Digital Economy

Smart Contracts sind digitale Verträge, die dank
Blockchain-Technologie ohne menschliches Zutun
zustande kommen können
BLOCKCHAIN
Smart contracts are digital contracts created
automatically, i.e. without human intervention,
using blockchain technology.
networks or decentralized energy communities. The financial
sector is one of the industries that can benefit from the use of
blockchain. Other huge potentials can be identified in the arts
as well as in the energy sector and supply chain management.
But, as Taudes points out, any new technology brings considerable
risks, which here encompass both technical hazards and
legal uncertainties.
Will blockchain create a better world?
According to Taudes, blockchain technology can particularly
help developing countries achieve greater economic freedom.
Bitcoin, for example, has been declared a national currency in
El Salvador and the Central African Republic. Yet it remains to
be seen whether this experiment will succeed, and other countries
decide to jump on the bandwagon.
A
blockchain can be described as a large database of
chronologically linked blocks of transaction data, with
a complete copy of the database stored on the computers
of the blockchain participants. The fact that each data block
is additionally secured by a checksum prevents subsequent
manipulation of the contents or the sequence of blocks. Blockchains
make use of distributed ledger technology (DLT). This
is a digital system for recording data, whereby transactions
and their details are recorded simultaneously on a computer
network distributed across multiple locations. Cryptographic
methods are used to securely store the data.
Does blockchain have the power to change the world for good?
Alfred Taudes, professor at the Department of Information
Systems and Operations Management and researcher in the
field of cryptoeconomics, is convinced of the disruptive power
of the technology: “Blockchain is a novel protocol that has the
potential to transform many fields,
similar to today’s Internet. Things are
Things
are only
now taking
off.
only now taking off; just as email was
the first Internet application, bitcoin
is the first application of blockchain
technology.” Taudes sees the greatest
potential for disruption in finance:
Banking services are already being
transformed by decentralized finance
(DeFi), a form of financing based on
blockchain. However, it will probably take some time before
new business models based on the technology become established.
And, of course, the entire world is not likely to change
as a result.
The implications of blockchain for the legal-tech sector
Mag. Sophie Martinetz, director of the WU Legal Tech Center
and founder of the legal-tech platform Future-Law, provides
some insights into the use of blockchain in the legal-tech sector.
For her, the decentralized approach to certain issues is
very interesting, especially for countries, say, that only became
democracies at the end of the last century and which, due to
their history, are wary of concentrating power in one person or
body. For example, new systems such as the official land registry
in Georgia are designed to include a decentralized (private)
blockchain in order to prevent individual decision-making on
questions of property ownership or expropriation.
Martinetz explains the ins and outs of smart contracts, which
are based on blockchain technology and enable the independent
execution of contractual agreements without human
intervention. A smart contract allows the fully automated entry
into force of individual contract clauses and parts of contracts
(or indeed entire contracts). They are legally classified as general
terms and conditions, with the application of blockchain
technology to automate processes. When companies decide to
make use of smart contracts, they must ensure that the keys
(identification numbers) are carefully protected, because these
are essentially the personal data of blockchain participants.
Who can benefit from blockchain technology?
According to crypto expert Taudes, blockchain certainly has the
power to transform companies in specific industries. However,
this potential does not lie within any one enterprise, but rather
through collaborative processes within supply chains, financial
He explains that while banks are already
beginning to exploit the new technology,
this is generally in partnership with
blockchain startups. The former bring
their customer base, reputation, and
legal protections to the table while
the startups introduce digital assets
to the mix. Martinetz confirms
Taudes’s view: “All the various
kinds of bitcoin constitute a major
new asset class in the financial
sector. Banks are already working
closely with so-called fintechs –
startups that use advanced technologies
to offer new financial
products – in
order to stay
competitive.”
Wenn’s steil abwärts geht.
Und Du trotzdem über’s
ganze Gesicht strahlst.
When things go downhill.
But you’re smiling head
to toe.
Sophie Martinetz offers an example from the legaltech
sector: “With blockchain technology, we are
able to create digital timestamps. Let’s imagine
that someone is a victim of hate crime
on social media. How can we prove it? If
you take a digital screenshot, the timing
has to be clearly identifiable. Today the
screenshot can be uploaded to a legal
tech tool and given a digital timestamp.
In the case of such an Austrian
legal tech tool (NetzBeweis), for
example, the underlying technology
is blockchain.” This application could
also be useful in the field of intellectual
property, where it’s often
necessary to document which
person had an idea first.
© Marlen Rahmann
Mag. a Sophie Martinetz ist Juristin, Gründerin und Direktorin des WU Legal Tech Center sowie
Gründerin der Legal-Tech-Plattform Future-Law. Sie berät Unternehmen und deren Rechtsabteilungen
in puncto Digitalisierung – von der Strategiefindung bis zur Implementierung von (Legal-)Tech-Tools.
Mag. Sophie Martinetz is a lawyer, founder and director of the WU Legal Tech Center and founder
of the legal-tech platform Future-Law. She advises companies and their legal teams on digitalization –
from strategy development to the implementation of (legal) tech tools.
20 21