The Artificial Lawyer reports on a new system that is intended to ensure the legality of contracts based on tokens that are used on the Ethereum blockchain platform, rather than on established legal tender.

Ethereum is “an open-source, public, blockchain-based distributed computing platform featuring smart contract (scripting) functionality” (Wikipedia). Its tokens, called “ether,” may be used like currency or represent other real-world assets such as “a virtual share, a proof of membership or anything at all” (Ethereum).

Ethereum’s smart contracts have until now been created by individuals who are more familiar with technology than with the law. The new system – created as part of OpenLaw, a “smart contract” project being developed by lawyers in the US and Switzerland – is intended to provide legal constructs that will offer lawyers more confidence in such contracts.

“The OpenLaw purchase contract seeks to provide legal contracting norms that any commercial lawyer would recognise,” the article states, “adding in key transactional clauses and provisions, as well as the ability to modify the terms as needed.”

Please note that while I am not yet comfortable recommending that lawyers deal with contracts of this nature – the head of the IMF, among others, continues to warn of the volatility of cryptocurrency – I do think we should know enough to speak intelligently about on-chain transactions with our clients. It is probably wise to assign a lawyer or lawyers in the firm to keep an eye on developments related to cryptocurrency and blockchain technology, and to provide internal updates to fellow lawyers on a periodic basis. The Artificial Lawyer article is thorough and balanced, and is a good place to start to acquire knowledge in this area if you haven’t done so already.

I invite you to share your thoughts on this or any other matter related to the law, either in the comments section below or directly via email.