Chaining Intellectual Property Rights To Blockchain
When it comes to smart contracts, it is only a matter of time until regulations are enacted to address issues such as smart rights enforceability, data security and privacy problems, and dependability of rules and definitions that might hinder their wide-scale legal implementation.
Understanding the Blockchain Technology Better
In recent years, blockchain technology has attracted a lot of attention from both academics as well as business. It allows transactions to be completed without the need for a trusted intermediary (third party). Business operations may indeed be done quickly and inexpensively as a result of this new technological development. Since it is almost difficult to tamper with any transactions kept in blockchains, and all historical transactions are auditable and traceable, the immutability of blockchains ensures distributed trust.
Smart contracts were initially proposed by Nick Szabo in the 1990s.[¹] If all pre-established circumstances are satisfied, smart contracts will automatically execute contract provisions expressed in computer programmes. Cryptocurrencies like Bitcoin and Ethereum use distributed ledgers to keep track of transactions and preserve them for future reference. Contracts that are performed by a third-party, on the other hand, take longer and cost more to execute. A “peer-to-peer market” will become much more feasible with the combination of blockchain technology and smart contracts.
On the blockchain, smart contracts ensure the accurate execution of contracts. As a public ledger, blockchains cannot be manipulated. A blockchain is a network of blocks that is constantly expanding. Whenever a new block is created, all nodes in the network participate in verifying the block, which is then sent to the blockchain for confirmation. Upon validation, the block is added to the blockchain. Consensus methods and algorithms are designed to assess the trustworthiness of a block. Which node stores the next block and how it is validated by other nodes are determined by those algorithms. Proof of Work (PoW), Proof of Stake (PoS) and Practical Byzantine-Fault Tolerance (PBFT)[³] , are representative consensus algorithms. It is generally done by people who are the first to solve the blockchain puzzle. such people are called miners. This means that each miner has a copy of the blockchain. To establish consensus, PBFT takes several rounds of voting. As a result, transactions can be completed without the participation of other parties, such as banks.
This whole technology greatly helped in saving the transaction costs as well as in protecting the users’ privacy as they can simply be a part of the blockchain through their virtual addresses. Blockchain systems have the potential for multiple nodes to gain consensus simultaneously, resulting in the split (bisected) branches. For example, a side chain that is too short might be desolated. Since the longer chain is more resistant to malicious attacks than the shorter chain in dispersed systems, this technique is more efficient. Anonymity, persistence, decentralization, and immutability are the main features of blockchain technology.[⁴]
As a major development in blockchain technology, smart contracts may be viewed as a major step forward.[⁵] “Smart contracts” were first suggested in the early 1990s as a type of computerised transaction protocol that implements a contract’s provisions. Smart contract terms can be implemented automatically when a specific criterion is met. Smart contracts are enabled by blockchains and then turned into computer programmes that can be run. It has also been possible to retain the logical links between contractual provisions in the form of logical flows in programmes. An unchangeable blockchain transaction records the execution of each contract. A suitable access restriction and contract enforcement is ensured by smart contracts. Each function in the contract can have its own set of access permissions, which developers can set. When any condition in a smart contract is met, the triggering phrase will automatically and predictably perform the appropriate function.
In total, there are four phases in the life cycle of smart contracts which are as possible:
- Creation: The first round of negotiations is conducted by several parties to determine commitments, benefits and limitations on contracts. Deliberations and negotiations might continue for several rounds before an agreement can be reached. Initiation of a contract is then facilitated by lawyers or counsellors. An expert in computer languages, including declarative and logic-based languages, converts the natural language agreement into a smart contract.[⁶]
- Deployment: The smart contracts that have been verified can then be deployed on blockchain platforms. Due to the immutability of blockchains, contracts placed on them cannot be changed. To make any changes, one must sign or create a new contract. Blockchains allow all parties to access contracts once they’ve been deployed, and all parties may access the contracts using blockchains. By freezing the associated digital wallets, digital assets of both parties to the smart contract are also frozen. As a result, it is possible to identify the parties based on their digital wallets. [⁷]
- Execution: Contractual terms get reviewed and assessed after the deployment of smart contracts. Contractual processes are then automatically implemented as soon as the contracting criteria are met. A smart contract is made up of a series of declarative assertions linked by logical connections; it is composed of a collection of declarative assertions with logical relationships. As soon as a condition is met, the relevant statement gets performed immediately.[⁸]. Following that, the committed transactions and modified values are recorded on the blockchains.
- Completion: As soon as a smart contract is performed, all parties involved are updated with their new statuses. As a result, the transactions that occur during the course of smart contracts, and the updated states, get recorded in blockchains. As a result of this, the digital assets get transferred from one entity to another. As a result, the digital assets of the parties involved get unlocked and may be accessed. The full life cycle of the smart contract concludes at this stage.
There are a number of transactions that get completed throughout the execution of the smart contract and then finally gets recorded in the blockchain.
This technology, which generates a time-stamped and immutable chain of information, is already finding uses in brand protection and security, marketing, consumer interaction and other fields. On a daily basis, it seems that new use cases are emerging. Fintech is not the only area in which the technology has gained popularity. In many IP-intensive industries, such as pharmaceuticals, automotives, and luxury, this technology is already being used to follow the flow of goods in a supply chain, through which the traceability of items becomes prominent and circulation of counterfeit goods, which is a real problem, is more easily detectable.
Many diverse businesses are attracted to blockchain because of its potential benefits. Various sorts of data may be uploaded to a blockchain, from bitcoin to transactional data and contractual data to file systems and design papers.
Why Smart Contracts?
While talking about smart contracts and their applicability, it become crucial to analyse why shall a country opt for a system so very advanced and technologically mature for carrying out its simple time-to-time requirements, which brings us to the following:
- Risk reduction: Smart contracts cannot be amended arbitrarily after they are published due to the immutability of blockchains. Furthermore, all transactions that are recorded and copied throughout the distributed blockchain system may be tracked and audited, according to the company. As a consequence, malicious activities, such as financial scams, can be significantly reduced or perhaps eliminated altogether.
- Cost efficiency: Distributed consensus methods in blockchains ensure the trustworthiness of the whole system without the need for a central broker or mediator. The decentralised nature of blockchains allows smart contracts to be automatically invoked. Administrative and service costs owing to the third-party intervention might be considerably reduced as a result of this.
- Business efficiency: The efficiency of corporate processes may be greatly improved by eliminating the need for a middleman. Once the preset condition is satisfied, the financial settlement will be performed automatically in a peer-to-peer method. Consequently, the turnaround time can be decreased by a great deal.
From the Internet of Things to financial services, smart contracts are revolutionising a wide range of industries and application fields. There are a number of problems that need to be overcome before smart contracts can truly transform the way business is done. While blockchains can provide some anonymity to the contracting parties, they may not provide privacy throughout their whole execution, as all transactions are publicly visible.[⁹] However, the vulnerability of computer programmes to faults and failures, makes it difficult to verify the accuracy of smart contracts.
In order to utilise smart contracts, contract generation is a crucial step. To create their own contracts, users must write their own code and publish it to multiple blockchain platforms. Smart contracts on blockchains likewise cannot be changed after deployment since blockchains are immutable. Consequently, developers must carefully handle the difficulties listed below:
The Stage of Creation
- Readability concerns: The majority of smart contracts are developed in languages like Java, Kotlin, Solidity, and Go. It is then compiled and run. As a result of this, programmes have distinct types of code in different time frames. The question of how to make programmes understandable in each form remains a major issue for the software industry.
- Functionality issues: Existing smart contract platforms have a variety of functional problems such as-
- Re-entry indicates that a function that has been halted can be securely re-entered. As described, cyber criminals may exploit this vulnerability to steal electronic money.[¹⁰]
- Lotteries and betting pools, for example, may need randomization of produced blocks. A block timestamp can be used to generate pseudo-random numbers. Although the pseudo-random generator may be used by malevolent miners for fabricating blocks. So, attackers can manipulate the distribution of possible outcomes.[¹¹]
- Due to the under-optimization of smart contracts, smart contracts might overcharge their users. Dead code, costly operations in loops consisting of repetitive calculations, are all characteristics of these overcharged patterns, which are also known as dead code patterns.[¹²]
- Smart contracts will be implemented on blockchain platforms, when they have been developed. In order to avoid any flaws, smart contracts must be thoroughly examined. The contract’s interaction patterns must be understood by the smart contract’s authors in order to prevent any possible losses due to malevolent conduct.
Evaluating smart contracts before official deployment is therefore of paramount importance. Because smart contracts are complicated to model, it is difficult to verify their validity.
- Even if smart contracts deployed are immutable, the same cannot be said about their control flow. A smart contract can interact with other contracts. A smart contract’s control flow must be properly established during the contract’s development process. Interactions between smart contracts can lead to a rise in the number of contracts that are related throughout. Most present approaches focus on detecting possible problems with dynamic control flow in programmes, even if the execution environment may not always be reliable.
The execution step of smart contracts is essential, as it defines their ultimate state. During the execution of smart contracts, a number of concerns need to be resolved which are as follows:
- Without real-time information, smart contracts cannot function. This means that a smart contract is meant to function in an isolated environment. It is an agent that detects and validates real-world events and passes this information to the smart contract in a smart contract. As a result, determining which oracles are trustworthy becomes a problem.
- Invoking functions in a smart contract requires users to transmit transactions, which miners bundle into blocks. This is due to the fact that the sequence of transactions on the blockchain is not predetermined. Inconsistency in order-dependent transactions can be caused by this type of uncertainty.
- Miners execute smart contracts in serial. This means that until his current contract is finished, a miner will not enter into a new contract with any other company. Execution serialisation reduces the system’s performance in a significant way. Due to the fact that several smart contracts exchange data, it is difficult to execute them simultaneously.[¹³] Examining the contract data without a specified interface is also crucial for increasing the smart contract execution performance, as it eliminates the need to redeploy a new contract and allows for more efficient execution.
The Completion Stage
When smart contracts are executed, the changes to system states are packaged as a transaction and propagated to each node in the network. Concerns are raised by the emergence of smart contracts.
- Privacy-preserving measures are lacking in most smart contracts and blockchain systems, especially when it comes to transaction privacy. They are dispersed over the whole blockchain network. As a result, all transactions on the networks are accessible to everyone. Despite the fact that certain blockchain systems use pseudonymous public keys to increase anonymity, the majority of transaction data is still publicly accessible.
- Blockchains and smart contracts are subject to harmful assaults by scammers since they are a relatively new technology. Since it allows them to terminate their investments at an early stage and avoid the unneeded loss, the identification of scams is of considerable relevance for contract users, in particular.
Intellectual Property Rights and Contracting
Intellectual Property Rights (IPR) is a field of law that deals with extending legal protection for creative innovations, inventions, designs, music and artistic works. The goal of these regulations is to encourage individuals to abide by regulations that assist and benefit society by assuring that anybody producing an art, design, concept, or technology can do so without any fear of repercussions, and thereby this field involves the drafting and execution of several contracts and agreements which are discussed in detail hereunder:
- IP Assignment Agreements: Agreement to assign IPR and their transfers, in whole or in part, from the original author to some other individual or persons or organisation in exchange for compensation. In this type of arrangement, the original owner transfers to another person or legal body his/her right to develop or sell the intellectual property in question. It is possible to assign patents, trademarks and copyright under the Patents Act of 1970, Trademark Act of 1999 or the Indian Copyright Act of 1957. Hence the assignment can be that of a copyright, a patent, a trademark, a Geographical Indication (GI), of design(s), or even confidential know-how.
- Non-Disclosure Agreements: When discussing commercial partnerships, one may need to engage into non-disclosure agreements (NDAs) in order to safeguard information that falls under the intellectual property branch, but they are also vital to the running of the business, such as trade secrets, business plans, technologies, business structures, and codes. To safeguard any future exposure of sensitive information, even if the bigger transaction is not successful, NDAs are typically entered into by parties anticipating a deeper commercial partnership. There are still certain non-disclosure duties under the NDA. Other contracts, such as employment or consulting agreements, also include clauses that are similar to those included in NDAs.
- Technology Transfer Agreements: Under the terms of this agreement, an owner of an IP permits a third party to utilise the technology produced by that owner for a fee or other compensation that has been mutually agreed upon in advance between the parties. In this approach, technical knowledge gets transferred. For the manufacture and promotion of a product, small firms might get technological licences from larger corporations. There have been a number of joint ventures in the car business in India that have featured similar partnerships, where the Indian company has access to the foreign partner’s technology knowledge and combines it with local distribution skills in India’s marketplace.
- Franchising Agreements: If someone owns a trademark, one can licence or franchise it to other companies or entities. As long as the business and its goods and services are maintained to the same quality, another entity can benefit from the goodwill gained by the use of such a mark.
- Copyright Licensing Agreements: Copyright licences allow copyright owners to provide permission to others to economically exploit the copyright by making reprints or reproductions of the original works. In some cases, a licence may only be granted for the development of just a translated version, limited to a period of only two years, and be limited in terms of territory or region. A royalty or other amount of compensation is given to the owner in return for such rights for a limited period of time; the copyright is not permanently transferred.
- Inventions Assignment Agreements: An employee’s creations created during his work are protected by this contract, which grants the employer ownership rights over those creations. All employee creations are considered to be the product of the employer’s business, unless otherwise stated in the employment contract. The sensitive information of the firm is likewise protected by these agreements and provisions. In an employer-employee relationship, intellectual property rights are automatically transferred to the employer under the Copyright Act, but not in the case of patents and trademarks. An inventions assignment agreement must be entered into separately for this purpose.
- E-book Publishing Agreements: When an e-book is published by an author or owner of the written manuscript, the rights to the e-book are usually acquired by that publisher. The e-book publisher is granted the right to publish the written text as an e-book under this agreement. These authors are compensated by offering a royalty on the sale of their e-books. They may also be compensated in some other way. According to the publisher, it may be integrated with a print publishing deal, or it may be a distinct arrangement.
- Music License Agreements: In exchange for a payment, a music licensing agreement gives the third party the right to publish or distribute the music in multiple forms.
- Research and Development Agreements: Companies enter into such agreements with any individual or organisation for the purpose of doing research and development on goods, ideas, or services in order to develop them. Research in relation with manufacturing hardware goods, or academics who undertake research at universities or scientists working at universities, are the most common types of research that are entered into. There are terms in the contract that enable the firm or university to retain ownership of any intellectual property produced by them.
- Work For Hire Agreements: Usually companies hire an artist to perform a specific piece of work or develop a work that it expects to have copyright over, which is why these agreements are entered into. When assigning intellectual property rights to a work, it is necessary to identify the work.
Important Elements of IP Contracts
A wide variety of rights can be transferred or leased to another person or corporation under a contract for the protection of IPR. This means that the terms in such contracts need to have the greatest amount of prudence.
The following are the important elements of every IP contract:
- Confidentiality: To shield the intellectual property rights of the IP owner, a confidentiality clause is essential. There has been a huge increase in technical know-how, therefore extra security measures ought to be implemented to safeguard the creation. As a result, some forms of intellectual property (trademarks, patents, copyrights) are publicised and openly available. In order to achieve commercial outcomes, they are typically combined with other confidential know-how – which must be kept confidential.
- Accessing Confidential Information: Employees, consultants, or representatives of the parties must meet certain requirements in order to gain access to know-how and sensitive information in a realistic way. To ensure that private information is kept safe, it is feasible to specify security requirements.
- Ownership and Duration of IP: During the course of the relationship, the contract must be crystal clear as to who owns the intellectual property. Even if the partnership is dissolved, the ownership of the intellectual property should be defined. Once the invention is complete, the employee quits his/her job and wants to take the creation with him, on the grounds that he made it. Arrangements regarding these circumstances must be specified in every contract, notwithstanding the fact that it was formed during his/her employment.
- Documentation of IP: Contracts that are more advanced may include mechanisms for recording and documenting intellectual property produced throughout a partnership in a way that allows it to be identified. So, the intellectual property may be valued more accurately in the future, and the parties have more chances to monetize the intellectual property through a whole or partial assignment, depending on their objectives.
- Termination of IP: Lastly, the contracts must specify the consequences of a breach of the contract. A watertight contract in regard to penalty provisions is thus a requirement. There should be no room for doubt.
Blockchain in the World of IPR
If the nature of the IP warrants it, smart contracts and blockchain technology can be used to handle a large number of routine transactions in the IP sector. IPRs can benefit from the use of blockchain technology by keeping IP registers and assigning rights to be governed from the blockchain, since they can easily and quickly be put into by the user, reducing the time and effort required.
Especially in the case of copyright, blockchain and smart contracts may be used as a repository of information regarding IP. According to the Indian Laws, a work’s copyright is formed at the time of its creation, not when it is registered with a government agency. Authorities are faced with a daunting challenge of determining when the work was created, and there is always some doubt regarding their existence at a given point in time. An electronic ledger would function as a permanent record of the property and allow the parties involved to know exactly who created the work, its nature, and when it was created. This would resolve many conflicts at an early stage. Everyone throughout the supply chain, from the creators to all the licensees, would be able to verify the authenticity of the product, protecting IP rights.
Weighing in on the fact that smart contracts are capable of dealing with standardized terms and conditions, they, together with blockchain technology, may become the appropriate instruments to manage licensing, permission of access and/or any other agreement with reasonably defined parameters. An important characteristic of smart contracts is that they are self-executing in nature. As soon as the required condition is met, the contract’s obligations are immediately performed. All royalties must be paid in line with the licensing agreement and based on whatever calculations must be included into the contract code for this feature to work. It is possible to utilise smart contracts to automate the flow of cash when a specific point has been reached in a project or when a certain goal has been achieved.
A large-scale legal application of blockchain might face a number of obstacles. In spite of this, blockchain and similar distributed ledger technologies (DLTs) provide clear potential for IP protection and registration, as well as evidence, both at the registry stage as well as in court, especially in businesses that rely heavily on IP protection.
Employing blockchain technology to handle IP rights has enormous potential. Instead of a typical database, recording IP rights in a distributed ledger may effectively transform them into “smart IP rights”. IPR offices may build “smart IP registries” by employing distributed ledger technology. This would produce an immutable record of events that occur throughout the life of a registered IP right, and would be managed by IP offices as accountable authorities. Also, it would provide a viable solution for gathering, preserving and delivering such evidence.
Numerous benefits would result from the capacity to trace the whole life cycle of a right, including a simpler audit process for IP rights. In mergers and acquisitions, for example, it might help reduce the due diligence required for IP deals. An opt-in approach might also satisfy the worries of IP owners about confidentiality.
The information stored in a ledger is useful for brand owners because it gives them a reference for their rights and for the amount to which those rights are being exploited in the marketplace. The amount of usage of a mark or data pertaining to its first use is essential, and this technology might be very useful in disputes or other procedures concerning the recognition of well-known marks, or in defending against a non-use-revocation action.
Using a blockchain-based trademark registry, for example, would allow the relevant IP office to be alerted almost instantaneously of the use of a trademark in trade or commerce. Thus, a trademark would be able to be used in commerce with a verifiable time stamp, which would be significant for the purposes of establishing first use, genuine usage, acquired distinctiveness, secondary meaning and goodwill of a brand. DLTs may also be used to publish technologies as legal precedence in order to prevent others from using them.
“Smart contract performance”[¹⁶] might be of relevance for digital rights management and other IP operations, since certain blockchain systems can retain, implement and audit contractual codes. As an example, “smart information”[¹⁷] regarding IP rights might be stored in digital form in protected material, and smart contracts could also be used to negotiate and execute IP agreements such as licensing and to transmit payments to IP owners in real time. Kodak’s recent announcement of a blockchain-based picture rights management system and its own cryptocurrency is evidence that these ideas are rapidly becoming popular.[¹⁸]
Blockchain, with its accountability, security, transparency, and immutability, can have a substantial influence on the field of IP as has been established previously. Due to the fact that blockchain technology is still in its infancy, we might possibly see many more advanced applications of blockchain technology for IP in the future, some of which are listed hereunder:
- When a predefined condition is satisfied in a transaction, a smart contract is immediately performed. Transactions in the field of IP such as acquiring a patent entail a number of procedures such as verifying that it was assigned, verifying its validity, negotiating, paying, and lastly notifying the relevant patent offices about the same. Using smart contracts, all of these procedures can be streamlined.
A smart contract is a digitalized and secure transaction mechanism that establishes trust between persons without compromising security. Especially for contents such as songs, photos, etc., Smart Contracts are proving to be highly beneficial in terms of automated commencement of legally binding contracts.
- This technology may be utilised as a trustworthy platform for validating the legitimacy of ownership of intellectual property works. To safeguard one’s intellectual property, an inventor might go to the patent office and file for a patent. In the absence of any formal evidence, the onus of establishing ownership of a creative work falls on the artist in the case of copyright. Exercise of copyright has grown increasingly difficult in the digital age, when anybody may download anything such as a music, an image, a painting etc., and use it at their own discretion without any restriction.
There is a requirement in the system to provide evidence of ownership towards intellectual assets and their security, given the growing digitalization and industry 4.0 technologies. By offering security and evidence of ownership towards intellectual assets, blockchain is one such technology that might fulfil the system’s requirement for both. In order to secure digital assets, many firms have already started offering blockchain-based timestamping and validation systems.[¹⁹]
- Nodes (computers) in the DLT, record, share and synchronise transactions in their own independent electronic ledgers. Inventors can submit their digital works in the form of ledgers with brief descriptions, therefore creating a marketplace for IP. As a result, innovators and patent holders may utilise blockchain to discover potential licensees for relevant know-how.
How information can be exchanged has been massively transformed by DLTs. As a result, this new manner of exchanging knowledge will have a broader impact in every sector. Given the blockchain technology, we may envision a possible application in IPR related data exchange.
- Unification of the patent system between countries would also be solved by blockchain, thanks to the DLT and its ability to store large amounts of data. This may greatly increase the efficacy of IP management, speed up the invention process in organisations, and facilitate the sharing of information inside them.
Blockchain is slowly being accepted as “admissible evidence” by a growing number of governments and patent offices.[²⁰] For example, blockchain receipts accompanied by a written statement of an individual attesting to the specifics of the transaction are accepted in Vermont, according to the law approved there in 2016, and as per the Vermont Rules of Evidence (under 12 V.S.A. §1913)[²¹].
In India, Section 65B (Acceptability of electronic records) of the Indian Evidence Act, 1872, may be of crucial relevance for the enforcement and jurisdiction with regard to transactions through a blockchain network in India.
This is because blockchain technology has the potential to become a worldwide tool for preserving digital assets because of its immutability, security, and transparency. Different laws and governments are slowly recognising and using blockchain as a means of providing proof of ownership. Most countries may eventually recognise blockchain as a technology that underlies their policies, which may lead to a unification of the whole intellectual property framework.
- A system is needed to link different versions of digital assets over their lifespan. Examples include copyrights, publications, patents, etc. With the use of blockchain’s ledger technology, one may link all copies of a digital asset and possibly utilise it for end-to-end lifetime management of the concerned asset.
This is a technique to prohibit someone from patenting an idea by releasing it publicly and establishing prior art for it. This is because each file has a unique fingerprint, duplications are eliminated, the platform enables versioning, and each network node may select which material it is hosting. The database is also indexed and searchable, and each node can pick which content it is hosting.
Many possibilities for collaboration and shaping of ideas are opened up by using a blockchain-based system for integrating numerous digital assets and being able to promptly regulate them.
The Way Ahead
The simple answer to this whole situation is “oracle networks”.
An autonomous collection of oracles that deliver data to a blockchain constitutes a decentralised oracle. As a part of the decentralised oracle network, every node autonomously obtains data from an off-chain source and delivers it onto the blockchain. A deterministic value of validity is then determined for each data piece. It is the decentralised oracle that resolves the oracle issue.
It is possible to add randomization, off-chain data, and additional processing resources to smart contracts by utilising oracle networks. Data is written in the blockchain by validators in the oracle networks. A single validator cannot manage the oracle feed since it aggregates inputs from numerous validators. To further improve robustness, validators can potentially utilise alternative techniques to generate the data they publish.
Using an oracle network doesn’t involve abandoning the benefits of decentralisation provided by blockchain. A hybrid smart contract is one that incorporates use of such an oracle network. They can begin to replace traditional contracts as soon as they gain access to off-chain data through an oracle network. A blockchain may be used to create any contract that pays out depending on real-world occurrences, provided that an oracle network is available to supply that off-chain data.
They can also incorporate processes with a higher computational complexity than their non-hybrid counterparts. Multiple on-chain gaming and gambling matches are supported by random number generators in oracle networks. These networks can also support randomised algorithms and processes that are more efficient than non-random equivalents.
Why use the Hybrid Smart Contracts instead of the Traditional Ones?
Due to the fact that blockchain enforces smart contracts, there is no need for a separate judicial system to enforce them. It is cheaper to sign contracts in the absence of an expensive judicial system. As a result, more peer-to-peer transactions may be regulated by contracts instead of trust.
Contracts between companies with locations across borders may be complicated. Navigating several courts costs money, and courts in one country generally have limited authority over corporations in other countries. It is a flaw that hybrid smart contracts are not reliant on any of these factors.
The cost of enforcing traditional contracts through the courts is high, and the outcome is unclear. Every now and again, lawyers will find some esoteric loophole that renders the contract null and invalid. Contracting parties depend on their government’s continuing goodwill to ensure contract enforcement, even when the contract is watertight.
They are quicker, more efficient and less prone to legal loopholes. They are less costly and can go across borders just as readily as they do within them.
Gazing beyond the Crystal Ball: Here’s What the Future Holds
Participants in the industry and blockchain developers will have to work together more as blockchain technology becomes popular, in order to create standards and the interoperability standards. Various groups are discussing global standards for self-executing contracts in the nature of smart contracts.
When it comes to smart contracts, it is only a matter of time until regulations are enacted to address issues such as smart rights enforceability, data security and privacy problems, and dependability of rules and definitions that might hinder their wide-scale legal implementation.
 Szabo, N. The Idea of Smart Contracts. Nick Szabo’s Papers and Concise Tutorials. (1997).
 Nakamoto, S. Bitcoin: A Peer-to-Peer Electronic Cash System. (2008).
 Castro, M. Liskov, B. Practical Byzantine Fault Tolerance. (1999).
King, S. Nadal, S. Ppcoin: Peer-to-Peer Crypto-Currency with Proof-of-Stake. (2012).
 Zheng, Z. Xie, S. Dai, H. Chen, X. Wang, H. Blockchain Challenges and Opportunities: A Survey.
International Journal of Web and Grid Services. (2018).
Tapscott, D. Tapscott, A. Blockchain Revolution: How the Technology behind Bitcoin is Changing Money, Business, and the World. (2016).
Li, M. Weng, J. Yang, A. Lu, W. Zhang, Y. Hou, L. Liu, J. Xiang, Y. Deng, R. CrowdBC: A Blockchain-based Decentralized Framework for Crowdsourcing. (2018).
 Ream, J. Chu, Y. Schatsky, D. Upgrading Blockchains: Smart Contract use Cases in Industry. Deloitte Press. (2016).
 Idelberger, F. Governatori, G. Riveret, R. Sartor, G. Evaluation of Logic-Based Smart Contracts for Blockchain Systems. (2016).
 Sillaber, C. Waltl, B. Life Cycle of Smart Contracts in Blockchain Ecosystems. (2017).
 Koulu, R. Blockchains and Online Dispute Resolution: Smart Contracts as an Alternative to Enforcement. (2016).
 Dai, H.; Zheng, Z.; Zhang, Y. Blockchain for Internet of Things: A Survey. (2019)
Moin, S.; Karim, A.; Safdar, Z.; Safdar, K.; Ahmed, E.; Imran, M. Securing Iots in Distributed Blockchain: Analysis, Requirements and Open Issues. (2019)
 Li, X.; Jiang, P.; Chen, T.; Luo, X,; Wen, Q. A Survey on the Security of Blockchain Systems. (2017)
 Joseph Bonneau, Jeremy Clark, and Steven Goldfeder. On Bitcoin as a Public Randomness Source. (2015).
 Chen, T.; Li, X.; Luo, X,; Zhang, X. Under-Optimized Smart Contracts devour your Money. (2017)
 Supra note 4
 Clark, B. Blockchain and IP Law: A Match made in Crypto Heaven? (2018)
 Kuhn, D. Kodak Launches a Blockchain-Enabled Document Management System. (2019)
 Zheng, Z.; Xie, S.; Dai, H.; Chen, X.; Wang, H. An Overview of Blockchain Technology: Architecture, Consensus, and Future Trends. (2017)
 The United Nations Centre for Trade Facilitation and Electronic Business (UN/CEFACT). White Paper Blockchain in Trade Facilitation. (2019)
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house
Around The World