This has produced a critical debate in the legal sector on how to control it and the regulations of the jurisdiction – a geographical territory where a State has the authority to implement and enforce the law – to apply in case of disputes. Also, participants (called nodes) experience anonymity or pseudo-anonymity. Consequently, their nationality, real identity, or residence is unknown.
Smart and Ricardian contracts
Smart and Ricardian contracts are not the same, notwithstanding having numerous similarities and being exciting alternatives to conventional contracts. While it is likely to achieve a Ricardian contract is a smart contract, not all Ricardian contracts are smart contracts, and not all smart contracts are Ricardian.
On the other hand, Ricardian contracts are digital agreements that designate the terms and conditions of a communication between two or more parties and that are approved and documented cryptographically. Unlike a smart contract, these are enjoyable for both people and machines, because it blends computer language with human language.
In 2017, Delaware enacted a bill that legalized the application of blockchain by corporations. Furthermore, Wyoming has passed five bills linked to the blockchain. This approach shows its aim to position itself as a blockchain-friendly jurisdiction and to embrace companies that are engrossed in promoting this technology. To accomplish these goals, the Wyoming Blockchain Coalition has been formed.
Civil and criminal justice
Blockchains provide an excellent solution for the timely, safe, and effective management of archives that help civil and criminal court cases. Records saved in a blockchain can be shared amongst all system participants without fear that their safety and integrity will be jeopardized.
Some companies utilize the blockchain to provide notarial services. The usage of these services can provide proof of a document’s existence at any given time by a unique and unrepeatable cryptographic hash that connects to the information recorded in the blockchain. If the content of the document changes, so does the hash, thereby nullifying the record.
The blockchain can offer proof of creation or existence by registering any content that is allowed a timestamp and is linked to a cryptographic hash. This information saved in a blockchain could help as legal evidence in court.
However, Blockchains does not restrict unauthorized usage of works preserved by copyright or intellectual property, nor do they certify their ownership. Consequently, the interruption of a lawyer will proceed to be necessary to resolve any dispute.