At the beginning of this month, Ohio legislation has become effective and this removes doubts about the applicability of electronic signatures, records and contracts guaranteed by blockchain technology. The amendment makes Ohio one of the few states to explicitly identify blockchain technology in its laws – positioning Ohio as a blockchain-friendly state for a technology, around which looming is both the & # 39; regulatory uncertainty that corporate uncertainty due to its infancy and breadth of potential applications.
Blockchain is a distributed ledger technology, in which a peer-to-peer network of computers (or nodes) maintains a decentralized registry or register to demonstrate transactions or transfers of value using cryptographic tools and consent protocols, ensuring that transactions transmitted through the network are secure, immutable and democratically maintained by members of the network.
There are many variations of blockchain applications, but most applications use common basic concepts in which users can digitally sign and record transactions or data transfers in a shared ledger within a network, and once published this transaction or transfer can not be changed. One of these series of steps is as follows: transactions or data transfers are digitally signed using public-key cryptography available to everyone on the applicable network, where a particular network user, intending to enter a transaction or transfer data, can do so by communicating the assent to "sign" such transaction or transfer with the private key of the user (ie a digital key known only by its owner) to verify the intention of the user to be bound to such transaction or transfer. The binding transaction or transfer is then transmitted via the network and verified by the network via a consent protocol.
Blockchain technology is examined, examined and applied in a wide range of industries. For example, blockchain applications have been tested by capital market participants to increase efficiency in liquidating and offsetting financial assets and to raise capital by creating and offering digital representations of financial or equity products in initial coin offerings. The transportation and trade industries have used technology as a supply chain solution to store and secure real-time information on products moving along the supply chain, while the health industry hopes that the distributed ledger technology can be used to create an information exchange efficient disintermediate and secure electronic medical records. Sometimes referred to as "smart contracts", blockchain technology provides a platform on which it is possible to execute the logic of an agreement via code that responds to particular messages or transactions.
In each of the examples above, the transfer of a digital financial resource or an intentional change of data through a blockchain network would require the originator or sender to digitally sign such transaction or change, thereby transmitting its intent through the shared network to bind to the transfer or change. After verification of the transfer or modification on the network, the transaction or data modification would be electronically recorded in accordance with the requirements of the applicable blockchain application protocol and stored therein. As such, the legal applicability of electronic signatures and registries is essential for the use of blockchain technology.
The federal and state governments are starting to formulate regulations and legislation necessary to promote the continuous innovation on the uses of the blockchain, and a handful of states of the first move have taken steps to make their respective states attractive to blocking entrepreneurs, investors and developers.
Amendment of the law on uniform electronic transactions of Ohio
The new Ohio legislation modifies the Ohio version of the Uniform Electronic Transactions Act (UETA), moving Ohio into the forefront of the initial acceptance of the legislative blockchain.
The main objective of UETA is to establish the legal equivalence of electronic signatures and electronic records with manually signed signatures and paper documents and, in doing so, remove the obstacles to electronic commerce and technological advances in the 39; use of records, contracts and electronic signatures.
In the UIMA 1306.01 section, an electronic signature is an electronic process logically associated with a record that is executed or adopted with the intent to sign. The new amendment from Ohio adds the following guarantee that the blockchain would be covered as an electronic signature: "A signature that is protected through blockchain technology is considered electronically and as an electronic signature."
UETA also requires that an electronic record be sharable and retrievable. The new legislation clarifies that blockchain technology can be an electronic record of this type: "A record or contract that is protected by blockchain technology is considered electronically and as an electronic record."
The amendment to the UCE of Ohio is not the only initiative taken by the state of Ohio to report its support for blockchain technology. In a limited trial period, the Franklin County Auditor used blockchain technology (provided by a local Ohio company) to legally register the transfer of confiscated real estate. Other duties of Ohio auditor could follow this initiative.
In what is otherwise a technologically agnostic statute, Ohio's new explicit reference to the blockchain in the UETA of Ohio and the efforts of a local county recorder to test the technology have indicated the & # 39; Ohio as an ally and collaborator with entrepreneurs, investors and blockchain developers. What remains to be seen is the multitude of potential commercial and governmental applications that blockchain can bring and which additional laws and regulations will be added as these multiple applications and achieve wider acceptance.