Blockchain, Smart Contracts and the Law

Abstract

Almost everyone has heard about the cryptocurrency Bitcoin. Blockchain, or distributed ledger technology (DLT), is the technology underlying Bitcoin and many other cryptocurrencies. Blockchain, however, is certainly not limited to cryptocurrencies. People will increasingly hear about blockchain’s use in a range of different sectors and industries, including supply chains, healthcare, energy and law. No one should be surprised about blockchain’s wide application: it is a general purpose technology. Smart contracts, which can be run on many different blockchains, are a logical step from electronic data interchange (EDI), which has been in use from the 1970s. While EDI has had some success in reducing some transaction costs, smart contracts are significantly more powerful. For example, as this article outlines, smart contracts can prevent people from breaching the law and breaching contracts, which has profound consequences.