Smart Contracts

Lawyers don’t like this, but more and more of their services are being digitized. It is not because digitization is better than advice given by highly educated and experienced professionals. It is because it is good enough for a given situation and less expensive.

I bumped into this the other day when a lawyer refused to negotiated a fee for drafting a legal document because he didn’t want to sacrifice his “reputation for quality”. Well, too bad for him. We just didn’t need to pay a huge fee for a relatively minor function.

Along comes the idea of “smart contracts“. What is that? Well check out the link.

Smart contracts hold the potential to empower people to build a fairer, more affordable and more efficient legal system and smart oracles are one of the simplest ways to realize that dream.

And what is a smart oracle?

Most proposals for smart contracts depend on independent entities to inform contracts about the state of the outside world. Bitcoin contracts rely on “oracles” to attest to facts from the outside world by introducing signatures into the network if and only if specific conditions are met. For instance, the smart contract for a will would need to know whether or not someone had died.

The point is that new network technologies are reducing the need for centralized control to ensure trust in transactional settings. Lawyers will need to get their hands around this idea.

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