Blockchain is coming. It will radically transform commerce. And the economy. And the practice of law. It’s another one of those things.
So what is blockchain? What is it going to change?
Start with this: blockchain is not a technology that blocks chains (of data). Instead, it assembles blocks (of data) into chains. Start there.
Blockchain is also called “distributed ledger technology.” In effect, it promises an internet-accessible registry system. Data is recorded electronically. And, instead of having one central official “place” where it resides, the data is “distributed” among all participants or potential users. Participants “agree” electronically about the validity of relevant information.
The resulting “distributed ledger” is analogous to land registration, such as that authorized in North Carolina, only it is digital and it goes much further. All the components of ownership, or an agreement, or a transaction, including enforcement, can be linked, block by block, into an inalterable, decentralized, automated digital chain — a ledger — that is Internet accessible.
- There is no need for a government or other central registry to record anything because the distributed ledger does that, making the data universally accessible among participants. And the technology can make recorded data unchangeable.
- There is no limit to what kinds of ownership or value or transactions can be recorded in a blockchain because the parties themselves make those choices electronically and the technology accommodates the data.
- In effect, the technology enables a universally accessible decentralized registry whose validity cannot be forged, and whose terms cannot be altered. And it can be made “smart,” which is to say, capable of executing agreed actions with certainty.
This has the potential for “radical transformation” of commerce. Ownership, agreements, and transactions can be digitized. The processes of authentication, verification, validation, recording title, and executing transfers upon counter-performance, can be blocked, chained and automated.
Currently, functions such as these are heavily dependent on assurances from lawyers: opinions and certifications.
But with the technology that is coming, lawyers will no longer be needed for those functions. Blockchains will provide them. Lawyers will be replaced by 1’s and 0’s.
Blockchains though will recast the role of lawyers.
North Carolina lawyer Nina Kilbride says that while lawyers will no longer be administrators of commerce; they will become instead its engineers. (That began this summer, she says.) The future role of lawyers, she says, is not to administer and validate processes, but to design the digital processes (blockchain structures) best suited to automate particular commercial objectives.
Good places to start to understand this are
- Bettina Warburg’s TED Talk, “How the blockchain will radically transform the economy.”
- Nina Kilbride’s website, “Cryptolawyer.net, The Evolution of Law in the Digital Age.”
- The Monax Explainers.
North Carolina appears to be right at the center of blockchain’s emergence, with Nina Kilbride and Monax, the Raleigh company she’s associated with. At least, that’s the evidence of the recent North Carolina Bar Association program on the subject (“What Lawyers Should Know about Blockchain Today”).
This has the feel of that moment in 1839 when Caswell County’s Stephen Slade awoke from his slumber and discovered the process for flue-curing tobacco.
People get ready, there’s a chain a-coming.