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Jun 10, 2019

Blockchain, Bitcoin, and Law: A Distributed Disruption

Posted by in category: bitcoin

The future of the legal industry is being reshaped by a number of rapidly advancing technologies and the disruptive ideas they enable. Today’s lawyers are being advised to learn to code, develop an artificial intelligence (AI) application, and outsource discovery to machines. Of the many new technological drivers impacting law firms is the secure information exchange platform known as blockchain. Some see it as a the basis for the reinvention of economies while others simply see it as means of secure and incorruptible information exchange between counterparties. This cloud-based distributed ledger technology provides a source of irrefutable record of every transaction. In legal it is enabling fully automated self-executing smart contracts, and has the potential to help attorneys provide new services and create new value for clients and law firms. Blockchain is known as the structure underlying Bitcoin and other digital currencies, but its applications in the legal sector are still evolving. This article provides an overview of the technology, highlights example applications and case studies, and presents a possible timeline of future developments over the next decade or so.

Overview: Blockchain and Bitcoin

Blockchain and Bitcoin have gained notoriety lately as a potential solution to an outdated and burdensome system for managing financial transactions between counterparties. Today most financial transactions between counterparties are settled via financial intermediaries which adds time and cost to the settlement process. Blockchain offers a distributed ledger model whereby the parties settle directly with each other, the transactions are recorded, secure, and immutable, and the counterparty identities remain anonymous. The goal is to enable a simplified and trustworthy financial ecosystem- but these digital peer-to-peer networks, also challenge the authority of institutions (banks, regulators, and governments) and are thus creating disruption.

According to its advocates, the decentralized nature of blockchain and Bitcoin will cause much-needed disruption, with reverberations far beyond the financial realm. There is an element of social revolution in blockchain, thus it is often portrayed as a conduit for challenging the status quo. Though Bitcoin, a digital currency, is an explicitly financial innovation (i.e., for payments, transfer of funds) blockchain is far less specific. Blockchain serves a critical role in the administration of Bitcoin, and that of other digital currencies, but it can actually be used to complete other objectives and track the movement, transfer, and ownership of all sorts of things besides money (examples include luxury goods, education credits, property titles, and patents, to name a few). Though blockchain is structured like a traditional accounting tool—it’s fundamentally a ledger that tracks deposits in and payments out, and maintains a running balance—its uses go far beyond counting coins.

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Jun 5, 2013

The Impending Crisis of Data: Do We Need a Constitution of Information?

Posted by in categories: cybercrime/malcode, information science, media & arts

The recent scandal involving the surveillance of the Associated Press and Fox News by the United States Justice Department has focused attention on the erosion of privacy and freedom of speech in recent years. But before we simply attribute these events to the ethical failings of Attorney General Eric Holder and his staff, we also should consider the technological revolution powering this incident, and thousands like it. It would appear that bureaucrats simply are seduced by the ease with which information can be gathered and manipulated. At the rate that technologies for the collection and fabrication of information are evolving, what is now available to law enforcement and intelligence agencies in the United States, and around the world, will soon be available to individuals and small groups.

We must come to terms with the current information revolution and take the first steps to form global institutions that will assure that our society, and our governments, can continue to function through this chaotic and disconcerting period. The exponential increase in the power of computers will mean that changes the go far beyond the limits of slow-moving human government. We will need to build new institutions to the crisis that are substantial and long-term. It will not be a matter that can be solved by adding a new division to Homeland Security or Google.

We do not have any choice. To make light of the crisis means allowing shadowy organizations to usurp for themselves immense power through the collection and distortion of information. Failure to keep up with technological change in an institutional sense will mean that in the future government will be at best a symbolic façade of authority with little authority or capacity to respond to the threats of information manipulation. In the worst case scenario, corporations and government agencies could degenerate into warring factions, a new form of feudalism in which invisible forces use their control of information to wage murky wars for global domination.

No degree of moral propriety among public servants, or corporate leaders, can stop the explosion of spying and the propagation of false information that we will witness over the next decade. The most significant factor behind this development will be Moore’s Law which stipulates that the number of microprocessors that can be placed economically on a chip will double every 18 months (and the cost of storage has halved every 14 months) — and not the moral decline of citizens. This exponential increase in our capability to gather, store, share, alter and fabricate information of every form will offer tremendous opportunities for the development of new technologies. But the rate of change of computational power is so much faster than the rate at which human institutions can adapt — let alone the rate at which the human species evolves — that we will face devastating existential challenges to human civilization.

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