Combining Blockchain and AI to Make Smart Contracts Smarter

Blockchain, the technology behind smart contracts, and AI are quickly converging. Futurists claim this will produce an entirely new paradigm that forever changes how companies write contracts and conduct business. What changes, though, can we expect?

The current state of smart contracts

Smart contracts remove trade or service agreements from the realm of static documents that require constant human management. They transform them into automation tools that drive complex transactions between multiple parties. Residing on the blockchain, they actively monitor conditions stated in the contract and trigger actions that the contract requires when those conditions are met.

One of the first smart contract demonstrations involved the purchase and transport of bales of cotton. A GPS device embedded in the shipment alerted the smart contract when the shipment reached its destination. This instantly triggered payment to the seller. No invoices or payments required human intervention.

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The value of AI in smart contracts for law

That analysis is where AI comes in. It powers the analysis necessary both to create and execute such complex smart contracts and make them more effective. The more data AI has, the better it can predict outcomes.

Thus, in contract negotiation, AI can analyze past negotiations to see how parties negotiated in the past and suggest the types of language and clauses most likely to secure agreement. AI can also analyze past contracts to identify variables not previously considered, and incorporate them into future contracts.

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