Blockchain - A link to future law reform: Factors for a regulatory framework response to disruptive technologies

Abstract

This world is being increasingly inundated with new technologies. Some fit in and improve the existing system, while others create imbalances in the market and challenges to the present legal structure. Examples of the latter include the Model T Ford assembly line, cellular telephones and the Internet. One such emerging and potentially disruptive technology taking the technological world by storm is the blockchain, the technology underlying Bitcoin. The blockchain is a distributed ledger which allows for a decentralised system of interactions. Its nascent application, Bitcoin, allows for secure financial transactions in virtual currency between parties who do not otherwise know each other and without the need of centralised services, such as banks or Paypal. The blockchain is now being developed to work with a variety of interactions between parties, whether to create autonomous self-executing smart contracts or establish a dependable and inviolable land title registry, all without the need for intermediaries. It has vast potential to change social constructs which have traditionally relied upon third parties to act as trusted intermediaries. However, in order for this innovation to develop its full potential and not become subject to misuse, some form of regulatory response is necessary.