Benefits for blockchain business when considering legal infrastructures
Whilst probably best known in relation to Bitcoin, it was quickly realised blockchain could have a wider application due to its features of transparency and immutability. Smart contracts (self-executing protocols embedded in the blockchain) are central to its potential because they permit transactions which might have been traditionally managed by third parties (such as the purchase of land or other assets); to be automatically executed. It’s anticipated this will provide reductions in third-party fees and transaction times, whilst enhancing customer access and limiting fraud.
With blockchain technology developing at an ever-increasing pace, what can businesses wanting to utilise blockchain technology do to protect themselves and gain a competitive edge?
Secure your investment
Usually, a third-party developer is needed to build the blockchain, so remember the blockchain is software, and you should have a contract in place with your developer as you would for any other software-related project. If you intend to create a DApp (Distributed Application) to operate on Ethereum, it is important to understand this operates on both permissive and restrictive licenses, and how this fits your business model.
Understand the IP
Consider carefully the elements of intellectual property involved. If you are paying for the creation of proprietary software, you will want to become the owner of this wherever possible.
Data privacy is a particularly complex issue for blockchain businesses, due to the transparent and unchangeable nature of blockchain. Whilst providing an excellent method to prove the provenance of goods or maintain unique records for individuals, it also means personal details are retained forever.
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