What are the legal risks while using blockchain technology?
The adoption of blockchain technology is taking place at a faster pace. The problem is most of the lawyers are not up to date with the blockchain technology. Owing to this very reason, they are not able to understand the legal problems which can arise out of the blockchain technology. Moreover, when there is any legal problem as well since lawyers are not up to date about blockchain technology, they might not be able to advise their clients. It is important for the lawyers to at least understand the risk of using blockchain technology.
We would today share with you 3 such risks to which the lawyers need to advise their clients about.
Privacy of data:
Distributed ledger technology which is the basis of blockchain, decentralizes the data. Even though it is encrypted but it is not held at a single place. The company does not have complete control over the data. Due to this very reason, the data of the consumers might be diverted through a lot of different servers when it is being processed in the blockchain. Both the EU as well as the US have a very strict rules and regulations when it comes to data privacy. These may interfere with the working of the blockchain.
You need to understand that blockchain technology can be using the resources from all over the world. Therefore, there is no particular jurisdiction unlike with the companies on the server. This can give rise to other problems as well. When there is a problem happening in a particular server which is located halfway around the globe, it would be very difficult to decide the jurisdiction. Therefore, it is the time that lawyers look into the jurisdiction problem as well on behalf of their clients using blockchain.
With the help of blockchain technology, the work of an American-based company can be done in China due to the decentralized structure. Therefore, there can be regulatory problems as well. This is another issue which the lawyers need to look into. (Source: abovethelaw.com)
Thus, not only the technology needs to be developed but also the legal aspect needs to take into account that blockchain is entirely different technology. Lawyers need to update themselves in order to advise their clients when it comes to blockchain related problems. It is high time that lawyers find the answers to these questions before their clients actually ask them to.
Blockchain legal, privacy and security concerns
Gardere attorneys Edward H. Block, Eric Levy and Peter S. Vogel presented the webinar titled “Blockchain Legal Risks.”
Many people are familiar with the online currency “bitcoin,” but many do not understand that blockchain is the technology that permits the internet to have its own monetary system. In January 2017, the Food and Drug Administration signed a contract with IBM to utilize Watson (its artificial intelligence technology) to better protect electronic medical records using blockchain technologies. Since data may be stored on the cloud anywhere around the world, it is essential to understand the laws that apply to your own use of blockchain. This webinar will educate you on blockchain and offer some insights into what the future may bring to currency, contracts and cross-border transactions.
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