Coin Telegraph recently wrote an interesting piece about the advantages of hybrid smart contracts over traditional contracts. It piqued our interest here at ByzGen. In a nutshell, they suggest that hybrid smart contracts will change the world by revolutionising the legal system that exists today.
Hybrid contracts are smart, self-enforcing contracts, written in code and executed by the blockchain. They’re short and don’t have a ton of legalese in them.
This gives them a potential edge over traditional contracts that tend to be longer, more expensive and reliant on an external court system to enforce them.
It's good to see someone is finally raising the challenges faced by many of these traditional legal contracts – slow, costly, subject to loopholes, and more. It’s an issue we definitely agree on.
There's synergy between the capability mentioned in the article and what we have developed within our platform, Falkor.
For example, one of our configuration options for how data within specific datasets is processed, is to use off chain cloud storage to hold the data objects themselves.
This allows us (for compliance and performance reasons) to hold the data itself within cloud storage, whilst having an integration with the blockchain in which we can transact checksums, versions, IDs, encryption keys, pointers to off-chain storage, links between data and permissions for each data object.
The platform can then use the blockchain to track any updates, enforce how different users can interact with the data, and generate transactions. This means different legal documents can be stored, controlled, tracked and audited as they pass through the process.
Our view is that any data that’s generated by these legal processes needs to be updated and shared under control, with the content and integrity protected.
On Falkor, via our API, a client can trigger a peer to peer validation request and define what parties and data or assets are involved in the transaction. A flow in Corda is then generated and private transactions between the parties can take place and be accepted.
Falkor then securely bridges that data back into the platform, so that the other parties in the network are operating against the latest state of all transactions – including those that are peer to peer.
Crossing between blockchain solutions and bridging the data between them is a big requirement for the future, so we don’t create more data silos!
The peer to peer transactions option is typically used when data or an asset is going to change ownership. Or if a change to that asset needs to be agreed by certain parties.
That’s why it’s perfect for the legal sector, where a number of these types of agreements need to be validated and recorded for audit.
In addition, we’ve also verified the technical feasibility for use of the public ethereum blockchain network, to validate peer to peer transactions.
When it comes to smart contracts, we also think that not all the processing should necessarily take place within the smart contract on the blockchain. The main reason for this is that if you’re packaging up the whole process and making it immutable, then you’re creating an overhead when the process changes, or you need to update it constantly.
In this situation, ByzGen offers a split of services, whereby the process itself can be managed off chain via a Business Process Management tool in the traditional way. The blockchain in this scenario can then be used to track the process immutably, enforce the latest state of the process for the rest of the network, and execute new states of the process that need to be enforced as it moves through.
Most excitingly, our platform Falkor can offer this process management, enforcement, tracking and execution – and in parallel handle the storage, control, tracking and audit of all the sensitive data that is produced by the process. It’s a combination we see as really powerful to the legal sector.
If you work in the legal sector and are curious to see how our process could help you, we’d be more than happy to chat.