Legal efficiency in blockchain projects
The term legal efficiency is a term I choose to use to represent a measurable benefit whereby a project and or organization can achieve their goals with minimal legal costs. Legal costs can be measured in the form of legal risks (risk of lawsuit, regulatory risk, etc). In order for a project to be efficient the resources of the project must not be wasted and legal expenses cost a lot to projects.
Interesting to note is many projects ignore completely the regulatory risks when setting up only to have to potentially pay more later on if regulatory bodies decide to aggressively enforce. As a solution to this problem it is suggested in this blogpost that increasing legal efficiency must be a goal in the ecosystem. Legal efficiency can be increased by decreasing the costs of stuff such as accounting, paperwork, legal engineering, and other processes which go into managing legal risks.
The concept of legal engineering is highlighted by Monax (not certain but they may have originated the term), and it's described to mean:
At its simplest, legal engineering is the practice of writing smart contracts that automate legally-enforceable rights and obligations.
Usually, legal rights and obligations are set out in “dumb” paper documents which must be read and interpreted, and acted on, by people. This takes a lot of time and effort. In today’s increasingly data-driven world, it makes much more sense for contractual obligations to be represented in code and processed at least in part by computers - improving adherence, easing compliance, and automating performance.
The goal of legal engineering seems to be both improvement in security in the form of dispute resolution and improvement in performance by reducing the costs in some cases. The costs can be reduced in some cases because if there is a legally enforceable document then disputes can be resolved off chain. This isn't ideal in my opinion because ideal is to avoid disputes in the first place by setting up smart contracts in such a way so as to minimize them but if there are disputes then the smart contract can include a dispute resolution procedure which either happens on chain where the result of that process is legally recognized off chain or it can be off chain if the on chain process fails.
Smart contracts that are legally (and morally) aware and efficient
Currently there aren't any smart contract platforms which allow for legal awareness due to lack of sophistication. This may in fact change once common sense is added to the blockchain. Common sense computation is one of the goals of the Tauchain. Common sense computing would theoretically allow a smart contract to truly be smart and this "true smart contract" can have emergent morality, legal awareness, and over time legal efficiency. The interesting thing about Tauchain is that theoretically this could all be automated. LKIF already exists (LKIF is an ontology of basic legal concepts), and to make sense of why this is useful to Tauchain we have to remember that in the design of Tau is the intended capability to utilize ontologies, with RDF/notation3 style encoding, for use by a reasoning engine (inference).
So at least in theory if Tauchain works as intended it would offer similar common sense computing capability as seen by Cyc:
Note:
- Tauchain promises to take advantage of knowledge engineering
- Knowledge engineering, of which legal engineering is a facet, if done right can make legal engineering better in terms of cost to benefit.
Lucid AI offers the commercial implementation of Cyc technology. Tauchain will go beyond Cyc in some ways by offering a programming language called Tau-MetaLanguage (TML) and eventually a development platform from which to make use of this language. Right now it is too soon to know a lot, but just as Ethereum once was just a whitepaper floating around on the Bitshares and other forums, now we see it has made an impact in crowdfunding. Tauchain could be the first platform in this space to offer an ability to do true "smart" contracts which are legally and morally aware. This would empower developers to truly reduce the costs over time and potentially result in increased legal efficiency by allowing their smart contracts to perform with minimal legal and moral risk to the participants themselves.
Questions:
- Could truly smart contracts eventually be recognized as legal persons?
- Will we treat truly smart contracts as we treat corporations which have obtained legal person status?
References
Pagallo, U., Sartor, G., & Ajani, G. (2010). AI Approaches to the Complexity of Legal Systems. Springer Berlin Heidelberg.
Web:
Good !
same questions lets see how other answer
One of the issues is legal complexity has far outpaced the ability of the average developer or group of developers to effectively navigate. So we have to figure out ways (using software) to reduce the costs of navigating the legal minefield. My post is basically a suggestion of using a cost reduction strategy to over time improve legal efficiency, and a similar approach can be taken to deal with ethics so that smart contracts can remain ethical even in legal uncertainty.
i must say such a brilliant mind you have . Using software would help alot
I think the answer to both those questions is a resounding yes. in time.
We are slow to change but, ultimately, I think the assault on the legal profession will end up devastating the legal industry. Plus, corporations as we know them, especially in the tech arena, are going to be drastically reduced. We are seeing the blockchain have the value, not the app creators. This is a vastly different system. In the age of automation, it only makes sense that these entities you mentioned are recognized as the central premise from which all transactions, commerce, regulatory, legal, etc, take place from.
Very forward thinking post and thought provoking.
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Good Post. :)