Blockchain - The changing relationship between the law & technology
The ever-growing interaction between technology and commerce is, arguably, the most talked about development in the commercial sphere today, and Scotland is no stranger to those attempting to disrupt current practices. Scotland’s first property transaction to settle using a cryptocurrency took place in August 2017 and there are many more examples on the way. The UK government is now launching an inquiry into Bitcoin and the technology behind it, Blockchain.
Blockchain is changing e-commerce
Consumers and entrepreneurs who once worked outside of mainstream commerce are going to have to discover their place both as a part of the economic make-up of the country, and as a driver for huge innovation within commercial systems currently in place.
While the media focus on the ups and downs of Bitcoin, visible innovation is being achieved through Blockchain, the mechanism behind cryptocurrencies. This digital tool dispenses with the need for any third-party authentication to verify transactions. Transactions can then run without the need for a level of trust between the parties, making them cheaper and quicker.
What is Blockchain?
A Blockchain is a string of chunks, or “blocks” containing transaction data. Think of a digital ledger. Each block is then linked to the previous block in that chain through the use of a unique digital code, a “hash”. Hash codes mean that blocks cannot be tampered with, changed, removed or inserted into the chain, securing the transaction from fraud or double-payment.
How Blockchain will revolutionise the legal sector
It is not news to say that the legal sector has been slow to adapt to the possibilities of using blockchain or recognising its potential influence on our clients. However, groups are now giving consideration to the ways in which the law needs to adapt to accommodate such massive innovation. Some experiments have already been carried out in the US to examine how the law and blockchain could interact and have focused on how public records can be digitised but the scope is there to import these ideas into UK sectors.
Ultimately, the value of innovation in new technologies to consumers and creators is linked to the ability of our commercial sectors to understand and work with these technologies. Change will be a collaborative effort between those using blockchain creatively and legal experts who are able to identify the potential challenges for blockchain in the future. Lawyers both in the UK and abroad are having discussions about how the use of blockchain will be drafted in commercial contracts, if and how “smart contracts” could become legally enforceable and how blockchain can operate under the regulations imposed by GDPR.
Blockchain – legal advice from specialists
While you might be at the forefront of digital innovation, the law has not caught up with you quite yet. It remains as important as ever to ensure that the systems that drive your business to comply with the legal system as it is now. Are your smart-contracts enforceable? Do you have digital assets that you need to account for? Are you contracting to use blockchain technology in a transaction? There are any number of potential pitfalls that a business could fall into if the basis on which their innovation is built does not adhere to current legal practice.
At Morisons Solicitors we are passionate about hearing from those with innovative ideas who need guidance on how their project can work within the current legal framework. Contact the Technology, Innovation and Life Sciences team at Morisons on 0141 332 5666 to discuss making the most of your innovation.< Back