Recently, an article from the Australian Financial Review explained that distributed ledger tech may be a blessing for lawyers, while Quartz has said, “The technology behind bitcoin could replace lawyers.”
However, one issue takes precedence is that lawyers and average citizens don’t have the programming expertise or understand code like software developers, so they may have technical difficulties dealing with smart contracts.
Cryptocurrencies such as Ethereum have popularized smart contracts, and some businesses want to deploy these concepts on the enterprise level.
Quartz explains in its editorial that certain sectors of business will ultimately be disintermediated if this technology takes hold stating:
“Innovators in the block chain space are experimenting with ways to use the protocol in B2B payments without all the usual limits on transaction volume. If they succeed, credit card companies, payments processors, and legions of accounting and law firms (and of course, the attendant consultancies) would be devastated.”
On the technical level, most of these businesses do not have enough resources to audit these platforms, verify the code, or have enough software developers on hand to handle these protocols, especially on the enterprise level.
Yesterday, Litecoin creator Charlie Lee stated on Twitter:
The fiasco that surrounded the DAO Hub last week is proof that this kind of technology requires more people who understand coding and programming languages.
The project was funded by thousands of people raising a whopping $160 million with code based on smart contract protocol using Ethereum native programming language Solidity.
The DAO Hub was dissected after (and before) the incident by many people who found a vast array of vulnerabilities. With these kinds of security issues a whole lot of technical expertise will be needed to deploy smart contract protocols over finance, law, insurance, and all things in between.
So will blockchain technology‘s smart contracts reform the legal system and make law firms obsolete? It’s possible, but probably won’t happen for a long time, due to the large need for hackers and developers to put together the pieces.
When it eventually happens, though, will blockchain technology and smart contracts cut costs as the Australian Financial Review and Quartz say it will?
Maybe very modestly, as the average pay for software developers earn a salary of $95-120,000 per year, and Lawyers make roughly the same at $114,000 per year on average.
There are no huge savings there within these numbers as most likely companies will need to employ developers to replace the lawyers. Not to mention there is a shortage of programmers on the global level.
Even the Ethereum inventor, Vitalik Buterin, believes smart contracts will need to keep safety and precaution on the forefront saying:
“My personal opinion regarding the topic is that an important primary conclusion is the following: progress in smart contract safety is necessarily going to be layered, incremental, and necessarily dependent on defense-in-depth.”
Smart contracts are a wonderful concept and someday the technology should help progress the lives of global citizens. The concept is in its early stages of infancy and people have just begun experimenting with this innovative protocols. Smart contracts will most likely be a vital tool in the next few decades.
However, it will take time for this type of technology to scale, and people need to remember this is a marathon and not a sprint.