- Exponential growth.
Technology in general has so far had a linear impact on the legal sector. In the past two hundred years, technology has allowed simplification and speeding up of models and formulas. But blockchain technology may have a deeper impact in the next 25 years, generating a growth which is not linear but rather exponential. Blockchain technology has the potential to create new relational models and formulas and, therefore, new legal models that are completely different from past models. This growth won’t be linear (i.e. requiring a century to affect the society and the system) It will be exponential, affecting the society in a shorter period of time as each new advancement begets another greater advancement. It is therefore important to study and discuss the matter as much as possible in this initial phase.
- Rethink from scratch.
The law has historically followed technology, adapting and developing to govern new phenomena introduced by technology. These phenomena have been studied, elaborated and readapted in the legal world. But the blockchain introduces governance and relational models that require a rethinking, sometimes from scratch, of models and institutions, and a different balance between legal positions. Decentralization offers new relational models that require us to re-examine our assumptions about models and institutions. For example, concepts such as ownership, liability and governance need to be rethought when we deal with distributed and delocalized networks where we have the ability to consider the anonymous votes of token owners. We are on the cusp of a rare, watershed event, a true paradigm change. Thus we must keep an open mind to rethink many aspects of today’s legal ecosystem from scratch.
- Blockchain industry.
To evolve and have an impact in the real world, the blockchain industry must shift its focus from pure speculation to different use cases that have concrete applications.
- Effective education.
Education instead of hype. Blockchain technology and their uses should be taught and divulged in a professional and clear manner in order to avoid misunderstandings, prejudice and fanaticism. We seek to create an educated community so that people can evaluate ICOs based on the quality of the projects and not on hype. This will allow the advancement of quality projects and the reduction of scams.
- An Interdisciplinary approach.
To meet the challenges of tomorrow we must apply a combination skills and analyze problems and solutions with open and coordinated work among developers, software architects, blockchain experts, lawyers, jurists and economists, with a joint effort and an open, unbiased dialogue.
- Reliable smart contracts library.
Software code for developing smart contracts is young and unstable, open to technical failure. Testing on a small, medium and large scale is necessary before smart contracts become stable. Early adopters will be able to benefit first and create a reliable library of secure and tested smart contracts, opening the track to the masses. It is all the more important to create open horizontal experimentation spaces where to encourage the natural evolution of blockchain applications.
Blockchain technologies are based on peers and community: miners, users, voters, developers, experts. An ecosystem to be built together so that thousands of improvements and tricks are achievable. It is essential to adopt a design approach that allows a reward/benefit to be distributed by limiting or eliminating, where possible, any element of centralisation.
- Automation vs Decentralisation.
The basic concept of smart legal contract refers more to the automation of the creation and performance of a contract, which can be achieved without decentralization. But when elements of the contract cannot be fully automated because they depend on external factors that software cannot reliably take into account, centralization cannot offer a complete solution. Even smart contract applications that appear to be compatible with full centralization at first may yield surprising results (e.g., delivering a bad result due to a successful hacking attack) can fail if they rely on centralized technology. The blockchain can go beyond solving the problem of inefficiency with automation by using decentralization to execute the contract reliably and offer solutions to unpredictable problems by resolving disputes and enforcing the resolution.
- New standards.
Blockchain and smart contracts require new standards to build on. Legal technologists and blockchain developers need to work closely together in order to create and disseminate these standards.
- Legal Design and User Experience.
New standards and widespread dissemination require a well-thought and shared design for smart contracts and smart legal contracts. Proper legal design along with an effective user experience will be crucial for mass adoption.
Smart contracts are obligations written in computer code. Code is deterministic and less open to interpretation than natural language. This simplifies commercial relationships and builds confidence that agreements will be executed correctly.
- Alternative Dispute Resolution.
A new legal system based on well designed and reliable smart legal contracts requires a related effective and decentralized alternative dispute resolution system based on blockchain to give certainty, speed and effectiveness to enforcement in the event of a breach of contract.
- Trusted Oracles.
Smart contracts are event-driven pieces of code. If the trigger event is based on information residing outside a blockchain, then it is crucial that the Oracles are reliable and trustworthy. A new legal system based on smart legal contracts requires specific rules governing who can be an Oracle and what their liabilities are.
Thanks to all the innovators who have contributed to its drafting