Smart contracts put lawyers out of work
The legal profession is often considered a ‘necessary evil’ that charges exorbitant fees and there are a substantial number of people who won’t be too upset at the thought of lawyers having less control. Sometimes you need a lawyer, but if the blockchain can provide another solution, it is fair to say that many will choose the blockchain.
This evolution of the legal system is thanks to the Ethereum blockchain and its creator Vitalik Buterin, who has also developed the pioneering ‘smart contracts’. This is technology that Lendo Cryptobank is using.
Buterin recently explained why transactions on the blockchain don’t need the intervention of a third party in the form of a lawyer:
“All transactions under Blockchain come with auditable trails of cryptographic proofs. Rather than simply hoping that the parties we interact with behave honorably, we are building Blockchains that inherently build the properties in the system, in such a way that they will keep functioning with the guarantees that we expect, even if many of the actors involved are corrupt.”
Blockchain disrupts the legal status quo
Essentially, the blockchain is what is known as a disruptive element, because it “eliminates the necessity to trust intermediaries to certify a transaction.” And, the Ethereum blockchain has these very neat ‘smart contracts’ that demonstrate how its disruptive factor works.
What is a smart contract?
It’s an algorithm or computer protocol that can verify the performance of a contract by reducing it into code. This code executes the contract so that its “clauses are automatically enforced once the pre-programmed conditions are satisfied. “ A smart contract can “automatically move digital assets, including ‘contracts’ according to arbitrary pre-specified rules, simply by writing up the logic in a few lines of code,” Buterin explained. And lawyers are seeing that the writing is on the wall, at least for this aspect of legal work.
For example, trademarks and copyright registered on the blockchain will have an immutable record that is time-stamped. Should someone else try to use a trademark, the blockchain smart contract will provide irrefutable evidence of ownership. Kodak used blockchain technology for its KodakCoin platform copyright registration and its shares shot up by 89% after the announcement. The reason being that the investors understood that using the blockchain to protect image rights made excellent sense.
We’ll undoubtedly see more companies like Lendo and Kodak use blockchain technology for legal protection. And that means there may be a few lawyers looking for an alternative career.