When will Blockchain proofs become legal evidence?

Legal change happens slowly and deliberately. This is as it should be: the law should not iterate rapidly at the whim of public opinion, but rather act as a predictable and stable foundation for our society.

Nevertheless, the law needs to respond to technological change and sometimes must respond quickly. For instance, legal recognition of DNA as definitive proof of identity mostly occurred within a single decade. In the face of disruptive technological change, lawmaking should be “proactive, dynamic and responsive.”

Many in the Blockchain community believe the immutability of data placed in a Blockchain will be as revolutionary for digital evidence as DNA. A record placed on a public Blockchain such as Bitcoin or Ethereum is for all practical purposes immutable, and the time stamp associated with that record constitutes absolute proof that the transaction occurred at a specific time. If that record is a hash of a complex legal document, it represents incontrovertible proof of the document’s timestamp. By combining that hash with a digital signature, we can additionally prove the identity of the document’s owner.

Although computer scientists and cryptographers acknowledge the mathematical certainty of these proofs, recognition in law is still forthcoming. Widespread adoption of public Blockchain records as digital proofs are unlikely to occur ahead of legal recognition of these proofs. So how and when might this legal recognition occur?

There are two ways that legal recognition could become formalized:

• Governments could enact legislation recognizing the special status of Blockchain records.
• Landmark court cases that use Blockchain records to settle important legal issues could create a precedent.

There are already some examples of both legislation and precedents. A Chinese court recently used Blockchain evidence as the basis for a criminal conviction, and another Chinese court ruled that Blockchain records can be used to settle intellectual property disputes. It is widely expected, given China’s recent official embrace of Blockchain, that these precedents will become codified in PRC legislation.

Outside of China, legislation recognizing the authenticity of Blockchain proofs exists but varies across regions. For instance, Vermont and other US states have legislation recognizing the authenticity of Blockchain data, but there is no corresponding federal US law.

I believe that governments should be encouraged to pass broadly applicable legislation to provide a legal framework for the use of Blockchain in law. Legislation recognizing digital signatures- such as the 1999 EU Directive for Electronic Signatures and the US 2000 Electronic Signatures in Global and National Commerce Act provides examples of such enabling legislation. Similar Blockchain legislation is critical both to allow Blockchain technology to improve efficiency, transparency, and fairness as well as to promote the development of new industries based on those technologies.

We are at a tipping point for the legal adoption of Blockchain proofs. The tipping point has already passed in China and will occur within the next few years in the West. In the future, documents and information anchored to a public Blockchain will simply be of a higher evidentiary standard than those which are not.

Given the impending adoption of Blockchain as an evidentiary standard, there’s a compelling business case for the securing and registering of legally significant documents and data on the Blockchain immediately. Within a few years, companies that have embraced Blockchain proofs of historical data will be in a stronger legal position, and therefore at a competitive advantage. Governments and regulatory bodies should proactively embrace this technology wave if they want their nation’s industries to remain competitive.

ProvenDB uses public Blockchain technology to create the world’s first trustworthy Database service. ProvenDB combines the functionality, productivity, and performance of a familiar database service with the immutability and trust of public Blockchain technology.