Recognising cryptocurrencies and the transactions emanating from it will be a long drawn out process. But when balanced with the long-term economic benefits and competitive advantage over other economies likely to be generated, it sure seems like a risk worth taking. An Ethereum-fuelled smart contract world. Credit: Robert Bagnall/YouTube, CC BY 2.0 The frustration associated with enforcing contracts could be eliminated—if we replace humans with fiddly bits of code. Conducting business could be a whole lot easier if we embraced the blockchain, say digital currency enthusiasts. The dream of smart contracts—legally enforceable agreements that aren’t left to the mercy of legal interpretation and lawyers—traces as far back as 1994 . However, it is only with advent of Ethereum, a new cryptocurrency and platform, that this dream now seems attainable. The digital currency comes with a new type of blockchain — a peer-to-peer database that provides a public and trusted record of transactions — that seems destined to kick-start the smart contract revolution. This revolution is not only relatively new to India but is understandably clouded by uncertainty and a number of myths. If India is to take full advantage of the digital currency revolution, these myths and misunderstandings need to be tackled by India’s regulators and the government. Myth No. 1: Smart-contracts do not satisfy traditional elements of a legally-binding contract, and are unaccounted for in international instruments It is often argued that the traditional elements of contracts in India viz. offer, acceptance and intention cannot be gauged in a smart contract since negotiations happen electronically, with no clarity as to these components. It is believed that the difference between invitation to offer and offer also gets blurred causing confusion as to intention, and whether the parties agree on the same facts in the same sense. However, contract-creation through […]
