Legal status of smart contracts: features, role, significance

This article using critical analysis discusses the legal status of smart contracts, their features and characteristics, and the possibility of introducing this category into the legal field. The main goal of the study is to determine the legal status of smart contracts. The study concludes that a smart contract is a program code based on blockchain technology, which, by legal characteristics, is a legally significant message recorded in a language (artificial language) and sealed with an electronic digital signature of each of the parties (or certified with a special key). It is proved that the multilateral interactions implemented through smart contracts can reduce the costs of operations and control them, increase the speed of operations and reduce the risks associated with dishonest actions of the parties, minimize or completely exclude intermediaries from the transaction; therefore, legislation should provide for the possibility of using smart contracts along with existing contracts.

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SMART CONTRACT AS A FORM OF CIVIL CONTRACT

Bulletin of Taras Shevchenko National University of Kyiv. Legal Studies ◽

10.17721/1728-2195/2019/4.111-3 ◽

2019 ◽

pp. 15-20

Author(s):

V. Varavka

Keyword(s):

Information Technologies ◽

Legal Status ◽

Legal Regulation ◽

Smart Contracts ◽

Electronic Signature ◽

Mathematical Algorithm ◽

Blockchain Technology ◽

Smart Contract ◽

Civil Contract ◽

Legal Force

Development of information technologies, cryptocurrencies and technology of distributed networks has caused the appearance of smart con- tracts as new types of civil contract. They have been widely used in recent years in such areas as initial coins offering (ICO), financial sector, inter- national trade and public services. At the same time the legal status and legal regulation of smart contracts are uncertain. These uncertainties cause many legal risks of smart-contractsutilization. The purpose of this article is to find out the conception of smart contract as a form of civil contract, to research its legal status and legal regula- tion issues and to develop proposals for the improvement of legal regulation of smart contracts and cryptocurrencies in Ukraine. By its legal nature a smart contract is a digital form of a civil contract realized in programming code automatically executed in a distributed network. Like a civil contract, smart contract has such elements as parties, subject and essential terms of the contract. The legal force of a smart contract depends on whether it includes the fundamental features of a civil contact, such as evidence that parties have intention to create legal relations, understandabil- ity of contract conditions and possibility to perform the terms of the contract under duress. The main advantages of a smart contract are its ability to significantly accelerate and reduce costs of the transaction and guarantee the fulfillment of contract terms regardless of the contractual parties' and third parties' will. The main risks of a smart contract are uncertainty of legal status of a smart contract and cryptocurrencies as a means of payment, complexity of expressing the contact terms in a mathematical algorithm, risk of software bugs and hacking attack. To solve the problems of legal regulation of smart contracts in Ukraine it is necessary to change the legislation in order to settle the legal status of cryptocurrencies and recognize a smart contract as a form of a civil contract. It is necessary to identify parties of the smart contract, confirm their agreement on the terms of the smart contract by using digital electronic signature. A smart contract should be supplemented by text application containing the es- sential terms of the contract which will have legal force in trail. It is necessary to implement blockchain technology in the state registers and pro- vide legal ability to make adjustments in the registers automatically for the performance of smartcontracts.

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Smart Contracts

Legal Regulations, Implications, and Issues Surrounding Digital Data - Advances in Information Security, Privacy, and Ethics ◽

10.4018/978-1-7998-3130-3.ch007 ◽

2020 ◽

pp. 127-135

Author(s):

Michael Casparus Laubscher ◽

Muhammed Siraaj Khan

Keyword(s):

Legal Status ◽

Legal Profession ◽

Smart Contracts ◽

Advantages And Disadvantages ◽

Blockchain Technology ◽

Smart Contract

When Nick Szabo pioneered the idea of a smart contract in the 1990s, the economic and communications infrastructure available at that time could not and did not support the protocols needed to execute and apply smart contracts. While smart contracts may be viewed as an example of the use of blockchain and blockchain technology which offers great opportunities to the field of law; others are more sceptical. The use of smart contracts in law is anything but straightforward, but this should not deter jurists from investigating the opportunities this instrument offers. This chapter aims to provide an overview of smart contacts, explaining how they work, the ways they differ from written contracts, their legal status, and the advantages and disadvantages associated with using them. Finally, it identifies the main challenges facing businesses and the legal profession with regard to the expanding use of smart contacts.

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SMART CONTRACT AND CHALLENGES TO LAW

10.36997/lbcs2020.359 ◽

2020 ◽

Author(s):

Gergana Varbanova ◽

Keyword(s):

Civil Law ◽

Smart Contracts ◽

Program Code ◽

Advantages And Disadvantages ◽

Smart Contract ◽

The Law

Are the technologies advanced enough to replace lawyers and the judiciary in the negotiation and enforcement process? Is it possible for a program code to be a contract that binds the parties named in it? What is a smart contract and what challenges does it pose to the law? The present study aims to clarify and show the advantages and disadvantages of using smart contracts in civil law.

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A Study of Use Cases for Smart Contracts Using Blockchain Technology

Research Anthology on Blockchain Technology in Business, Healthcare, Education, and Government ◽

10.4018/978-1-7998-5351-0.ch099 ◽

2021 ◽

pp. 1823-1844

Author(s):

S R Mani Sekhar ◽

Siddesh G M ◽

Swapnil Kalra ◽

Shaswat Anand

Keyword(s):

Natural Disaster ◽

Vital Role ◽

Use Cases ◽

Use Case ◽

Smart Contracts ◽

Digital Identity ◽

Blockchain Technology ◽

Smart Contract ◽

Healthcare Finance ◽

Natural Disaster Management

Blockchain technology is an emerging and rapidly growing technology in the current world scenario. It is a collection of records connected through cryptography. They play a vital role in smart contracts. Smart contracts are present in blockchains which are self-controlled and trustable. It can be integrated across various domains like healthcare, finance, self-sovereign identity, governance, logistics management and home care, etc. The purpose of this article is to analyze the various use cases of smart contracts in different domains and come up with a model which may be used in the future. Subsequently, a detailed description of a smart contract and blockchain is provided. Next, different case-studies related to five different domains is discussed with the help of use case diagrams. Finally, a solution for natural disaster management has been proposed by integrating smart contract, digital identity, policies and blockchain technologies, which can be used effectively for providing relief to victims during times of natural disaster.

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Smart Contract: The Concept, Legal Nature, Features of Conclusion and Execution

Legal Concept ◽

10.15688/lc.jvolsu.2019.4.7 ◽

2019 ◽

pp. 54-60

Author(s):

Nizami Safarli

Keyword(s):

Russian Federation ◽

Legal Regulation ◽

Smart Contracts ◽

Advantages And Disadvantages ◽

Blockchain Technology ◽

Smart Contract ◽

Legal Nature ◽

Domestic Legislation ◽

The Russian Federation ◽

Statutory Regulation

Introduction: the paper is devoted to a new phenomenon in business activity in the conditions of IT development that contribute to the creation of secure contractual relations on the Internet on the basis of transactions executed through smart contracts. The author notes that the need for amendments that could fill the loopholes in the current legislation is obvious. And, first of all, it concerns Blockchain technology – the algorithm that mediates the safe development, conclusion and execution of smart contracts. Blockchain technology is considered in the paper as one of the safest means for concluding and executing smart contracts. The author argues that the study of the concept, legal nature and essence of smart contracts is relevant in the light of spreading their share in the total array of transactions in the world economy in conjunction with the changing domestic legislation governing the relevant sphere, as well as the international integration processes affecting the intensification of foreign economic activity of the Russian Federation. The smart contract concepts formulated by the Russian legislator in the process of upgrading the array of statutory regulation under conditions of economy digitalization are studied and compared. The features of conclusion and protection of the smart contract in the civil legislation of the Russian Federation are analyzed. In order to fully articulate the concept of the smart contract, reflecting its essence, functional purpose and legal nature, it is proposed to create a special law that would focus on the conclusion and implementation of “the smart contract” and the specification of the general norms of the civil code. At the same time, the norms of other special laws would supplement and correct the provisions fixed by this act depending on the sphere of managing and the legal regulation branch. The concept of the smart contract is formulated; its value for economic and contractual activity, and also the advantages and disadvantages of its application are established. The possible classifications of smart contracts are given.

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Introduction to Blockchain and Cryptocurrenncy

10.36227/techrxiv.12100842.v1 ◽

2020 ◽

Author(s):

Vidhi Pitroda ◽

Vraj Shah ◽

Jinan Fiaidhi

Keyword(s):

Peer To Peer ◽

Research Topic ◽

Smart Contracts ◽

Blockchain Technology ◽

Smart Contract ◽

High Security

In recent years blockchain technology has become mainstream research topic because of its decentralized, peer to peer transaction and anonymity properties. There are several applications of blockchain which are secure and easy as compare to the current techniques. One of the applications is a smart contract. Smart contracts are lines of code which are stored on a blockchain and automatically executed when the conditions defined by the it (developer) are met. This smart contract with the addition of blockchain technology can do task fast and with high security. In this paper we have developed a smart contract for a generalized notary application on solidity, Ethereum and the application is tested using the truffle suite. Furthermore, applications and their methodology for notary applications are also mentioned.

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Blockchain Smart Contract Meta-modeling

Journal of Web Engineering ◽

10.13052/jwe1540-9589.2073 ◽

2021 ◽

Author(s):

Nicolás Sánchez-Gómez ◽

Jesus Torres-Valderrama ◽

Manuel MEJÍAS RISOTO ◽

Alejandra GARRIDO

Keyword(s):

Smart Contracts ◽

Meta Model ◽

Business Environments ◽

Blockchain Technology ◽

Collaborative Processes ◽

Requirements Specifications ◽

Smart Contract ◽

Meta Modeling ◽

Software Engineers ◽

Future Work

One of the key benefits of blockchain technology is its ability to keep a permanent, unalterable record of transactions. In business environments, where companies interact with each other without a centralized authority to ensure trust between them, this has led to blockchain platforms and smart contracts being proposed as a means of implementing trustworthy collaborative processes. Software engineers must deal with them to ensure the quality of smart contracts in all phases of the smart contract lifecycle, from requirements specifications to design and deployment. This broad scope and criticality of smart contracts in business environments means that they have to be expressed in a language that is intuitive, easy-to-use, independent of the blockchain platform employed, and oriented towards software quality assurance. In this paper we present a key component: a first outline of a UML-based smart contract meta-model that would allow us to achieve these objectives. This meta-model will be enriched in future work to represent blockchain environments and automated testing.

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Survey of Smart Contract Framework and Its Application

Information ◽

10.3390/info12070257 ◽

2021 ◽

Vol 12 (7) ◽

pp. 257

Author(s):

Edi Surya Negara ◽

Achmad Nizar Hidayanto ◽

Ria Andryani ◽

Rezki Syaputra

Keyword(s):

Literature Review ◽

Theoretical Basis ◽

Smart Contracts ◽

Blockchain Technology ◽

Smart Contract ◽

Exploratory Approach ◽

Implementation Studies ◽

Technological Developments

This article is a literature review on smart contract applications in various domains. The aim is to investigate technological developments and implementation of smart contracts in various domains. For this purpose, the theoretical basis of various papers that have been published in recent years is used as a source of theoretical and implementation studies. Smart contracts are the latest technology that is developing in line with the development of blockchain technology. The literature review that we have carried out explains that smart contracts work automatically, control, or document legally relevant events and actions in accordance with the agreements set forth in the contract agreement. This technology is one of the newest technologies that is expected to provide solutions for trust, security, and transparency in various domains. This literature review was conducted using an exploratory approach. This literature review focuses on reviewing frameworks, methods, and simulations of smart contract implementations in various domains.

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Efficient Concurrent Execution of Smart Contracts in Blockchain Sharding

Security and Communication Networks ◽

10.1155/2021/6688168 ◽

2021 ◽

Vol 2021 ◽

pp. 1-15

Author(s):

Yan Wang ◽

Jixin Li ◽

Wansheng Liu ◽

Aiping Tan

Keyword(s):

Performance Optimization ◽

Concurrency Control ◽

Critical Issue ◽

Smart Contracts ◽

Throughput Performance ◽

Concurrent Execution ◽

Blockchain Technology ◽

Smart Contract ◽

Execution Strategy ◽

Feature Information

Throughput performance is a critical issue in blockchain technology, especially in blockchain sharding systems. Although sharding proposals can improve transaction throughput by parallel processing, the essence of each shard is still a small blockchain. Using serial execution of smart contract transactions, performance has not significantly improved, and there is still room for improvement. A smart contract concurrent execution strategy based on concurrency degree optimization is proposed for performance optimization within a single shard. This strategy is applied to each shard. First, it characterizes the conflicting contract feature information by executing a smart contract, analyzing the factors that affect the concurrent execution of the smart contracts, and clustering the contract transaction. Second, in shards with high transaction frequency, considering the execution time, conflict rate, and available resources of contract transactions, finding a serializable schedule of contract transactions by redundant computation and a Variable Shadow Speculative Concurrency Control (SCC-VS) algorithm for smart contract scheduling is proposed. Finally, experimental results show that the strategy increases the concurrency of smart contract execution by 39% on average and the transaction throughput of the whole system by 21% on average.

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Smart Contracts to Support the Advancement of Blockchain Technology in the Security Integrity

Conference Series ◽

10.34306/conferenceseries.v2i11.331 ◽

2020 ◽

Vol 2 (11) ◽

pp. 31-39

Author(s):

Sulistiawati Wati

Keyword(s):

Data Security ◽

Financial Services ◽

Energy Resources ◽

Smart Contracts ◽

Secure Storage ◽

Blockchain Technology ◽

Storage Media ◽

Smart Contract ◽

Problem Solvers ◽

Effective Source

The development of technology today is used as a benchmark in the advancement of the industrial world where the development of technology has influenced various aspects in the life of today's society. Smart contracts as one form of blockchain technology that resembles a conventional contract can be used to bind agreements between one party and another. One difference between a smart contract and a conventional contract is the smart contract that is stored in the blockchain. With the presence of smart contracts on the blockchain has become one of the most sought-after technologies, because the number of users is high enough for each transaction within the company. In this case various features of smart contracts applications in various worlds, ranging from financial services, life sciences, energy resources and media voting. Smart contracts still pose a lot of challenges that overwhelm the interaction of some Parties, such as users, developers, and organizations built on smart contracts. Smart contracts are essentially a very effective source of problem solvers, where smart contracts on the blockchain make it easy to maintain data security, and save costs and time. In addition, in the absence of third parties strongly minimizes the fraud that is often done by irresponsible parties, this prevents conflicts between parties. Prone to cases of loss of a document is generated because there is no secure storage media. The advent of smart contracts on the blockchain is expected to be a solution to tackle most of the world's commercial and bureaucratic systems.

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