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Business Transformation through Blockchain pp 287–315Cite as

Palgrave Macmillan

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

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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.

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Notes

  1. 1.

    For example: http://compk.stanford.edu/, last access on 03/27/2018.

  2. 2.

    A smart contract is software running in a blockchain. As long as the blockchain itself remains fully functional, the smart contract cannot be altered or stopped.

  3. 3.

    A multi-signature wallet is a contract which defines that n out of m parties are required to move funds from this wallet (in this case: n=2, m=3).

  4. 4.

    Ether is the currency of the Ethereum Blockchain.

  5. 5.

    Assuming German law.

  6. 6.

    Note, that different countries are testing Blockchain for land registry, e.g. Sweden (Rizzo 2016).

  7. 7.

    The first blockchain, namely Bitcoin, only supports pseudonymous identities, as all actions of one key-pair are visible in the system. The user acts under a pseudonym. If a key gets somehow linked to a real-world identity, all actions are traceable.

  8. 8.

    A list of projects and companies working on blockchain and identity can be found here: https://github.com/peacekeeper/blockchain-identity

  9. 9.

    This could be anything from weather data to stock market prices.

  10. 10.

    https://www.everledger.io/

  11. 11.

    https://www.bka.de/DE/UnsereAufgaben/Ermittlungsunterstuetzung/Technologien/ITForensik/itforensik node.html, last access on 26/03/2018.

  12. 12.

    For example: PUFs—Physical Unclonable Functions.

  13. 13.

    https://www.docusign.de/, last access on 26/03/2018.

  14. 14.

    http://www.uncitral.org/uncitral/en/uncitral texts/arbitration/2010Arbitration rules.html, last access on 26/03/2018.

  15. 15.

    https://iccwbo.org/about-us/who-we-are/dispute-resolution/, last access on 26/03/2018.

  16. 16.

    https://iccwbo.org/dispute-resolution-services/arbitration/icc-international-courtarbitration/, last access on 26/03/2018.

  17. 17.

    WTO https://www.wto.org/english/thewto_e/whatis_e/tif_e/disp1_e.htm, last access on 26/03/2018.

  18. 18.

    General Agreement on Tariffs and Trades from 1947.

  19. 19.

    https://confideal.io/, last access on 26/03/2018.

  20. 20.

    https://jury.online/, last access on 26/03/2018.

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Author information

Authors and Affiliations

  1. Software Engineering for Business Information Systems, Department of Informatics, Technical University of Munich, Munich, Germany

    Bernhard Waltl, Ulrich Gallersdörfer & Florian Matthes

  2. Institute of Computer Science, University of Innsbruck, Innsbruck, Austria

    Christian Sillaber

Authors
  1. Bernhard Waltl
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  2. Christian Sillaber
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  3. Ulrich Gallersdörfer
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  4. Florian Matthes
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Correspondence to Bernhard Waltl .

Editor information

Editors and Affiliations

  1. Department of International Management, MODUL University Vienna, Vienna, Austria

    Horst Treiblmaier

  2. Head of European Blockchain Center, IT University of Copenhagen, Copenhagen, Denmark

    Roman Beck

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Waltl, B., Sillaber, C., Gallersdörfer, U., Matthes, F. (2019). Blockchains and Smart Contracts: A Threat for the Legal Industry?. In: Treiblmaier, H., Beck, R. (eds) Business Transformation through Blockchain. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-99058-3_11

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