Blockchain, Smart Contracts and Your Privacy
It has arrived. The blockchain; a piece of technology that began to formulate in the early 1990s and is finally now being introduced for the public’s use. Essentially speaking, it is a distributed ledger that is shared among computers all over the world, creating a global platform.
Through the blockchain, individuals or large organizations can enact a variety of online transactions or negotiations with each other. These transactions and negotiations are initiated through the use of something known as smart contracts, which are, in a nutshell, digital versions of a traditional contract.
Smart contracts are appealing for numerous reasons, catching the eyes of companies as well as governments for their potential in strengthening consumer trust. They minimize the need for intermediaries, such as a lawyer or a notary, by using a distributed public ledger to transfer value from person to person. Each smart contract is run on a set of rules, all of which are stored in digital form, for a wanted outcome. Once those rules are confirmed by both parties, the smart contract carries out the agreed upon terms resulting in the desired outcome. With this method, individuals or organization don’t have to pay that additional intermediary to handle the transfer for them, and the potential for tampering or manipulation by a middleman is eliminated.
The smart contract has a variety of purposes, including and also extending past financial functions. It is expected to bring new possibilities to monetary transactions through simplifying and clarifying complicated financial outcomes, which would usually be dependent upon the middle man. It can even be used to handle activities such as mortgages or housing rentals, automatically connecting and initiating the transaction between different parties.
There are quite a few cross-industry uses of smart contracts as well, uniting fields of finance, technology transactions, real estate, intellectual property, identity verification, data security, and privacy, all on a global and public platform. Smart contracts are even being used for medical research to manage the patient consent process while sharing needed data and, simultaneously, securing the patient’s private information. Smart contracts also allow for individuals to control their digital identity through deciding what private information to disclose to other parties, making these digital identities completely self-sovereign. This private information can consist of authentications such as birth certificates, tying the digital identity to a real world person. This enables businesses to know their customer’s digital identity with ease while protecting the privacy rights of the individual. These digital identities would also be of assistance for digital voting, which could potentially be done through the blockchain so as to create a more error free voting process.
Smart contracts also offer significant aid to businesses, allowing them to manage their digital identity over the blockchain – providing product authentication for companies and helping to build consumer trust while strengthening the validity of the company in the eyes of its buyers.
To summarize, smart contracts can be used for a variety of fields, relying on digital contracts that bind two parties together so as to create seamless transactions and/or negotiations, whether that deals with money, property, information, etc. All of these elements help to create a level of comfort amongst its users, offering a cleaner, more effective alternative for exchanges rather than relying on the time consuming bureaucracy.
Zore Law provides legal services to entrepreneurs and emerging companies, including a legal comprehensive approach to those operating in the blockchain and smart contracts space. Our experience in technology transactions, intellectual property, data security and privacy, business and other legal content areas provides our clients with front line knowledge and strategic counsel. Contact us at info@zorelaw.com.