With the recent price hike for nearly all cryptocurrencies, the transactional property of cryptocurrencies has received a disproportionate amount of attention from the media. Most people have, therefore, overlooked the far more consequential long-term benefits that the underlying technology has to offer. Here’s a look at how smart contracts combined with blockchain could disrupt the legal services industry:
What Makes Blockchain Unique?
In essence, a Blockchain is simply a public ledger of transactions. What gives Blockchain its power is that this ledger is maintained and updated not by a centralized organization or government, but a decentralized peer to peer network comprised of everyday users. In doing so, a lot of the overhead and security flaws of centralized services are eliminated as the transfer of value is completely trust-less.
Additionally, once a transaction is made on the Blockchain, there is absolutely no way to reverse it because of the huge mining infrastructure that’s protecting the ledger. At no point in the history of mankind has such a powerful and transparent global ledger existed. This is a huge advantage for Blockchains and has applications in almost every industry imaginable.
Future of the Legal Services
Law Enforcement is one the industries that stand to gain the most from blockchain’s innovative technology. Throughout history, people have had to rely on their local governing bodies to arbitrate in case of dispute for, say, land or other assets. This model suffers from the inherent weaknesses of a centralized organization like bias and inaccuracy.
In a recent study by Goldman Sachs, it was estimated that businesses spend somewhere around $4 billion every year in order to verify property title deeds. This is where a data integrity project like Factom could help people by using their authentication solutions to secure physical documents on the Bitcoin Blockchain. For example, if the title deeds to land could be appended to the Bitcoin Blockchain using data integrity services provided by Factom, the owner is easy to determine until the end of time and the record is resistant to tampering.
Although not part of Bitcoin, Smart Contracts are invariably linked to blockchain technology as they can revolutionize the way humans conduct business. Ethereum, the second largest cryptocurrency by market capitalization implemented smart contracts which are executed over the decentralized Ethereum infrastructure. With Ethereum it is possible to create contracts that self-execute when certain conditions are met.
For example, a real-world use case for such contracts is Etheroll, which uses smart contracts for distribution of payouts to its investors. Etheroll pays its token holders quarterly in Ether from the profits generated by the game. Etheroll token holders can get their profits automatically because of Etheroll’s smart contract and the best part is that there is no human being involved in the whole process.
Initial Coin Offerings, which have gained a lot of steam over the last year, also use smart contracts to distribute their tokens based on how much ether they receive. Since the process is automated, there is no chance of foul play and a fairer distribution is achieved.
Intellectual Property Rights
With the advent of the internet, as media has become increasingly available to the masses because of file-sharing services, it has also become harder to maintain ownership of content to ensure that content creators are compensated fairly for their work. There are several interesting projects in the cryptocurrency space that are coming up with unique ways to combat intellectual property theft.
SingularDTV is one the foremost intellectual property Blockchain solutions that are aiming to revolutionize content distribution in order to ensure more equitable outcomes for artists. In their unique model, artists can tokenize their upcoming projects to raise funds from investors who in turn get rewarded from sales of the final product. In the real world, this would work by artists creating a sort of initial coin offering for their newest project. Investors can buy shares in projects they find interesting and because of smart contracts, they can get paid in the future. For every dollar earned by the final product, a pro rata share goes to all of the investors. This model incentivizes users to be part of content creation and also to share the profits. Artists benefit as they retain the ownership of their work and also get paid more because no middlemen are involved.