Everyone knows bitcoin, the most famous cryptocurrency. However, few people know that bitcoin is actually one of the first concrete applications of blockchain. Difficult to define, this technology will nevertheless constitute, according to specialists, one of the greatest legal innovations to come in the coming years. So, what exactly is blockchain and how can it be useful to legal professionals?
The major advantages of blockchain: low cost and maximum security
In simple terms, blockchain can be defined as a technology for storing and transmitting information. Its main advantage lies in the fact that it does not use intermediaries . In this respect, it is much more secure than most current systems that rely on "trusted third parties," such as banks, insurers, etc.
Security is therefore the main advantage of blockchain.
It is thus considered tamper-proof because it is based on a transparent system . Everyone can observe and know their neighbor's transactions. Therefore, for the system to be breached, more than half of the users would have to band together to cheat. Based on the assumption that all users are honest, the blockchain reveals one of its weaknesses, even if the risks of intrusion into the system are minimal.
To mitigate the potential drawbacks associated with this idea of transparency, private blockchains exist. The UJA (Union of Young Lawyers) has therefore called for the creation of a private blockchain reserved for lawyers to "combine technology with the ethics of the profession" and "move towards a new generation of documents countersigned by lawyers."
A second advantage of this innovation is its low cost . It is entirely digital and accessible worldwide.
Finally, and most importantly, blockchain can interact with APIs , that is, with a technological platform allowing different software to connect with each other and exchange information.
It is therefore possible to easily integrate it into the daily management of your practice thanks to software offering API integration such as Jarvis Legal.
Jarvis plans to include file timestamping technology DeepBlock, a Legal Tech which offers to associate blockchain functionalities without knowledge and quickly to its digital environment.
Thus, thanks to this new feature integrated into the Jarvis Legal platform , it will be possible to accurately certify the creation date of a document.
This is a major step forward which will make one of the major advantages of blockchain concrete: the creation of proof in advance. One example among hundreds of possibilities: certifying the anteriority of a creation subject to copyright.
Two concrete applications for your law firm: pre-constitution of evidence and smart contracts
Document Authentication
One of the possible applications for legal professionals is the pre-constitution of evidence. Blockchain is already used by the US government for this purpose.
Concretely, the blockchain works by assigning to each document or transaction a unique encryption translated into a “hash”, that is to say an alphanumeric sequence. A single change of even a comma causes the entire string to change.
So let's imagine that a malicious individual decides to modify a page. For the fraud to be successful, he would have to modify all the pages of the chain so that it remains coherent and logical! It then becomes much easier to spot fraud and discourage attempts to unduly modify documents.
Moreover, this encryption or digital fingerprint remains the same for millions of years; once "mined," it no longer changes and cannot be modified.
The fingerprint is secured by proof of the identity of its holder using a password or a blockchain address. This last security links the document to its holder.
Automation of certain contracts
Is the code the new law? The controversial “smart contracts” are also based on the idea of blockchain.
These "smart contracts" are automatic contracts programmed to execute when one or more clearly defined contractual obligations are fulfilled.
For example, a smart contract could offer compensation planned in advance and automatically in the event of a flight or train delay or could be applied to a car rental contract.
The advantages of smart contracts for lawyers are numerous: reduced risk of loss or modification of the contract, better legal security of contracts, but also facilitation of the sometimes problematic execution of some of them.
Obviously, smart contracts must be under the control of a legal professional. They are only possible in simple cases and without particular difficulties and are in no way intended to replace the lawyer and traditional contracts!
Finally, it should be noted that an order facilitating the transmission via the blockchain of certain unlisted financial securities was adopted on December 8, 2017. This is a first in Europe which gives the beginnings of legitimacy to the system and paves the way for good prospects for the future.