Brief Survey of Blockchain Related Lawsuits

I came across this article recently providing an overview of a few recent Blockchain related cases.

As noted in the article, we have yet to see much in the way of actual disputes over the technology itself, but instead we find your more run of the mill contract disputes wherein the contract was related to Blockchain (or, more likely, Bitcoin) performance.

While there isn't a lot here on the Smart Contract side of things, it is interesting to see how the public nature of blockchain based databases, as well as the strong consensus as to the veracity of the records, did come up in quite a few of the cases. 

If nothing else, hopefully blockchain will be able to lift the fog of fear surrounding electronic contracting and business. If we were dealing with standard hard currency, a victim of a fraudulent transfer will never be able to know where the money actually went and has almost no chance of recovery. In cases involving bitcoin, there is at least a public ledger that clearly documents the fraudulent transfer.

Blockchain and Notarization

BTC Manager ran this terrible headline recently: Be Your own Notary with the new Blockchain Plugin for Microsoft 10. As someone who participates in the e-notary business and who finds blockchain an interesting new technology, I was pretty excited by this headline.

Well, it turns out this headline is pure clickbait and neither Microsoft nor any sort of blockchain based technology will allow you to be your own notary.

First and foremost, notarization isn't, in nearly all jurisdictions, something you can do for yourself. Generally, a notary is not allowed to notarize their own documents, they can only perform the service for someone else. Secondly, most states require a witness for the notarization. The article doesn't even come close to addressing either of these issues, and instead talks in the most general terms about forgery and authenticity.

Proving the authenticity of documents in court is actually easier than this article would have you believe. Documents are presumed authentic unless challenged, and usually such a challenge is based on the other party of the case presenting a competing document. Generally, though, simply walking into court with a piece of paper is all that is necessary, rather than worrying about whether your hashes match.

Sometimes, however, the actual original copy of the document does matter. In those cases, notarization often isn't even the way you prove an original - notarization is the way you prove that the signature is valid.

I'm not exactly sure what the real value is in using blockchain as an e-notary service, but I do think blockchain has a lot of potential for tracking authenticated original documents.

Arizona Bill Enabling Smart Contracts

This came up through CoinDesk (an excellent source which everyone reading this should also be reading) and interestingly uses very similar language to that of electronic signatures (a signature may not be deemed invalid simply because it is electronic).

Unpacking a little bit further, we see that a contract cannot be denied enforceability merely because it includes a smart contract term. Further down in the bill, the term Smart Contract is defined as "Smart Contract means an event-driven program, with state, that runs on a distributed, decentralized, shared and replicated ledger and that can take custody over and instruct transfer of assets on that ledger."

I like that we are starting to define Smart Contracts as they are (automated computer code) and getting away from the goofy notion that they are knowing beings that will put attorneys out of business. I'm a little more confused, though, by the use of the language "take custody over" in conjunction with "instruct transfer of assets on that ledger." One could argue that each time I enter into a casino I do the same - I can put my money in a machine, and agree that depending on the outcome of an event, my assets will be transfered accordingly with no further input or recourse by myself or the house. The main difference is that no slot machine is run by distributed ledger (that I'm aware of) and interestingly the slot machine generates its own outcome data, theoretically the blockchain does not.

For my part, I'll enjoy following this one as it moves through the legislative process and seeing what commentary arises. The full text of the bill is available through Scribd here.