When the Internet entered the global sphere in the 1990s, many questions arose about its use, its potential, or the way in which it would change people's daily lives and activities. Today there is no doubt about it. The technological progress brought about by the Internet has exceeded initial expectations and changed life on Earth.
Almost 20 years later, the world has witnessed the emergence of cryptocurrency or digital currency, and there are renewed concerns about its real benefits and power as a monetary system, since, being a new proposition, there is still no legal consensus on how it works and which device deserves to fulfill its mission.
The technology behind cryptocurrency has offered practical benefits to various companies around the world. One of them corresponds to the name blockchain or chain of blocks and refers to a virtual public ledger that allows you to confirm encrypted transactions made with digital currency. When transactions are confirmed, they are placed in a block and added to the chain, becoming seemingly immutable records.
The functioning of this system requires legal support that is aware of the benefits and challenges, which is a new challenge for lawyers around the world.
As the legal landscape evolves, professionals must understand the implications of these changes, including compliance with international standards. For detailed guidance on these complex issues, including ofac on credit report, this service offers expert advice.
Why is blockchain still evolving?
Although blockchain is still being tested in some of the industries that have ventured to use it, it has brought important benefits, making transactions an increasingly efficient and secure process.
Among the resulting benefits is the fact that blockchain disrupts distribution chains, making cross-border transactions faster and more transparent. In addition, it offers personal data to those who do not have it to work, promoting financial inclusion and allowing countries with new technologies to more easily participate in global transactions.
With the help of the so-called blockchain, it is possible to separate the person who performs the transaction from the monetary transaction, reducing the possibility of hacking. In its procedure, it eliminates many traditional procedures, which significantly reduces the time spent on operations and allows you to avoid the involvement of outsiders in them.
Thus, the application of the blockchain involves the reduction of costs associated with these operations, the immutability of accounting records, the transparency of transactions and the creation of new business models. Just like cryptocurrency, it is not regulated by any central authority such as a bank or government. Also Check: E-Marketing Brings Lawyers Closer to Clients
Its birth was in response to the need to secure online cryptocurrency transactions by providing a reliable mechanism for two interested parties to conduct business without knowing each other.
The challenges to overcome are blockchain related
The benefits of blockchain seem incalculable. However, the risks and challenges that arise during the implementation of this system also need to be reviewed. Despite the controls in place, security is not foolproof because once access is granted to an individual, it is possible for that user to gain access to the entire platform. The nature of the blockchain does not support the imposition of additional restrictions, as this would mean introducing more processes and depriving the system of efficiency.
The immutability of saved records cannot be changed. Technically, it was found that they can be "bypassed" and in a certain way violate security. After assessing the potential and the challenges to be overcome, the recommendation for its use is to ensure that the company does business with various stakeholders who require trust and access to certain information.
As noted above, the legal aspects that condition the use of technology must be designed to facilitate it. Regulation provides the legal basis and legitimacy for all these innovative processes aimed at facilitating and protecting financial transactions.
Especially in countries with a weak technological development in this regard, as in the case of Venezuela, it is necessary to define coherent legislation that supports the legal security of those who carry out these digital transactions in order to avoid the violation of human rights of the execution of crimes of extortion, fraud or money laundering.
This topic undoubtedly opens up a new opportunity for lawyers around the world to study the legal landscape and innovate the regulatory framework for this nascent technology. Education, experience, and the pursuit of knowledge will be key factors in developing a strong legal statute.
