Blockchain Security and Legaltech
Blog Article Published: 12/14/2021
Written by Sebastian Soriano, TRATO
Since its inception, the blockchain technology has shown promising application prospects. With the rise of technology many industry players are now digitizing and integrating new technologies to ensure cybersecurity in transactions. Among all solutions, the best and most powerful are usually solutions built on the basis of blockchain.
What is Blockchain Security?
Blockchain security is a comprehensive risk management system for internet transactions, using cybersecurity frameworks, assurance services and best practices to reduce risks against attacks and fraud.
The use of blockchain in the electronic signature of legal documents guarantees security in several ways. Its public and decentralized infrastructure allows Users safety and reliable business.
Generally in the block, it contains main data, hash of previous block, hash of current block, timestamp and other information:
- Main data. Depending on what service is the blockchain application. For example: transaction records, banking records or contracts.
- Hash. When a transaction is executed, it generates a hash (or code) and then broadcasts to each block.
By the way it is built, in Blockchain infrastructure, the information entered by the user is stored in blocks and each block can be identified from the others. This block connection generates a cryptographic chain impossible to break. Therefore, all transactions are validated in a consensual mechanism, guaranteeing that the information contained in the chain is true and correct. Also blockchain technology produces a tamper-proof ledger of transactions.
Decentralized storage ensures that each block contains only a small piece of information from a much larger jigsaw puzzle, limiting hackable data. Cybersecurity industry benefits from blockchain unique characteristics, by creating a virtually impenetrable wall between a hacker and Users' information.
Legaltech is the application of technology to the legal practice in order to make legal processes more efficient and reliable for the various parties involved in the different branches of the legal profession.
In this regard, these technological developments and their quick progress help multiple sectors of the industry. Legaltech works in law firms to provide better and automated legal services for their clients and companies, or making electronic evidence to help judges in the enforcement of law, among many other alternatives. Technological advances in Blockchain, Biometrics and Artificial Intelligence enable the legal areas to provide a faster service to their clients' needs.
Legaltech can be understood as tools that connect technology and law.
The Legaltech area supports users in developing and supporting the documents generated on the platform. In this regard, there are different rules that regulate the use of electronic means for the execution of legal acts. Therefore, it is important to use the correct legal grounds when signing electronically.
A platform that assists users in the fulfillment of legal requirements and the data security, ensures integrity of their rights and assets, as well as all of the parties of their business.
The use of electronic tools streamlines legal departments' deal flow, so that team members can focus on important tasks such as content, substance and procurement of documents required for the conclusion of the agreement.
Contract Lifecycle Management
Electronic tracking of documents becomes easier with technological solutions.
A Contract Lifecycle Manager (CLM) is a cloud-based software application that supports the draft, signing and management of legal agreements and other documents in a fully electronic and automated environment.
This means that CLM guarantees that documents signed electronically cannot be modified after they are submitted, as well as identifying the holder or participants of a contract or other legal documents.
Besides, this kind of application satisfies all current legal requirements in order to make any electronically signed document enforceable against any authority.
Therefore, Users are protected both from legal and technological sides.
As it is a Blockchain-based system, a CLM features the following functions:
- User Identification and access management
- Key management
- Data privacy
- Secure communication
- Smart contract security
- Transaction endorsement
In conclusion, the benefits of using a CLM are:
- Efficiency, implementing the use of this solutions enables users to save time and money;
- Immediacy, the management of digital contracts is simple;
- Control, total and absolute control on the creation and administration of legal documents.
Implementing CLM solutions is simple and the first step to digitize your legal processes.
About the Author
Sebastian Soriano encourages and supports the digitization of different legal processes for private and public entities in TRATO. As a legaltech lawyer he participates in building solutions ensuring legal compliance and techno-security. The most important thing when surfing the Internet is the privacy and security of our information.
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