Blockchain. It’s persistently in the tech news. And on July 23, Arkansans can start signing electronic contracts and records using “smart contracts,” or computerized legal transactions using blockchain.
But before you start thinking this is something that will never impact you, let’s talk about what exactly is blockchain and the importance of electronic signatures.
Blockchain technology is software that provides a distributed, decentralized, shared and replicated ledger that, when combined with a commercial transaction, automatically verifies and executes the contract when “signed.” Think a password-protected, peer-to-peer spreadsheet that only the relevant people can access and make changes to, but that also can’t be corrupted and compromised.
Most people know blockchain through its use for Bitcoin and other cryptocurrencies, but the use of blockchain extends far beyond cryptocurrency. IBM, Walmart and other technology companies have looked at the use of blockchain in tracking the provenance of wine, or the source of contaminated mangos to protect consumers.
Blockchain technology use in supply chain transactions can expedite tracking the source of contaminated produce from seven days to 2.2 seconds through collaborations between suppliers and vendors. Blockchain technology has the potential to offer more capabilities to existing written agreements, speeding business transactions and reducing the time for audits and other record review processes, but we need more adoption of blockchain technology by business to get there. For example, with a standard supply chain arrangement using smart contracts, a carrier can receive automatic payment upon acknowledgment of the receipt of goods from a customer.
Which brings us back to why the new change is important to Arkansas. Arkansas began recognizing electronic signatures for contracts in 2001, bringing Arkansas in line with about half the country. The Arkansas legislature at the time recognized that…