Blockchain technology is becoming an eventual element which could disrupt every industry around the world. Widely known for its ability to store information in a transparent and immutable ledger, blockchain offers businesses a higher level of precision.
Legal industries are also looking to revolutionize their operations with distributed ledger technology. By storing and validating records of transactions, legal firms will be able to maintain an accurate chain of custody and other legitimate activities on the blockchain. Currently, all lawyers are buried under the mountain of excessive paperwork. Keeping the historical records of the cases is a challenging task for every legal advisor.
However, blockchain has the potential to disrupt the legal industry and there’s a Global Legal Blockchain Consortium which seeks to adopt decentralization in the business of law.
BENEFITS OF BLOCKCHAIN
Decentralized: Decentralization is one of the key advantages of Blockchain. The blockchain system is fully decentralized instead of being stored in a single database, which implies that it is not possible for an overarching authority to promote its own agenda and manipulate the network. Decentralization, in addition to being a fair distribution system, often translates into more protection.
Peer-to-Peer (P2P) network: As information is exchanged and continuously recorded between network participants, the network becomes stronger with a growing number of participants. An integral aspect of blockchain technology is a P2P network. Within the blockchain network, the term 'peer' applies to the computer system. In this network, a user simultaneously makes use of and provides the foundation for the network. Each peer is called a node, and every node is considered equal to each other. A peer offers to other users resources such as bandwidth, processing speed and disk storage without central coordination on any servers or hosts. Even though nodes are equal, each may perform different roles such as that of a full node or of a miner.
Security/Immutability: Once every block is cryptographically sealed, removing or editing is impossible, guaranteeing the digital ledger's immutability. Owing to the very nature of network decentralization, central points of error or failure within the system can never occur. With the lack of weak points within the system for hacking, there can be zero chances of malice, improving the security of the network. In addition to this, each transaction involves the digital signature by both private and public keys that use distinct cryptographic schemes to ensure maximum encryption.
Trust: As the identity of the participants remains private, everyone can freely deal with everybody else through the secure network. Among the top benefits of blockchain technology are total anonymity and transaction security. For several reasons, it is important for participants to preserve privacy and anonymity. The address is given out for any transaction on centralized networks, which means hackers can find out the information of the user.
Transparency: In the public, decentralized ledger, it is possible for users to verify and monitor transactions. The entire record of transactions can be seen by any person. Besides, blockchain, being open source, any alteration of data is extremely difficult. With several eyes glued to the network, any alteration is sure to be seen in the logged data, adding to the blockchain's transparency and protection.
Ease of use: Blockchain has the benefit of being easy to use and fast with competent integration capabilities. Due to the absence of middlemen, the movement of data or money is smoother. Transactions of enormous volume in conventional banks take many days to complete due to various protocols or software transitions. In addition, financial institutions have defined operating hours, while online transactions in some countries are often not permitted on holidays. Blockchain technology works on a 24/7 basis, meaning it is possible to make transactions easily and safely every day, at any time.
Blockchain implementation and regulation poses no danger to businesses willing to embrace the technology, while it is essential to understand what the future holds for the adoption of the blockchain.
As blockchain technology is maturing, we will continue to see its implications in the legal industry. Lawyers will emphasize more on drafting complex agreements as smart contracts trigger rules embedded in those agreements. Smart contracts will make enforcement of laws and compliances more efficient.