Blockchain and the future of legal systems

Despite its complexity and algorithmic depth, blockchain technology has proven its significant utility in today’s time. From the well-known Bitcoin to the modern voting systems, blockchain technology has managed to decentralise and secure the ways that information and transactions are handled to ensure transparent and tamper-proof record-keeping. As we move forward towards a future led by advanced technology, blockchains can be applied to solve numerous problems across all fields. One such area is the legal sector, wherein blockchain can be efficiently used to arrange, organise, and manage legal documents in entities such as law consultancy firms and courts.

In many countries, legal systems still work on the outdated methods of documentation, where court files are often misplaced, lost, or tampered with. This problem can cause delays, corruption, and uncertainty for the citizens who try to seek legal justice. Additionally, even in countries such as the UAE, Germany, and Saudi Arabia, where parts of the legal recordkeeping have been digitised with the use of centralised databases, it remains vulnerable to problems like data manipulation. According to the 2024 article by Frontiers in Blockchain, the lack of transparent record-keeping limits the citizens’ trust in the justice system.

However, by 2035, blockchain technology could meaningfully help revolutionise this problem through the use of a decentralised, verifiable digital structure. When a party uploads the document on a blockchain ledger, it will automatically assign a digital signature, a hash value, and a timestamp. Since a hash value is a unique digital fingerprint generated from the content of the document, even a minor change would create a completely different hash value, instantly revealing whether the document was tampered with. Furthermore, to add access levels, digital signatures can be used. These signatures can confirm the identity of the person who either views, uploads or modifies the files. To further enhance efficiency, the concept of a Merkle tree can be used, wherein multiple hash values can be grouped under a singular ‘root hash’ stored on the blockchain, reducing storage requirements and speeding up the verification process.

This adaptation makes interactions with the judicial system far simpler for the citizens. Rather than physically submitting each piece of paperwork at the court time and again, one can simply upload the documents through a secure digital portal connected to the legal blockchain. Every submission will generate a timestamp and a verification ID, which can be the proof of the document's authenticity by comparing their hash values in case of further disputes.

However, the implementation of a system this complex comes with its own challenges. One major concern is scalability. Courts handle millions of documents each year, and storing every hash value and transaction on a blockchain can prove to be computationally heavy and can take up a lot of processing time, resulting in inefficiency. Additionally, building a blockchain system for the use of a whole nation’s legal system can be extremely expensive, especially for developing countries. To tackle this, a hybrid solution can be adapted where only the essential identifying and verification data will be stored on the blockchain, while the bulk storage can be put on an off-chain database. This can reduce energy and infrastructure expenses.

Another concern that arises is the issue of privacy. Since blockchain data is permanent, uploading sensitive legal information can be a risk if not carefully managed. To address this, the concept of selective transparency (first proposed in 2015 by researchers at the MIT Media Lab) can be used. The concept reiterates the use of an off-chain database to store the actual documents that can only be accessed by authorised users, while storing only cryptic proof on the chain itself.

To conclude, by 2035, blockchain technology can significantly change how legal entities handle information to ensure accuracy, accountability, and justice for all. While the implementation costs are high and some questions about privacy risks remain, using this technology has the potential to be a remarkable step forward for the future of the legal system.

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