Interesting guest post by the team at Jincor, who are looking to deliver simple smart contracts and cryptocurrency transactions for any business.
Ray Kurzweil, a famous inventor, thinker and futurist, whose projections on technological development and social changes are highly appreciated by global business community and political elite, believes that the era of national boundaries, as we know them, is coming to its end due to the growth of advanced technologies, which blur state borders and lead to a continuous transformation of traditional national states. Kurzweil claims, that we are moving towards a unified global community:
“We are building a global culture, a global legal system. Nations are still powerful, but I think they will continue to lose influence.”
According to a last year research by Globalscan consulting, the number of people considering themselves cosmopolites, rather than citizens of their nations, reached 49% of total 20,823 people across 21 countries, and this is the highest figure for the last 15 years.
Virtual environment has already seen some examples of associations which are not fitting into the governmental system, such as open digital unions, decentralized societies, virtual cities and nations. These are the first efforts to affirm brand-new law paradigms and form a unified digital jurisdiction.
At the same time, in this «globalisation-digitization» era, corporate environment has some specific requirements, which include, first of all, clear legal foundations for its presence in a digital world. However, a decentralized ecosystem does not imply any central regulatory body, like government, so, the credibility of the system should be automated, and the conditions of interactions and their consequences should be spelled out at the code level.
Where do the smart contracts step in?
The nature of smart contracts, as well as the benefits of their implementationare now commonly known. The advantages brought by smart contracts to companies are numerous: transactions immutability, complete trust between parties to an agreement, automatisation of many business activities, full transparency (and privacy, as well), exclusion of intermediaries … This list could be much longer. More on this you can read in our previous articles:
In the previous article (Smart contracts: when papers are smart enough to understand all the whens and hows of business…medium.com
So, if they are so handy, what stops the companies from prompt implementation of smart contracts? There could be several reasons, such as:
1) Doubts about the reliability of the code (many examples of recent hacks)
2) conservatism, traditionalism, narrow-mindedness
3) Lack of coherence with existing legislation
The last obstacle is the biggest problem of all mentioned above: code could be improved and the narrow-mindedness could be rightly treated. Although, there is no point to expect that all national governments will ever come to universal understanding of smart-contracts and blockchain technology.
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For instance, in Russia, the legal definitions of “blockchain” and “cryptocurrency” are still passionately discussed but not fixed on any official level. The lack of regulation is remaining the main obstacle for the adoption of new technologies by business entities.
At the same time, gradually, the programmable code becomes a universal language and the basis for a new legal paradigm. In fact, legal standards for decentralized space might be very useful if we have to resolve disputes, hedge risks and establish legal relations. These standards could be resulting from conscious consensus of the blockchain community.
Jincor team believes that, for the benefit of further development of technology and society, a progressive community can reach a public consensus, implying that Code is the law, and only according to this law the code can be regulated.
Digital legal environment is necessary for a full-fledged functioning in the Cryptoeconomics of the future. This could be a new type of legal: fraudless, detached from the centralized judicial system, automated, regarding the implementation of court’s decisions. It is especially crucial in the corporate sector, where risks are higher, responsibility is larger, and procedures are more complicated.
Smart contracts have all chances to form the basis for all legal relations within this new type of jurisdiction, including the relations of the individual with official institutions.
Smart contracts in the Jincor ecosystem
It all starts with ideas, which are followed by experiments. In case the experiment demonstrates the viability of the concept, the prototype becomes a market product with specific characteristics. Only after its wider adoption on the market, the legislative environment and regulatory procedures around the innovation are starting to form.
In the work-frame of blockchain-ecosystem Jincor the settlement of smart contracts will be available only for identified users.
* Digital identification is the process where the participant is assigned with a unique fragment of the code, which represents some critical information about the user in the encrypted form, and acts as a link of a digital identity to a real world.
In the blockchain-world, as well as in real, a spotted reputation will close many doors and constrain the further development of unreliable counterparties.
The blockchain project Jincor has already started to build the basis of digital jurisdiction for business, in which participating organizations can make secure crypto-currency transactions, conclude smart contracts, use the services of decentralized arbitration and insure their crypto assets and transactions without special technical knowledge. In one of the previous articles, we described how a decentralized arbitration system might look, now we will look more precisely at the basic types of smart contracts in Jincor.
The main types of smart contracts available to members of the Jincor ecosystem are:
- Operational corporate smart contracts of counterparties;
- Loan agreements;
- Shareholders agreements (regulating relations between shareholders and participants, regarding the disposal of their shares and stakes);
- Labor contracts;
- Civil-law agreements (aimed at the emergence, modification or termination of mutual rights and obligations);
- Property contracts (purchase, sale, lease, transfer into partial ownership);
- Insurance contracts (insurance of cryptocurrency accounts, transactions, hedging of risks);
- Agency agreements;
- Smart contracts of commercial concession;
- Trust management agreement;
- Banking tools (derivatives, escrow, collection, letter of credit)