Blockchain, like, WTF dude?
‘Blockchain’ is one of the biggest buzzwords in LegalTech. And this year, we predict it’s going mainstream. Everyone from May to Macron to Meghan Markle will be talking about it.
But what actually is it, and what does it mean?
The trusty Oxford English Dictionary can’t help us on this occasion, only offering this definition, which – even to our small-town Legal Geek eyes – seems wildly outdated:
A system in which a record of transactions made in bitcoin or another cryptocurrency are maintained across several computers that are linked in a peer-to-peer network.
Legal Geek has written to the OED to suggest they update their definition of blockchain (true story) and whilst we await their findings we thought we would crowd source opinion from some of the most blockchainy Legal Geeks we know: Distlytics’ Gary Nuttall, blockchain luminary Florian Glatz, Freshfields’ Tom Hingley and Pinsent Masons’ Charlie Clarence-Smith. And you can hear more from some of these law-gends at our upcoming Blockchain event.
The blue sky definition
The Internet allows us to share data, the Web to view information. Blockchain allows us to transfer value without an intermediary.
– Gary Nuttall, Managing Director of Distlytics
The beermat-friendly definition
Blockchain in its simplest form means a public or private database which records the transactional data of digital assets. Whilst a bitcoin blockchain is a public record of everyone’s day-to-day transactional history.
– Charlie Clarence-Smith, Solicitor at Pinsent Masons LLP
The Harry Potter definition
A blockchain is exactly what it says on the tin. A chain of blocks. Each block tells a story and when placed in order with all the other blocks in a chain, they tell you the entire life story of that blockchain (e.g. every bitcoin transaction ever, or every diamond or piece of property registered and re-registered, or every smart contract ever executed).
If you try to remove or to edit an existing block from the chain, the story stops making sense and the fans (i.e. nodes) of that story get mad and won’t let you make the changes (imagine removing a few chapters from a Harry Potter book).
Each time you add a new transaction to a block or a block to the chain, those same fans will re-read the entire story (like Harry Potter fans) to check it makes sense. They know the story, and exactly how it should go. Oh, and they also have superpowers (i.e. algorithms), so don’t try to fool them. Over half of the fans of the story must agree a change should take place before it can take place, and because the bigger blockchains have tens of millions of fans – it’s very difficult to fool half of them.
– Tom Hingley, Associate at Freshfields
The techy definition
A blockchain is a shared database and application platform. Instead of a centralised service provider, a blockchain is run by a decentralised peer-to-peer network, where every node stores a full copy of the database. Sophisticated consensus algorithms keep individual copies of the blockchain in sync across the network.
Blockchains are interesting because they allow for the secure storage and transfer of value on a global scale without intermediaries for the first time in human history.
– Florian Glatz (@heckerhut), Blockchain lawyer
Still not clear?
Check out these two fab introductory videos to blockchain from our friends at Freshfields…
…and our friends at BPP University Law School…
** Don’t forget to register for our upcoming Blockchain event **
Legal Geek is compiling a crowd-sourced straight-talking LegalTech dictionary to jargon bust the hell out of buzz words, over-used clichés and mis-leading names in LegalTech. Is there a LegalTech definition you think should be included in our dictionary? Scribble a line to [email protected] (yes that is dot.co).