How Blockchain Technology is Being Used in the Legal Industry

Understanding the Technology Behind Bitcoin and How It Applies to Smart Contracts

The database technology used to store Bitcoin transactions is taking the legal industry by storm. Blockchain technology is secure, fast, and efficient. It has a number of different uses, from automating workflows and completing payments to using event triggers once certain conditions are met.

In addition to eliminating certain human errors and cutting down on massive amounts of paperwork, Blockchain technology has the ability to reduce fraud. It is extremely difficult to hack - music to most attorney's ears.

What is Blockchain Technology?

In order to understand how blockchain technology is being utilized in law firms across the world, it is imperative to understand what blockchain is and how it is different from other databases.

As explained by Investopedia, Blockchain is a record-keeping technology that differs from other databases in the way that it stores data. In traditional databases, information is stored in tables. Whereas with blockchain, data is stored in blocks and then chained together as those blocks reach capacity. Blocks, once chained, are challenging, if not impossible, to alter.

Primarily used as a ledger of transactions such as to store cryptocurrency transaction history (bitcoin), they are becoming more people in other areas such as smart contracts. Decentralized blockchains are immutable, meaning that once data is entered, it is irreversible, creating a permanent record of the transaction.

Why Utilize Blockchain Technology?

Blockchain gained popularity as the record-keeping technology behind Bitcoin. Transactions stored in blockchain databases cannot be altered. As noted by Investopedia, a blockchain database “inherently makes an irreversible timeline of data when implemented in a decentralized nature.” Blocks are given “an exact timestamp” when added to a chain making it nearly impossible to tamper with or change.

Benefits of using Blockchain technology include:

·      It is a fast, secure way to transfer data and execute agreements;

·      It is difficult if not impossible to alter;

·      It can be used in several ways, including the automation of workflow through event triggers;

·      It provides a transparent transaction history;

·      Reduces human error; and

·      It cuts back on tedious tasks and endless paperwork for law firms.

What is a Smart Contract?

Forbes recently published a detailed article on Blockchain based Smart Contracts explaining that smart contracts, contrary to their namesake, are neither "technically smart" nor contracts in the purest sense. Smart contracts represent "programmable and executable code that is embedded, or a part of, an underlying blockchain."

Ultimately with blockchains, coding is used to tell the program to complete an action once a specific condition is met. Smart contracts are being used to automate several office functions, including automating payments and processes, reviewing documents for discrepancies, releasing funds, and executing agreements.

Ready for More?

If you are ready to learn more about Blockchain technology and how it is being used in law firms worldwide, contact Amicus Capital Group, LLC at (877) 926-4287. Amicus Capital Group has been Transforming the Business of Law? for over 25 years. Call our office to discuss how we can help you grow your firm and discover how technology can change the way you do business.

This blog post does not contain legal or financial advice. Author and publisher disclaim any and all warranties, liabilities, losses, costs, claims, demands, suits, or actions of any type or nature whatsoever, arising from or any way related to this blog, the use of this blog, and/or any claim that a particular technique or device described in this blog.