Smart Contracts Legal Agreements For The Blockchain

With the implementation of Ethereum in 2015, based on blockchains, the „Smart Contract“ is usually used specifically in the sense of a general calculation that takes place on a blockchain or a distributed Ledger. The U.S. National Institute of Standards and Technology describes an „intelligent contract“ as a „collection of codes and data (sometimes called functions and state) provided by cryptographic transactions on the blockchain network. [16] In this interpretation, used z.B by ethereum Foundation[6] or IBM[17], an intelligent contract is not necessarily related to the conventional concept of a contract, but can be any type of computer program. An intelligent contract can also be considered a safeguarded procedure, as its execution and codified effects such as the transfer of a certain value between the parties are strictly enforced and cannot be manipulated after a transaction containing certain details of the contract is stored in a blockchain or a distributed ledger. This is because the actual execution of contracts is controlled and monitored by the platform, not by any server-side program that connects to the platform. [18] [19] Smart contracts are now a prototype example of Amara`s Law, the concept of Stanford University computer scientist Roy Amara, that we tend to overestimate new technologies in the short term and underestimate them in the long term. Although it is necessary to develop intelligent contracts before being widely used for production in complex business relationships, they have the influence of revolutionizing the reward and incentive structure that characterizes contracts in the future. To this end, and in thinking about intelligent contracts, it is important not to just think about how existing concepts and structures can be transferred to this new technology. On the contrary, the real revolution of intelligent treaties will come from brand new paradigms that we had not yet imagined. In January 2020, Illinois passed the Blockchain Technology Act („BTA“), a law that addresses blockchain technology and intelligent contract enforcement.

Under BTA, „no legal or enforceable effect can be denied to an intelligent contract, registration or signature simply because a blockchain has been used to create, store or verify.“ 46 In addition, the „filing of a blockchain containing the data set electronically,“ where a law requires a signature, „the filing of a blockchain electronically containing the protocol“ meets such a law, and if a law requires a signature, „the filing of a blockchain electronically containing a person`s signature or intention to present the signature verifies that that law is being complied with.“ 47 „Blockchain“ is defined as „an electronic dataset created by the use of a multi-party decentralized method to verify and store a digital record of transactions.