I contend that blockchain technology is going to disrupt many businesses and industries and the legal profession just might be next. Although there are many appealing characteristics of blockchain technology for lawyers, perhaps the best one of all is that it can secure information in an immutable and transparent ledger. Blockchain technology is on pace to revolutionize the legal industry and many predict it will become as ubiquitous as the internet is today.
What is blockchain technology?
Blockchain is a comprehensive, up-to-date (real-time) ledger of anything that can be recorded from financial transactions to ownership of physical assets stored in a distributed, peer-to-peer fashion. Every record is encrypted and time stamped. Only users can edit the part of the blockchain that they “own” and they gain access to the file only because they have a private key that allows them to. It also ensures that everyone’s copy of the distributed blockchain is kept in sync.
There are many different blockchains—public and private—and they allow anyone to send value anywhere in the world where the blockchain file can be accessed.
Blockchain technology has solid and effective security and has been described as “hackproof.” Unfortunately, nothing really is fully hackproof, but blockchain technology is more secure than our current technology and should reduce the risk of breaches.
How blockchain will impact the legal profession
Even though widescale adoption hasn’t happened yet, there are proof-of-concept projects taking place in nearly every industry. Law firms need to know about this technology so they can be poised to guide and serve clients within the new blockchain reality in addition to altering their law firms to address the new blockchain reality.
Source: Practical Examples Of How Blockchains Will Be Used In Legal Firms – Forbes Tech #BigData
No, code isn’t law, but if the Enterprise Ethereum Alliance’s new members have anything to say about it, that might someday change.
Today, the alliance announced that ten law firms and four legal institutions that specialize in blockchain technology have joined the group. New members include Cooley, Debevoise & Plimpton, Hogan Lovells, Holland & Knight, Jones Day, Morrison Foerster, Perkins Coie, Shearman & Sterling and Cardozo Law School’s Blockchain Project.
With the news, the new members have also joined the alliance’s Legal Industry Working Group, chaired by Aaron Wright, co-director of the Cardozo Law School’s Blockchain Project.
However, the chairman of the Enterprise Ethereum Alliance board of directors, Julio Faura, told CoinDesk the law firms will be working to ensure that blockchain-based technologies are more than just compliant with the financial system, but also with the power delivery and telecommunications industries.
Faura, head of blockchain research and development at Banco Santander, said:
“If we’re going to represent all of these things using smart contracts, and we’re going to mimic the same properties that we have in the corporate world using smart contracts, then it’s very important that we do it in a way that is compliant with today’s laws and today’s policies.”
More at: Legally Binding Smart Contracts? 10 Law Firms Join Enterprise Ethereum Alliance – CoinDesk
We’ve been so focused on the benefits blockchain has on the finance sector that we’ve forgotten about the legal industry. Enter the Accord Project, the world’s first consortium for smart legal contracts. It’s worth your attention because it seems to be the place where legal and tech come together. We invited Peter Hunn and Houman Shadab, founders of Clause.io to tell us more about the Accord Project and the aim of this initiative.
“Clause, with support from leading law firms and other organizations, including Linux Foundation’s Hyperledger, the International Association for Commercial and Contract Management (IACCM) and Clio, has launched the Accord Project to develop open source technology and standards for computational contracting,” according to the post announcing the initiative.
Brian Behlendorf, Executive Director at Hyperledger has stated that the Accord Project is “is an industry first that will facilitate the setting of much needed technical and legal standards for smart/computable legal contracts. The work that they [Clause] are doing in changing the nature of the contract using distributed ledger and other technologies will be greatly advanced with this initiative.”
We caught up with Clause co-founders Peter Hunn and Houman Shadab to talk about the Accord Project and the set of open source software development tools which will be established.
More at: Introducing the Accord Project: “The future of law will be revolutionized by legaltech” – JAXenter
Illinois Moving Forward with Blockchain Pilots; Singapore: Latest Country to Develop a Regulatory Sandbox to Promote Energy Innovation; LO3 Energy Developing Blockchain-Powered Microgrid Technology to Australia
There is a lot of buzz around blockchain technology and its potential to revolutionize a wide range of industries from finance and healthcare to real estate and supply chain management. Reports estimate that over $1.4 billion was invested in blockchain startups in 2016 alone, and many institutions and companies are forming partnerships to explore how blockchain ledgers and smart contracts can be deployed to manage and share data, create transactional efficiencies, and reduce costs.
Illinois Moving Forward with Blockchain Pilots
The Illinois Blockchain Initiative (“IBI”), which was formed to study applications of blockchain technology for government services, is moving ahead with five pilot programs. According to a recent article, the pilots selected by the IBI will study how blockchain technology can be used in the following five areas: (1) property deed recording: (2) validating academic credentials; (3) creation of a single state-wide health provider registry; (4) securing vital records (beginning with birth certificates); and (5) creating a renewable energy credit marketplace.
The pilot making the most progress thus far is the property deed recording registry, which is being developed through a partnership with the Cook County Recorder of Deeds (“CCRD”). The goal of the pilot is to consolidate property information that is currently maintained across various government offices into a single shared ledger. According to a report issued earlier this year by the CCRD, preliminary findings indicate that the transition to a blockchain network could lead to enhanced liquidity, accuracy, immutability, and efficiency within the real-estate industry. Blockchain-based land registries could also help reduce development and due diligence costs for energy infrastructure projects that require significant land holdings and access rights.
However, the report also highlighted a number of hurdles, including heavy implementation costs and the need for multiple parties to “buy in.” The cost of replacing legacy systems is often cited as an obstacle to blockchain solutions, but the CCRD report concludes that “the payoff appears to be worth the effort.”
More at: Blockchain Energizer Vol.9 – The National Law Review
What is smart technology?
All technology is equal, but some technology is more equal than others. “Smart” technology is a term used to describe devices and systems that are capable of adapting and modifying their behaviour to fit their environment. They sit in contrast to “dumb” technology, i.e. tools that need human interaction to function.
We are becoming more familiar with smart technology as part of our home ecosystems. But what if it can be used to improve things that we don’t consider “dumb”? What if it can augment a commercial contract – something which is usually the product of significant human drafting and negotiation? To understand how technology might change the way in which we contract, we need first to explore blockchain technology. It’s most commonly associated with Bitcoin but the secure and public network that it provides can be used for other purposes.
More at: Smart contracts | Dentons – JDSupra
Delaware is on the verge of enacting legislation intended to facilitate the use of blockchain technology for corporate record keeping, after the measure sailed through both chambers of the state’s General Assembly.
The state’s House, in a 40-1 vote on June 30, passed proposed amendments to Delaware’s General Corporation Law (SB 69) that would provide a framework for how companies incorporated in the state can use blockchain, or “distributed ledger” technology.
Corporate governance attorneys have suggested that the technology may help companies keep better track of who owns their shares and proxy voting results.
The proposal, which earlier this month was unanimously passed by the state’s Senate, is expected to be signed into law by Gov. John Carney (D). Carney has around 10 days under state law to sign the legislation. His office didn’t immediately respond to a request for comment.
If signed into law, the amendments will be effective Aug. 1.
More at: Delaware Close to Enacting Blockchain Record-Keeping Measure – Bloomberg BNA
A draft proposal contains recommendations for licensure requirements for those conducting virtual currency businesses across states.
Lawmakers from around the country will meet in San Diego from July 14-20, 2017, at the Uniform Law Commission annual meeting. One of the topics that will be discussed is the proposed Uniform Regulation of Virtual Currency Businesses Act.
The draft contains recommendations from legal organizations, though the bill will likely undergo various changes from its current form, as attempts are made to persuade lawmakers to adopt it.
According to the draft, the act’s purpose is to “create a statutory structure for regulating the ‘virtual currency business activity’ of person offering services or products to residents of enacting states.”
The act is aimed at businesses with services that encompass “the exchange of virtual currencies for cash, bank deposits, or other virtual currencies; the transfer from one customer to another person of virtual currencies; or certain custodial or fiduciary services in which the property or assets under the custodian’s control or under management include property or assets recognized as ‘virtual currency.’”
More at: A Look At The Uniform Regulation Of Virtual Currency Businesses Act – ETHNews.com