The blockchain has been revolutionizing industries around the globe. From cross-border payments and health and education records to gaming, retail and insurance, the blockchain is quickly becoming the go-to tech tool of today and the future. And the heavily-regulated legal industry is one of the latest sectors adopting this innovative technology.
What is the blockchain?
Blockchain technology may have begun with bitcoin, but the transparency and accountability it offers has gained the attention of the world. The blockchain is a decentralized public ledger that records transactions, eliminating the need for third-party interference and oversight. Every transaction is connected to a unique user ID and logged. This allows users—not their transactions—to remain anonymous. The blockchain also provides greater verification and security to reduce the risk of data breaches.
Smart contracts for a smarter day-to-day
The legal sector has been undergoing transformation over the last several years. With trends like online legal services, machine learning technology and Artifiicial Intelligence, the legal profession isn’t a stranger to change. And now, in the latest advent of transformation, the blockchain is redefining automation, security and contractual agreements.
The Ethereum blockchain’s smart contracts increase security and facilitate automation and efficiency in an industry where time is money. By utilizing smart contracts, legal professionals can store digital information on the blockchain and share it with applicable parties in real-time. The blockchain verifies information and identities to prevent fraud, eliminating the need to draft contracts in courtrooms. And with the immutable nature of the ledger, lawyers can rest assured knowing that their documents and data can’t be tampered with.
Here are 3 more ways the blockchain is already transforming the legal sector:
The blockchain is changing the way governments keep track of their citizens. Some countries are already utilizing it to store census information, and could expand it to store voter information as well. By tracking data like birth, death, marital status and criminal activity, the blockchain can minimize fraud and mistaken identities.
In 2016, Bitfury announced that they were creating blockchain technology that could store information about land titles and give ownership to citizens of the Republic of Georgia. In 2017, they began accepting bitcoin as payment for the transfers. By moving land rights to the blockchain, the data is less likely to be breached and landowners could more easily manage and transfer rights for a fraction of previous costs.
Intellectual property (IP) rights
IP is a nuanced field ready for change. When placed on the blockchain, trademark and copyright filings can be accessible to the world. Entries are immutable and time-stamped, enabling the blockchain to minimize disputes that could arise between parties. And before granting a new trademark, the blockchain’s algorithm automatically searches transaction histories to eliminate duplicate or suspiciously similar requests.
What is next for blockchain technology in the legal field?
Despite the streamlined, automated processes (and latent fears), the blockchain isn’t about to put legal professionals out of work anytime soon. For blockchain to become reality in the legal industry, techies and legal professionals must work together to share and expand upon their expertise.
As tech experts and lawyers work together to move contracts and records onto the blockchain, many questions remain to be answered. How can a decentralized platform, rather than a private entity, be held accountable for property loss? How will regulations shape the way we conduct and structure blockchain technology that gives legal rights to intellectual and commercial property? What currencies will legally be accepted and recognized?
As the technology evolves and becomes more integrated within the industry, legal professionals will continue to explore how they can move more complex transactions to the blockchain. The technology is expanding outside of the world of finance. And it’s only a matter of time before it revolutionizes everything we thought we knew—about the legal sector and everything.