Advertisement

Blockchains and Smart Contracts: A Threat for the Legal Industry?

  • Bernhard WaltlEmail author
  • Christian Sillaber
  • Ulrich Gallersdörfer
  • Florian Matthes
Chapter

Abstract

Blockchain, as a distributed data structure ensuring trust and establishing consensus among participants that do not know and potentially do not trust each other, is expected to change businesses in many different areas. One of these areas is the legal industry. How blockchain can potentially disrupt the legal industry is in the focus of this chapter. We differentiate three pillars of legal systems, namely (i) intermediaries and notary services; (ii) courts, judges, and trials; and (iii) companies and the financial market. We explore potential disruptions for each of them. We describe multiple scenarios which allow us to elaborate on the capabilities but also the limitations of blockchain technology.

References

  1. Adhami, S., Giancarlo G., & Martinazzi S. (2018). Why Do Businesses Go Crypto? An Empirical Analysis of Initial Coin Offerings. Journal of Economics and Business.Google Scholar
  2. Atzei, N., Massimo B., & Tiziana C. (2017). A Survey of Attacks on Ethereum Smart Contracts (SoK). In International Conference on Principles of Security and Trust (pp. 164–186). Springer.Google Scholar
  3. Bailey, J. P., & Yannis, B. (1997). An Exploratory Study of the Emerging Role of Electronic Intermediaries. International Journal of Electronic Commerce, 1(3), 7–20.CrossRefGoogle Scholar
  4. Bartoletti, M., Salvatore C., Tiziana C., & Roberto, S. (2017). Dissecting Ponzi Schemes on Ethereum: Identification, Analysis, and Impact. arXiv preprint arXiv:1703.03779.Google Scholar
  5. Bench-Capon, T., Araszkiewicz, M., Ashley, L., Atkinson, K., Bex, F., Borges, F., Bourcier, D., Bourgine, P., Conrad, J., Francesconi, E., et al. (2012). A History of AI and Law in 50 Papers: 25 Years of the International Conference on AI and Law. Artificial Intelligence and Law, 20(3), 215–319.CrossRefGoogle Scholar
  6. Brenig, C., Schwarz, J., & Rückeshäuser, N. (2016). Value of Decentralized Consensus Systems—Evaluation Framework. In: 24th European Conference on Information Systems (ECIS), 12–15 June, Istanbul, Turkey.Google Scholar
  7. Brown, R. (2016). On Distributed Databases and Distributed Ledgers. https://www.corda.net/2016/11/distributed-databases-distributed-ledgers/
  8. Civic Technologies, Inc. (2018). Civic Secure Identity Ecosystem. https://www.civic.com/
  9. Fenu, G., Marchesi, L., Marchesi, M., & Tonelli, R. (2018). The ICO Phenomenon and Its Relationships with Ethereum Smart Contract Environment. ArXiv e-prints (March). arXiv: 1803.01394 [cs.CY].Google Scholar
  10. Fromknecht, C., Velicanu, D., & Yakoubov, S. (2014). Certcoin: A Namecoin Based Decentralized Authentication System. Technical Report. Massachusetts Institute of Technology. 6.857 Class Project.Google Scholar
  11. Hacker, P., & Thomale, C. (2017). Crypto-Securities Regulation: ICOs, Token Sales and Cryptocurrencies under EU Financial Law. European Company and Financial Law Review Forthcoming. Available at SSRN: https://ssrn.com/abstract=3075820 or  https://doi.org/10.2139/ssrn.3075820
  12. Hampton, N. (2016, September). Understanding the Blockchain Hype: Why Much of It Is Nothing More Than Snake Oil and Spin. Computerworld, 05. https://www.computerworld.com.au/article/606253/understanding-blockchain-hype-why-much-it-nothing-more-than-snake-oil-spin/
  13. International Organization for Standardization (ISO). (2016). ISO/TC 307—Blockchain and Distributed Ledger Technologies. https://www.iso.org/committee/6266604.html
  14. Jentzsch, C. (2016, November). Decentralized Autonomous Organization to Automate Governance. White Paper.Google Scholar
  15. Jolls, C., Sunstein, C., & Thaler, R. (1998). A Behavioral Approach to Law and Economics. Stanford Law Review, 50, 1471–1550.CrossRefGoogle Scholar
  16. Karame, G. (2016). On the Security and Scalability of Bitcoin’s Blockchain. In Proceedings of the 2016 ACM SIGSAC Conference on Computer and Communications Security. ACM.  https://doi.org/10.1145/2976749.2976756.
  17. Koulu, R. (2016). Blockchains and Online Dispute Resolution: Smart Contracts as an Alternative to Enforcement. SCRIPTed, 13, 40.CrossRefGoogle Scholar
  18. Lemieux, V. L. (2017). A Typology of Blockchain Recordkeeping Solutions and Some Reflections on Their Implications for the Future of Archival Preservation. In Proceedings of the 2017 IEEE International Conference on Big Data, Boston, MA.Google Scholar
  19. Luhmann, N. 2001. Legitimation durch Verfahren (6th ed.). Frankfurt am Main: Suhrkamp. ISBN 3-518-28043-0.
  20. Pesch, P., & Sillaber, C. (2017). Distributed Ledger, Joint Control? Blockchains and the GDPR’s Transparency Requirements. Computer Law Review International, 18(6), 166–172.CrossRefGoogle Scholar
  21. Ritter, R., & Welch, I. (2002). A Review of IPO Activity, Pricing, and Allocations. The Journal of Finance, 57(4), 1795–1828.CrossRefGoogle Scholar
  22. Rizzo, P. (2016). Sweden Tests Blockchain Smart Contracts for Land Registry. https://www.coindesk.com/sweden-blockchain-smart-contracts-land-registry/
  23. Sillaber, C., & Waltl, B. (2017). Life Cycle of Smart Contracts in Blockchain Ecosystems. Datenschutz und Datensicherheit DuD, 41(8), 497–500.CrossRefGoogle Scholar
  24. Surden, H. (2012). Computable Contracts. UCDL Review, 46, 629.Google Scholar
  25. Swan, M. (2015). Blockchain: Blueprint for a New Economy. Sebastopol: O’Reilly Media, Inc.Google Scholar
  26. Tapscott, D., & Tapscott, A. (2016). Blockchain Revolution: How the Technology Behind Bitcoin Is Changing Money, Business, and the World. New York: Penguin.Google Scholar
  27. Vasek, M., & Moore, T. (2018). Analyzing the Bitcoin Ponzi Scheme Ecosystem. In Fifth Workshop on Bitcoin and Blockchain Research, Financial Cryptography and Data Security 18 (FC). Springer.Google Scholar
  28. Venegas, P. (2017, August 1). Initial Coin Offering (ICO) Risk, Value and Cost in Blockchain Trustless Crypto Markets. Available at SSRN: https://ssrn.com/abstract=3012238 or  https://doi.org/10.2139/ssrn.3012238.
  29. Vogelsteller, F. (2017). ERC-725 Identity. Technical Report.Google Scholar
  30. Vogelsteller, F, & Vitalik B. (2016). ERC-20 Token Standard. https://github.com/ethereum/EIPs/blob/master/EIPS/eip-20.md
  31. Wright, A., & De Filippi, P. (2015). Decentralized Blockchain Technology and the Rise of Lex Cryptographia. Rochester: Social Science Research Network.CrossRefGoogle Scholar
  32. Zhao, L., Shaokun, F., & Jiaqi, Y. (2016). Overview of Business Innovations and Research Opportunities in Blockchain and Introduction to the Special Issue. Heidelberg: Springer.CrossRefGoogle Scholar
  33. Zheng, Z., Shaoan, X., Hong-Ning, D., & Huaimin, W. (2016). Blockchain Challenges and Opportunities: A Survey (Working Paper).Google Scholar

Copyright information

© The Author(s) 2019

Authors and Affiliations

  • Bernhard Waltl
    • 1
    Email author
  • Christian Sillaber
    • 2
  • Ulrich Gallersdörfer
    • 1
  • Florian Matthes
    • 1
  1. 1.Software Engineering for Business Information Systems, Department of InformaticsTechnical University of MunichMunichGermany
  2. 2.Institute of Computer ScienceUniversity of InnsbruckInnsbruckAustria

Personalised recommendations