It’s been 10 years since blockchain technology was first introduced, with the past few years showing tremendous growth of explosive proportion. Since blockchain is now finding wider application across almost every industry, businesses that want to stay ahead of the curve should consider learning more about its applications.
Lawyers could benefit from learning about the many applications of blockchain, as it has the potential to disrupt the legal industry in significant ways. While it’s impossible to predict all the ways that blockchain will be used to change the practice of law, here are some major trends to be aware of.
Time normally required to write, edit, and sign contracts can be effectively reduced via blockchain technology. In being able to create what have been called “smart contracts”, lawyers utilizing blockchain can create a “trustless” ecosystem. “Trustless” as in, minimizing the amount of trust required between two parties – for example, knowing that a document to be signed is legitimate without the need for manual verification. This ability can drastically shorten the process for negotiations and approvals. In addition to “smart contracts”, blockchain can also assist with carrying out contract terms, by automating any verification involved.
Smart contracts have multiple uses, such as automating agreements or transferring currencies. Given how much time lawyers spend drafting contracts, this would make the process much more efficient. This can also simultaneously assist in executing payment terms with minimal banking fees and transfer times. An assortment of blockchain tools can be created to help lawyers automate more repetitive aspects of their duties that can be delegated to the technology (although many non-blockchain startups have already tackled this).
With intellectual property (IP), using blockchain as a registry for IP may bring the necessary transparency to copyright authors and owners. Disputes over IP can be avoided with immutable records from the blockchain, which are both permanent and time-stamped, making it very easy to discover ownership and original works.
Keeping Public Records
Various types of information are publicly available under federal, provincial/state, or local domain, but the information is not always readily accessible and may be susceptible to hackers. Blockchain technology could make it easier to store and distribute public records at lower operating costs, while also making it possible to verify accuracy and originality of documents.
Time-stamps associated with blockchain allow users to ensure that documents available
online are identical to those uploaded by the publishing government agency, leading to greater transparency and trust. Since no individual can change the contents of a public record once uploaded to the blockchain, it is stored indefinitely.
As a decentralized digital source, blockchain technology removes the need for a paper trail and drastically reduces the possibility of human error in a variety of contexts. At its current state, blockchain provides a better method of data security over traditional network storage options utilized in law firms. Here, documentation is safely stored and secured in a decentralized environment. Accessing stored documents requires a private digital key that only the owner holds – which ensures ultimate protection of customer data and privacy.
Since digital ledgers make it easier than ever to monitor records, they are expected to have wide-ranging effects on land ownership and related areas. Property valuations, for example, will be simplified by the ability to access sale prices of land, titles of property, and other relevant information.
A large percentage of real estate fraud originates from the fact that different parties have possession of different documents. Agreements with fraudulent signatures, and other scenarios of untrustworthy arrangements can be eliminated with blockchain’s immutable records. Blockchain enables the ability to cross-reference agreements to ensure contents are nearly impossible to modify, further protecting land owners from fraud.
Blockchain is an exciting technology with countless applications that can bring major improvements to firm processes. Almost every industry will be confronted with the need to learn and adapt to the new opportunities that blockchain can bring. While there’s no way of knowing exactly if or how it will be adopted in the legal realm, these applications show how its potential to shift the practice substantially.