Many view blockchain and smart contracts technologies as pivotal for bringing about the second generation of the digital revolution. Creating what is known as the Internet of value: blockchain underpins a new platform to reshape the world of business and transform the old order of human affairs for the better.
There is no doubt as to the vast benefits of the global distributed ledger or database recording trusted data about millions of devices and open to anyone. However, the question regarding the regulatory framework surrounding blockchain technology remains. And this makes it all the more necessary for lawyers to get on with the times and become familiar with it.
And especially how it is impacting your clients and how it may impact the legal profession as a whole.
Understanding the importance of blockchain for Lawyers
Blockchain is a unique system in that it creates a real-time digital record verifying that a transaction containing certain data happened at a certain time and in a certain order. It has two very important qualities – it is immutable and highly hack-resistant. Thus the integrity of each transaction can be trusted because once data enters the blockchain, it is resistant to alteration, hacking, or deletion.
The decentralised nature of the blockchain technologies in combination with its security and immutability makes it well-suited for multiple industries. From government and military applications to healthcare, fintech, banking, manufacture and supply chain, energy, oil and gas exploration, sustainable development and agriculture, real estate, notaries and logistics – virtually every sector has a strong case for implementing blockchain technology.
This disruption that is occurring on a global scale relies heavily on lawyers’ counsel and advice. While this is opening opportunities for lawyers to help and guide the digital transformation of companies, organizations and regulatory bodies, it is also impacting the legal sector as well. Niche practice areas are already appearing for lawyers who choose to understand blockchain and become part of the new trend.
As a technology platform, blockchain is positioned to become as ubiquitous as the internet, something we don’t see or even think about, but that affects many, many things that lawyers (and their clients) do.
Being so nascent, blockchain presents a unique opportunity for lawyers to position themselves as trusted strategic advisors to clients navigating the myriad legal, regulatory, and logistical webs surrounding the technology and its applications. To this effect, understanding blockchain within the context of a client’s business is imperative.
Why? Because lawyers are situated differently than others most likely to have blockchain savvy (e.g. IT advisors). Yes, IT has a good understanding of the way the technology works (maybe). But only the lawyer can extrapolate from the technological understanding to what this really means for a client operating in a law- and regulation-bound environment.
Lawyers specializing in blockchain and smart contracts require new tools and a new multidisciplinary approach. As contracts on a blockchain look very different than contracts on paper, the nexus of disputes in transactions potentially will shift to the stage of dynamic execution. Lawyers with deep blockchain and smart contract knowledge will therefore act as mediators and trusted architects in this process, helping parties to navigate the smart contract process.
Becoming a blockchain expert now requires diving deep in blockchain and smart contracts but this should not put you off as we are truly on the verge of a new stage in the digital evolution and maturation of the Internet. As such, blockchain-savvy lawyers will play a crucial role as primary contributors to the evolution of law, policy, and regulation surrounding the use of the technology.
The benefits in applying blockchain are becoming the starting points for exploring how their value proposition changes in the age of blockchain.
About Trakti, your blockchain and smart contract technology partner
Trakti specializes in integrating smart contracts in existing infrastructure to support the entire lifecycle of commercial negotiations. We offer a simple and innovative way to manage contract on boarding, negotiation, signature and automation procedures in blockchain.