In laymanÂs terms blockchain is a database, and as databases do, blockchain stores information.
Blockchain appears to be very well suited to storing information relating to Bitcoin for two reasons. Firstly, because the information is stored and accessed from computers all over the world, in high numbers, this means that any attempt to change the information must be authenticated by the whole network. Secondly, the fact that blockchain is combined with cryptographic technology that validates the stored information makes it very difficult to alter or modify. This means that whist not impossible it would be very hard to damage information that is stored on the blockchain.
Because blockchain is so well suited to storing information and virtually impossible to corrupt, Âsmart contractsÂ may be very well perfect for the platform. A Âsmart contractÂ is a contract that is executed when a specified event occurs. For example, if I want to execute a contract when something happens and I want to ensure that it is recorded a smart contract functioning on blockchain will not only record the event and the information it will also be near on impossible to alter or corrupt.
However, whilst blockchain and Bitcoin may appear to be perfect, they have a number of questions that hang over their heads.
Jurisdiction: because blockchain is stored on a vast number of computers, more often than not across the world, whoÂs laws are to be applicable. If I, in the UK, enter into a Bitcoin transaction with someone in the US, and that transaction is recorded in Australia what countries laws are to be applicable.
In the UK we have the Sale of Goods Act 1979, the Act implies that a seller of goods must have a good title to the goods. But does this apply to the blockchain? One may argue the fact that the transaction has been recorded on the blockchain this guarantees a good title and therefore the Sale of Goods Act is not needed.
One thing is for sure, Bitcoin and blockchain are here to stay and Lawdit will be closely following the chain of events.Â