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Can you trust blockchain?

Every few years, the legal profession is told that some new breakthrough technology is going to change the profession forever. “Trust me,” the futurists say, “this will change everything.”

In reality, technological change happens far slower than many futurists predict. While tech adoption takes time, though, it can have a much more profound effect than predicted in the long term. The internet, email, cellphones and social media have all changed the legal profession — but not overnight. Lawyers resisted email for many years, but now they are glued to their phones reading correspondence. Lawyers weren’t the first to set up Twitter accounts, but now social media can be a key place to look for digital evidence in a dispute.

A more recent technological innovation is artificial intelligence or AI. We wrote about artificial intelligence last year in our April issue cover story, and the message we gave was that it would change the profession — but not how you thought. It wasn’t about robot lawyers but about efficiency. In other words, it wouldn’t replace lawyers, just make them faster (although perhaps less numerous).

And now blockchain is the next supposed revolution. Just like all the other technologies before it, it is likely to change things, but exactly how we are not yet sure.

At its essence, blockchain is a ledger system. While the technology is very complicated, the basic idea is not. It is a way to validate information reliably and securely without giving anyone the ability to edit or delete. It is a technical solution to a very human question: How do we create trust?

And when the question is asked that way, it does seem like a technology that could replace lawyers. As Amy ter Haar put it in our cover story, “With blockchain, the trust train is moving to a new place.”

As all lawyers know, trust is a fundamental part of the legal profession’s value proposition. You can, hopefully, trust that your lawyer will work in your best interests and keep everything confidential. And your lawyer has the power to control your trust account.

So, unlike AI, social media or email, blockchain seems like a basic existential threat. Should lawyers be scared?

As with any technology, there are drawbacks and hype. The drawbacks are numerous, including the massive energy required to run a blockchain system and lack of privacy for a system that is essentially unalterable. The hype is no doubt clouding many people’s judgment, too — including those who are betting on the value of Bitcoin, which uses blockchain technology.

But the benefits — for people who can’t afford a lawyer at least — are substantial. As Aaron Grinhaus put it in our cover story, blockchain may render many legal services — including secured and commercial transactions, real estate registration and dispute resolution — “obsolete.”

I am not going to try to predict how blockchain is going to change the profession. As our cover story says, blockchain is still in its infancy — fragmented and lacking common standards or standardized processes.

But I will say this — if you don’t understand how it works, it may be worth your time to do some research. It could change everything. Trust me.