Cryptocurrencies and non-fungible token (NFT) news headlines presently concentrate on the industry crash (often framed as a crypto-winter or cryptoextinction), fraud and the collapse of a variety of crypto exchange platforms — or the “wealth” becoming designed or lost by way of cryptocurrencies and NFTs. Earlier, in 2021 and the initially half of 2022, headlines have been focused on the meteoric rise in worth of cryptocurrencies, digital art marketed as NFTs, and platforms and exchanges that facilitated these transactions making use of blockchain technologies. Hunting ahead to 2023 and beyond, additional legislation and regulation, along with the enforcement of current laws and regulations, is inevitable in connection with these economic, investment and otherwise speculative use situations relating to cryptocurrencies, NFTs and blockchain technologies.
Having said that, the underlying blockchain technologies could be (and is becoming) applied for much less headline-grabbing and much more mundane, pragmatic and much less speculative purposes, and these use situations should really not be confused with the use situations normally noticed in headlines.
What the future holds for cryptocurrencies, NFTs and other comparable makes use of of blockchain technologies is hotly debated, and several folks have robust feelings about these developments — particularly about the worth of new currencies, NFTs and the like. Having said that, regardless of one’s feelings and beliefs in this regard, we assume every person should really be conscious that the legal and organization dangers differ significantly based on the use case of the blockchain technologies. At its core, blockchain technologies is about securely recording and tracking transactions by means of a ledger that can then be applied for several nonspeculative purposes unrelated to cryptocurrencies or digital asset speculation, numerous of which are discussed under.
Option blockchain makes use of
Legal principles to take into account
Blockchain is an fascinating, promising and somewhat safe technologies, but like most technologies, its use situations and how humans use (or abuse) it require to be thought of when getting into into transactions, contracts or relationships involving the blockchain. Nothing at all is completely secure or safe, nor is it free of charge from the human element at some level — which includes error, omission or abuse. For instance, folks may possibly drop passwords or other credentials or new technologies may possibly arise, which could boost the prospective for hacking and the circumvention of encryption mechanisms underlying the blockchain.
Time-tested and simple organization, legal and contracting principles should really be kept in thoughts when taking into consideration the use of blockchain technologies, which includes (1) counterparty and other due diligence and evaluation, (two) legal and regulatory compliance evaluation, and (three) robust and thoughtful contractual provisions and protections primarily based on the nature of the use case and application, which includes the allocation of dangers (regardless of whether recognized or unknown).
If you are a vendor offering items or solutions incorporating blockchain technologies, affordable and acceptable disclaimers about the technologies and ancillary human components should really exist in your contracts. Conversely, if you are a client or customer getting items or solutions making use of blockchain technologies, be realistic and cautious about the prospective positive aspects and make sure there are acceptable controls, safeguards, treatments and recourse that could be realistically enforced.
Conclusion
Just since cryptocurrencies and NFTs, which use blockchain technologies, have been in the news grabbing alarming headlines about prospective fraud and enormous economic gains or losses, there are nonetheless other use situations and applications of blockchain technologies that, though possibly much less glamorous or newsworthy, may possibly potentially be much more profound and advantageous in every day life in the future.
