When people hear the word “blockchain,” they usually think of cryptocurrencies such as bitcoin, which run on a blockchain platform. But the technology has far more extensive applications than generating bitcoin.
That has prompted Austin Mills, a Morris Manning & Martin associate, to start a blockchain-specific practice for the firm to advise on the unique legal issues arising from the disruptive, fast-proliferating new technology.
Mills said Morris Manning has a dozen blockchain clients—about half in Atlanta—who have built non-currency-based applications in industries ranging from health care, insurance, real estate, and financial services to event ticketing, sharing economy and digital asset management.
“The next generation is moving past cryptocurrency,” he said.
While a number of local firms have payments and financial technologies practices, Mills thinks this is the first blockchain-oriented practice for an Atlanta law firm.
A few firms in tech hot spots, such as Seattle’s Perkins Coie and Palo Alto’s Cooley, also have dedicated blockchain groups, which draw on areas of law such as securities, tax, corporate, technology, cybersecurity and payments.
“Blockchain technology is now a tangible reality that could disrupt any industry that relies on the movement of data or value,” Mills said. “A lot of people are talking about this as a paradigm shift on par with the internet.”
The idea is that blockchain-based applications can replace the Internet intermediaries that store data, transfer mortgage titles and the like. Blockchain operates using a “smart contract”—essentially an agreement that enforces itself via code rather than courts—and many adherents think blockchain technology could replace traditional contracts and payment systems used in industries like law and real estate.
The unique feature of a blockchain-enabled enterprise, Mills said, is that it takes out the “trusted intermediary,” such as a bank, that ordinarily organizes and secures a digitized marketplace.
“If you jump past the technology, the biggest thing is really the disintermediation,” he said.
Blockchain is a digital ledger that uses complex algorithms (cryptography) to process and verify transactions. Each user’s identity and transaction activity is encrypted with a unique digital key, but the digital trail of each transaction is publicly recorded and open to verification.
A blockchain operates on a distributed computing platform, so it can’t be easily modified, and it contains a complete history of activity, which proponents say makes it more difficult for fraud to occur in transactions.
“We take it for granted that businesses make money off acting as trusted intermediaries in services they provide to others, whether banks, Google or Facebook,” Mills said.
Blockchain has the potential to disrupt any online business or industry managed by a central gatekeeper, he said, because the distributed computing platform allows the activity of the users to create and maintain the market.