Smart contract technology is reshaping conventional industry and business processes. Being embedded in blockchains, smart contracts enable the contractual terms of an agreement to be enforced automatically without the intervention of a trusted third party. As a result, smart contracts can cut down administration and save services costs, improve the efficiency of business processes and reduce the risks. Although smart contracts are promising to drive the new wave of innovation in business processes, there are a number of challenges to be tackled.This paper presents a survey on smart contracts. We first introduce blockchains and smart contracts. We then present the challenges in smart contracts as well as recent technical advances. We also compare typical smart contract platforms and give a categorization of smart contract applications along with some representative examples.
Elena B. Zavyalova, Ekaterina I. Shumskaia, Alexandra I. Shumskaia
Introduction. Smart contracts have become demanded agreements in the modern market with the development of crypto-currency due to their ability to provide and guarantee enforcement. To date they are performed automatically using blockchain technology. Smart contracts are the subject of debate in many countries, primarily because issues have arisen in their legal enactment in the field of regulation of digital assets and the legal recognition of blockchain technology itself, which determined the purpose of this scientific research. For the purpose of a deeper understanding of the essence of this type of agreements, a historical method has been applied in the work on the features of the formation of smart contracts. To identify key differences, a formal legal and comparative analysis of smart contracts with classical contracts in electronic form was carried out. The areas of application of smart contracts in the world and in Russia, such as banking, healthcare, insurance and public services, were also studied. Materials and methods. The methodological basis of the study was made up of the following general scientific and special methods of cognition of legal phenomena and processes, including systemic, historical, formal legal, comparative and analytical approaches. Results. An assessment is made of such contracts from the point of view of the existing civil law of the Russian Federation and further directions for study and development are proposed, including the improvement of the regulatory and institutional environment to maintain legal certainty. Discussion and conclusion. The existing legal regulation does not prohibit the use of smart contracts in the business practices of companies and individuals. But the simplicity of the transaction implementation algorithm built on the blockchain still requires some legal support.
Prosecutor's Office of Moscow Region, Madina M. Dolgieva
ПРОТИВОДЕЙСТВИЕ ЛЕГАЛИЗАЦИИ ПРЕСТУПНЫХ ДОХОДОВ ПРИ ИСПОЛЬЗОВАНИИ КРИПТОВАЛЮТЫРассматриваются рекомендации Группы по разработке финансовых мер борьбы с отмыванием денег и финансированием терроризма, которая с 2018 г. приступила к разработке обязательных правил регулирования криптовалютных бирж и обменников.На основе исследованных рекомендаций обосновывается вывод о необходимости включения в уголовный закон нормы об ответственности за неправомерный оборот криптовалюты, вследствие чего нормы
Abstract Since the emergence of cyberspace there have been different legal principles evolving, such as functional equivalence and technology-neutrality, with the aim to ease the regulator´s challenge of coping with the new paradigm of virtual, digital and electronic. Currently our societies have reached the doorstep of another similar disruption: infrastructures decentralized on the basis of blockchain and distributed ledger technology, or so-called cryptoeconomics. It is time to turn to cyberspace-related principles for inspiration on how to solve similar concerns, such as applying existing regulation(s) to new technological disruption. This article looks at different understandings of the functional equivalence principle, its shortcomings and the guidance it provides to regulators and courts in dealing with the challenges related to technological innovation including that of cryptoeconomics.
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.
The present chapter will look at the possible application of smart contracts in the intellectual property arena in general, but it will specifically discuss mostly copyright solutions, although a few uses apply to different areas of protection. This presents a few challenges, at the time of writing many of the proposals that will be discussed have not yet been implemented, or are in a prototype level, and as such we may have to assume their viability based on nothing other than a few examples that have not been fully tested. Similarly, legal discussions about the blockchain and smart contracts tend to be surrounded by considerable hype, often fuelled by commercial interests, and it is often difficult to separate facts from sales pitches. This is why this work will try to take a more sceptical approach to the phenomenon.
Abstract Smart contracts are software codes based on the Blockchain technology which are involved in the field of information technology. The Blockchain smart contract is still in the contractual scope in nature, although its origin and automatic performance functions are different from existing contracts, but it can be identified as a typical unnamed contract. Therefore, at the legal level, a smart contract is a new form of contract that can automatically and automatically perform all or part of the contract. While discussing the technical aspects of smart contracts, we cannot ignore the relevant issues at the legal level. Smart contracts are developments and innovations in the form of traditional contracts. Smart contracts exist in electronic form and automatically fulfill contracts through software that is accurately encoded on the Blockchain. How to create smart contracts according to law and evaluate the legal effect of smart contracts are the main research issue of this paper.
Elena Kirillova, Богдан Варвара Владимировна, Igor B. Lagutin, Evgeniy Dmitrievich Gorevoy
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.
The technology that makes smart contracts possible was developed with a view to enabling transactions to be made end-to-end without the intervention of third parties, intermediaries, adjudicators or courts. In this sense, it achieves in principle complete freedom of interaction. Whether this is the same thing as freedom of contract, however, remains to be seen. It is not yet clear, for example, which smart contracts will be legally enforceable, either because the parties do not want them to be, and/or because the courts do not recognise them as being so. What seems inevitable at this stage in the development of smart contract technology is that conventional contract law in its current form is unlikely to be the most effective way of adjudicating smart contract disputes. One reason for this is that securing performance will be far less of a problem under smart contracts than it is in relation to conventional contracts: the automated nature of the former means that actions are far more likely to be executed than those promised in the traditional way, albeit that their results might not accord with the parties’ expectations. Any issues are therefore far more likely to arise (or at least to be brought to a court’s attention) after a transaction has occurred. Automated execution means that parties are free to determine the contents of their agreements, and that machines will abide by those agreed instructions. The way in which smart contracts operate, therefore, means that any adjudication of them is likely to need to emphasise restorative rather than enforcement remedies. The extent to which the law chooses to do this will effectively determine how free smart technology users are to make legally recognised contracts.
The article investigates by etymological and legal analysis the origin of the institution of obligations and risk management, for centuries in the process of formation of Russian law.
Os smarts contracts são, em termos bastante gerais, protocolos informáticos que permitem que um dispositivo execute as prestações de um contrato de forma autônoma, logo, sem a necessidade de intervenção humana. A substituição da ação humana por um processo – conjunto de protocolos – que viabiliza (a) a automação de operações, (b) a materialização automática das prestações nas transações e (c) a utilização de outras tecnologias, as quais permitem a verificação do clausulado e da identidade dos sujeitos vinculados à transação resulta em elevada economia de custos. Ademais, as expectativas das partes para a satisfação de seus interesses negociais, tal como estabelecido no contrato, acabam sendo amplamente protegidas. Rapidez, previsibilidade e automação permeiam o exercício da autonomia privada, facilitando a efetiva autotutela. Não obstante os evidentes benefícios, tal figura apresenta limitações e desvantagens, trazendo consigo possíveis problemas. Este trabalho explora brevemente o fenômeno dos smart contracts, reflete sobre seu ecossistema particular e, a seguir, aborda importantes questões jurídicas que acompanham os smart contracts.
In recent decades land registration systems operating in Europe and worldwide have been subject to modernisation processes consisting in implementation of information and communication technologies. Such reforms have gradually led to facilitating access to land information, improving effectiveness of land registration proceedings and even introducing possibilities to dispose of the ownership of land electronically by developing electronic conveyancing mechanisms. Another innovative concept much discussed nowadays is the application of blockchain technology in the land registration sector. This solution is currently being tested in a number of countries.Distributed ledger technology underlying blockchain is expected to revolutionise land registration by offering a secure architecture to store land transactions with the use of cryptographic protocol. This shall bring advantages of increased trust and processing efficiency as well as reduction of costs. However, the above idea raises concerns given that, under the assumptions of the “original” blockchain model, transactions are irreversible and are carried out without intermediaries, which means the lack of any external control and independent verification of the transactions to be recorded.The article examines potential benefits and risks of automatisation of land transactions as well as practical experiences of selected countries in implementing blockchain in the area of land registration. On this basis, an assessment will be made as to whether blockchain-based registration could indeed replace the existing methodology of registering rights to land.
Among substantial advancements challenging contemporary contract law special attention is given to autonomous, cryptographic solutions based on decentralised infrastructure provided by blockchain technology, intended to execute transactions automatically, designated as smart contracts. The need for comprehensive research on legal implications of practical implementation of this technological innovation is triggered particularly by the prognostications declaring it a valid alternative to hitherto contract law framework that is expected to be ultimately replaced by algorithmic mechanisms underpinning smart contracts.A relevant assessment of the impact smart contracts are presumed to have on the contract law domain requires a thorough analysis of their juridical status. The specificity of the category of smart contracts raises doubts whether they comply with the definition criteria inherent to contract law terminology. Additionally, it is of material importance to determine the function smart contracts can perform in the sphere of contractual practice and to confront it with the role and axiology of contract law.The article aims at analysing the peculiarities of smart contracts from the perspective of the Polish private law system with account being also taken of current development tendencies concerning the concept of contract.
The paper is devoted to the legal regulation of smart contracts in French law. The question of the admissibility of the use of smart contracts in economic relations is considered. Particular attention is given to the French legal doctrine in the issue of formulating the definition of “smart contract” and identifying its characteristic features, the various points of view of French legal scholars are compared. Examples of the most effective use of a smart contract in economic relations are given. The problems of applying contractual legal obligations and obligations of French law to smart contracts are considered. The importance of the oracle for the implementation of the smart contract and the features of its legal status under French law are disclosed.
Within the framework of this article, the authors carry out the study of the design of the smart contract in the context of jurisprudence and technical sciences. The paper analyzes the legal nature of the smart contract and the issues concerning the scope of application (in relation to distributed ledger technology). The authors conclude that the category of “smart contract” can be defined in technical and legal aspects. In foreign literature, there are two categories: a legal smart contract and a smart contract code (or smart contract). The smart contract as a technical phenomenon represents a computer code that allows automated fulfillment of obligations. From legal point of view, the approaches to the definition of the smart contract depend primarily on the fact that the authors rely on the possibility of using smart contracts only within the framework of distributed ledger technology or other information technologies. At the same time, the majority of authors share the view that the smart contract exists exclusively in relation to the technology of distributed ledgers, namely, the blockchain. The article proposes to define the smart contract as a standard (special) contractual design — a contract concluded by electronic or other technical means, under the terms of which performance of the obligation is carried out without directed explicit additional expression of will (under Part 2 of Article 309 of the Civil Code of the Russian Federation). The article states that the smart contract cannot be qualified as an independent way of ensuring the performance of obligations. Such qualification is possible only if the functional approach to understanding security is applied. The paper examines the main fields of application of smart contracts and possible risks of their application (in terms of statement of terms of agreements in relation to a programming language; in respect of necessity of compliance with such fundamental principles of civil law as legality, fairness, protection of the weak; the need for communication with public authorities and notaries, as well as risks of using smart contracts in relations involving the participation of consumers). A separate set of questions concerns the protection of the rights infringed due to the use of smart contracts.
Антон Назаров, Vladislav Shvedov, Vladimir Sulimin
Abstract Progressive technologies associated primarily with the use of the latest information systems are developing very quickly and are being introduced in the modern world. Recently, such phenomena as cryptocurrency and the smart contract, functioning thanks to the blockchain technology, have become very popular. The application of this technology is used in many areas: information technology, law, state, and municipal administration, etc. This article discusses the mechanisms of functioning and features of the latest Internet technologies in the context of the agro-industrial complex of Russia. Their practical significance for optimizing the relationship between the seller and the buyer has been investigated. The advantages of the blockchain for all market participants when using technology in the supply of agri-food products are justified. The research shows the possible difficulties and shortcomings of the existing content system, gives recommendations on the use of the blockchain and its evaluation for domestic producers of agricultural products. The authors propose a mechanism for using the blockchain technology in agriculture, which will change the existing practice of trade and settlement transactions between counterparties of the agricultural market.
The central institute of private international law — conflict of law — in the modern globalization and information context is evolving, which is largely due to the paradigm shifts in law, laid down and developed based on international commercial arbitration. The widely interpreted concept of «rules of law» actualizes a completely new view of conflicting arrays of rules: the law of the state and the system of non-state regulators. The medieval lex mercatoria, revived in the XX century, is modernized by cyberspace, acquires a new sound in the form of e-merchant or lex informatica, especially in the context of the parallel development of smart contracts and new decentralized forms of dispute resolution, one of which is blockchain arbitration. In particular, the issues of conflict of law, traditional for cross-border transactions, arise in relation to smart contracts, which, using blockchain technology, are inherently linked to several jurisdictions. It is important to reflect on the questions of applicability of traditional conflict-of-laws bindings to the regulation of relevant relations, including through forecasting the practice of choosing the law of a state, the substantive rules of which are adapted to the use of new technologies, or recourse to the rules of non-state regulation.
In the paper, the authors formulate a multidimensional concept of «cryptocurrency», which takes into account the technical, economic and legal nature of cryptocurrencies. In addition, the paper defines the relationship of the concepts of «cryptocurrency» with such commonly used terms as «digital currencies», «virtual currencies» and «electronic money». The authors understand cryptocurrencies as a kind of digital money, which is the result of the functioning of the corresponding computer program (digital code). Cryptocurrencies are created using the appropriate Protocol, operating in a decentralized manner, with the use of the blockchain technology. If the issue has a centralized issuer while maintaining other features inherent in these cryptocurrencies, then it is possible to talk not about cryptocurrencies, but about the issue of electronic money. The main difference between electronic money and cryptocurrencies is the presence of electronic money of the Central Issuer and the lack of it in cryptocurrencies. Another important difference between cryptocurrencies and electronic money is the way they are issued and stored. Cryptocurrencies are stored and issued in a decentralized manner, while the information about electronic money and transactions with them can be centralized on one server. There are also other differences, such as the mandatory use of asymmetric cryptographic encryption when creating cryptocurrencies, etc. Being digital money, cryptocurrencies at the same time are a kind of digital property that performs the functions of a means of payment in the society, does not have a physical form, that is, can not exist in the form of coins or banknotes. The authors support the addition of art.128 of the Civil Code of the Russian Federation with a new object of civil law (digital money) in the context of improving the draft law «On digital financial assets».
The author examines the features of the use of smart contracts in transactions in virtual property, taking into account the fact that the smart contract is a way of fulfilling those obligations in which the transfer of property provision takes place in the virtual world with the help of appropriate technical means. It should be recognized that the list of virtual property is open, at the moment it includes, for example, cryptocurrency, domain names, «game property», virtual tokens. The question of the legal nature of objects related to virtual property is relevant: are they a new independent type of property requiring special legal regimes, or are they a form of known property rights? The paper also notes that smart contracts differ in both vulnerabilities in computer code and insufficiently effective legal regulation. Smart contract, in the opinion of the author, is a kind of written (electronic) form of a contract, the peculiarity of which is that the will of the subject is expressed by means of special technical means in the form of program code. In this case, the will to conclude the contract simultaneously means the will to its execution upon the occurrence of certain conditions of the contract circumstances. In conclusion, the author shows that the automation of performance of obligations in particular and the digitization of contract law in general should not create obstacles to the implementation of the fundamental principles of good faith and contractual justice, to assess the proportionality of the distribution of rights and obligations of the parties, the equivalence of their property.
BACKGROUND: The rapid development of genetic and genomic technologies, such as next-generation sequencing and genome editing, has made disease treatment much more precise and effective. The technologies' value can only be realized by the aggregation and analysis of people's genomic and health data. However, the collection and sharing of genomic data has many obstacles, including low data quality, information islands, tampering distortions, missing records, leaking of private data, and gray data transactions. OBJECTIVE: This study aimed to prove that emerging blockchain technology provides a solution for the protection and management of sensitive personal genomic data because of its decentralization, traceability, encryption algorithms, and antitampering features. METHODS: This paper describes the case of a blockchain-based genomic big data platform, LifeCODE.ai, to illustrate the means by which blockchain enables the storage and management of genomic data from the perspectives of data ownership, data sharing, and data security. RESULTS: Blockchain opens up new avenues for dealing with data ownership, data sharing, and data security issues in genomic big data platforms and realizes the psychological empowerment of individuals in the platform. CONCLUSIONS: The blockchain platform provides new possibilities for the management and security of genetic data and can help realize the psychological empowerment of individuals in the process, and consequently, the effects of data self-governance, incentive-sharing, and security improvement can be achieved. However, there are still some problems in the blockchain that have not been solved, and which require continuous in-depth research and innovation in the future.
In order to develop the digital economy in the Russian Federation, the Program «Digital Economy of the Russian Federation» that is aimed, inter alia, at the formation of a regulatory framework for the legal regulation of new relations in the field of digital economy, was approved by the Decree of the Government of the Russian Federation No. 1632-r of July 27, 2017. Particularly relevant in this regard is the issue of cryptocurrency and bitcoin legal regulation. The article deals in detail with a special type of cryptocurrency, namely: bitcoin. The author analyzes the main problems associeted with the necessity of legal regulation of cryptocurrencies. The conclusion is made that legal regulation of cryptocurrency as a means of payment requires a complex approach and it is impossible without due regatd to the peculiarities of legal regulation of bitcoin. The paper provides for the interaction between the concept of bitcoin and other key concepts, namely: virtual currency and digital currency. The author concludes that it is necessary to create a non-governmental self-regulatory organization supported by the State in order to protect the interests of the cryptocurrency business. Since legal regulation of cryptocurrencies is global in its nature, the article examines the foreign experience of legal regulation of cryptocurrencies and their types.