Even Years Away From Full Adoption, Blockchain Disruption Is Already Here
Cardozo School of Law's Aaron Wright discusses how blockchain's development may mimic that of the World Wide Web, and what attorneys get wrong about smart contracts.
January 25, 2018 at 10:00 AM
5 minute read
As the chairman of the Enterprise Ethereum Alliance's Legal Industry Working Group and co-director of “The Blockchain Project” at Yeshiva University's Cardozo School of Law, Aaron Wright is at the forefront of bringing blockchain technology to the practice of law. But Wright knows that blockchain still has decades to go before it is as common at law firms and legal departments as e-billing or e-discovery platforms.
Still Wright, an associate clinical professor of law at Cardozo and the founder and director of the school's Tech Startup Clinic, believes that the blockchain technology space, while nascent, is at a seminal point in its history, and efforts to define the trajectory of the technology and educate on its eventual disruption are needed now more than ever.
In the days before Cardozo Law's first-ever “Works in Progress Program on Blockchains & the Law” academic conference in late January, Wright spoke to Legaltech News about why it's important to understand blockchain technology early on and how the technology is already changing the economy as we know it.
LTN: What was the impetus behind launching The Blockchain Project at Cardozo Law?
Aaron Wright: We've done a whole bunch of work related to blockchain technology, and we realized we should probably bring that together under one umbrella, which we called “The Blockchain Project.”
The primary thought behind the project is, in a holistic way, to address some of the tricky legal and policy challenges that blockchain technology presents. So the project forces us to re-examine some of the processes we have in place when it comes to our financial services industry, when it comes to legal industry, when it comes to the insurance industry. And because blockchain has the possibility to disintermediate certain intermediaries that are involved in those processes, it is creating new tensions with existing laws and systems.
Why do you believe blockchain-powered smart contracts adoption is not happening faster?
What I'm seeing is smart contracts being used, though they are not necessarily being used by lawyers yet. All those token sales happening nowadays, they are facilitated via smart contracts.
So those computer processes and those computer programs are being created on a daily basis. I think by last count there was over 2 million that are in existence, and some of them are doing really important things.
These smart contracts for token sales, what they are doing in so many lines of code is stripping out and automating the core functions of what lawyers would do, what accountants would do, and what certain aspects of financial services companies do. These small lines of software are having dramatic impacts on various different industries.
But I think when it comes to the legal industry, there is still a lack of understanding of what smart contracts can effectively do. I think a part of the issue is it's a bad term. A “smart contract” doesn't necessarily mean a legal agreement. It means a small computer program or process that is running on a blockchain.
Some people think you can turn entire agreements into source code. We're not there yet, and I don't know if we'll ever actually go there. But what you can begin to do is program how assets are transferred between parties in new and novel ways.
Blockchain records are regarded as unchangeable. Can this attribute be an issue given human error?
They are changeable, it's just really hard to change them. Some people refer to blockchain as being immutable or unchangeable, that's technically not correct. I think the more accurate term is that they are tamper resistant. It is really hard to change information stored on the blockchain.
The reason that is the case is because the blockchain is maintained by all these different computers, potentially scattered across the globe. So in order to change anything, you pretty much have to convince everybody or at least a huge portion of the party to modify the data that is recorded.
In terms of modifying an agreement going forward, you can create another record, so you have a chain of changes which can be really useful. We've seen this with software development, where they track every change to a software library, and you can see it evolve and modify over time.
When you do see blockchain-powered legal technology actually being used in law firms and legal departments?
In terms of when the technology will be adopted, I think this is a 20-year adoption curve much like with the internet. We're right at the beginning of it, and over the first four or five years we're going to see the first use cases emerge with blockchain technology.
In many ways, they will replicate or imitate or improve what we currently have, then we'll move into a phase two or three of blockchain technology, like a blockchain 2.0 or 3.0, where these types of infrastructure can fit behind more and more online applications and business processes.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllWomen of Legal Tech: 'People Are the Most Important Part of the Equation' Advises Katherine Lowry
Cleary Sees AI as 'Co-Pilot,' Among Growing Client Eagerness for Legal Tech
5 minute readReed Smith's New Emerging Tech Partner Sees 'Much Overlap' Between AI Regulation, Privacy Laws
'Disclose, Disclose, Disclose': A Conversation With Stradley Ronon's David Piper on the Rise of CIPA Claims
Trending Stories
Who Got The Work
Clark Hill members Vincent Roskovensky and Kevin B. Watson have entered appearances for Architectural Steel and Associated Products in a pending environmental lawsuit. The complaint, filed Aug. 27 in Pennsylvania Eastern District Court by Brodsky & Smith on behalf of Hung Trinh, accuses the defendant of discharging polluted stormwater from its steel facility without a permit in violation of the Clean Water Act. The case, assigned to U.S. District Judge Gerald J. Pappert, is 2:24-cv-04490, Trinh v. Architectural Steel And Associated Products, Inc.
Who Got The Work
Michael R. Yellin of Cole Schotz has entered an appearance for S2 d/b/a the Shoe Surgeon, Dominic Chambrone a/k/a Dominic Ciambrone and other defendants in a pending trademark infringement lawsuit. The case, filed July 15 in New York Southern District Court by DLA Piper on behalf of Nike, seeks to enjoin Ciambrone and the other defendants in their attempts to build an 'entire multifaceted' retail empire through their unauthorized use of Nike’s trademark rights. The case, assigned to U.S. District Judge Naomi Reice Buchwald, is 1:24-cv-05307, Nike Inc. v. S2, Inc. et al.
Who Got The Work
Sullivan & Cromwell partner Adam S. Paris has entered an appearance for Orthofix Medical in a pending securities class action arising from a proposed acquisition of SeaSpine by Orthofix. The suit, filed Sept. 6 in California Southern District Court, by Girard Sharp and the Hall Firm, contends that the offering materials and related oral communications contained untrue statements of material fact. According to the complaint, the defendants made a series of misrepresentations about Orthofix’s disclosure controls and internal controls over financial reporting and ethical compliance. The case, assigned to U.S. District Judge Linda Lopez, is 3:24-cv-01593, O'Hara v. Orthofix Medical Inc. et al.
Who Got The Work
Attorneys from Cadwalader, Wickersham & Taft and Pryor Cashman have entered appearances for Diageo Americas Supply d/b/a Ciroc Distilling Co. and Sony Songs, a division of Sony Music Publishing, respectively, in a pending lawsuit. The case was filed Sept. 10 in New York Southern District Court by the Bloom Firm and IP Legal Studio on behalf of Dawn Angelique Richard. The plaintiff, who performed as a member of producer Sean 'Diddy' Combs girl group Danity Kane and later his band, Diddy - Dirty Money, claims that she was financially exploited by Combs and subjected to inhumane working conditions. Among other violations, Richard claims that Combs required group members to remain at his residences and studios, deprived them of adequate food and sleep and forced them to rehearse for 36 to 48 hours without breaks. The case, assigned to U.S. District Judge Katherine Polk Failla, is 1:24-cv-06848, Richard v. Combs et al.
Who Got The Work
Mathilda McGee-Tubb and Kevin M. McGinty of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, as well as Jesse W. Belcher-Timme of Doherty, Wallace, Pillsbury & Murphy, have stepped in to defend Peter Pan Bus Lines in a pending consumer class action. The suit, filed Sept. 4 in Massachusetts District Court by Hackett Feinberg PC and KalielGold PLLC, accuses the defendant of charging undisclosed 'junk fees' on top of ticket prices during checkout. The case, assigned to U.S. District Judge Mark G. Mastroianni, is 3:24-cv-12277, Mulani et al v. Peter Pan Bus Lines, Inc.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250