Babbitt Column | Using Blockchain Technology to Promote Legal System Construction in Digital Society

Modern society has experienced the wave of industrialization and informationization. With the evolution and integration of artificial intelligence, Internet of Things, blockchain and 5G technology, it is entering the early stage of digital transformation. The digital society will form new production factors and production relations, and data will become the core element. In the digital society, people and everything are “digitalized”. Our behavioral activities and social management are all implemented under the new digital paradigm. The main characteristics are:

  • The identity of the subject (institution or individual) is digitized;
  • The property rights and economic activities are digitized;
  • Legal relations and the judicial system are digitized.

The current Internet mainly carries the function of informationization, and the digital society requires the network to carry the identity and value of the subject (including property rights) and other elements to realize value interconnection and legal system construction, which puts new demands on the network infrastructure.

First of all, in the trust mechanism, the original Internet does not have endogenous trust and reliability, so it is necessary to centralize the authority to provide exogenous trust (because the network does not carry the main value of the society, the risk of problems with the “authoritative organization” is also Controlled). The basic network of the digital society bears the main value of the society, and relies on the authority to provide trust with systemic risks, which has too much impact on the macro level of society. The blockchain is an endogenous trust mechanism based on cryptography, which is technically sufficient to meet this need.

Secondly, in legal practice, traditional social relations are based on the basic legal framework. Economic activities are mainly based on contractual relationships. The legal basis for guaranteeing such social relations will face enormous challenges in the digital society. Digital identity, network behavior, electronic contracts, electronic evidence, etc. all exist in the form of data, because electronic data itself is easy to tamper and storage is unreliable, which brings many difficulties to judicial execution. The traditional method relies on centralized three-party institutions to certify and preserve electronic evidence. This can only solve part of the problem. The three parties still have problems of fairness, notarization and reliability. In addition, the digital society relies heavily on artificial intelligence (equipment) decision-making or decision-making, and the legal disputes caused by the behavior of artificial intelligence devices and IoT devices are still blurred. The endogenous proof, indefinite modification and decentralization of blockchain technology provide new ideas for solving the legal problems of digital society.

Digital identity

Digital identity is the foundation of a digital society. The real world of people, organizations and other subjects need to complete a reliable digital process to achieve a one-to-one digital identity, which is also the basis of the digital legal system. The blockchain-based digital identity system has the advantages of decentralization, non-tampering, and privacy protection. The binding and generation process of digital identities still requires service organizations to provide certification and uplink services, which need to be licensed and regulated. The role of the blockchain is to separate the data voucher storage from the service organization and become untamperable. All operations are documented. If the service organization has a bad behavior, it is easy to be discovered by the regulator.

Digital deposit

The evidence of the digital society is mainly based on electronic evidence. If it is necessary to satisfy the proof of the judicial field, the electronic evidence is required to have authenticity and reliability in the aspects of security and storage. The use of blockchain certificate has the characteristics of non-tamperable, consensus time stamp, distributed storage, etc., which can effectively meet the security requirements of electronic evidence.

Electronic signing

After the identity is digitized, the digital signature technology can be used to electronically sign the agreement (contract) to achieve the effect of similar signature or stamp. In fact, digital signature technology has higher reliability than traditional stamping, the cost of forgery cracking is huge, and the verification is very simple and fast, and the verification of traditional stamping still depends on the expert's personal experience. Electronic contracting can establish a contractual relationship in a digital society and can be preserved through digital deposits. By using the programmability of the signing process, electronic signing can be embedded in social chat, e-commerce, and online services, which can greatly enhance the spirit of social contract and improve judicial efficiency in the event of disputes.

Smart contract

A blockchain-based smart contract means that the rules are implemented and deployed on the blockchain according to the agreement of the parties. When certain conditions are met, the blockchain can be triggered to execute according to the agreed rules (such as authorization, payment, Transfer of digital property rights, etc.). This largely guarantees the execution of electronic contracts. However, due to the possible bugs in the smart contract code, it may not be implemented according to the true intentions of the parties. This requires the legal system to supplement and finalize the smart contracts of the digital society. The ideal "code is the law" still needs a long way to go, and it may be realized as the technology such as formal verification matures.

Digitalization of everything

The core of the digital society is data. The ownership, privacy and use rights of data can be managed through the blockchain, and the use of data is obtained through authorization or transaction. Various assets, property rights, artificial intelligence devices, etc. can be digitized through the blockchain to achieve unique identification and ownership certification. This process also requires licensed service agencies to participate in the data chain, such as the Housing Authority's certification of housing property rights, these services are subject to supervision. With the popularity of IoT devices and artificial intelligence devices, the definition of legal issues such as network security, device authentication, and artificial intelligence has presented new challenges. So far, blockchain technology can better solve these problems. Although many solutions still need to be verified, the convergence of blockchains has begun to take place.

The above is the basic element of the digital legal society. Blockchain technology can effectively solve the core problem of legal system construction, relying on the storage of data and subject behavior credentials in a decentralized system, rather than relying on a single centralized organization. It plays an important role in the balance of security, fairness, notarization, privacy and efficiency.

(Author: hedgehog, Block Chaining legal innovation Joint Laboratory Senior Fellow)