Do the benefits of smart contracts overwrite their downfalls? While smart contracts bring a lot of benefits, allowing for a quick execution once a certain condition takes place, a lot of value can get lost in these transactions. For example, it is estimated that in 2017, over $1B in value was lost with smart contracts due to bugs allowing hackers to get a hold of millions of dollars. See here.
What is currently being done to solve the disputes arising around these losses?
A number of projects have emerged to tackle the disputes arising out of smart contracts. Below just a few.
Jury.Online is creating a protocol for interaction between judges and parties, as well as an allegedly transparent, secure and convenient platform for making deals using Blockchain and modern cryptographic systems.
Sagewise suggests smart contracts to contain *within* them the mechanisms for resolving disputes that may arise *under* them by stopping the execution for a certain amount of time until the dispute is resolved.
Chargeback is an app that allows users to take quick actions like instant gift card deactivation, cancel recurring billing, and services suspension to prevent disputes that may arise due to unfulfilled obligations and payments.
The Smart Arbitration & Mediation Blockchain Application, SAMBA, intends to utilize blockchains to eliminate the need for couriers, hard copies, and mailing. The application gives claimants the ability to use a blockchain portal, held by an arbitral institution, to file requests for arbitration.
Mattereum offers legal-technical interface, using blockchain technology to enable suppliers and customers to implement their commitments. It claims to be the first “Internet of Agreements” (IoA) project, connecting digital assets on a blockchain with goods and services of the real world.
Agrello allows a user to easily create and manage smart-contract-based legal agreements by engaging automated, artificial intelligence powered counselors.
JUR is another attempt to build a blockchain based platform that offers fast legal dispute resolution services through a consensus based voting system.
The takeaway is that the traditional dispute resolution system is not effective in the digital era. Jurisdiction issues and time consuming processes do not help parties involved in disputes to solve their issues. Blockchain is a great technology but let’s think about how to make it work!
For more on blockchains and how technology is impacting legal issues, contact Francesca Giannoni-Crystal. Thanks to Federica Romanelli.
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