By Mike Barker
Read Part 1 here.
Part 2: The Resurgence
New technology surrounding Blockchain is emerging every day. Since the inception of this bi-fold report, the development of the Lightning Network has made real world Blockchain transactions tangible. Jeremy Rubin, one of the core developers of the Bitcoin Blockchain (now leading developer for Stellar Blockchain) has stated of Lightning Network:
“Lightning is perhaps the most important protocol innovation happening in the cryptocurrency space right now. When Bitcoin’s Lightning Network comes online fully, any community not preparing scalable off-chain solutions is going to get left in the payments dust.”
Lightning Network is powered by smart-contracts, bridging the digital gap on Blockchain to Blockchain exchanges (say, exchanging Ethereum tokens for Bitcoin without a coin exchange agent raking in intermediary fees), and developing a framework for Blockchain to real world facilities, akin to ChainLink’s developments for real world data connectivity.
It is now more essential than ever for legal arbiters practising in commercial and dispute resolution to shift focus onto Blockchain’s technology. Heavyweight banking institutions are quietly stepping in. Westpac, via their venture capital subsidiary, Reinventure Group, owns a stake in the Australian division of Coinbase; the world’s second-largest cryptocurrency exchange, next to Bitfinex. It takes little effort to read between the lines to grasp the notion that something significant is mounting behind the scenes.
It would be wise for legal arbiters in dispute resolution to focus on models such as Jury.Online, a platform where arbiters from around the world culminate and provide the price for which they are willing to work. Counterparties make their choice of arbiters on an established cost of service, and the jury’s decision settles the dispute. Confideal goes one step further (or, in a transaction’s timeline; behind), coupling the execution of smart-contracts with dispute resolution mechanisms through qualified arbitration. The platform offers a wide range of tools for drafting and managing Ethereum smart-contracts without any programming skills or legal requirements. Further, they forecast API and IoT integration and scalability to other Blockchains (the exact platform described in Part One’s hypothetical scenario).
The community behind Blockchain has been reaching out, calling to arms an arsenal of developers via email lists and online forums. For the most part, developers are contributing on a volunteer basis, investing their time and real world money into the technology, with the aim of yielding greater returns for a brighter future — not just financially, but socially. The constructs of the Blockchain system is wiping out economic intermediaries, and it is no surprise that banking institutions are quietly stepping in on the side-lines. God forbid should they miss out on a buck.
All of this assumes that technology is infallible. That is a far cry from the truth. A multitude of hacks, digital crashes and ‘phishing’ of accounts have occurred, casting ominous shadows of doubt over Blockchain’s viability. However, Rome wasn’t built in a day. It will likely take a decade or two for the technology to seep its way in the fabric of our financial and social infrastructure.
Jurisdictionally speaking, the prospective dispute resolution mechanisms are sound. However, should parties be dissatisfied with their outcomes, the question lies in what jurisdiction to pursue a cause of action — a question beyond the scope of this report. The US has encountered tricky grey-areas, with investors losing significant sums of value to vulnerabilities. The US government administration has taken a hands-off ‘permissive’ approach, recognising that the circumstances are entirely unprecedented.
Despite the uncertainty and limited regulatory oversight, the force of Blockchain’s community is one to be reckoned with. The innovative team at King & Wood Mallesons multinational law firm have adopted the practice of Blockchain integration; coaching their junior legal staff to learn computational coding. Jean Yang, McCarthyFinch’s legal tech counsel and legal services manager, envisages a landscape comprising of both lawyer and technology, stating;
“While AI [artificial intelligence] could outperform lawyers in many areas, when it came to tactics it was the experienced lawyer who was best able to assist the client.”
The foreseeable future is shaping up to be an amalgamation of technological finesse and lateral legal expertise. It is the creative minds that will outmanoeuvre the data crunching juggernauts; for they feed on past and present tense only. To excel and stay afloat amidst the ever-shaping landscape, one must be prepared to think beyond the current constructs of our social paradigm. Patrick Murck, a fellow at the Berkman Klein Center for Internet & Society at Harvard Law School, lawyer and expert on Blockchain-based technologies poignantly noted:
“If you’re constructing a system that really is tethered to the existing institutions of the old world, you’re going to be bound by the rules of the old world.”
Strap in. It’s going to be a wild ride.
About Mike Barker
Mike is a final year Juris Doctor student focusing on the hyperpower of Law + Blockchain technology. Connect with Mike on Linkedin.