What does this mean in terms of lawyers?
♫ I can still hear you saying
You would never break the chain...♫
– Music, Lyrics and recorded by: Fleetwood Mac
There has been much talk about technology and artificial intelligence agents replacing lawyers, in terms of being better and faster at what we do. However, one topic that hasn’t been mentioned a great deal is technology replacing the need for lawyers. Take real property transfers for example.
Imagine, if you will, a system where you sign onto a computer, enter some information and voilà, the title to a property is transferred along with a payment in Bitcoin, the cyber-currency. The transfer doesn’t go to a government-run database, rather the transfer takes place using the Internet distributed database created using the Blockchain, which is the underlying technology used in Bitcoin. No lawyers are needed since the Blockchain technology verifies the title transfer and “locks” the transfer into the Blockchain database where it can be verified by any user.
Sound far-fetched? Well the Government of Honduras has announced that it is doing just this. And it is not alone.
According to SiliconAngle.com, a “Texas company by the name of Epigraph which specializes in extending the power of Blockchain technology to build transparent, tamper-proof, next generation title registration solutions for domestic and international organizations” will be creating such a land transfer system for Honduras.
Now Honduras has a dubious record when it comes to fraud. They are turning to Blockchain technology because, according to Peter Kirby, the President of Blockchain company, Factom, “by building Blockchain title records with appropriate safeguards, Honduras will have a system that would allow for more secure mortgages, contracts, and mineral rights, without the problems experienced in the immediate past.”
If this project succeeds, it will be a precedent not only for real estate registrations but potentially any form of property where transparency, security and verification of ownership is vital. Using Blockchain technology, transaction costs are low and parties can do transfers themselves. The Blockchain, it is believed, “cannot be hacked.”
This isn’t the only project based on the decentralized Blockchain technology that potentially changes the legal landscape. Blog.factom.org lists several projects such as: an anti-corruption tool in Kosovo to build a cryptographic record proving records have not been corrupted in the land municipal registry database; a music authentication system to verify intellectual property rights and an identity management system for banks.
The Isle of Mann has started formally registering companies on Blockchains of their own, according to newsbtc.com/2015/05/19/countries-adopt-blockchain-land/.
The bigger question is, if Bitcoins can be transferred without the need for banks and bankers, what does this era of digital property registration mean for lawyers and law firms? Does the security and verification ability of the Blockchain technology eliminate the current need for expensive government databases, title insurance and lawyers?
Governments and industry are going to great lengths to ensure that Blockchain technology is reliable and strong enough for property transfers. If indeed, no one can break the chain, does this echo in a diminished need for lawyers?
Hat tip to Euan Sinclair at Lawson Lundell for this column.
The views expressed herein are strictly those of David Bilinsky and do not reflect the opinions of the Law Society of British Columbia, CBABC, or their respective members.
David J. Bilinsky is the Practice Management Advisor for the Law Society of British Columbia.